Why does Riot continue to invest on E-Sports/ Pro play when it's not even close to be profitable ?

MOuHahaHAhahaaaa·7/25/2019, 9:28:15 PM·37 votes·14,023 views

Apparently riot investments on E-Sports and Pro play aren't profitable.

It's even worse because they apparently lose money :

https://www.pcgamesinsider.biz/news/67702/riot-isnt-even-close-to-breaking-even-on-league-of-legends-esports/

My question is why continue believing investing into E-Sports and pro play when the number of players as already reached its maximum and now it tends to decline ?

Would it to try to decelerate the number of players leaving the game ?

If that's the case Riot would better invest on bringing back Morello listening to the community feedback and stopping to care about pro play which only represents barely 0.1% of league's players...

Investments would be better on fixing bugs, client and trying new things to fix the game after the rune reforge fail...

52 Comments

kyoyaoaaa7/25/2019, 9:42:41 PM28 votes

I'm glad it's no longer relevant I believe it reflects how far (aka low) the game has come. Game's so desperate they give you rewards for watching pro play. No disrespect, but... in your dreams, Rito. That shit is more boring than knitting with Grandma. If you want pro play to succeed how about fixing your game, your ABSOLUTE GARBAGE CAN CLIENT, and no more new boring champs you desperately try to make "cool" then maybe I'll give a fuck about where your company is headed.

HeY i knOw! Untargetable chAmpIonS (bOnuS poInts iF theY have a MiLLiOn dAsHeS oR iNVisIbiLity) wiLl bRiNg pLaYErz BaCk!

Die. Not you, I mean your game.

ModThe Djinn7/25/2019, 9:30:24 PM17 votes

Advertising "loses" money if you discount the interest it brings to the product. E-sports is similar, I imagine -- people like watching League played, and see skins/champions they're interested in.

Kattzy7/25/2019, 11:58:09 PM8 votes

Oh hello, friendly neighborhood gaming business development manager here at your disposal! In general, we treat esports as a marketing cost rather than a revenue generator. The goal (for the developer, at least) is not to make money, but to hopefully break even, with the expectation that gains will be re-invested in the marketing initiative. I understand why you might think it would be better to invest in fixing bugs and whatnot, but the esports marketing budget is usually completely separate from the development budget. Both departments are critical to the success of the game, and each are staffed and budgeted for accordingly. I hope this is helpful to you!

Xhaiden7/26/2019, 1:42:26 PM3 votes

That's like asking... "Why do all the major brands like AMD, Apple, Samsung (and so on...) - waste millions of $ (hundreds even if not more) on marketing?"

They do it for Marketing - to promote their image (to be there among the major players from eSports) - which "is profitable". Also, that article is focused only on the revenue from the actual events. Tho, for each of those events Riot also sales this tickets (+ the dedicated skins for those events...

https://eune.leagueoflegends.com/en/news/game-updates/special-event/learn-more-worlds-season-2018-event

It's true that they earn less than they used to - but they still scored a revenue of 1.4 billion $ for 2018

https://www.statista.com/statistics/806975/lol-revenue/

preternatural7/25/2019, 10:56:57 PM3 votes

cause the esports thing is their marketing strategy. it validates the whole ranked system which is "the game" when we take it to bare bones.

Dabrick017/26/2019, 3:10:43 PM3 votes

First of all, that is an article from last year, before they made like 20 amazing deals with big investors like Statefarm and Alienware. They said they are out of startup mode, mainly because they have investors. The 2018 franchise move was a HUGE step into the realm of making massive cash.

Second of all. Who are you? Yeah, I asked that. You are level 186 and in Silver bro. I'm Level 70-something and am unranked.

So why listen to the pros? Because unlike us they know the game at the highest possible level and play the game for real. They understand the tiniest balance shifts and even the most minute problems with any part of the game they are familiar with. Guess who the level under them are? Popular streamers and influencers that are highly ranked. What the fuck is Riot gonna do if the balance for people who can't even really play the game like you and me, and have ALL the streamers complain about how shit the game is.

Lastly, eSports is a RIDICULOUSLY big industry these days. These aren't the days of start-up $1,000 prize pools. These are big cash transactions with 10-20 million dollar franchise spots and huge sponsorships for the game from companies around the globe. If a company as big as riot isn't breaking even in money, they are going to make some BIG moves about it. They have huge investor backing, and not profiting or god forbid LOSING money is out of the question.

Frankly, if you think the game is so shit: don't play and don't give them money. That's the end of it. Learn to love the game and have fun in it or cut it out of your life.

Shrek Luigi7/26/2019, 5:37:56 PM3 votes

Riot/Tencent belongs to a corporate-culture where their primary means of doing business is perpetual self-advertisement, by way of E-Sports and constant-exposure in the gaming business (advertisements, cross-promotions & sponsorships), instead of the originating product itself. At this point, the game is just a singular revenue-stream and bit of intellectual-property.

Having a stable concurrent-playerbase isn't enough when your model-of-business is based around constant growth, for constant revenue-growth. And this model of business most always disenfranchises the people who enjoyed said originating product; the folks who helped those companies get to where they are today.

More than anything in the world, I hate retail-investors, Big Business executives, and other corporate snakes. Worse than politicians, or warhawks.....they are the number-one detriment to society at large. Even something as innocuous as video-games ends up being tainted when these folks get their hands on them.

Sorry for the rant, but these issues Riot faces are all interconnected & it's a perpetual and absolute pain-in-the-ass for people who actually enjoy LoL.

Illabethe7/26/2019, 10:43:43 AM2 votes

Esports isn't directly profitable.

However, it is some of the greatest MARKETING.

If an entity's portfolio is evaluated purely on the merits of the product they create, generally the market for that product is smaller. Marketing draws the attention of a wide array of potential buyers, and "sports" are some of the greatest marketing mankind has created.

Remember: What Football, Basketball, Baseball, etc are selling isn't a sport; They are selling merchandise! Seats. Clothes. Video Games. Lower league franchises. etc etc. The players and the game are actually their primary EXPENSE.

Yet, I want you to think of something: Baseball. Declining as a sport, selling less merchandise. In the modern world, Baseball is turning out to be a failure. The Moneyball strategy of trading/calculating the best teams, while creating more competitive, stronger teams, has taken away irregularity at the fringes, and that irregularity is what drew fans to baseball. Games last about 2 hours longer. It's harder to tell who has a better franchise. People generally are "bored" with it.

I'm not saying League has the same problem. In fact, League is doing the opposite: -Higher irregularity is creating shorter games. -Balance (imbalance) changes are directly affecting the fans (Players)

But...... It's still the right call to support Esports. Esports are what has attracted about 60% of this game's player base.

Also, it's worth noting: Riot isn't selling Summoner's Rift, or ARAM, or TFT. They are selling a dreamscape of lore behind them. A world of larger than life characters at war with each other, that can be applied to ANY platform they come up with. They are selling Skins/identities for that world.

In other words, a decline in Summoner's Rift Subscription doesn't actually mean Riot is hurting itself. It simply means some other platform they own is going to be their next revenue source.

TFT has been so energized that for the first time in .....FOREVER..... Riot has wait times to login to their portal.

Ie..... Riot can afford to make bigger mistakes with SR right now, simply because their other products are doing VERY well. (Whether they SHOULD is another matter entirely)

Ragnaveil7/25/2019, 11:01:11 PM2 votes

{quoted}

Investments would be better on fixing bugs, client and trying new things to fix the game after the rune reforge fail...

Oh, you mean the stuff they came out and said they are working on? Pretty sure I heard we are getting a new client/patcher by the end of the year that replaces the old buggy programming of this one. Remember when everyone said they'd never fix Death Recap, then all the sudden it got shadow worked on and people were dumbfounded? Yeah, I remember that.

PaffWasTaken7/26/2019, 10:22:19 PM2 votes

Well, pretty much every pro-play/esport parts of any videogame ever are pretty much just marketting to bring interest to the game itself, its not meant to bring actual profit form here and its even explained in the article.

So the problem is not the lack of profit from it, but actually the fact that riot invests far too much into this "marketting" strategy in hopes it will keep afloat for eternity a gamewho's been progressing through a cancer who's slowly but surely approaching terminal phase, instead of investing in actual "treatment", AKA just making the game better instead of making it worse bit by bit and not giving a single care about fixing every new errors and failures.

Esports are supposed to bring an interesting showcase to an interesting game. Riot's Esports are showcasing a sick game getting beaten by them with a nailed stick. Even if you find the sick game interesting, nobody wants to see a game company murdering their own only "actual" game and this is something that Riot kinda forgot in the recent years.

Galactic Mayhem7/27/2019, 1:08:11 PM2 votes

Its profitable when each team that is in pro play needs to cough up like 20 million a season to be there I believe

Leetri7/26/2019, 10:23:26 AM2 votes

The e-sports has literally never been profitable, which is why all of the "LC$" memes are stupid. For some reason people on the boards believes that LCS makes a ton of money and that's all that Riot cares about.

Bolembwa7/26/2019, 8:38:22 PM1 votes

I'm almost sure a showroom doesn't break even yet every cloth brand have a show room.

GripaAviara7/26/2019, 3:24:49 PM1 votes

What do you define profitability? If e-sports is bringing them exposure and a stream of new players, then it's profitable. Also the pro scene offers the game credibility that is a fair competitive game, which boosts retention.

So at the end, profitability is a vague term

HàrrowR7/26/2019, 1:22:41 PM1 votes

It adds to the longevity of the game, look at games like Starcraft, Dota, Counter Strike, they are all old school, you could argue that any of the new cod or bf games have so many more interesting features than CS, but CS has that competitive feel to it, even if you're a noob you still get to feel that spirit.

Same is with league, ESports is just there to extend the longevity of the game, more specifically to help keep it relevant and its free marketing too. I recently started playing Starcraft 2 cause YT recommended to me videos of some Tournament games, i watched it and was cool i wanna try that too, so i'll say first hand that it works

Pierce The Veal7/26/2019, 12:02:00 PM1 votes

Esports has gained them quite a few customers. It has also sold a lot of skins and merch that otherwise they might not have. Furthermore, it was a pretty ambitious idea, that, had it taken off, would have cemented Riot permanently as one of, if not the biggest and richest gaming companies.

I do believe there needed to be some level of a balancing act for this, however. It seems the might have gotten to the point where investment into Esports has gotten them diminishing returns... and then some. A lot of older customers/players seem to have left the game/ do not spend or play much of the game any more.

UnstoppableMaybe7/26/2019, 2:05:14 PM1 votes

The profit obviously comes from the game itself, and I can tell you right now they make profit off hosting their pro gaming events. They sellout their tickets for fans to watch, and supporters all around the world of the game in general. You might hate the truth it seems, but they profit off the game and the pro gaming events. Perhaps you should look into your facts a bit further, because the amount of people who show up to the Live event, or buy the event ticket pass for loot, adds up to more than it costs to host the gaming event most likely. It's similar to a professional sport stadium, and that's why they charge a certain amount for tickets, to pay for the cost to host the event for everyone. You can bet your a$$ they make profit both for the game itself, and the pro gaming events!

We don't need proof of numbers for statistics when you can clearly watch a Pro gaming "Live" event, and see that the stadium is absolutely packed, whether we like it or not! So how can you counter this then (since you likely can't, due to the facts involved)? Galio However I can agree that League of Legends is starting to lose my patience for a long time again due to not listening to the majority of the community, in which case I don't have to acknowledge they exist either if they continue to ignore what should matter most to them about their game, including the playerbase that pays to support them, but they don't have to if they feel let down for the wrong reasons, or feel betrayed trust wise, after so many chances long term (given for them to improve, and in hopes of such).

It's almost like Riot is about to run out of ammunition, and only has a few rounds left before the clip is empty, and they run out of shots or chances remaining.

If League of Legends fails, I can guarantee it will take a long time, and I mean another Decade (if not 5 years at the least...) or so if it truly fails at all...but I doubt Riot would just let it fail, given the amount of profit they already have from League of Legends to be able to save it in an emergency situation where they may be forced to make changes for the best of results by the community involved as well, overall.

(This is a strong subject that was on my mind though out of skeptism, and am glad you posted a subject about it, including other profitable considerations Riot can take into account, such as expanding the League of Legends Lore into a RPG or MMO as shown in detail, also feel free to Vote if you agree, or want to see it happen at some point in the near future...) https://boards.na.leagueoflegends.com/en/c/gameplay-balance/GaEQf8GU-should-riot-make-a-league-of-legends-ip-or-full-retail-game-an-rpg-like-elder-scrolls-for-next-gen

(Voting In The Link Below) https://www.strawpoll.me/18357327/r

maembe7/26/2019, 2:50:33 PM1 votes

Profitability isn't as straightforward as described here. Part of the reason LoL is one of the most popular games in the world is because its the biggest E-sport in the world, so while they lose money on the E-Sports scene itself, it contributes to their overall revenue in other ways. They also see it as an emerging market that they want to be in the fore-front of. They're playing the long game.