NEW YORK (TheStreet) -- Microsoft's (MSFT) purchase of Minecraft publisher Mojang gives it a strategic opportunity no one is talking about: getting back into the business of digital game distribution.
Microsoft could use Minecraft to challenge the clear leader in distribution: Valve's Steam. According to IHS Screen Digest, the Steam platform has a 75% market share. In 2013, DFC Intelligence estimated the size of the market at $5.5 billion.
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Even though Steam was launched more than a decade ago, in 2003, it's still growing rapidly. In January, Valve co-founder Gabe Newell said the company had sales growth of 65% with 65 million accounts, but a few weeks ago Valve said user accounts had increased to 100 million.
Privately held Valve also has a great track record developing its own games. Successful franchises include Dota 2, Half-Life, Team Fortress, Left 4 Dead and Counter-Strike.
A few years ago Forbes valued Valve at $2 billion to $4 billion, but given Valve's recent user growth, large market, valuable intellectual property and Steam distribution business, one can easily come up with an estimate of the company's value at $8 billion without making aggressive assumptions.
To understand why Minecraft is important for Microsoft to compete with Valve, one must look at Steam's history.
When Valve developed Half-Life 2, it wanted to easily update the game and protect it from piracy. By offering an easy patching feature and always-on digital rights management, Steam addressed both needs.