Riot Games is scaling back some of its e-sports spending for League of Legends

    
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lol
You may not care for e-sports, but you can’t deny that they bring in big money. Look at Riot Games, which has invested tons of money into League of Legends as a professional competitive game, and you’ll see that these investments make a ton of money for the game. Except it appears that they do not make a ton of money, as players noted the company is scaling back and global head of e-sports Derrick Asiedu confirmed that the company is cutting costs in certain areas.

This means that we’re holding ourselves more accountable to net income targets (as in revenue minus cost) than we have historically. We’re a long way from breaking even (revenue minus cost equaling 0), and are trying to see if on the cost side, there are things we can cut or scale back that fans don’t care about, while continuing to invest in the areas fans do care about.

Asiedu also stated that the studio is fine with the costs because it feels that the benefit brought by the e-sports side of the game justifies the costs, but it’s notable that the company is scaling back some of its expenses. Certainly it’s an interesting change in light of the concept that the competitive scene is a good way to make money.

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Sorenthaz

https://clips.twitch.tv/InnocentPreciousFoxSaltBae here’s Monte’s thoughts on it. (If somehow folks don’t know, he formerly worked for the Korean scene’s OGN English broadcast team and was basically the Korean analyst for some years. Currently an OWL caster.)

flyingltj
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flyingltj

You’re right. I still don’t care about esports. Fidget spinners and anime themed mobile games bring down big money too… doesn’t mean they have anything to do with MMOs.

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Sorenthaz

Basically Riot was able to get away with what they were doing for some years because they were seeing continual growth and the esports side was basically serving as a great advertisement for the game itself.

But now they aren’t seeing so many people come in, folks are dropping to go play other games, and for some reason they’re refusing to do large-scale crowdfunding akin to DotA 2 + haven’t been pursuing multiple sponsors/deals like Blizzard has done with their Overwatch League.

Riot’s got such a large potential for revenue that they just ignore. They have/had the most desirable esport scene for at least 5 good years, and instead of looking into ways to increase their revenue and turn profits, they’re just going to budget cut and pretend this is all about ‘maturing’ their scene or whatnot.

Thorin gives a good criticism of all of this as someone who’s been in the esports industry well before LoL was even a thing.

Travis and MarkZ’s talkshow also covered it.

And yes there’s been quite a bit of buzz over on Reddit with folks questioning why Riot isn’t monetizing the scene better.

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Sally Bowls

A question is how much of this is an eSports story and how much is it a LoL story? Even with this, eSports expenditures will be up this year: e.g., OWL teams (more teams; ESPN contract) and especially the $100,000,000 spent by Epic for Fortnite.

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Armsbend

I am not surprised the MOBA era has peaked. Think about. It is an entirely new generation of young’uns playing games compared to when these were released. The kids seem to be gravitating back towards shooters, more lone wolf, imo.

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Sorenthaz

Yeah, and even those who were playing LoL as a career of sorts (Twitch streamers etc.) are moving more to BRs because they like the individual focus and are simply burned out by LoL.

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Rheem Octuris

E-Sports, generally speaking, is a tool used by companies to recruit more normal players to the game. I have to wonder at this point that, much like World of Warcraft, everyone who would ever play League of Legends probably already has at one point or another.

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traja

It probably also helps with retention. Makes the game feel like it is more relevant than some other game with no competitive scene.