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Riot Games 'a long way' from breaking even in esports

Riot Games 'a long way' from breaking even in esports

August 29, 2018 | By Chris Kerr

League of Legends maker Riot Games has chucked a lot of cash at esports over the past few years, but despite some hefty investments and high-profile events, the company says it's still "a long way" from breaking even. 

Asked whether the company was cutting its esports budget by a Reddit user, Riot's head of esports Derrick "FearGorm" Asiedu offered an insightful answer that laid out where the League creator stands after years of investment. 

In short, Asiedu claimed the company has spent "way over" $100 million annually on esports in recent years in an attempt to grow the business by forming local leagues, hosting international events, and hiring iconic venues like Madison Square Garden and the Bird's Nest. 

Now though, Riot is attempting to get out of start-up mode, and that means focusing on creating a financially stable business "instead of just making esports happen and be awesome." 

"We're ok with costs continuing to be high, because we think the value esports provides to everyone who plays LoL is worth it. But we don't want to continue to be in start-up mode," he wrote. 

"We're now a mature business and costs need to be more in line with revenue in the future: Now that we've built something awesome, we're going to start exercising more discipline around holding ourselves to financial constraints as revenue continues to pick up." 

With that in mind, the firm will be holding itself more accountable to net income targets than it has in the past, and might cut or scale back in areas that fans don't seem to care about.

It'll also attempt to give revenue a boost by creating digital experiences and securing traditional sponsorships, though it's also keen to experiment with different monetization tactics.

"This year in particular is a transition year we're experimenting with cutting back costs in some places to see how fans feel about it, but we also continue to invest a lot overall -- in fact, this will be the second most expensive Worlds yet," added Asiedu. 

"To be clear, the goal isn't to decrease our investment in esports: we want to to invest even more than what we do now in the future, but only if it makes sense for the business."

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