Deal of the Month
March 15, 2021

Carlyle enters the video game universe

Nicolas Cole

Since the pandemic hit, lots of people turned to video gaming as a new outlet to help combat social isolation. The global multiplayer online role-playing game sub-sector has been particularly popular, with many choosing these games not only as a form of entertainment but also for some much-needed connection on the other side of the screen.

The $160 billion global video game market is on track to exceed the $200 billion mark over the next two years, according to Statista and private equity managers are not missing the boom.

The Carlyle Group acquired in January, the leading British video game studio, Jagex, with headquarters in Cambridge. The acquisition was announced as Jagex celebrated the 20th anniversary of RuneScape, one of the world’s longest running and most successful video game franchises.

While the terms of the transaction were not disclosed, Moonfare’s first Deal of the Month in 2021 was realised through equity provided by Carlyle Partners VII and Carlyle Europe Technology Partners IV funds. Jagex will benefit from Carlyle’s global network, expertise and resources, with a focus on driving growth by evolving the core RuneScape franchise.

With Covid-19 forcing a shift to virtual, the importance of an engaging digital experience has skyrocketed and gaming makes no exception. Gamers who played periodically are now playing more often and previously non-gamers are now playing. To continue serving this new and broader base of users, Jagex is planning to launch RuneScape on mobile devices for both iOS and Android, delivering cross-play functionality between the PC and mobile platforms. 

Next levels of gameplay

Launched in 2001, RuneScape has attracted a vibrant community of over 300 million player accounts all over the world, being evaluated as a $1 billion franchise. 2020 represented a marquee year for Jagex, achieving peak popularity and an all-time high of online subscribers with more than 1.2 million members joining a network playing RuneScape for free.

While Jagex has been investing in the creation of new content for the RuneScape franchise by hiring top-tier game developers and publishing talent, the Carlyle investment will allow the British company to “drive growth by focusing on R&D and increased content release rates, as well as launching titles to diversify its portfolio and engage with an even wider community of players,” according to Carlyle Managing Director Patrick McCarter.

Deal of the Month is a monthly series published by Moonfare to highlight exceptional deals. To learn more about opportunities to invest in private equity, please contact our team or your dedicated relationship manager. Please note that for regulatory reasons, Moonfare is only permitted to share specific investment opportunities with registered users.

Nicolas Cole

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