They are VERY dependant on other companies. What happens if their ISP goes under? Or their energy supplier? Or the server hosts? Or their insurance company? Or even the health care fund that supports their employees?

 

 

 

In struggling families, a computer and internet are not necessary unless they are used for work purposes. I'm not sure how much it costs over your part of the world, but If I drop my internet and computer here, it's enough of a saving to feed my family each month. It could easily be the difference between losing my house or not. (I've already lost my house, but thats beside the point)

 

 

 

The companies location and it's owners don't matter. We WILL suffer from a domino effect because of the U.S recession, and it will affect everyone in one way or another.

Also whoever it was who talked about prices of computers shame on you! Once a computer is bought and you almost never sell it unless to get a better one. Runescape has never needed next gen graphics or this is barely a issue. Everybody has and uses a computer and internet in todays world and nobody is going sell it as the pros easily outweight the cons.

 

 

 

No, shame on you. I don't know how you define "this world", but there's a reason why the digital divide is considered a real and important social issue and a part of social exclusion.

 

 

 

Read this for an eye-opener.

Also whoever it was who talked about prices of computers shame on you! Once a computer is bought and you almost never sell it unless to get a better one. Runescape has never needed next gen graphics or this is barely a issue. Everybody has and uses a computer and internet in todays world and nobody is going sell it as the pros easily outweight the cons.

 

 

 

No, shame on you. I don't know how you define "this world", but there's a reason why the digital divide is considered a real and important social issue and a part of social exclusion.

 

 

 

Read this for an eye-opener.

 

 

 

 

 

right so people without computers in the first place are going to somehow effect jagexs profits? Once you bought qa computer you don't need to resell it. Its like a car. It is very unlikey you will sell a car for good without replacement as you will not get massives more it and the job it allows you to get allow you to get more income to cover the running cost of the car. Don't confus this with selling a luxary car for a cheap version as you still have a car.

 

 

 

 

 

They are VERY dependant on other companies. What happens if their ISP goes under? Or their energy supplier? Or the server hosts? Or their insurance company? Or even the health care fund that supports their employees?

 

 

 

 

I have no idea what ISP is but off hand, i see no reason why they would just swap to another suppiler like with energy suppilers. I pretty sure Jagex owns its own servers or agian would swap to another server prodicer. Health care for workiers? well seeing as the NHS is owned by the goverment this is ludicrus. The biggest cost of a budget in software which is what i would put Jagex under is staffing. And seeing as the company is expanding i asume, Jagex would cut jobs if cost raised.

The recession can easily begin to impact upon Jagex. No company is entirely self sufficient. For example, due to share prices falling, the server hosting companies could be forced to rise their prices. Jagex suddenly has higher expenses, and needs to raise membership prices. Higher price of membership could potentially cause members to "leave" the game, further impacting cash flow. More members leave, even less money coming in, prices begin to rise again, or we lost servers, customer support personnel, updates, etc. We lose those things, even more players leave the game.

 

 

 

Why would other companies raise their hosting prices because of the share price dropping?

 

 

 

Like most companys, Jagex probably have money tied up in term deposits and shares of other companies.

 

 

 

Most likely, but this wouldn't affect their liquid cash for operations much.. They would take a hit on the balance sheet but i can't see this raising their membership prices

 

 

 

As the shares the company owns begin to drop in price, which by the way, is decided by fellow traders, and NOT by the company past the initial sale, the net worth of investors sinks, causing them to (generally) need to replace the money they have lost. To replace it, they increase the prices of their goods and services. As these things become more expensive, most people need to sell off shares to cover expenses, and they are forced to sell at lower prices, which drives the market even lower. As superannuation companies and banks invest in shares & currency, people can lose their retirment funds, and have their loan interest rates shoot up, which then causes THEM to increase the prices for their goods and services.

 

 

 

Umm.. As far as i know Jagex isn't a public company. Therefore i don't understand what you mean by this? Maybe you are saying Jagex's investment in other companies have dropped?

 

 

 

"But then the government will just bail these companies out, no?" Well, no. Because sooner or later, with the government spending money it doesn't have, inflation becomes a problem.

 

 

 

American Government is already printing money to bail out companies over there. I don't see this crisis happening to someone like Jagex at all, not even in europe for the time being.

 

 

 

I ended up in a bit of a ramble, but it's 3am, and I've been at work since 7am. I'm sure you can extract some useful information from it.

 

 

 

i know....

 

 

 

i do economics at college. however shares can be sold to generate revenue, which is related to jagex making money to be able to continue with rs...

 

 

 

Sell shares in what exactly?

 

 

 

They are VERY dependant on other companies. What happens if their ISP goes under? Or their energy supplier? Or the server hosts? Or their insurance company? Or even the health care fund that supports their employees?

 

 

 

Good Point Here. But what would make these companies go under exactly?

 

 

 

In struggling families, a computer and internet are not necessary unless they are used for work purposes. I'm not sure how much it costs over your part of the world, but If I drop my internet and computer here, it's enough of a saving to feed my family each month. It could easily be the difference between losing my house or not. (I've already lost my house, but thats beside the point)

 

 

 

I can't see mum & dad investors in Europe relying solely on an income from their investments. I also dont forsee any Banks toppling in the near future.

 

 

 

The companies location and it's owners don't matter. We WILL suffer from a domino effect because of the U.S recession, and it will affect everyone in one way or another.

 

 

 

Yes, it DOES matter. I'm Australian, even though we are being hit, it will be nowhere near the extent that america has been.

I have no idea what ISP is but off hand, i see no reason why they would just swap to another suppiler like with energy suppilers. I pretty sure Jagex owns its own servers or agian would swap to another server prodicer. Health care for workiers? well seeing as the NHS is owned by the goverment this is ludicrus. The biggest cost of a budget in software which is what i would put Jagex under is staffing. And seeing as the company is expanding i asume, Jagex would cut jobs if cost raised.

 

 

 

Nice one. ISP = internet service provider. Sometimes it is not as simple as "just swapping". Jagex does not own their own servers, they rent them. In both cases, there are these tiny little things called contracts. You can't "just swap". If the ISP or server companies go under, and can no longer honour their contracts, Jagex is out of pocket. Sue them? Sure, but THAT takes time, and money, which the company has none of. Jagex decides to pull out? They have to pay out their contract, or get sued.

 

 

 

Jagex includes PRIVATE HEALTH CARE in their salary packaging. So, your argument there is flawed. Even cutting jobs costs money. You can't simply fire people in this day and age. If they cut jobs, it also cuts output, which further decreases earning potential. Take a minute to think, and maybe do a little research before you post.

Craven Range:

 

 

 

Because they have connections to other companies, who have investments. BANKS have investments. INSURANCE COMPANIES have investments. SUPERANNUATION FUNDS have investments. If a companys net worth decrease rapidly, say by their investments dropping in value, they will more than likely have to raise the price of their goods and services to increase income.

 

 

 

Liquid assets aren't everything in business. The business' overall value is just as important for its future. And companies must look towards the future to be successful, be it in 5 years time or 30 years time.

 

 

 

What I was explaining then is how share prices dropping can affect people who have very little connections to the investment market.

 

 

 

For the time being. This paragraph is to prematurely answer that question, which I assumed would be raised because of the US government doing it. Incase you didn't know, Britain also has a rescue plan in the works, worth over 250 billion pounds. Jagex is based there, correct?

 

 

 

What would make those companies go under? Read my posts you are quoting, and you will see just how it can happen.

 

 

 

Plenty of people, and families, make their sole income from trading. Banks in Iceland, Britain and America are already losing money fast. Governments all over the world are introducing "bailout" plans, which will eventually lead to higher taxes, which can lead to inflation.

 

 

 

You contradicted yourself in your last comment. You think I'm wrong, yet admit I'm right?

Didnt the uk government invest tons of money to solidify their economy lately? Jagex should be fine.

I didn't bother reading the whole post, but here's few points...

 

 

 

 

 

 

 

1. Jagex is not a public stock company. This means that the general stock value doesn't have same kind of swings (currently downfallish) as the public ones. This means that it's hard to see Jagex getting into a snowball affect where bad results feeds bad results and the general belief drops the value.

 

 

 

 

 

 

 

2. The way how Jagex produces their commodities is quite simple: you don't necessarily need any big investments in the near future and even if they did, I'm relatively sure a company with their revenue and not falling stock price (=aka no bad beliefs) could get loans quite easily.

 

 

 

 

 

 

 

3. The most money comes from investments that are approximately 5-10e/month and from a large number of people. It would need a huge depression to cut down that flow of income: it's not really something you could compare for the companies that are suffering atm. If we compare RS to WoW on this aspect, RS is a bit ahead of them due f2p and easier ways to limit the p2p time.

 

 

 

 

 

 

 

4. If I've understood right, Jagex doesn't have major debts. This means that even if the interest rates rose a lot, Jagex wouldn't face huge problems.

 

 

 

 

 

 

 

5. The United Kingdom has been putting a lot of efford to keep the banks alive. It would require a huge swings to make them crash and if this happened, Jagex wouldn't be the only one suffering and the damages caused to RS wouldn't be our main concern.

 

 

 

 

 

 

 

6. Jagex is a widely known brand. Selling advertisement space from the game would easily create more money to Jagex. Yea, maybe watchin a Nike logo at the centre of the GE wouldn't be nice but hey, money talks.

 

 

 

 

 

 

 

7. Around half of the Jagex staff are working at the customer support. This means that cutting the salary (+other mean costs caused by the labour) costs would be relatively easy and wouldn't affect to the final production too badly.

 

 

 

 

 

 

 

8. There's plenty of half free server space if you're ready to cut a bit from the quality.

 

 

 

 

 

 

 

8+7 = It's easy for Jagex to cut solid costs without a huge affect to the ending production. If things went bad this could, if not save, at least give more time to recover.

 

 

 

 

 

 

 

9. Jagex is pretty 100% working on the virtual world. Rosen delivery costs or other nice things won't affect to it almost at all. In the other words, as long as there are banks to do the money transfers and servers to host the game, Jagex doesn't need to care what the other companies are doing. I know I'm exaggerating a bit here but hope you get the point.

 

 

 

 

 

 

 

Nice one. ISP = internet service provider. Sometimes it is not as simple as "just swapping". Jagex does not own their own servers, they rent them. In both cases, there are these tiny little things called contracts. You can't "just swap". If the ISP or server companies go under, and can no longer honour their contracts, Jagex is out of pocket. Sue them? Sure, but THAT takes time, and money, which the company has none of. Jagex decides to pull out? They have to pay out their contract, or get sued.

 

 

 

 

 

 

 

Jagex includes PRIVATE HEALTH CARE in their salary packaging. So, your argument there is flawed. Even cutting jobs costs money. You can't simply fire people in this day and age. If they cut jobs, it also cuts output, which further decreases earning potential. Take a minute to think, and maybe do a little research before you post.

 

 

 

 

 

 

 

 

 

 

 

You miss the point pretty badily.

 

 

 

Company don't cut jobs to lose money they do it if pulling it will be cheapier than paying them there years work in the future. If servers are under contract that almost always means a fixed rate so they can only change when the contract up so i was right Jagex can then move servers.

 

 

 

 

 

 

 

Being a incovence is irelivent. If it means Jagex staying in business they will do it. Its like describing dodging bullet a hassile. I never said to fire people for the fun of it which your are making out. Before you come back make you you understand business.

Runescape is an essential part of many people around the world, so the UK government would give financial support if things would go wrong, at any cost. ;)

 

 

 

 

 

 

 

But serious, i don't think Runescape will be hit harder by this economic situation than other companies. They get their money from members all over the world, not from other companies, a big advantage, and the online games sector is still a market of growth.

 

 

 

 

 

 

 

Jagex should be concentrating on creating a 'good' game, rather than worrying about the current situation. Perhaps they have to be a little more careful with investments, keep enough cash in their business, but other than that i don't see any huge dangers.

Yeah, i'm worried about RS future in this world economical crisis...Will it affect RS too or even end it if it gets worse? :ohnoes:

 

 

 

 

 

 

 

Hopefully not :pray:

 

 

 

 

 

 

 

STOP SCAREMONGERING, you obama votin' gun totin' fool'

The first thing to understand is that the UK is practically in a recession, this mean two quarters of negative growth i.e. the economy has shrunk for half a year. The second thing to understand is that this "credit crunch" is exactly what it says, that it is harder to gain credit at an affordable rate. The third thing to take note of is how the economy is being hindered by the high inflation, high rate of interest and low confidence.

 

 

 

Ok... so we know that Jagax is an independent business and that it is not a public company, this first limits it's direct exposure to the economy it is unlikely that short selling will occur on it, which nearly brought down Halifax Bank Of Scotland, HBOS.

 

 

 

Cash flow is hardly an issue at this moment for Jagex as they are a successful business and banks abet are cautious will lend to Jagex, if they need the money, if they dont get a loan from the banks they still have sufficient assets to carry on.

 

 

 

Ok some of you have mentioned rising costs yes this is true. Inflation and the price of oil have a great deal to do with all of the economy, prices are rising but the are staring to peak and will slowly start to decrease. Other people have mentioned how they are reliant on other companies, this is the case yet if the other company goes "bust" it wont effect Jagex on a huge scale. They will just have to change different suppliers and they wont lose out because of they do not break the contract the supplier does and so they cannot demand money from Jagex.

 

 

 

Membership will start to fall but those that were members are most likely to stay and become F2P, Jagex will still gain revenue from people. Jagex is also not just limited to RS, they have other assets like funorb, I think they also own their headquarters.

 

 

 

 

 

The revenue of RS is through 2 different sources Adverts and membership will probably fall so they earn less that way. Yet adverts are unlikely to decrease their profit as huge corporations will still advertise although they wont spend as much on it. So really Jagex's profit margins go down but they are unlikely to lose money.

 

 

 

Depresins talked about a health care fund for Jagex's employees but Jagex is a relatively small company and is unlikely to have one.

 

 

 

Jagex is unlikely to fail and it is mostly likely to try and sell some of it's other enterprises cut jobs and slow the amount of updates before it decides to close runescape. It is very likely to collapse in the current economical crisis because of its constant stream of revenue. If Jagex does collapse RS is a high profile venture and will most likely by bought thus meaning it will carry on but in another companies control, in a very extreme case.

 

 

 

Anyway if a depression does hit, which is the most likely thing to destabilise Jagex, would RS be the most important thing on your mind?

 

 

 

Jagex is not going to collaspe and so RS will still live on.

 

 

 

A good indicator to a companys future is whether it is still expanding and if they are still offering jobs as that shows confidence and so is unlikely to collapse.

Depresins talked about a health care fund for Jagex's employees but Jagex is a relatively small company and is unlikely to have one.

 

 

 

As I've said previously, do some research. Spend maybe 30 seconds on the Jagex website to find your answer.

 

 

 

As I'm on my phone, I can't feasibly respond to the posts until after work, but many of you are failing to see the bigger picture, and basing your posts on opinions, not experience. A company must always look towards the future, but in times like these, the short term matters just as much. Just thinking about supply & demand for a few minutes will show you just how intertwined finances are in this day and age. The fact that a majority of the world is entering a recession just proves it.

I think there is a reasonable chance Runscape subscribers may actually increase a result of the economy. People who play online games often use them as an important part of their lives, and is not a luxury that they would cut unless they get really desperate.

 

 

 

However the idea of switching games is more apealing. Runescape is in a great position where they are the western worlds second biggest MMO, whilst also being one of the cheapest on the market for subscribers.

 

 

 

I would expect games like WoW to be hit far worse possibly losing a large portion of players to Jagex,this may not have happened pre Pking worlds and graphics though due to the nature of WoW players.

 

 

 

But that is only on the games sucsess side, the other is how JAgex keeps it's money.... and we cant really talk about this as we don't know, but I assume they have allot of investments with public companies which may effect them.

 

 

 

I asumewith the size of investment Jagex needed for the development of MEchscape (probaly in the region on 50million) and the runescape HD option they do have some large debts currently, and would guess funorb is only scraping a profit *currently*, but I feel they are quite safe.

 

 

 

If funorb fases issues they can easily move developers around to cut costs on the prodject till it picks up, but they should be fine

I think there is a reasonable chance Runscape subscribers may actually increase a result of the economy. People who play online games often use them as an important part of their lives, and is not a luxury that they would cut unless they get really desperate.

 

 

 

However the idea of switching games is more apealing. Runescape is in a great position where they are the western worlds second biggest MMO, whilst also being one of the cheapest on the market for subscribers.

 

 

 

I would expect games like WoW to be hit far worse possibly losing a large portion of players to Jagex,this may not have happened pre Pking worlds and graphics though due to the nature of WoW players.

 

 

 

But that is only on the games sucsess side, the other is how JAgex keeps it's money.... and we cant really talk about this as we don't know, but I assume they have allot of investments with public companies which may effect them.

 

 

 

I asumewith the size of investment Jagex needed for the development of MEchscape (probaly in the region on 50million) and the runescape HD option they do have some large debts currently, and would guess funorb is only scraping a profit *currently*, but I feel they are quite safe.

 

 

 

If funorb fases issues they can easily move developers around to cut costs on the prodject till it picks up, but they should be fine

 

That's a good point, RS may benefit in the same way as, say, cheap supermarkets have. It just depends on how easily the average RS gamer could give up gaming. This is going to be interesting.

There is no possibility of runescape dieing or even losing f2p. Ads can pay for the game to stay in tact just with no updates.

I agree with the fact that the recession will decrease the number of subscritptions if it becomes severe, but Jagex will just reduce the size of their company to lower expenses; as a few people will play even if they have to fake their own deaths, it is unlikely to ever completely shut down RuneScape.