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Mojang Follows Up 'Minecraft' With 'Scrolls'

Camilla Louise Lyngsby
Wednesday, 20 Mar 2013 | 1:18 PM ET
Scrolls
Source: Mojang
Scrolls

As Mojang, the maker of the popular videogame "Minecraft," gets ready to release the beta version of its next game "Scrolls" at the end of April, it is targeting an entirely different type of gamer.

Trying to best "Minecraft" would be no easy feat, according to the company. Mojang has sold more than 20 million copies of the game on PC platforms, mobile devices, and the Xbox 360 since inception, netting Mojang $235 million in revenue last year.

"We could never anticipate this kind of success. Who could?" said Carl Manneh, Mojang's 35-year-old co-founder and CEO.

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With "Scrolls," Mojang isn't taking the safe path of releasing a game that is similar to "Minecraft" and targeted to the same audience it has come to know and understand. Instead, it is looking to create a totally different game experience that would appeal to a hardcore gamer.

"Scrolls," a strategic role-playing game where the player creates a personalized army before going to battle with other players, is a new take on collectible card games, such as "Pokemon" and "Magic: The Gathering." It also draws inspiration from traditional board games.

"Mojang is the leading independent developer," said Billy Pidgeon, a research analyst at Go Play Research. "Their profit margins are just astounding and their business model is very sustainable to fund new games."

Much like "Minecraft," "Scrolls" will be released as a beta version, which means the company sells the game before it is completely finished and releases updates that improve the game as the company reacts to comments from players. The game's early adopters will receive a discount, as opposed to players who buy later versions of the game for full price.

"We release it early because we want the community to come in and help us to get to the next level," said Jakob Porser, co-founder and creator of "Scrolls." For Mojang, the instant feedback is tremendously important. "Gamers know what they want," he said.

Just as Mojang did with "Minecraft," there will be periodic updates and new features. Plus, since it is a collectible card game at its heart, players can purchase additional cards, or scrolls, or items for their on-screen characters.

Compared to "Pokemon," "Scrolls" is an inexpensive game, according to the company. The creators have designed the game in a way in which the player doesn't need "a fat wallet to buy new scrolls in order to be competitive and to win," Porser said. When players buy the game, all the content is available to them and new content can be earned by playing the game. The game is packed with new scrolls, and players can get ranked against others, and play in groups or in single-player matches.

"Scrolls" will be released on PC/MAC platforms, Android, and iOS. The company is currently considering other platforms, as well.

Co-founder and CEO Manneh said it will be hard to follow up with another game with the same kind of reach as "Minecraft," because it appealed to so many different types of players—young and old, male and female—but he expects that while "Scrolls" will be popular, players will be mostly male.

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Beyond "Scrolls," the company also is continuing to provide "Minecraft" fans with new offerings, such as "Minecraft Realms." In "Realms," players can pay a monthly subscription fee to access servers that will host the increasingly complicated worlds players are creating. The company is aiming to launch the service before the summer.

"This is the first time in the company's history that we are going to have recurring revenue—this is very big for our company," Manneh said. Mojang executives know that, at some point, sales of the original game will decline, but believe the "Minecraft Realms" series could generate revenue for a long time to come.

'Minecraft': Building Success Block by Block
Carl Manneh, Mojang CEO, discusses how his privately-held company has become a more than $1 billion success, and why he has no plans of going public, despite acquisition offers.

Go Play's Pidgeon said "Minecraft Realms" provides Mojang with great growth prospects and expects "Minecraft" will continue to be the company's cash cow.

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Mojang is also mulling partnerships with new platforms for "Minecraft" as soon as the company's current exclusive deal with Microsoft expires.

Mojang is a three-year-old private company, and Manneh said he wants it to stay that way. "We have no plans of going public," he told CNBC's "Squawk Box" recently.

If it were publicly traded, it is estimated that Mojang could be worth $1 billion or more, according to some analysts.

Doing the math, Robert W. Baird & Co. analyst Colin Sebastian said there's precedence for private growth companies to be valued at five times their yearly revenue, or in some cases even more.

Mojang has received acquisition and investment offers from various videogame businesses and other investment firms, "but we have turned down every single offer," including a bid from Sean Parker of Napster and Facebook fame, Manneh said.

It's not easy to turn down all these offers, he said, "but we want to stay small and independent, and our biggest value is our community of players—if we lose that relationship, we don't have that much left."

By CNBC's Camilla Louise Lyngsby

(CLARIFICATION: Mojang is following up on its success with "Minecraft" with a game called "Scrolls," which is targeted to a "hard-core gamer." An earlier headline incorrectly implied "Scrolls" would attempt to best "Minecraft.")

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