A few months ago, I was in the library and noticed a little kid playing some cool looking game on the library computer. RuneScape. Never heard of it... Which is pretty much the same anecdote told in this article.
RuneScape is basically the Ultima Online of 1998 done today with Java and a browser. The biggest difference is that Jagex appears to be extremely successful and profitable. And in this age of huge private buyouts (versus the huge IPO's of a few years ago), these three founders stand to make bank on a really simple idea that wasnt even theirs to begin with.
What I like most about this story is that it shows that a good game isn't always about the best graphics or about "gamers". It's also nice to see a few guys make some money without big publishers or pre-paid royalty contracts.
The Knights of Networking
Online Fantasy Game RuneScape Has Dull Graphics, but It's Free, Luring Millions to Play, Mingle
October 5, 2006
Inside an office park in Cambridge, England, several hundred people administer an online world of knights and knaves that -- despite its crude graphics and unsurprising story lines -- has achieved the kind of Web popularity usually reserved for the likes of Paris Hilton.
The office workers toil for Jagex Ltd., a closely held company whose primary business is operating RuneScape, an online fantasy game that lets players control characters decked out in Arthurian garb as they embark on a variety of adventures, socializing with each other in the process.
The game's burgeoning audience is attracting the attention of mainstream media and Internet companies, fueling speculation that it could become the latest in a line of acquisition targets like MySpace, which News Corp. purchased last year for $650 million. Last year, Jagex executives demonstrated the game for Barry Diller, the chief executive of IAC/InterActive Corp. No deal resulted, but Mr. Diller, through a spokeswoman, says, "I more than liked it."
A person familiar with the matter says Jagex executives have indicated they wouldn't sell the business for less than $500 million. But Constant Tedder, the co-founder and CEO of Jagex, says Jagex isn't interested in being acquired right now and hasn't placed a price on the company for suitors.
RuneScape's numbers are the source of all the buzz. The game has more than five million active players, 55% of whom are in the U.S. Over 850,000 of RuneScape's users pay $5 a month for access to extra playing levels and better customer support. That suggests more than $50 million in annual subscription revenue for Jagex. (The company doesn't disclose its finances.) In addition, the company is expanding its business by running ads through a partnership with game firm WildTangent Inc., which RuneScape users see while they play.
RuneScape's achievement has been to win over more casual game players. Many of them don't play other MMOGs, some of which carry subscription fees of as much as $15 a month. One of RuneScape's attractions is that it's written in Java, a programming language that allows games and other software to be run through ordinary Web browsers. Players can also start playing within seconds after registering and downloading the game over a high-speed Internet connection, even on older PCs. By contrast, the rich graphics and sophisticated software behind World of Warcraft come on multiple CDs that users must purchase and install.
"In my view, they've picked up on the convergence of social networks and entertainment," says Jeff Horing, a venture capitalist with Insight Venture Partners, a New York firm that acquired a minority stake in Jagex late last year.
RuneScape usage typically spikes in the midafternoon, after school gets out. Cecilia Sinclair, 24 years old, witnessed that phenomenon firsthand two years ago at a public library in Denver, where she accessed the Internet with her husband. After school let out, the library computers filled up with youngsters playing RuneScape, and Ms. Sinclair and her husband got hooked.
RuneScape started as a pet project of computer programmer Andrew Gowers when he was an undergraduate at Cambridge University in the late 1990s. Mr. Gowers -- a fan of early text-based multiplayer games called MUDs, or Multi-User Dungeons -- introduced the first RuneScape online in early 2001, then formed Jagex with his brother, Paul, and Mr. Tedder.
