Why Analysts Like Microsoft's (MSFT) $2.5 Billion Deal for Mojang

This story was updated from 10:40am EST with analysts comments, stock price update.

NEW YORK (TheStreet) -- Microsoft (MSFT) plans to acquire Mojang, the Stockholm-based creator of the popular multiplayer video game Minecraft, for $2.5 billion, the Redmond, Wash.-based company announced on Monday.

Since its launch in 2009, the game has been downloaded over 100 million times on PCs alone with millions of more downloads and sales on the Xbox, Sony's  (SNE) Playstation and mobile platforms. The deal is expected to close later this year.

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"Minecraft is more than a great game franchise," said Microsoft CEO Satya Nadella. "It is an open world platform, driven by a vibrant community we care deeply about, and rich with new opportunities for that community and for Microsoft."

Microsoft shares declined 0.97% to $46.24 on Monday. Here's what analysts said about the deal.

Keith Weiss, Morgan Stanley (Equal Weight)
The addition of Minecraft to MSFT's portfolio will strengthen the Xbox platform but more importantly provide a broader entry into mobile computing across a younger base. 5x NTM sales (with offshore cash) for an asset growing >30% with >40% op. margins is a good investment, in our view.

Norman Young, Morningstar (Hold)
[We] believe Mojang's value to Microsoft lies in the massive network of users (between 50 million and 100 million) of its popular "Minecraft" game and the large device ecosystem in which the game is played. By acquiring this wildly popular game that is played by virtually every demographic, Microsoft ensures that this content will be available for all of its devices. Because the transaction is only a fraction of Microsoft's sales, we don't expect near-term results to meaningfully change our estimates and are leaving our $46 fair value estimate and wide moat rating unchanged. We believe the stock is currently fairly valued and would await a larger margin of safety before investing.

TheStreet Ratings team rates MICROSOFT CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate MICROSOFT CORP (MSFT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

You can view the full analysis from the report here: MSFT Ratings Report

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