Suggested Alternative to Fundamental Flaws in New Lore Approach
I think there is a fundamental flaw with your new lore approach, and as a writer myself I'm hoping you'll read this and consider an alternative. As other players have eloquently said completely separating the lore from the game is NOT a good idea. It feels great when you are playing a match and that match feels part of the lore, not as a side game disconnected from it. That context makes it FEEL more epic. It matters. That the old context was bad and limiting, that's true but that means you needed a better context for the game play not to just remove it.
Here are the key elements to a narrative revision:
-** One, **that champions do have agency "outside" of the gameplay and a complex world for those champions to have to explore that agency.
- Two, that in addition to number one there is an strong lore context to the the gameplay that makes matches feel epic.
- **Three, **That since this is an interactive media the players (and developers!) are part of the lore not as individuals but an "entity".
Your current rewrite only addresses the first point, and that just really isn't good enough. Here is an alternative narrative:
The champions are all citizens in the world of Runeterra, a complex place with wars, culture, drama and conflicts where the champions have agency and can be flushed out in context. In this world the champions are all inhabitants who started out as regular people but rose to be among the most powerful warriors. This fulfills the first point, as you proposed.
To the second and third point:
As part of Runeterra's mythos there is the belief their world was created by powerful beings known as "Summoners". These beings care little for what happens in their world, they observe but don't interfere. They are neither malevolent or benevolent.
But they are willing to trade favors, and it is known that for the strongest champions of Runeterra the summoners will grant a wish, for a price. Some great champions call out to the summoner's in their last breath to trade their life for the blood contract. Others sign the contract in exchange for the life of a loved one, others to buy the love of another, or for power, or to be free of a prison, or whatever wish they have view worth the price of the contract.
In exchange the champion is bound to the summoners to be called upon to fight in the summoner's game known as the "League of Legends". For this game, the Summoners have created a special place outside of runeterra, inside an inter-dimensional rift known as the "Summoner's Rift." This game is of great importance to these mysterious and powerful Summoners. Each game, each team of summoners teams imbues their own nexus with some of their own power to fuel their defenses and minion army. And each time a team of summoners defeats an opposing team and destroy their nexus they absorb the power stored in it for themselves, while the losing team loses that power. Thus the winning summoners becomes more powerful and attains higher rank within their own society (ranked ladders/LP!).
This game is of such importance to the Summoners the greatest team of Summoners to defeat all others is crowned the champion among all summoners and leader of their society (championship winners!).
When the champions are summoned from Runeterra to the Rift they are still themselves, their lives only temporarily left behind, but are bound by the blood contract to obey their summoner and fight alongside the other champions in their Summoner's team, regardless of how much they may despise them in their lives in Runeterra.
While in the Rift, champions are brought back to life by the Summoners upon death, but still feel the agonizing pain of each death and blow they take. While the summoners guide them and assist them towards victory with spells and directions, the champions mostly rely on their own strength and combat experience to win.
A champion that fails to fight to their best capacity and obey the orders of the summoner pays the price of the contract: permanent death and a loss of the wish granted in the blood contract (if it was other than their own life). Champions are only allowed to return home, to continue own with their personal lives, when a game is completed and a nexus destroyed... that is, until they are summoned again.
This approach would give:
An interesting context for the game that explains the Summoner's rift and why the champions are doing what they're doing and why the nexus matters, while including gamers and even developers (the summoners who created their world), all in the logical way. The ability to continue developing the champion's stories in their world, and the world itself, since their normal lives are separated from the battles in the Rift and the summoners unlike the old academy actually want nothing to do with what happens in runeterra other than collecting champions by contract and playing their game. Adds a lot of dramatic flare to the champion/summoners relationship allowing champions to be "themselves" even in the rift.
Rather than the old notion of "joining an academy" which was very simple and limiting in writing their personal stories, each champion now signs a contract with the summoner's on their own terms getting in return something that was special to them and plays a big role in their own personal story and since the "wish" in the contract can be almost anything writers have tons of options on how to build it in to their story.
For example perhaps Lucian's wife died and he signed the contract to bring her back only to then have Thresh steal her soul and to them be summoned to the rift by that contract and have to fight alongside Thresh - knowing that if he refused the summoners they would take both his life and what remains of his wife inside Thresh's prison, talk about dramatic. Perhaps rather than randomly reawakening after a millennia (that was not the best story guys...) the summoners came to Gnar in a dream inside his ice prison, and promised the ancient yordle a concept so simple even he could understand: freedom, in exchange for a blood contract. Etc.