Microsoft CEO Satya Nadella’s new book “Hit Refresh” tells a different version of the company’s $US2.5 billion purchase of Minecraft studio Mojang than we’ve heard before.
The version we know: Markus “Notch” Persson, the original creator of Minecraft, was getting tired of the pressures of running Mojang and tweeted out his willingness to sell. Numerous video game companies courted Persson and Mojang, but it was Microsoft which ultimately won out, and the deal was signed in mid-2014.
In the book however, Nadella recounts an anecdote that adds another wrinkle: Microsoft had a chance to buy Mojang earlier than had previously been reported, but ultimately decided not to move forward. Also of note is that Nadella claims the person pushing for the deal was Phil Spencer, the Microsoft executive who’s been in charge of Xbox since mid-2014.
“Early in Microsoft’s relationship with Mojang, before I was CEO, Phil presented an opportunity to purchase Minecraft, but Phil’s boss at the time chose not to move forward,” writes Nadella.
In other words, if the deal had worked out, Microsoft could have bought Minecraft earlier on in its meteoric rise to popularity, perhaps for a cheaper price than the $US2.5 billion it ultimately paid.
It’s notable, too, because in a 2013 appearance on late night television, Persson publicly claimed he had no interest in selling Mojang or Minecraft. It’s possible, however, that Persson’s claims came after any talks with Microsoft had already fallen apart.
Asked about Nadella’s account of an earlier deal, Persson told Business Insider: “I’m probably the wrong person to ask about specifics, but I do remember us getting a ridiculously low offer from some company at some point fairly early on. We said no.”
“Just to be clear,” Persson added “we weren’t actively looking to sell, but would with some frequency get asked. It wasn’t until my tweet we decided to pursue it.”
A Microsoft representative did not immediately return a request for comment.
“Now they get it”
Reading between the lines, we can devine some details from Nadella’s account of the initial deal that never was. Minecraft was first released into beta at the end of 2010. Microsoft and Mojang teamed up in the Spring of 2011 to announce an Xbox 360 version, which launched in 2012. This would be “early in Microsoft’s relationship with Mojang,” as Nadella writes.
Given this timeframe, “Phil’s boss at the time” would likely have been Don Mattrick, the former head of Microsoft’s Xbox division. In mid-2013, Mattrick left Microsoft to accept a role as CEO of social games company Zynga. Mattrick’s move left Xbox without a formal leader until mid-2014, when Nadella appointed Spencer to the role.
Nadella praises Spencer’s pursuit of the Mojang deal: “For some, such a visible, high-level rejection could have been withering, but Phil didn’t give up.” In mid-2014, when Nadella was CEO and Spencer was head of Xbox, the opportunity to buy Mojang presented itself once again, and the final deal was struck.
In any case, Nadella writes that he’s more than pleased with the acquisition of Minecraft, by way of Mojang. It’s tremendously popular, and it teaches important skills to school-age children, writes Nadella. Even Microsoft’s former CEOs, who were sceptical at the time, have come around, he says.
“Bill Gates and Steve Ballmer, who were still on the board when the deal was presented, later laughed and said they had initially scratched their heads, failing to understand the wisdom of the move,” writes Nadella. “Now they get it.”
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