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Minecraft makes $80 million in revenue but hardly any profit

By on March 26, 2012

The Financial Times has uncovered numbers from Minecraft-maker Mojang’s financial statements suggesting the company made revenues of $80 million from Minecraft sales in the 15 months since the game launched in October 2010.

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That figure compares to Rovio’s $100m revenues last year.

But there is a big difference. Mojang only made EBITDA of $13.5m. Rovio claims to be “insanely profitable”. (I remember reading a claim of 90% gross profit, not EBITDA in 2011, falling to 80% in 2012, but can’t find it now. The difference between gross profit and EBITDA is broadly marketing, sales and administrative expenses and R&D, which could drop the figure massively, but Rovio still made a 58% margin in H2 2010.)

So what I’m wondering is: what cost Minecraft $66.5 million in the year. The obvious answer is staff costs but a) the FT says that Notch shared a $3.7m dividend with the rest of company and b) that would be a payout of over $2.5m per person.

If you have any ideas what I;m missing here, let me know.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • http://profiles.google.com/mumblerit Aaron Walerstein

    The rest of the money goes to Jeb for hair shampoo/conditioner

  • http://www.dwlt.net/ David Thomson

    A few things come to mind: hosting costs for the game servers (via Amazon Web Services and which Rovio don’t have so much of), the MineCon event in Las Vegas, the fact they’re also building Scrolls (and the legal fees that went with that!), and (I assume) they commissioned and are at least part-funding the iOS, Android and XBLA editions of the game.

  • http://twitter.com/WickedHatter Edwin Zeng

    how did you know they only made ebitda of 13.5m?

  • Maik Seyring

    The hosting on Amazon is not this expensive (in relation to $80 Millon).
    For one “Quadruple Extra Large”-High Memory-Insance you pay 7000$ a year plus the traffic. So I doubt they spend not more than 100k on their servers.

  • http://twitter.com/WickedHatter Edwin Zeng

    I think you forgot to factor in property related costs too.

  • Simonyschang

    May have something to do with minecrafts’ company structure. Top management and owners may be paying themselves big paychecks to avoid double taxation? Just a guess