Jagex develops the RuneScape game series

Carlyle, the US private equity giant, is weighing a London listing of the Cambridge studio behind the hit online video game RuneScape.

The buy-out fund is understood to have hired bankers from Morgan Stanley to explore a float of Jagex just six months after buying the game developer.

RuneScape has attracted 300m users and more than 3.4m paying subscribers since Jagex launched the online role playing game 20 years ago.

The title was first created as a simple browser game but has become one of the longest-running online games in history where players build up their skills and collect resources in a fantasy world.

The enduring popularity of RuneScape and sister title Old School RuneScape bolstered Jagex’s revenues by 19pc to £111m in 2019, with profits up 7pc to £48m.

In Runescape, players can create characters and battle monsters or trade and level up with friends

Credit: Jagex

It came ahead of an industry-wide boom during lockdown, where children and stay-at-home workers binged on video games in their down time.

Jagex is the latest video games firm to eye a London float after The Sunday Telegraph reported that publishers Devolver Digital and Catalis were considering listing this year.

It comes after TinyBuild – the Seattle-based video games publisher behind Hello Neighbor 2 – launched a £340m listing on London’s junior market in March. It is now valued at £500m.

The flurry of potential listing comes amid a dealmaking boom across the video games sector.

Electronic Arts, publisher of the Fifa football series, sealed an £860m takeover of London-listed Codemasters in February, while China’s Tencent bought Sackboy developer Sumo Digital for $1.3bn (£930m) in July.

Carlyle, which has $276bn under management, snapped up Jagex from the US holding firm, Macarthur Fortune Holding, in May last year. It was previously owned by the Chinese conglomerate Fukong Interactive.

Jagex did not respond to a request for comment. Carlyle and Morgan Stanley declined to comment.