Jagex's 2008 Finances

[Ren]

I've gone through Jagex's accounts and made various graphs and such from them. As these are business years 2007 means April 1 2006 to March 31 2007 and so on. I have just added 2008 (financial year April 1st 2007 to March 31st 2008) to the financial overview alongside its business review and future developments. I am using the actual figures so there has not been any corrections for inflation.


http://www.mechscapeworld.com/images/re ... rview2.gif
Various financial indicators. Turnover has gone up 15% from 2007 to 2008.


While advertising and subscription revenue are both shown to be going up, the data indicates that there is a trend towards subscriptions becoming a larger proportion of their primary revenue. Advertising revenue went up from £1.95m to £2.2m whereas game time sales (subscriptions) went from £26.1m to £30m from 2007 to 2008.


For a long time Andrew had a majority stakeholding in the company, but after Insight invested in Jagex he merely has the largest share. However, Paul and Andrew working together still have over 50%.


At first Constant was the only director, but in 2005 Andrew and Paul joined the board along with the two people from Insight who invested in Jagex. At the time of writing no filings were on record to show that Iddison has been replaced with Gerhard on the Board of Directors.






What do they mean by 'second game' - MechScape? FunOrb?





Profit margin (percentage of turnover which ended up as profit not cost): 36.93% (2004), 51.94% (2005), 60.95% (2006), 53.45% (2007), 44.89% (2008). Remember Jagex had been investing heavily in FunOrb, MechScape and RuneScape HD.

So I'm guessing the dividends for 2008 are:
Ian: £59,150
Paul: £1,183,000
Insight: £3,185,000
Andrew: £3,489,850

[sk3l3t0r711]

Revenue is trending upwards and profits trending lower, interesting. Granted they are investing in infrastructure and R&D for new products. They have increased workforce and so on... but they are burning through lots of cash faster than they are making it.

The next 2 years should be the most interesting to see and track with a global downturn in the economies and people moving towards cheaper sources of enterntainment.

What would be very interesting is if they ever decided to go public and release an IPO. I would buy Jagex stock just for the fun of it!

[Rue Night]

I am surprised that their revinue from advertising has actually gone down over the years. Obviously it was never big to begin with, but it is still surprising.

[Gentle Dove]

It isn't that ad revenue has decreased; in terms of absolute dollars -- er, pounds -- it appears to be about a flat line. It's that revenue from other sources has increased, so that ad revenue is a lower percentage of the whole.

[Ren]

Advertising revenue has gone from £171,027 in 2004 to £2,208,355 in 2008. However, it has gone down as a percentage of primary revenue from 9.40% in 2004 to 6.84% in 2008 because Jagex are earning more from "game time sales". As always these are actual figures and do not take into account inflation.

[Rakshar]

Another excelent job Ren. Seems their operating profit has gone down for the first time in their history but as you said they are investing heavily in infrastructure.

Is there anyway to find the average subscription rates over time? I have only ever seen general numbers and their reported peaks in subscribers. I'm really curious as to the boost they may have gotten from Funorb and if there was a drop a year ago and what the recovery has been. Maybe even a view of the Miniclip infusion from way back when??

[Ren]

I just thought of another chart which people might find interesting - Jagex's yearly charitable donations as a percentage of their annual turnover:

Is there anyway to find the average subscription rates over time? I have only ever seen general numbers and their reported peaks in subscribers.

You can try to extrapolate the numbers from http://www.mmogchart.com/ but they don't publicly publish their subscription figures - I'll see what I can do. "From the six million active players, the last number I had was one million fifty thousand subscribers—that’s four or five days ago—those are subscribers that pay five dollars a month." - Henrique Olifiers, 22 September 2008

[arigold16]

Is there anyway to find the average subscription rates over time?

If total subscription revenue in 2008 was £30m, that is about $43.6m, which is about $3.63m per month, which is about 720,000 $5 memberships. Granted, that is all pretty rough math and there are various sources of inaccuracy (such as it includes FunOrb numbers on both sides), but there we go. 720k members is pretty far from the oft quoted 1m+ members.

[Ren]

720k members is pretty far from the oft quoted 1m+ members.

Don't forget VAT. It is also possible that the transaction fees are deducted prior to turnover.

[arigold16]

720k members is pretty far from the oft quoted 1m+ members.

Don't forget VAT. It is also possible that the transaction fees are deducted prior to turnover.

Is there a VAT for these kind of services?

[Gentle Dove]

It's also true that the pound has slipped dramatically in the last few months. As recently as this past summer £30m would have been about $60m.

[Ren]

Is there a VAT for these kind of services?

I believe so in the UK, but you'd have to ask someone in the know.

It's also true that the pound has slipped dramatically in the last few months. As recently as this past summer £30m would have been about $60m.

Good point.

[Gentle Dove]

From January 1 through August 12, 2008 the pound was hovering in the range of 1.9 to 2.0 American dollars. It began to slide on August 13, and on December 31 it was at 1.4619 American dollars. (source: http://www.ny.frb.org/markets/fxrates/historical/fx.cfm)

I have seen numbers elsewhere to suggest that Americans are the largest single demographic in game.

If we attribute 7/12 of £30m to a high value pound (let's say $1.95) and 5/12 to a low value pound (let's say $1.5) we get . . . *off to do calculations* . . . $34,125,000 + $18,750,000 = $52,875,000.

Divide that by $60 (the cost of a year's membership in dollars, at least for established customers) and that comes to 881,250.

Still well short of the 1m mark.

What were 2007's numbers?

[arigold16]

From January 1 through August 12, 2008 the pound was hovering in the range of 1.9 to 2.0 American dollars. It began to slide on August 13, and on December 31 it was at 1.4619 American dollars. (source: http://www.ny.frb.org/markets/fxrates/historical/fx.cfm)

I have seen numbers elsewhere to suggest that Americans are the largest single demographic in game.

That difference in exchange rate almost exactly accounts for the gap between the 720k number and the 1m+ number. 720k would jump up to 970k if we use 1.95 instead of the current exchange rate.

[Gentle Dove]

From January 1 through August 12, 2008 the pound was hovering in the range of 1.9 to 2.0 American dollars. It began to slide on August 13, and on December 31 it was at 1.4619 American dollars. (source: http://www.ny.frb.org/markets/fxrates/historical/fx.cfm)

I have seen numbers elsewhere to suggest that Americans are the largest single demographic in game.

That difference in exchange rate almost exactly accounts for the gap between the 720k number and the 1m+ number. 720k would jump up to 970k if we use 1.95 instead of the current exchange rate.

I apologize, Ari, I edited my post while you were posting. I got to approximately 881,250 members.

[Ren]

What were 2007's numbers?

Turnover (not taking into account inflation):
2004: £1,819,437
2005: £5,217,298
2006: £16,852,871
2007: £28,148,738
2008: £32,293,572

[Gentle Dove]

Incidentally, I see that my link doesn't work, probably because I had put specific information into it. The basic site for obtaining historical currency exchange rate data is here: http://www.ny.frb.org/markets/fxrates/h ... l/home.cfm

[Gentle Dove]

What were 2007's numbers?

Turnover (not taking into account inflation):
2004: £1,819,437
2005: £5,217,298
2006: £16,852,871
2007: £28,148,738
2008: £32,293,572

According to that same site, the pound was pretty consistently hovering around the $2.0 mark in 2007 (that's consistent with my personal recollection as well).

So £28,148,738 would be about $56,297,476, or about 938,291 paid subscriptions.

That suggests a decrease in the number of paid subscriptions from 2007 to 2008. Don't forget that they also raised the price of subscriptions in 2008.

Interesting. I wonder if that was attributable to the significant, dramatic changes? Didn't we see a jmod say somewhere that they estimated they lost about 60k customers as a result? That would appear to be pretty spot on with our calculations here.

[Ren]

For added accuracy lets go with game time sales not turnover:
2004: £1,648,410
2005: £4,763,079
2006: £15,751,389
2007: £26,192,348
2008: £30,060,951

[Gentle Dove]

For added accuracy lets go with game time sales not turnover:
2004: £1,648,410
2005: £4,763,079
2006: £15,751,389
2007: £26,192,348
2008: £30,060,951

Sigh, you are just trying to test my math skills, aren't you?

2008 would be: (7/12 x £30,060,951 x $1.95) + (5/12 x £30,060,951 x $1.50) = $52,982,426.14

$52,982,426.14 / $60 = 883,040


2007 would be: (£26,192,348 x $2.0) / $60 = 873,078

Pretty much unchanged then in total numbers.

Very rough, unverified numbers.