“Carlyle really makes sense for us, that independent spirit. We only need to think about ourselves,” – Behind the acquisition of Runescape creator Jagex

Consolidation has been the buzz around the game industry in recent years, with Microsoft, Tencent, and many more buying up developers at a pace. However, incumbents aren’t the only financial power in the land, and last week it was announced that Runescape creator Jagex had been acquired by The Carlyle Group.

The Carlyle Group is big business. Considered to be the second largest private equity firm in the world, it manages over $200bn of assets. So it’s somewhat surprising to discover that Jagex is its first proper games industry acquisition.

So we caught up with Jagex CEO Phil Mansell to discuss what the new ownership means for the company, it’s strategy, and for the games industry more broadly.


Phil Mansell, CEO Jagex

“I think [the deal] talks not just to the journey Jagex has been on, but also what’s going on in our industry and the renown and resilience and maturity that we’ve now got,” Mansell responds when we ask about the broader environment around the deal.

“It was certainly not the case that the very largest private equity companies were getting really serious about gaming five to ten years ago, when they started on the fringes. And now, while it’s newish, it’s not heart stoppingly shocking that it’s happened.

“You can understand it from their perspective as well. You’ve got the games industry becoming more mature, better known throughout the world, whether it’s in live games or mobile or in AAA, you know that those franchises can be robust, long term, growth vehicles.

“We’ve shown that with Runescape, but I think at an industry level, you’re seeing that increasingly over the last number of years, and COVID has only accelerated that. When other sectors have really struggled, games have remained resilient as we have through recessions and other things in the past.

“It’s a good milestone, certainly for us as a company, but also a good signal of the confidence that the investment world has in video games.”

And Jagex has confidence in its new owner as well. As we went to press, there were allegations from third parties that the dealings of previous owners had not been entirely transparent. Nothing there reflected on the behaviour of Jagex itself, though, and the company is very confident that this move is both proper and correct. After all, the Carlyle Group certainly looks to know its business.

“We’ve decided not to go into the details on the mechanics of the transaction. But certainly, as you allude to, it has been something of a journey,” Mansell tells us when we ask about the short period under previous owner Macarthur Fortune. “The ultimate destination with Carlyle is absolutely ideal and we’re genuinely, really, really happy with it. It’s been a bit of an intense period, but the destination has made it worth it for sure.”


So just what makes their new owners such a sweet deal for Jagex?

“They genuinely embraced our vision for the company,” says Mansell. “We’re in a good place, we’ve had a strong track record for many years of growing the company, we rejuvenated the Runescape IP, and we pretty much doubled the size of the company in four or five years.

“But you can’t just reflect on the past, you’ve got to know where you’re going. And we’ve always wanted to really establish ourselves as a premier, global level, living games company.

“Certainly, we’ve done a lot with Runescape, and Old School, and moved to mobile, with massive growth of the communities that we’ve had there. And the next thing we’re doing is we’ve got even more expansion for our existing games.

“We have new platforms, new territories, loads of cool features that we have in the pipeline. We do want to do more with the Runescape IP which has 300 million users in its lifetime.

“There’s a groundswell of fondness for the world and its stories and characters. Obviously, we love it, we’ve been telling chapters of this story of Runescape for 20 years. We think there’s a lot more to do there. So we’re really excited by the creative potential there as well. I think they could see that, and they really bought into it. They wanted to sponsor our vision for growth, and support us and accelerate that. And I think it was that alignment and that meeting of minds that really made us just really happy.”


So what can Carlyle offer Jagex? Apart from access to funds, of course. Just how does a non-endemic owner assist running a company in an industry that’s historically misunderstood from the outside?

“One of the reasons they have acquired Jagex, is that they found a really strong management team,” Mansell begins in answer. “I’ve been at Jagex for 10 years, I’ve been running it as CEO for four, running the games for many years before that. But I’ve also built a really strong management team. My executives have built their own teams as well over the last few years. And all of that really inspires a lot of confidence.

“We don’t need someone to come and run the company, what we need is support and help. So some of that is wisdom and advice. It’s the Carlyle tech fund, so they do understand the world of digital, business to consumer, and the internet services side of things. So there’s certainly going to be a lot of wisdom about infrastructure and general tech company running which as we expand, that’s going to be really helpful.”

And Carlyle is providing top-tier advisors too. “We’ve been really fortunate to bring on two non-executive directors,” explains Mansell. “We’ve got Niccolo de Masi, who is currently the chairman of Glu Mobile… and was also the former CEO there. He’s got tons of experience in not just mobile games, but the mobile ecosystem as a whole. We know mobile offers more opportunity for us, so that wisdom at a corporate level and investment level is going to be really helpful.

“And the other non-executive director we’ve been lucky enough to bring on is Mike Griffith. And he’s a former CEO of Activision. So there’s another whole angle, developing franchises, developing IP… an understanding of high production value development.”

To their role Mansell adds: “They’re not managers in our business, what they are is sage counsel for me and the leaders of Jagex to bounce ideas off, get good advice from, utilise their contacts in the industry.”


And those contacts will come in handy as Jagex looks to grow its reach globally.

“We certainly have ambitions… to play in more markets. And that might mean we need presence in more places in the world. Someone like Carlyle, who has hundreds of companies, has the resources and help that can assist you in doing those growth expansions, finding new markets.”

“We’ve got our two MMOs at the moment. Runescape and Old School, which have some degree of localization, but I don’t think we’ve fulfilled the potential there. So that’s not something we’ve got a plan to announce today. But it’s an ambition that we’ve got, we know there’s demand and interesting stuff to do there.”

But it’s not just the current games that will allow Jagex to reach new regions, it’s also thinking more globally about its new titles.

“When Runescape came out, originally 20 years ago, it probably wasn’t too surprising it was only in English. But in 2021, you’re launching a new game, you’re expecting not just the game to be really well localised and culturised, but for you to have the ability to publish, or partner, in order to sell it and build communities around the world.

“For us as a company we’re building this expertise overlap between our current games and our new games. But certainly, as we’re bringing new games to market, we expect to cover a much wider reach with those games.”

Taking a couple of steps back, we ask what the strategy is for new titles, which would be a huge change of direction for a company that has, in recent years, concentrated on its crown jewels of Runescape and its Old School iteration.

“When we think about new Runescape games, we know that our players have got homes in Runescape or Old School, we’re not looking to jolt them and move them out. Where we are looking at new Runescape games, multiple I would say, not just a third, is where we think there is a really great creative idea. One close enough to home that we’ve got the skill set, generally within RPGs to realise that, although RPG means a lot of different things these days,” Mansell notes.

“Is there something that isn’t going to cannibalise or confuse our current players, or players who come and go from the games we already have?” he continues. “How can we extend that portfolio, but in a really constructive way, rather than forcibly migrating players?

“We’re going to run Runescape and Old School successfully in perpetuity, and hopefully continue to grow and grow for many more decades. But what else does the Runescape IP offer? What else does our skill set and our creative energies want to conjure up that can sit as a complimentary addition?”

We’re sure that Runescape’s passionate player base would be hollering out answers to that question, but we won’t indulge in any of that here.

Jagex is having a year-long party in Runescape for its 20th anniversary


With all that in mind, Jagex’s recent move to place Runescape on Steam, the first time it’s appeared on another platform, makes a lot of sense. So was that simply an experiment for the future we wonder?

“A lot of things we do, we do treat as experiments, the best thing you can do as a company, especially for games, is experiment and learn from it… and capitalise on the things that you’ve learned,” Mansell replies. “So Steam was a bit like that.”

That said, it was also simply a good move to build the brand. “I think the main reason we went to Steam was it helps us reach more players. There are some players for whom Steam is their number one venue. It’s got a great toolset behind it. And we want to be exposed to as many players as possible to be building up our communities.

“We’ve managed to grow as far as we have on our own, but we want to further expand our reach. And some of that is from distribution platforms, Steam has had the Runescape release and Old School is coming very shortly as well.” On the 24th of February to be precise.

The company is also looking to make its first move onto console, Mansell reveals: “We are also looking at the potential of console platforms in the future as well, there’s some work started on that, again we’re not announcement-ready, but we’re really interested.

“We’ve got some of the most successful MMORPGs in the world. And, yes, Runescape has a retro vibe to it, but in terms of their growth and the size of their communities they’re really up there. We want to continue to expand that reach. So whether it is Steam, whether it’s innovations we can do with the products ourselves, whether it’s other platforms, and ultimately other regions. We’re working on all of that.”

And speaking of that retro vibe, it’s worth noting that Jagex is having a year-long party to celebrate Runescape’s 20th anniversary. Although those plans have had to be rethought without a tentpole physical event such as its huge annual Runefest fan gathering.

“There’s a silver lining, which is it prompts you to rethink things. And you have to innovate a bit as well, what it’s meant is we’ve rethought how to celebrate these kind of events with players, we’ve got a lot more in-game events, and they’re not just like a moment in time, we have different chapters of celebration going through  both games throughout the year. We think of it as a rolling year’s celebration.”


Returning to what Carlyle brings to Jagex, we wonder if its new parent will enable the company to make acquisitions of its own? But funds were never the issue, Mansell replies.

“We’re very, very fortunate as a company, we’re not particularly constrained by cash. You can see in our accounts we have over £100m in revenue, and around half of that as pure profit. So we don’t lack for cash to put into things. I think the difference with Carlyle is probably more about confidence and accelerating our growth. I think that we do expect to be a bit more punchy, we want to grow our business a bit more aggressively. So I think we’ll speed up a bit on a number of fronts.”

Mansell explains what the new, punchier, Jagex will look for in terms of opportunities.

“Are there studios that we want to invest in ourselves, that could be part of the third-party publishing? It might be separate to that, just our own acquisitions. That’s something we know we’re going to be looking at more actively. So that’s also an exciting change, with our acquisition, that has opened more doors and potential.

“For us, it’s what are the games that make sense? What’s the right size of deal or game where we really think there’s value that we can add, we can team up with a partner and give them something they don’t already have. Some of that is capital, some of that’s funding for marketing, a bit of development funding, absolutely.

“But it’s as much about, do we think a big community can be built around that game? Do we think the game has a special place in the market? The test we talk about a lot is ‘can this game be the new favourite game of millions of players?’ And that’s the test we want to go through. And we’re very fortunate that we have the war chest to be able to do those things.


Which brings us right back round to the industry’s current consolidation spree. So does Mansell believe that the current buy-outs are healthy for the industry?

“Each to their own,” he replies. “I think it very much depends on the company and the people there, about what they want to achieve. Jagex has always been, through different ownership, independently spirited. We’ve got our own IP, we’re not particularly dependent on other parties.

“Carlyle really makes sense for us, that independent spirit. We only need to think about ourselves,” which is in stark contrast to say Microsoft’s acquisitions, which are then aligned heavily with the company’s Game Pass strategy. That doesn’t seem the right course for Jagex of course, although an alternative to venture capital ownership could be an IPO.

“Long term, we’re open, and we know Carlyle is open to those sorts of things,” Mansell muses.

“With Carlyle, we will be working on plans that build the long term value and growth for Jagex. Whether things lead to IPOs, or that sort of thing in the future, we remain open minded, that’s not the driving consideration, the driving consideration is to build our community, make our players happy, do some great creative work and continue to run a really healthy company.”

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