Yesterday Microsoft announced it would acquire Mojang along with its massive Minecraft gaming franchise for $2.5 billion. By now we've all seen the coverage, including the gratuitous interviews with middle-schoolers about whether Microsoft is "cool" enough to own Minecraft. By and large, we think this is a good acquisition for Microsoft, and we said as much in our Quick Take, just published this afternoon, summarizing the acquisition, its benefits, and its challenges for Forrester clients. Go to the report to read the client-only details of our analysis: "Quick Take: Microsoft Mines Minecraft for the Future of Interactive Entertainment." As we explain in the report, there are specific challenges Microsoft will face that will determine whether this ends up being a sensible acquisition or a sensational one. 

Beyond the detailed analysis of the report, it's worth exploring the long-term question of what that sensational outcome would look like. The difference turns on the question of whether Microsoft is ready to invest in the future of digital interactive entertainment. This is a subtle point that has been missed in most analysis of the acquisition. Most people insist on covering the purchase as a gaming industry event. Microsoft, the owner of the Xbox, buys Minecraft, a huge gaming franchise. But that low-level analysis misses a bigger picture that I sincerely hope Microsoft is actively aware of.

That bigger picture is this: Since as long as there have been people fretting about the future of media and entertainment, they have harbored the conviction that interactive media would someday be huge. Billions of dollars have been poured into interactive TV trials dating back to the 70s, not to mention CD-ROMs, the Web, and now mobile and tablet companion apps for TV viewing, all under the assumption that someday interactive entertainment will be a big deal, potentially disrupting the linear storytelling model of TV and certainly creating a new multibillion-dollar industry. But even as these things have come and some have gone, they have not fundamentally replaced linear narrative media. TV shows still proceed from first to final frame, and even video games like Halo follow a narrative arc in which the users can play but not truly create. Some attempts to break this mold have succeeded for a time, including Second Life, which had no narrative but also had no staying power, and Spore, a highly creative creature- and world-building environment that left the creative act to the user but ultimately steered each creation down a clever narrative path.

Minecraft changed all that. Minecraft, with its low-resolution blocky characters and landscape, offers up a truly pointless world in which people build and explore. And that's precisely the point. The Minecraft world could, with modest investment, grow to become as many things as people choose to make it. Already we see people using Minecraft as a toolset to create architectural renderings. Others create models of human physiology for medical students to explore. The creative tool set is so simple — and the number of people who know how to navigate the rendered worlds of Minecraft is so high — that it's amazing no celebrity has released their own Minecraft world filled with creative renderings of their favorite things or even products that they endorse.

As we say in the report in passing, Minecraft is everything that Second Life never could have been. And it has only begun to infect the world with its open-ended narrative-optional mindset. In some ways, Minecraft really should be called Mindcraft, because that's exactly what it's doing for generations of people growing up with it. Will these kids be content a decade hence with the restrictive linear experiences of the past? Not that they will abandon movies or TV shows or even what we might then refer to as "traditional" gaming. But they will also be open to a much bigger world. And for the sake of posterity, I will briefly describe that world for you:

  • Virtual reality (VR) will finally make sense. I haven't been bullish on VR for anything other than console gaming because the execution has so far been limited to a narrow range of applications, many of which can also be experienced with less invasive augmented reality solutions. Plus, to create compelling VR experiences will require millions of dollars of investment. Unless they're built with Minecraft tools. Then suddenly, the idea of VR for short-term lightweight experiences makes a lot more sense. Especially when you can achieve it Samsung-Gear-VR-style, where you put your phone screen in a headset and it becomes a good-enough solution for immersive VR (but can also use the camera on the phone to mix the virtual and real worlds into a seamless experience). 
  • Minecraft models will be common education resources. Teachers today sweat over combining videos, textbook references, and worksheets to prepare class time. In the Minecrafted future, teachers will build virtual spaces that have movable parts and full-scale models of molecules, star systems, or historical events. They'll use Minecraft VR experiences to "walk through" the Kennedy assassination site, the moon landing, or a recreation of the Continental Congress that produced the US Constitution. By then, Minecraft models will offer high-resolution options to extend the low-res toolkit, but many scenarios won't even need it, since understanding will be the goal, not verisimilitude.
  • 3D cameras will create Minecraft worlds. Imagine a soccer coach recording a soccer game on one or more 3D cameras — the kind of cameras that Microsoft already packs into the Kinect and that Google has recently been adding to phones and tablets in its labs. At the next practice, the kids will don their Gear VR headsets and walk through a life-size recreation of key plays of the game, seeing and interacting with Minecraft versions of themselves and changing what they did in the game to see how the play would have ended had they managed it differently. Yes, capturing the world in video is nice, but capturing it and then recomposing it as a virtual explorable reality is captivating.

Then marketers will have a whole new world of tools at their disposal. Sure marketers will still create 30-second TV spots, but they'll also go beyond those spots to the TV show's Minecraft companion world, where viewers can walk into the set and play with the props, including those placed there by the sponsors. Yes, this is years away, but as I told The New York Times late last week when the acquisition was still speculative: Minecraft is the interactive thing that we have all been waiting for for years. And Microsoft now owns it. Let's hope Microsoft's Nadella is as interested in this cool future as we are.

James McQuivey, Ph.D., is a principal analyst at Forrester Research. He is the author of the book Digital Disruption and generally sees the world through digital-colored glasses.