Private equity group Carlyle, owners of UK based games developer Jagex, most notorious for their free-to-play MMORPG RuneScape which launched back in 2001 , are looking for a potential buyer for its fledging acquisition.
The Carlyle Group had acquired Jagex in 2020. The financial terms of the acquisition were not publicly disclosed, so the exact amount Carlyle paid for Jagex remains unknown, however that’s not stopping Carlyle from demanding a hefty ransom in the pursuit of its sale.
Apparently to the sum of £1 Billion GBP or roughly $1.24 Billion USD.
The current stage of the process is preliminary, and Carlyle is anticipated to initiate an auction process nearing the end of the year, the Carlyle Group is collaborating with advisors from Morgan Stanley and Aream & Co. to evaluate potential options for Jagex, the developers of RuneScape, including a potential sale or listing.
Jagex had previously been considered as a potential candidate for an initial public offering (IPO) in the UK. However, it is worth noting that several video game developers listed in London, such as Codemasters and Sumo Digital, have been acquired by foreign entities, resulting in their delisting from the UK public markets in recent years.
In January 2021, Carlyle Group, a global investment firm with $376 billion in assets under management, acquired Jagex from the U.S. holding company Macarthur Fortune Holding for an estimated $530 million. Established in 2001, Jagex had undergone several changes in ownership before being acquired by the Carlyle Group two years ago.
But it’s quite obvious that the RuneScrape ship is sinking, especially after Jagex had announced its universally hated “Hero Pass” concept, which is merely a form of Pay-to-Win for its MMORPG.
The introduction of the Hero Pass is a similar feature that all modern free-to-play games and MMORPG titles incorporate, a seasonal event with tiered cosmetic items of other in-game item / currencies able to be unlocked after hours of merciless grind.
The Hero Pass was introduced barely a week ago and was absolutely demolished with online criticism summarizing the move as being a desperate attempt by Carlyle to inflate Jagex’s income so that they can sell it off for much more money than it ever should be worth to an unsuspecting sucker.
The Hero Pass was introduced with the promise that it would not follow the typical ‘fear of missing out’ (FOMO) approach to compel players to participate. During the announcement stream, Mod Jack emphasized that the Hero Pass and the removal of Daily Challenges would alleviate players’ FOMO. However, it is contradictory to find a direct quote from Jagex stating the opposite outcome.
“We currently do not have firm plans on making all Hero Pass rewards available in the future, so if you have a particular reward you’re looking for, you may want to ensure you earn it during the Hero Pass before it ends.”
It was a total shit show, the community seeing through Jagex’s obvious bullshit trying to swindle their fledging player base into ponying up money for microtransactional season pass content, with about every single large-ish YouTube channel that focuses on RuneScape content shitting all over the Hero Pass for being a downright money grabbing scam.
Thousands of angry players berated Jagex on social media, review bombing the game on Steam and outright canceling their premium membership subscription in large enough numbers that Jagex were forced to intervene.
And it was removed, to an extent. Yep. The backlash regarding the introduction of the Hero Pass was so universally despised that Jagex had no other option but to abort its MTX cash grab barely a week after it was first introduced.
To begin, the ability to purchase Hero Pass levels and Underworld Emblems has been promptly removed. Additionally, the Hero Pass content buffs will be completely eliminated in the coming week.
Another improvement scheduled for next week involves the relocation of XP buffs from the Premier rewards track. These buffs will only be accessible to all players through gameplay, rendering the paid Premier Pass limited to cosmetics and consumables.
Furthermore, the Daily Challenge system will be reintroduced within the following weeks. Moreover, the rewards for the Hero Pass will be rebalanced to ensure they are more attainable.
According to the update’s FAQ, players who are dissatisfied with their purchase of the Premier Pass can reach out to customer support to request a refund.
This is obviously potential money for Jagex down the drain and a spanner in the works for the Carlyle Group who are seemingly desperate to offload the UK based development studio for a massively inflated figure.
Jagex themselves only makes roughly $155 Million USD per year from premium memberships combined with microtransactional (MTX) sales.
According to an anonymous report from Reuters, the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) currently stands at £60 million ($75 Million).
Which of course just goes to show where exactly majority of their profits are being reallocated, because it surely isn’t being used productively in-house for the betterment of RuneScape more rather their revenue is being used to fluff the balance sheets of their corporate overlords, Carlyle.
And it also means that Jagex doesn’t have to pay as much in tax, which is fucking splendid, isn’t corporate scheming cool?
Jagex seemingly are the town bicycle, having had five owners in over a decades time, they’ve been used, abused and are seemingly bound to be passed off for a sixth time running, considering how they have been focusing more of their development efforts on adding more unnecessary microtransaction content rather than actual content and features to RuneScape itself it’s no surprise as to why their player base happens to be shrinking year over year.
