Originally Posted by
Andrew
There is so many new areas for Jagex to get into its not even funny. Mobile, VR, AR, PC, Console, etc. Classic example would be Nintendo whom had several failures with mobile launches, but then pokemon Go generated them 3billion + in revenue from it; then super mario was a good hit. Jagex has tried pursuing the mobile market, but the last release that wasn't related to runescape was 6+ years ago. & I wouldn't necessarily say runescape profit is sustainable. Runescape OSRS has one main stream of income - membership, (and bonds as an extra stream). RS3 is far more profitable b/c of the shit you can buy within game + membership. A big issue Jagex will be facing soon, is the fact that membership allows users to use both games; I wouldn't be surprised if Jagex eventually makes the memberships tailored to each version , and has a package for the two combined.
But we can do some basic assumptions here for oldschool..
As of right now 56k people are on osrs...
of those 56k roughly 9k are f2p; so 45k are them are paying members... so at a minimum... Jagex is making in revenue (solely from osrs)
45k * 9.50 = 427k; let's now do some fun stuff, lets double that figure, to assume that for every one person playing right now, there is an additional 1 person who has a subscription, (so a 100% addition, which beyond modest). So Jagex would have $854k in revenue.. Now in 2005-2006, on weekends there would be 250k+ users playing at a given time.
Now lets make some more assumptions. of the 56k, 9k of them are f2p; so lets use that same percentage for 2005, which would be 16%, but lets bump that up to double, b/c there would be more free playing people, so 32%. So of 250k * 32% = 80k; so 250k-80k = 170k users; & back then membership was about 6$, so roughly $ 1million in revenue. Now lets say of that 170k, there would be an additional 100% of people (just as we used above, which would be modest), so 1m * 2 = 2Mil in membership.
So Jagex has literally seen a 50% decline in revenue in initial product, which was old-school runescape, which is why they had introduced introduced eco/rs3; which atm has 90k online. So an additional 90k * $10 = 900k, & lets add a 50% addition to that, so that 1.35m.
So......
We can hypothesize that in total with our added additions of assumptions, just off solely membership Jagex could be generating roughly 1.35m + 854k = 2.2m in revenue from combine games as of right now. Now what is extremely interesting is just with our assumptions previously, Jagex was generating roughly 2million+ from one game.
Now what does this tell us?? - Maturity, almost 0 growth. Jagex has had to introduce new products into its services like paying for shit in rs3 & bonds in osrs. They had to introduce a new product (in this case revive an old product, osrs) b/c people were leaving rs and they needed to stimulate some sort of short-term growth & a bunch of other shit which I dont feel like getting into detail about;
but....
we also have ignored something important here...
EXPENSES...
Jagex right now has 480 employees. We can speculate that their salaries can range from 30k-god knows what, but lets just use 30k a year.....
so... 30k * 480 = 1.4m / 12
so... 2.2mil-116k = 2.1, now lets take Uks tax rate which is 20%; so 2.1 * 20% = 420k / 12 ; so 2.1 - 35k = 2.05m.
Now we have other expenses, such as marketing, interest on debt if any, unusual expenses, and most importantly R&D!; Jagex will need to do the following
A) Come up with a new product, like I said before....
B) Increase prices... & reduce expenses..
C) Produce ORGANIC growth
D) The list goes on...
All in all it is pretty clear to me that Jagex needs to invest somewhere, and perhaps selling the company to these Chinese was a good idea on their end to expand their operations. Similar to how Instagram is flourishing under Facebook's control.
I haven't proof read any of this and dont really plan on making any edits, im done & bored with this conversation. Everyone can have their own opinion, its just a pixel game anyways
Also this is all on a monthly basis obviously. - forgot to divide by 12, fixed it up now