The latest deal came Monday when Microsoft announced a $2.5 billion deal to acquire Mojang, the Swedish firm that's behind "Minecraft," which has more than 100 million players.
Last month, e-commerce giant Amazon agreed to pay $1.1 billion for San Francisco's Twitch, an online video game streaming service that in just three years attracted an audience of more than 55 million viewers.
In March, social network Facebook announced a $2 billion acquisition of Oculus VR, a company that's building a virtual reality headset widely hyped as the next big thing in video games.
Even the Chinese construction firm Zhongji jumped into the video game pool in August when it shelled out $960 million to buy DianDian Interactive and its stable of mobile farm simulation games like "Family Farm" and "Happy Acres."
Those deals might seem shockingly large to those who think of video games as a market still fueled by the bank accounts of players' parents. But the demographics of video games have become so diverse and lucrative that Gartner Research estimates the worldwide video game market generated $93 billion in revenue last year.
Communities of players
And with those games come built-in communities of players that are as big as any other in the entertainment industry - the exact audience pools that the Microsofts, Amazons and Facebooks of the world are eager to reach."You have more people playing in more places with more devices and spending more time in aggregate with more games," said Michael Frazzini, vice president of Amazon Games.
With "Minecraft," which Mojang founder Markus "Notch" Persson launched in 2009, Microsoft gets a game that players are constantly developing themselves. It's called a "sandbox" game, in which players build Lego-style structures from materials they find in a seemingly infinite virtual world. There's no set plot - players are free to explore, collaborate with and battle each other.
And they spend a lot of time doing it.
Wide age range
The game has sold more than 100 million copies on PC alone. Gamers who log on using Microsoft's Xbox 360 video game console have logged more than 2 billion hours of playing time in the past two years. Mojang reportedly generates more than $350 million a year. Warner Bros. has even picked up the rights to a "Minecraft" movie.Equally as important: The game has attracted an audience said to range in age from 8 to 80.
"My kids are 8 and 10, and I wouldn't call them hard-core gamers, but they love 'Minecraft,' " said P.J. McNealy, CEO and founder of the consulting firm Digital World Research.
Microsoft, which built its original empire on computer operating systems and office software, isn't new to video games. The Redmond, Wash., company's Xbox system continues to battle Sony's PlayStation for dominance in the console market, although the next-generation Xbox One lags behind the PlayStation 4 in sales.
But with "Minecraft," Microsoft and its new CEO Satya Nadella are tapping into a game community that crosses beyond its own ecosystem and reaches into the popular Apple iOS and Google Android mobile platforms.
"It's a huge sea change for Microsoft to admit going vertical is not the right strategy going forward," McNealy said.
This year's big tech firm acquisitions illustrate a wider trend in technology, he said.
"We're at an inflection point where the big companies are empire building again," he said. "So Amazon buys Twitch so they can get into the entertainment space with a company centered on gaming. Apple puts out its iPhone, a new payments system and a watch to build on their empire."
Top execs not included
Analyst Brian Blau of Gartner Research said the bigger companies are also after new technologies that they would not be able to create quickly on their own."Game developers tend to push the envelope of what can be done with a device or an app," Blau said.
But acquisitions aren't without hitches. Microsoft - unlike Amazon, Facebook or Zhongji - isn't gaining the expertise of Persson or Mojang's top executives, who are leaving.
And Microsoft doesn't have a good track record with acquiring other companies, Blau said.
"I hope they don't screw this up because they will have squandered the money and the opportunity they have," he said.
©2014 the San Francisco Chronicle
