sign in sign up
<<
Home , Jagex, Runescape, Virtual goods

: A New Era Under IVP

Recent changes to ownership, the company that manages the popular online MMO, RuneScape, have allowed for the game to progress rapidly and maintain its leading position in the industry. From its humble beginnings as a “graphical MUD” with a mixture of poorly rendered 2D and 3D sprites, to Guinness Book of World Records fame, Runescape has been one game worth following. Developed and coded by Andrew, Ian and Paul Gower in 1999 and released in January 2001, it has met with repeated success. Andrew, who had been coding since he was just 7 years old was the main force behind RuneScape’s conception. The game is managed by Jagex, the UK’s leading private developer, which was formed in late 2001 by the Gower brothers and their friend Constant Tedder. Just recently, ownership of Jagex was handed over to American venture capital firm Insight Venture Partners (IVP). This change has generated much speculation about the future of RuneScape as a game and community, and also as a business. What led up to the big decision? In what direction does IVP intend to take RuneScape and how will this affect the game’s popularity?

Why IVP? Robert Edwards, a freelance journalist who contributes to the popular online gaming magazine PCGamer, sees the change in Jagex ownership as an aid to RuneScape’s continuing growth and popularity. “IVP has consistently demonstrated a very strong interest in software and online companies with a list of investments which include tech giants Tumblr and Twitter,” he said, “The sale of Andrew Gower’s shares [valued at €75 million] to IVP last year effectively turned over control of the company to IVP who now has a 55% stake in Jagex.” For the first time Jagex control shifted out of the U.K. and into America. What led up to the big decision? JMod Lutetia, a Jagex employee said, “It wasn’t a spur of the moment thing. We [at Jagex] spent the better part of a year going over the pros and cons, the ifs and buts and eventually agreed that the company would benefit greatly in both the short and long term from going ahead with the deal.” She continued, “IVP has the capital we need to continue advancing the game at their disposal and they have a good track record with online companies and services.” In a previous interview for gaming magazine Games Industry International, current Jagex CEO and former CTO Mark Gerhard said, “If we do want to put Britain back on the map for games development it takes success. And it takes success around the world. I'd say that comes from having investment.” Indeed in today’s gaming industry where new games sprout up almost every day and technologies change rapidly, it is more important than ever to have the financial backing needed to stay ahead and stay on top.

What’s happened already? Naturally the change in Jagex ownership, resulted in great changes for RuneScape. In the same month as the sale of Gower’s shares, the first ever (small online payments for or currency) were introduced to the game. Though this angered many players who believed microtransactions went against the ethos of RuneScape, an official post on the game forums stated that they were “immensely successful” and were creating a significant amount (though a figure was never given) of extra revenue to put back into the game. “Microtransactions are a very controversial topic but we’re doing the best we can to balance keeping players happy and turning a good profit,” said Lutetia, “This is a business after all.” Despite the general disapproval of the update, Jagex has managed to retain the favour of its players by funneling a lot of its increased profits back into the game in the form of more frequent and more technologically advanced updates.

What does the future look like? From a business standpoint it seems Jagex has been making all the right calls. Their forward looking mentality, innovative use of gaming technologies and willingness to do what it takes to stay ahead - even if it means giving over control of the traditionally British company to an American investment firm - have ensured RuneScape’s enduring popularity. Now, with financial backing from said American investment firm, IVP and a mollified, if not completely satisfied player community of over 10 million, the future of Jagex and of RuneScape appear to be in good shape.

*most JMods real names are unknown as they perform all of their Jagex duties under their “mod” name

Explanation of terms: Graphical MUD: (multi-user domain) multiplayer real time that uses computer graphics as opposed to typical MUDs which are text based MMO: massively multiplayer online game, games that can support hundreds of thousands of players simultaneously JMod: Jagex moderator, official employees of the company Microtransaction: usually small payments that occur online in exchange for virtual goods RuneScape Ethos: Jagex believes your real life wealth should not have any effect on your success in RuneScape