Jagex - a 'poster boy' for a world without publishers?

Jagex - a 'poster boy' for a world without publishers?
Michael French

By Michael French

May 19th 2008 at 2:57PM

Our latest IP profile looks at the commercial success of indie UK firm's RuneScape MMO

Did you know that Jagex, the studio behind popular youth-oriented MMO Runescape, is probably one of the most profitable independent games companies in the UK?

OK, so if you recall the fact that creators the Gower brothers were the highest-ranked games people on the Sunday Times' 2008 Rich List then yes you probably did know it. But given the fact that the company has forged a lucrative path, Jagex's existence is proof that developers can thrive in a world without publishers.

That's the verdict of our latest IP profile which examines both the rise of RuneScape and the firm that runs it, which is available to read here.

MMO RuneScape’s average revenue per paying subscriber, at $5 to $6 per month, suggests annualised sales of some $60m to $66m. In its last available accounts (2006) Jagex reported a pre-tax profit margin of some 61 per cent (£10.2m) making it one of the most profitable independent games companies in the UK.

The article, written by analyst Nick Gibson adds: "As an online games business, Jagex’s business model is very dissimilar to traditional computer and video games developers. Its principal business partners are not games publishers but hosting and bandwidth companies, payment service providers, advertisers and distribution companies. Jagex operates with the sort of creative and commercial autonomy that most other developers could only dream of. It remains one of the quietest and least publicised developers in the UK (a stance taken deliberately by its management team).

"In addition to being one of the most profitable, Jagex is also the UK’s largest independent developer by staff level, and one of the biggest employers. Its commercial model should make it a poster boy for the disintermediation of publishers and the ‘direct to consumer’ distribution channel in which so many developers place their hopes."

Read the full profile here.