Microsoft-owned Mojang, the developer of 'Minecraft,' quietly ended its annual $12,000 holiday bonus for most of its Stockholm-based employees

  • Mojang, the Microsoft game studio behind "Minecraft," quietly restructured its generous holiday bonus plans last year — ending a tradition that dates back to the developers' earliest days.
  • Mojang used to give holiday bonuses worth about $12,000 to every employee in its Stockholm headquarters, but made a change last year such that most no longer receive the full bonus, according to two people familiar with the matter.
  • "In 2019, Mojang Studios made the decision to restructure our compensation model, including our incentive program, to continue on our path toward sustainable long-term growth," a company spokesperson said in a statement to Business Insider.
  • Employees joined Mojang Stockholm with the expectation they would receive summer and winter bonuses, the people said, and even accepted lower salary offers in employment contracts after factoring the bonuses into their compensation.
  • Still, one employee notes that the new bonus structure is a reflection that under Microsoft, Mojang is a bigger and more mature company than it used to be, and that this change brings its policies closer.
  • Visit Business Insider's homepage for more stories.

Mojang, the video game developer behind the "Minecraft" phenomenon, had for years offered employees at its Stockholm headquarters an unusually generous holiday bonus every December: Everybody from the c-suite down to customer service agents received an extra 100,000 Swedish Krona (approximately $12,000 USD).

That tradition continued in the Stockholm office for years, even after Microsoft acquired Mojang in 2014 for $2.5 billionas the developer's new corporate parent sought to preserve the independent spirit that's driven "Minecraft" to reach 126 million players each month in the first place.

Then, last year, Mojang announced plans to restructure the bonus system so most employees in Stockholm would no longer receive the full amount, according to two people familiar with the change. The people asked not to be named discussing internal matters, but their identities are known to Business Insider.

Mojang confirmed the company restructured compensation and bonuses, characterizing it as an investment in the future of "Minecraft."

"In 2019, Mojang Studios made the decision to restructure our compensation model, including our incentive program, to continue on our path toward sustainable long-term growth," a company spokesperson said in a statement to Business Insider. "We want to enjoy Minecraft alongside our amazing community for decades to come, and this decision will help make that possible."

The new structure brings Stockholm-based employees closer to parity with their counterparts at Mojang's Washington office, where employees are largely held to the same compensation and bonus plans as the rest of Microsoft. Some took the change as a signal that Mojang is simply updating its policies to be closer to those of its corporate parent, and that it's a signal of how much larger and more mature the company is than it used to be.

The bonus policy started when Mojang was a smaller, independent company run by eccentric founder Markus "Notch" Persson, an employee told Business Insider. However, Persson left after the Microsoft acquisition, and the reality is that Mojang is now a sizable game studio with 125 full-time employees in the Stockholm office, alone. In that employee's view, revamping holiday bonuses was a frustrating but understandable reality check. 

"Even though I was negatively affected, that's what a real company would do — as painful as it was," that employee said.

The employee, whose duties have included hiring, said the reasoning Mojang leaders gave for the change included that awarding the same bonuses to everybody made it harder to sweeten the pot for big hires, and that decoupling bonuses from performance gave employees less incentive to care how the company was doing financially. 

Still, employees joined Mojang Stockholm with the expectation they would receive summer and winter bonuses, according to the employee and another person familiar with the matter, and even accepted lower salary offers in employment contracts after factoring the bonuses into their compensation. There was also internal criticism that the Mojang executives who made the decisions to cut the bonuses for most employees but retained their own. 

One employee asked during an all-hands meeting in Stockholm whether anyone involved in making the decision had their bonuses lowered, to which one of the people familiar said Mojang's CEO Jonas Mårtensson replied: "No." Some people received a salary bump as part of the adjustment, but it was a "mixed bag," and most Stockholm-based Mojang employees' total compensation fell after the change, according to the employee with hiring experience.

The change provides insight into how Microsoft operates the games studios it acquires, especially noteworthy as the company in September announced plans to buy ZeniMax Media – the company behind hit video game franchises like "Fallout" and "The Elder Scrolls" – for $7.5 billion.

Generally speaking, Microsoft has used a "minimal integration" approach with the game studios it acquire, including Mojang. That's a model that Microsoft has famously used to great effect with GitHub and LinkedIn allowing them to operate with greater independence than has been traditional for big-money acquisitions in the tech industry.

Are you a Microsoft or Mojang employee? Contact reporter Ashley Stewart via encrypted messaging app Signal (+1-425-344-8242) or email ([email protected]).

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