Riot Games announces a League of Legends Esports business model rework that takes cue from Valorant for “more predictable revenues.”
Very few companies come close to Riot Games’ expertise in reeling in viewers when making waves in the Esports scene. League of Legends and Valorant became two of the most sought-after and lucrative Esports scenes worldwide.
The League of Legends Worlds tournament is a global phenomenon, drawing in millions of viewers from all corners of the world. The reverence and respect for LoL pro players extend beyond the game, with renowned figures like Faker and Bjergsen attaining celebrity status even among non-LoL players.
While the LoL pro scene is far from unpopular or sinking, Esports has had its woes in recent years. The scene has faced sustainability and long-term viability issues, so Riot Games revamped the League of Legends business model to generate “more predictable revenues” for both the game publisher and its partnered teams.
League of Legends leagues and teams “still reliant on sponsorship”
Many consider Esports (and gaming in general) a lucrative career, with the top players taking home winnings that can amount to millions of dollars. However, Riot Games themselves admitted to the dependency of the pro scene on sponsorship.
While the possibility of making a stellar career in Esports remains, long-time players are more of an exception than the rule. Many fans and players are always surprised by news of players being cut off from the team mid-season, with some unable to pick up their tracks after being laid off.
Most notably, Riot Games also revisited one of their “rock bottoms” in recent years, with the company taking part in the massive lay-off waves in the gaming industry.
Given this unpredictability, League of Legends Esports management looks to recent changes in the Valorant structure for stability—for the league, its partnered organizations, and its players.
Valorant recently introduced the VCT Team Capsule, a unique skin line for absolute fans looking to support their favorite players. Riot Games and partnered organizations split the revenue of the teams’ respective skin line halfway, giving the teams incentive to promote the VCT and more staying power financially.
Under this new model, Riot Games also aims to share revenue from digital content and in-game purchases with partnered teams. The devs also reveal the introduction of the Global Revenue Pool, an “aggregation of digital LoL Esports revenues” to be redistributed with Esports organizations.
Beyond this, Riot Games plans to implement significant financial structure changes for the 2025 season. Among the changes they plan to roll out are “minimum guarantees on league revenues, accelerated revenue share payments, and deferred and spread-out participation fee payments.”
Notably, partnered organizations in LoL Esports pay around $10 Million (USD) to participate in the league – a feat that may no longer be sustainable due to significant changes to the sponsorship market post-pandemic.
Given these changes, the League of Legends developers hope organizations will have more predictable business growth and trajectory.