Microsoft Corporation (MSFT)’s Mojang AB Is Also About Intellectual Property

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Microsoft Corporation (NASDAQ:MSFT)’s rumored deal to buy Mojang AB, the maker of the popular game “Minecraft,” is probably also about intellectual property, Morningstar’s Norman Young said in a discussion on CNBC.

The comment from the Morningstar senior equity analyst about the deal comes after Microsoft Corporation (NASDAQ:MSFT) has been reported by The Wall Street Journal to be close to buying Mojang AB for over $2 billion.

“[Microsoft has] been able to hit a few successes with some of their acquisitions, especially some of the software ones, and I feel like this one is a little different as well. It’s a small company [that’s] already profitable. […] If they are smart about it, it’s not just the game, it’s kind of leveraging the [intellectual property]that’s behind the game,” the analyst explained at the end of the interview.

Early in the interview, Young explained that Microsoft Corporation (NASDAQ:MSFT)’s interest in the video gaming company may be explained as a move to strengthen the Windows-maker’s intellectual property portfolio in terms of being able to offer games on different platforms like mobile with Android and iOS and personal computers with Windows- and Mac-based systems.

“Minecraft” is available on a plethora of platforms including game consoles, personal computers and mobile devices. The game accounts for about 90% of Mojang AB’s revenues.

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Meanwhile, Young also echoed what Bloomberg Intelligence analyst Anurag Rana said in a recent discussion on Bloomberg that the deal will not be very significant for Microsoft Corporation (NASDAQ:MSFT) when seen from a financial perspective.

Young said that the technology giant reported about $86 billion in cash reserves by the end of the second quarter with about 90% stashed outside the U.S. The analyst said that the company will likely tap into this trove to buy Mojang AB.

Jean-Marie Eveillard’s First Eagle Investment Management reported about 35.67 million shares in Microsoft Corporation (NASDAQ:MSFT) by the end of the second quarter of this year.

Disclosure: None

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