In response to the economic downturn affecting the esports industry, Riot Games’ President of Esports, John Needham, has unveiled plans for the future of League of Legends esports.
The popular MOBA is set to adopt a model inspired by the successful VALORANT Champions Tour (VCT), where teams are rewarded for in-game purchases. The aim of this transition is to ensure the sustainability and continued growth of the game that has enjoyed immense success over the years.
Despite the growth in international tournament audiences, Needham has opted for a strategic shift to prevent teams from relying too heavily on sponsorships.
He revealed that the majority of clubs were struggling financially with revenue solely from sponsorships, in addition to the 50% revenue share provided by the developer. As a solution, Riot Games has proposed the introduction of the Global Revenue Pool among teams from major regions.
Introducing the Global Revenue Pool
The Global Revenue Pool consists of three components: general shares, competitive shares, and fan shares, each accounting for 50%, 35%, and 15% of the total revenue respectively.
The objective is to distribute total revenues, recognize sporting achievements (both regionally and internationally), and reward clubs that generate fan engagement. The new strategy focuses on the sale of digital content, such as in-game products within League of Legends, to mitigate reliance on external or extraordinary sources of revenue.
Adjusting our LoL Esports Strategy
Read: https://t.co/9M5AOQnj9L pic.twitter.com/OCKSMNsgKC
— LoL Esports (@lolesports) March 14, 2024
Exclusion of LPL from the Global Strategy
Interestingly, Riot Games has not included the League of Legends Pro League (LPL) in this global strategy. However, this exclusion does not imply disregard for the Chinese competition.
The company has stated that it is evaluating the LPL separately due to its unique market dynamics, including audience size, monetization, and existing initiatives. Notably, China is the only country with Chroma aspects for its league’s standout players, providing it with a competitive advantage in this regard.
Prioritizing Sustainability for League of Legends Esports
All changes are made with the growth of League of Legends esports in mind, particularly following the success of similar measures in the VCT.
Riot Games emphasizes that sustainability entails generating sufficient revenue to cover costs for the company, professional teams, and other stakeholders invested in the ecosystem, while also providing a lasting career path for top players to compete professionally.
Conclusion
Riot Games’ decision to adopt a VCT-inspired model for League of Legends esports signals a strategic shift aimed at ensuring the long-term sustainability and growth of the game.
By prioritizing revenue sharing and fan engagement, the company seeks to create a more stable and prosperous ecosystem for all stakeholders involved in the esports industry. As the esports landscape continues to evolve, Riot Games remains committed to adapting and innovating to secure the future success of League of Legends as a premier competitive gaming title.