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Jagex continues to profit from Free, and pays a whopping £22 million dividend
Last year, I used Jagex as evidence that free pays. (See Free doesn’t work? Try telling that to Jagex making £38m from one free game, RuneScape)
I’ve just dug into their accounts again. And it looks as if free is still paying. In the year to 31st March 2010 (which admittedly is 18 months ago), the company made revenues of £44.5 million, profits of £18.8 million and paid its shareholders a dividend of £22.3 million.
There are some wrinkles though. The company has changed its accounting policies which increased its revenues by £2.7 million. Essentially, it was previously reporting its revenue after deducting “certain commission and transaction costs”. Now it includes those in revenue, and deducts them as cost of goods. I’m guessing that this is mainly amounts paid to payment providers, and is a fair way of presenting the numbers. If you applied the same restatement to the 2009 numbers, the 2009 revenue would be £41.1 million, so nearly half the company’s revenue growth has come from accounting jiggery-pokery.
Perhaps the most interesting numbers are yet to be revealed. The figures for the year ended March 2011 aren’t due to be filed until the end of the year. They include the loss of “tens of millions” on failed project Mechscape.
Whether Jagex kept growing despite that debacle will be very interesting to see.