In search of a path to “long-term sustainability” for its League of Legends brand, Riot Games announced Friday that it is adjusting its business model to shift revenue sharing among teams away from sponsorship sales and toward digital sales.
While a downturn in sponsorship has occurred since the 2020 pandemic, new sponsorship has been added in 2024 and core sponsors such as Kia, MasterCard, Mercedes-Benz and Red Bull have remained. Still, Riot Games officials believe it’s digital content sales that will keep teams viable.
The new plan aligns with Riot Games’ strategy for its Valorant Champions Tour brand to offer what it hopes is more “predictable revenues.” Those include a change in how digital revenue is allocated to LoL teams in North America’s League Championship Series; the League of Legends EMEA Championship in Europe, the Middle East and Africa; and the League of Legends Champions Korea.
A “Global Revenue Pool” will be allocated to teams in three areas. Half of the GRP will be allocated to Tier 1 teams as general shares. Another 35 percent will be divided into competitive shares and will be distributed according to competitive performance in league play and international events.
The remaining 15 percent of the GRP will be “fandom ahares” that reward teams for developing a strong fan base.
All LCS, LEC and LCK teams will receive a fixed stipend as well as share revenue from Riot Games’ LoL Esports digital content sales.
“We believe it rewards teams for their partnership with the league while incentivizing them to be competitive and grow fandom and engagement for the sport,” Riot Games esports president John Needham said in a news release. “Most importantly, it puts us in a position to win together.”
The changes come amid Riot Games’ decision in January to part with 11 percent of its workforce, or about 530 employees globally.
Under the adjusted plan for LoL Esports moving forward, Riot Games plans to increase the quantity of digital content during any given season. In-game content like MSI/Worlds content, SKE emotes and Worlds Winner skins, among others, have set engagement and revenue records, according to Riot Games.
“LoL Esports is the (No. 1) esport on the planet, has a passionate community, the most recognized teams, the best players, and an unparalleled legacy,” Needham said. “We intend to grow that position and future-proof it for current and future players.
“There will be more changes and adjustments along the way, always with the goals of elevating our games, serving our players better, and achieving ecosystem-wide sustainability for Riot Games and our partners.”
–Field Level Media