Minecraft Village and Pillage Expansion is Big for Microsoft

 In Analysis, Microsoft, Video Game Genres

Minecraft is one of the most popular video games of all time. However, since developer Mojang was acquired by Microsoft in 2014 the game has seemed to stagnate. This seems to be changing. In 2019, DFC Intelligence has seen a major resurgence in Minecraft usage and interest.  The launch of Minecraft Village and Pillage has been a major success. In other words, Minecraft is cool again.

DFC has written numerous reports on Minecraft over the years. In many ways, Minecraft is the Lego of the video game world. It is a complete open-world sandbox game that lets users build to their heart’s content. Even with its blocky graphics, nothing could seem to compete with Minecraft.

Microsoft purchased Sweden-based Mojang for $2.5 billion in 2014. After the Minecraft purchase, creator Marcus “Notch” Persson left the company in some controversy. Meanwhile, products like Minecraft: Story Mode did little to extend the brand.

Considering the recent cost of major game franchise acquisitions, Microsoft’s purchase of Minecraft was a bargain. But, for some time, it looked like, Minecraft was doomed to slowly fade away. Now, DFC believes Minecraft could be the biggest video game asset Microsoft owns. Bigger even than the Xbox brand.

The official launch date of Minecraft was May 2009, meaning this month is its tenth anniversary. This should be a happy birthday party as DFC tracking is showing Minecraft is enjoying a significant resurgence.

Of course, this begs the question of whether Microsoft is the right owner for Minecraft. For years, DFC argued that Nintendo should look to buy Minecraft and make it a pillar of its hardware systems. However, this was not realistic for the conservative Japanese company.

One of the first things Microsoft did with Minecraft was to make an Educational Edition designed to help teach Common Core principles (retired Microsoft founder Bill Gates is a big Common Core supporter). Minecraft was also used as a demo for Microsoft’s HoloLens augmented reality.

These efforts were interesting. It is a way to introduce Minecraft to a new generation of school children. However, they do little to build Minecraft among core gamers. In 2018, we actually saw older kids making fun of people that still played Minecraft.

On both a qualitative and quantitative perspective, Minecraft had been showing a downward trend. Outside emerging markets, usage was declining, but more importantly, qualitative analysis was showing Minecraft was considered uncool for anyone 8 years or older. This was especially true as Fortnite stormed the scene.

In late 2018, it was clear that Microsoft was putting a renewed effort behind Minecraft targeted toward the core gamer. Really this was the result of efforts such as the Minecraft Marketplace that launched in June 2017. The Minecraft Marketplace allows users to sell their own creations. This was similar to what was done in Roblox, a game that had been seeing more popularity among older users.

It took over a year for the Minecraft Marketplace to gain major traction, but going into 2019 it was clear Minecraft had the potential for a comeback. It is still early, but after the first week, it appears the Village & Pillage update seems to have more impact than expected.

DFC started to see the usage of Minecraft increase just a few weeks ago. However, things really started to pop when the Village & Pillage expansion launched on April 23. Our 5th through 8th-grade group of gamers (age 9 to 14) had dismissed Minecraft. Suddenly they are back in the fold.

Based on a quick, informal focus group we learned that the Village & Pillage update is a massive improvement on the game. It is early, and we have not fully tested out this mode, but our young users raved about pandas, berries, crossbows, brown mooshrooms, campfires, and raiding villages. In other words, Minecraft has suddenly become hot.

The sudden success of Minecraft shows two things: 1) gamers are fickle and 2) refreshing old IP can do wonders. Minecraft is an established product and in the right hands will be incredibly valuable for years to come.

Long-term Minecraft could be a major win for Microsoft’s Xbox platform. The main focus for Minecraft now is Windows, Xbox One, Switch, and mobile platforms. Left out is the PlayStation 4 which seems now to be relegated to Minecraft scraps.

Among DFC users age 9 to 14, they all seem to play on Windows PC or the Nintendo Switch. The Xbox One is not a major platform with this group. However, Minecraft could become a major attraction for a future Xbox system. This would be especially compelling if Minecraft was an Xbox/Windows exclusive.

Over the years, we have learned that the game market is fickle. Past success is no guarantee of future success. Furthermore, consumers are more loyal to game franchises then they are to hardware systems. This has been a secret to Nintendo’s success. Nintendo’s core IP brings them back from the brink of hardware oblivion.

Microsoft’s major video game IP has been Halo. Halo appeals to a core group of hard-core gamers. Minecraft is on an entirely different level. Where Halo appeals to tens of millions of users, Minecraft reaches hundreds of millions of users.

The challenge for Microsoft is maintaining Minecraft’s relevance as consumers grow older. Prior to the launch of Village & Pillage, there were concerns that Minecraft would lose to games like Fortnite. Many of those concerns have now been erased.

In coming months, DFC Intelligence will continue to update its forecasts for upcoming video game systems. As always, a key focus is on the appeal of core franchises. Outside North America., the Xbox One can be seen as a failure. However, Minecraft as a worldwide phenomenon continues to grow.

The 2019 Global Video Game Consumer Segmentation

The 300+ page Business of Video Games report is now available.

The latest DFC Intelligence survey on streaming game services is available here

Our ongoing look at nearly 300 upcoming video games is also available on a one-time or annual basis.

You can view all of the latest DFC Forecasts here.

We also encourage you to check out the new video game industry segmentation that DFC Intelligence did in conjunction with Venture Beat and Atlas Technology Group. It is available on the Venture Beat website.

The $150 billion+ video game landscape: 7 segments to watch

 

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