5 ms·

If this keeps going they're going to end up as profitable as Minecraft!

by staunch 13y ago

ChuckMcM 13y ago
Heh, except the cost to develop is much lower. So they will probably never achieve the same level of profitability, even if they achieve better revenue.
- pisarzp 13y ago
  It doesn't really matter if margins are lower as long they have positive return (NPV) on every additional dollar spend
- jaredsohn 13y ago
  I think it depends on what you mean by "level of profitability". In absolute terms (i.e. how many coins could you put in a money bin), it should be achievable; but as a percentage (i.e. how you would measure it as an investor) it likely won't get there simply because the expenses for creating Minecraft were relatively low.
Impossible 13y ago
GTA V is already more profitable than Minecraft, even though Minecraft has sold more units across all platforms (http://www.ign.com/articles/2013/09/03/minecraft-pc-sales-at-12-million-franchise-at-33-million http://www.ign.com/articles/2013/09/03/minecraft-pc-sales-at...). 33 Million units at ~$20 is $660 million in revenue. This isn't including development costs, which are low for Minecraft but not zero (I'm guessing $5-$10 million over its lifetime.) Subtracting GTAV's combined development and marketing budget of $265 million still puts it ahead of Minecraft at $735 million, and it still has a lot more runway left.
- kansface 13y ago
  But Take 2 has to share that revenue with retailers. Minecraft has direct sales, no?
  - Miyamoto 13y ago
    > Minecraft has direct sales, no? A cut through the iOS store, a cut through the Google Play store, a cut through Xbox Live Arcade Marketplace. The IGN article says Minecraft sold 12 million on PC, so it's paying cuts on the other 21 million.
  - citricsquid 13y ago
    Minecraft PC sales are almost exclusively Mojang's money (except for merchant fees) except when it comes to the giftcards that can be purchased in stores like Target. Minecraft Xbox is a licensed product so it's fairly safe to assume that Mojang are sharing a non-negligible portion of the revenue with Microsoft. Pocket Edition is sold through mobile stores and developed by Mojang. The Mojang and Notch AB financial records are public -- as it is the way Sweden works -- by the way, if for whatever reason you want to look into the money that they're making.

If this keeps going they're going to end up as profitable as Minecraft!

by staunch 13y ago

If this keeps going they're going to end up as profitable as Minecraft!

Heh, except the cost to develop is much lower. So they will probably never achieve the same level of profitability, even if they achieve better revenue.

pisarzp 13y ago
It doesn't really matter if margins are lower as long they have positive return (NPV) on every additional dollar spend
jaredsohn 13y ago
I think it depends on what you mean by "level of profitability". In absolute terms (i.e. how many coins could you put in a money bin), it should be achievable; but as a percentage (i.e. how you would measure it as an investor) it likely won't get there simply because the expenses for creating Minecraft were relatively low.

Impossible 13y ago

GTA V is already more profitable than Minecraft, even though Minecraft has sold more units across all platforms (http://www.ign.com/articles/2013/09/03/minecraft-pc-sales-at-12-million-franchise-at-33-million http://www.ign.com/articles/2013/09/03/minecraft-pc-sales-at...). 33 Million units at ~$20 is $660 million in revenue. This isn't including development costs, which are low for Minecraft but not zero (I'm guessing $5-$10 million over its lifetime.) Subtracting GTAV's combined development and marketing budget of $265 million still puts it ahead of Minecraft at $735 million, and it still has a lot more runway left.

kansface 13y ago
But Take 2 has to share that revenue with retailers. Minecraft has direct sales, no?
- Miyamoto 13y ago
  > Minecraft has direct sales, no? A cut through the iOS store, a cut through the Google Play store, a cut through Xbox Live Arcade Marketplace. The IGN article says Minecraft sold 12 million on PC, so it's paying cuts on the other 21 million.
- citricsquid 13y ago
  Minecraft PC sales are almost exclusively Mojang's money (except for merchant fees) except when it comes to the giftcards that can be purchased in stores like Target. Minecraft Xbox is a licensed product so it's fairly safe to assume that Mojang are sharing a non-negligible portion of the revenue with Microsoft. Pocket Edition is sold through mobile stores and developed by Mojang. The Mojang and Notch AB financial records are public -- as it is the way Sweden works -- by the way, if for whatever reason you want to look into the money that they're making.