Runescape maker Jagex sold to investors for estimated $1.1B



Global investment firm Carlyle and CVC have agreed to sell Runescape maker Jagex to CVC Capital Partners Fund VIII and Haveli Investments.

The deal is reportedly worth $1.1 billion, according to a story in the Financial Times. Jagex is known for its key RuneScape titles, the massive multiplayer online role playing (MMORPG) game started 20 years ago.

The live service game has a community of 2.4 million active subscribers and one million free-to-play users, with over 300 million lifetime RuneScape accounts. Founded in 2000 and based in Cambridge, United Kingdom, Jagex is one of the largest and most successful British video game studios, developing and publishing video games on PC and mobile – with about 700 employees.

Carlyle invested in Jagex through Carlyle Partners VII, Carlyle’s flagship U.S. buyout fund, and Carlyle Europe Technology Partners. Carlyle made its investment in Jagex in 2021.

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During its ownership, Carlyle said it worked in partnership with Jagex’s management team to increase growth across its core titles through operational improvements including marketing and CRM initiatives; broaden the distribution of its games portfolio through new channels and platforms; execute M&A to expand the Jagex platform and create a strong independent player in forever games; and invest in new content releases, user acquisition, gameplay experience, and portfolio diversification.

Jagex acquired Gamepires in 2022, the developer of Scum, an open-world survival game acclaimed by players for its detailed survival mechanics and character customisation. Jagex also acquired Pipeworks Studios in 2022, adding a broad portfolio of game development expertise and a games-as-a-service platform.

Jagex is now very well-positioned to continue in its mission of creating new and innovative player experiences as it also looks to reach new communities under the leadership of CEO Phil Mansell, supported by CVC and Haveli Investments.

Phil Mansell, CEO of Jagex, said in a statement, “Jagex has transformed significantly in recent years thanks to the hard work of our entire team as well as the insight and expertise we have leveraged through our partnership with Carlyle. We are delighted to bring CVC and Haveli in as our new strategic partners for the next stage of Jagex’s journey.”

Mansell added, “Through our successful partnership with Carlyle we have already seen the benefits of working with experienced, global financial sponsors. The video gaming sector has huge potential, and with CVC and Haveli’s support, I am confident that we can continue to enhance our platform for the good of both our existing valued gamers and potential new gamers yet to experience our products.”

Nick Clarry, managing partner at CVC, said in a statement, “CVC has followed the video games space for many years with great interest. We are huge fans of the RuneScape games, the large global community of players, and the Games-as-a-Service capability at Jagex. Our ambition is to bring relevant experience from our sports, media & entertainment assets to help realise the full potential of Jagex over the years ahead. This will involve continuing to improve the existing RuneScape games, the accessibility to games on various platforms, and reinvesting into new IP content to create the exciting games of tomorrow.”

Brian Sheth, chief investment officer at Haveli Investments, said in a statement, “We, along with CVC, are thrilled to partner with Jagex, a premier player in gaming. We have been following Jagex closely since we first began implementing our gaming investment strategy, and we believe it is among the most innovative and creative companies across gaming with a large and loyal player base, operating in an attractive, growing market where they’ve been a leader for more than two decades. We are excited to work with Phil and the Jagex team, along with CVC, to take its flagship franchise RuneScape to the next level.”

The transaction is subject to customary regulatory approvals. Financial advisors on the transaction for Carlyle are Morgan Stanley & Aream, and Goldman Sachs advised the transaction vehicle to be funded by CVC Fund VIII and Haveli.

Stuart Smith, a partner and specialist gaming lawyer at media and entertainment law firm Simkins, said, “The Jagex acquisition is a positive sign for the U.K. gaming industry – a sector that has had a turbulent time attracting investors after a surge in growth during the Covid years.”

Smith added, “Private equity generally only invests in businesses that it is confident it will be able to meaningfully grow within a five year horizon, so this is a reassuring indication of CVC’s outlook on at least certain parts of the industry.”

He also said this demonstrates the power of nostalgic and well-loved intellectual property.

“Jagex is one of the stalwarts of the UK industry, and whilst RuneScape 3 – the current version of the game – is enjoyed by many, the valuation for Jagex is certainly bolstered hugely by the very successful release of Old School RuneScape (OSRS) in 2013,” Smith said. “This version of the game was snapshotted from the 2007 client and has since seen a variety of updates, including release on Steam and Mobile, attracting larger concurrent playership than RuneScape 3.”

He noted that Jagex has a history of listening to community feedback, famously championing a polling system for major in-game updates to OSRS.

“This news is hopefully a sign of the gaming industry in the UK settling back into a more sustainable growth model after the plateau in 2022 and 2023, and embracing development studios that have a reputation for fostering long-term community over short-term monetization,” Smith said. “However, it remains to be seen how the monetization of Jagex’s two flagship games will evolve following the acquisition.”

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