Mentioned in this article Games: League of Legends

Riot Games head of global esports events Derrick “FearGorm” Asiedu responded to a Reddit thread which raised concerns of esports budget cuts.

Asiedu stated that Riot spends over $100M annually, and that the esports team is “a long way from breaking even.”

The publisher is experimenting with cost-cutting measures for live events, while pursuing strategies to increase esports revenue.

Riot Games head of global esports events Derrick “FearGorm” Asiedu has responded to a Reddit thread which raised concerns about the publisher’s esports budget. The discussion was sparked by news that the English broadcast of the upcoming League of Legends World Championships would largely come from the company’s studios in California, rather than onsite in South Korea.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]According to Asiedu, the esports team is “a long way from breaking even.”[/perfectpullquote]

Asiedu explained that Riot spends over $100M annually on esports globally. “Instead of just making esports happen and be awesome,” he said, “we also want to focus on making this a financially sustainable endeavor that can last decades or more.”

According to Asiedu, the esports team is “a long way from breaking even” and is attempting to cut costs in the short term, such as reducing travel expenses for the broadcast team, while implementing strategies to increase revenue. “Regardless,” says Asiedu, “we think increasing revenue will get us much closer to breaking even than simply reducing costs, so worldwide we’re focusing on increasing revenue.”

For its Western esports properties, Riot has significantly increased its brand partnership activity this year, signing deals with gaming chair brand DXRacer, online ticket platform SquadUp, fast food chain Hungry Jack’s, sandwich chain Jersey Mike’s Subs, Dutch blood bank Sanquin, and insurance company State Farm.

Asiedu also stated that this change in esports strategy “has nothing to do with our relationship with Tencent, it’s something we want to do so that we can last in the long-term.” Chinese investment conglomerate Tencent Holdings acquired Riot Games fully in 2015. A recent report by The Information indicated that tensions between the two companies had risen after Riot reportedly declined to develop a mobile game version of League of Legends, prompting Tencent Games to release Honor of Kings. Riot issued a statement that the two companies “have an incredibly strong relationship built on collaboration and a shared vision for what we can do for players.”

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[perfectpullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Throughout his statement, Asiedu reiterated that 2018 has been an experimental year for the esports team.[/perfectpullquote]

Asiedu then responded to the concern of the esports budget facing cutbacks by saying:

“It depends. If revenue picks up enough over the next [about three] years, our budget can stay the same or increase. If revenue does not pick up enough, our budget will need to decrease by some amount.”

Throughout his statement, Asiedu reiterated that 2018 has been an experimental year for the esports team. Decisions such as holding the Mid-Season Invitational and NA LCS Spring Final in smaller venues were made to test out potential cost-cutting measures.