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Jagex Limited receives growth investment from new investors

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http://www.cambridgenetwork.co.uk/news/article/default.aspx?objid=78922

Date: 08/02/11

Jagex Limited receives growth investment from new investors

Jagex Limited, a leading independent developer and publisher of online games, today announced it has accepted a new investment from Insight Venture Partners, Spectrum Equity Investors and The Raine Group. The investment will enable Jagex to accelerate growth of its development and publishing capabilities in support of continued enhancement of the Studio’s portfolio of award-winning games.

 

 

“Insight has been part of the Jagex family for a number of years and it has been a real pleasure to serve alongside them on the Jagex board," said Mark Gerhard, Chief Executive Officer of Jagex, who will continue to lead the company following the investment.

 

“Both Spectrum and Raine bring a wealth of expertise and it gives me great delight to be able to welcome them to the Jagex team. It’s a great privilege to serve alongside such esteemed individuals and their wider organizations. This investment will hugely benefit both the Jagex team and our loyal community and I’m confident that Jagex will continue to go from strength to strength. I fully expect that the collective experience of the shareholder base will be highly advantageous as we embark on our next chapter of growth.”

 

Jagex is the UK’s largest independent games developer and publisher, with dedicated user base of millions playing Jagex’s games worldwide. The Company’s flagship game, RuneScape, holds numerous Guinness World Records, including that of the world’s most popular free-to-play massively multi-player online game (MMOG). In addition to Jagex’s in-house development, the company also acts as a 3rd party publisher for developers of great content. Jagex recently published its first 3rd party title, War of Legends, and the company intends to release numerous 3rd party games throughout the next 12 months.

 

“Jagex has long held a leadership position in bringing to market innovative, entertaining and sophisticated online games”, said Jeff Horing, Managing Director at Insight Venture Partners. “Jagex’s team has been developing several new games in the same tradition; our new investment will help accelerate their successful launch.”

 

Brandon Gardner, a Partner at Raine, commented, “Jagex is the standout player in one of the most attractive and fastest growing segments of the games industry. We are excited with both the near- and long-term growth opportunities at the company, and look forward to working with Jagex’s founders and management team to continue to develop their industry-leading MMOG platform.”

 

Jim Quagliaroli, Managing Director of Spectrum Equity Investors, further noted, “We are very pleased to support Jagex’s growth. RuneScape is a highly successful free-to-play and subscription-based online game with an enormous community of virally-generated players. We look forward to supporting new growth initiatives as the Jagex team builds on RuneScape’s global franchise.”

 

As part of the investment, Chris Mitchell and Jim Quagliaroli of Spectrum Equity, and Brandon Gardner and John Salter of Raine, will join Jagex’s board of Directors. Mark Gerhard, along with Jeff Horing and Alex Crisses from Insight Venture Partners, will continue to serve as Directors of the company.

 

 

 

 

About Insight Venture Partners

Founded in 1995 Insight Venture Partners is a leading growth oriented, entrepreneur focused venture capital and private equity firm focused on expansion and late stage investments in the global software, Internet, and data services industries. Insight’s team is composed of experienced investors and operating executives with more than 150 years of collective experience in its focal industries. With almost $5 billion raised since inception and a large network of technology industry experts, Insight provides strong support to its portfolio companies. In 2009 Insight was named among the Top Ten VC’s Globally by Red Herring Magazine. www.insightpartners.com

 

About The Raine Group

The Raine Group is a boutique merchant bank focused exclusively on entertainment, digital media and sports. Founded in 2009 by Joseph Ravitch and Jeffrey Sine, in partnership with WME Entertainment, Raine has offices in New York, Los Angeles, Palo Alto and Beijing. With a global reach, Raine focuses on growth equity investments where its deep industry experience and unique network of strategic relationships, limited partners and advisory board members can create value for portfolio companies.

 

About Spectrum Equity Investors

Spectrum Equity Investors is a private equity firm focused on investing in profitable, growing businesses. Founded in 1994 with offices in Boston and California, Spectrum manages over $4.7 billion in capital across six funds. Spectrum has been an active investor in online media franchises including Ancestry.com (NASDAQ: ACOM), Demand Media (NYSE: DMD), and SurveyMonkey, as well as electronic information service providers such as iPay Technologies (acquired by Jack Henry & Associates), Passport Health Communications, RiskMetrics Group (acquired by MSCI), Seisint (acquired by LexisNexis/Reed Elsevier), and World-Check.

 

 

About Jagex Limited

Jagex Games Studio is a multi-award winning games developer and publisher based in Cambridge, England. Jagex specializes in the development of high quality online games and is the largest independent games developer and publisher in the UK.

 

Jagex has a long-standing reputation for creating the world’s best online games and for developing hugely popular, fun, high quality, compelling, accessible, free games and for its passion to provide an awesome social community experience for hundreds of millions of players around the world. Jagex has developed and self-published over 40 online titles including the world’s most popular free online multiplayer game, www.RuneScape.com.

 

*******

 

PR Contacts

 

Jagex: Adam Tuckwell ([email protected])

 

Insight Venture Partners: Erica Harris ([email protected])

 

Spectrum Equity Investors: Kathy Yager ([email protected])

 

The Raine Group: Mary Beth Grover / Brendan McManus ([email protected] / [email protected])

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So basically even less of Jagex is independently owned now (only about 50% of jagex is not owned by investors at last check in 2009http://forum.tip.it/topic/256788-jagex-financial-report-2008-09/), and now the Gower brothers own even less of Jagex in exchange for more $. Thanks MMG. ... .. .

 

Profit is fine, but Jagex is already profiting no matter what. They made $32.9 MILLION dollars in 2009. (see link below) Selling out to investors means huge lump sum cash in exchange for less leadership. This is mostly fine for things like General Motors but in the history of gaming studios, this does not bode well. Quite a few gaming studios just DIED completely after being sold to another company or investors. ie. once Andrew feels like he's rich enough from all the selling-outs, what's to stop him from just taking the cash and have a nice life in the Tahiti's and leave who-knows-what left to run RuneScape?

 

 

Not banning bots, bring back wildy PR campaign (including T-shirts!), buy back a banned account... FFS what is next? Selling level 99 for $2000? Jagex is not a failing company by any means and I just don't get why the greed never ends.


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Jagex is a business. They are supposed to try and be as profitable as possible.

 

Did you read that off a fortune cookie?


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Jagex is a business. They are supposed to try and be as profitable as possible.

 

Fully agree, what do you expect from a large company, it's all about money, you seriously think they care about their players? But then again, investing should put more money in, therefore more features, etc.

 

Thanks,

 

Quenya

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Jagex is a business. They are supposed to try and be as profitable as possible.

 

Did you read that off a fortune cookie?

Yep.


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Boohoo, Jagex isn't a tiny company like when RS started, it actually does other crap now too and has investors interested in it -.-


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http://www.develop-online.net/news/36967/Jagex-announces-surprise-investment-round

Here's a 2nd article that reveals that Jagex had gotten 4 new board of directors, all from some random invest firm who knows nothing about RuneScape. If I keep down this slipptery slope, next thing Anrew will quit and the Gowers will no longer be a part of RS at all....


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It's called owning a business and making a living through it (in their case, a very hefty living), quit whining over every little aspect that makes them money. Don't like it? Too bad, deal with it and stop whining.


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Does Andrew actually do something for the game at all the last 2 years? I haven't seen a single message from him. :s

Selling out is really a bad move. I know Jagex isn't the little playground anymore of the three Gower-brothers, but the company they are becoming is more or less bad. Foreign investors will do anything to squeeze enough money out of their investment, without the care and love that the founders have put into this game.

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complete props to the gowers tbh

 

one of the uks top [recent] success stories and an inspiration to young developers everywhere

 

i'm very jealous


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Does Andrew actually do something for the game at all the last 2 years? I haven't seen a single message from him. :s

Selling out is really a bad move. I know Jagex isn't the little playground anymore of the three Gower-brothers, but the company they are becoming is more or less bad. Foreign investors will do anything to squeeze enough money out of their investment, without the care and love that the founders have put into this game.

 

Andrew is much more involved in the higher end stuff at the moment, coming up with new projects and technologies for the company. He still has an involvement in Runescape but not as big as it used to be. Paul still very much works on Runescape although he prefers a much less "control" based position at the company. Ian I believe is currently doing the graphics for Stellar Dawn.

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Does Andrew actually do something for the game at all the last 2 years? I haven't seen a single message from him. :s

Selling out is really a bad move. I know Jagex isn't the little playground anymore of the three Gower-brothers, but the company they are becoming is more or less bad. Foreign investors will do anything to squeeze enough money out of their investment, without the care and love that the founders have put into this game.

 

Andrew is much more involved in the higher end stuff at the moment, coming up with new projects and technologies for the company. He still has an involvement in Runescape but not as big as it used to be. Paul still very much works on Runescape although he prefers a much less "control" based position at the company. Ian I believe is currently doing the graphics for Stellar Dawn.

We'll definitely get some great updates because people like the Gowers and Mod Mark are working hands on, for quests.

WGS and and ROTM and Dungeoneering for example.

 

But their loss of control of the rest of the company is noticeable.

i find the majority of updates that aren't tied into runescape's primary storyline (the ones that the original founders of Jagex put most of their attention in)

to be very unsatisfying.

 

I'll wait and see how these investments affect management.

But I'm probably not gonna be too happy about it.

 

I get the feeling that the gower brothers just really dislike the drama that comes with being owning a big company.

And this is more so the result of pushing the responsibilities of being the head of a company onto someone else.

Rather than the result of their personal greed.

Which I guess is fine. But I just find it rather unambitious.


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I'd just like to say that "I called it" ...

 

:rolleyes:


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Hopefully capital injection will mean Jagex can throw a little money towards developing and aggressively advertising flagging projects like WoL & FO. :shades:

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It's sad but inevitable. Any business will seek to expand, earn money and ultimately just stay alive.


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You can't fault them for wanting to have more investors involved. The game has grown quite a bit since they first started, and they need that financial support. They may have earned millions, but when you start subtracting operational costs, financial responsibilities, as well as a number of other things, that number shrinks. Profit is good, but it also needs to be able to come in constantly to allow for investment in improving current existing areas. So yes, it may suck to the outsider that more and more of the company is being owned by third-parties, but when you start to consider just how much Jagex is trying to expand as a business, it's really a good deal. So they might not play RuneScape. Look at how people buy stocks in the stock market on public trade. You don't have to be a doctor or specialist to buy and sell stocks for a pharmaceutical company. You don't need to be a metalworker to invest in the steel market. The money is put in there because you expect the company to grow and give you a share of the profits in return for investing, giving both parties company.

 

However, I do understand the feeling about how RuneScape seems to be feeling rather disconnected as time has passed with the number of updates we had. Perhaps that's why the Wilderness and Free Trade came back, to bring back some of the connections we once had (although it's really hard to see that right now considering all the bad that's come with it, but that's for another topic).

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Hopefully capital injection will mean Jagex can throw a little money towards developing and aggressively advertising flagging projects like WoL & FO. :shades:

WoL was just a reactionary project that they used moreso to combat another developer.

Jagex made it with the intention to make another company lose money, as opposed to make themselves money.

 

Some other company used the title "#1 free online game". A title Jagex very much believes belongs solely to Runescape.

In reaction WoL was made to cut into the sales of said rival company.

 

I wouldn't expect a game, that wasn't made out of true passion to make a good game, to ever prosper in the long run.

 

As for FO.

It seems like a little playground for individual developers to test them before making them do real stuff.

Kickabout for example. The developer for that game was shown in a developer interview.

and the developer for kickabout literally says that kickabout was the first thing he programmed, ever.

The guy was a 100% novice at coding.

FO doesn't really strike me as something that was made with the intention of make big money.

It was just something for the, not quite tried and true developers to do without losing money on them.

 

 

Both of them aren't really organized in a way to promote strong growth.

They've served and still serve their respective purposes.

If Jagex wants to do something big, they should try something new and separate from these two entities.


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I don't blame the Gowers for selling when their stock is high. I would do the same once I saw the check with all the 0's on it as most of you would too.


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Watch the wildy deleted in 6 months. FML


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how is this considered selling out?

Because now not only are employees from 3rd part investors on the board of directors, even less stock is owned by the company which means that outside influences have more control over the company's decisions. Basically they got invested in, and now because they need to return that investment they need to focus on making the money back first instead of improving the game; the two aren't always mutually exclusive, but if there comes a time when they are things will start to go downhill fast.


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Not selling out, more like agreeing to financial expansion.


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how is this considered selling out?

from my understanding, the gowers had majority stock prior to this, but now they do not.

whether that's actually considered selling out is not something i'd be fond of debating :P.

 

I think the more fundamental problem is the fact that the Andrew does not actually want to manage a big company.

I'm sure 1 eloquent, motivated individual with 25% stock could exert more control than an unmotivated leader with 100% stock over the company.

 

ultimately, sure Andrew gave up stock share of the company.

But I also get the feeling that he gave up practical control of the company a while ago.

When he decided to focus on making RS game updates rather than the company as a whole.


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Why do people think they're being so hard done by? I have very little to no problem with how Runescape is being run at the moment. I think people are trying too hard to hold on to the supposed "good ol'days". Let it go, things change. People weren't happy with things back then just as people aren't happy about things now.

 

On topic... I can't see how this is a bad thing. More money will allow Jagex to do sooo much more.

 

Ps: $32.9 Billion?? That's not right...


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