Microsoft buys Minecraft-maker Mojang for $2.5B

Microsoft will acquire the maker of the popular game Minecraft for $2.5 billion.

The technology company said it will buy Stockholm-based game maker Mojang. Minecraft, which lets users build in and explore a virtual world, has been downloaded 100 million times on PC alone since its launch in 2009. It is the most popular online game on Xbox, and the top paid app for Apple's iOS and Google's Android operating system in the U.S.

The deal is expected to close in late 2014. Microsoft expects the acquisition to be break-even in fiscal 2015.

Microsoft is primarily known for business software like Word and Outlook. But this acquisition will help Microsoft expand its gaming division which also includes game franchises such as the Haloshooter game and Forzaracing game.

CBCs technology expert Jesse Wente says Microsoft isn't buying a game so much asMinecrafts network of users.

Microsoft may also be interested in the potential to create an interesting virtual space with strong visual elements, he told CBC's Metro Morning.

"What if Microsoft, with Minecraft, builds the successor to the web. Well call it 'Mega-Minecraft,' in which you take every Minecraft server that every pubescent kidhas created, stitch it together and create one single virtual environment," Wente said.

"It would be more graphically friendly than the web. It would be more game-friendly than the web and youll have over 100 million people building it. I think thats what Microsoft is doing," he added.

In a blog post, Mojang said its founders, Markus Persson, known as Notch, Carl Manneh, and Jakob Porsr are leaving the company.

Microsoft bought Nokias phone business for $7.3 billion in April and is also seeking to boost Microsofts Windows Phone system, which has gained little traction against Apples iPhones and Googles Android system.

Microsoft CEO Satya Nadella has made mobile phones and Internet services priorities for the company as its traditional businesses Windows and Office software installed on desktops slow down or decline.

We believe the acquisition of the ubiquitous Minecraft game (almost 54 million copies sold) strategically makes sense as Microsoft looks for ways to drive users toward its nascent mobile hardware business, where it can leverage and cross-sell a wide range of its higher-margin software (e.g., Office 365, Windows), FBR Capital Markets analyst Daniel Ives said in a client note.