Riot Games Introduce New eSports Monetization Possibilities for League

September 23, 2016 - Esports, News

Following the removal of solo queue and Riot Games’ refusal to reinstate it, controversy surround the Christopher “MonteCristo” Mykles team’s Renegades removal from the LCS, and the public spat between Marc “Tryndamere” Merril, the CEO of Riot Games and Andy “Reginald” Dinh, the owner of Team SoloMid, players good-will towards the company was waning for a long time. Taking steps to recover, Riot Games released an announcement about their plans to solve most of the concerns raised by various League personalities, concerning the financial system issues, which were stunting League of Legends’ growth as an eSport.

The, first, and probably the most important, issue with the previous Riot model, raised by people like MonteCristo, Reginald and others, was the way League teams supported themselves financially. For a long time, the brunt of their income came from sponsorships, which are actually a very small portion of a professional sports team’s income in traditional sports. This was due to the Riot stipends which didn’t change for years while League grew as an eSport and the cost of running a team balooned significantly, as well as the fact that Riot did not share the revenue of the eSports related merchandise, like Team Icons, and the revenue of the LCS, with the teams which played in the league.

Even the sponsorships were a difficult thing to acquire, or the biggest teams as well as the small, because League of Legends teams are not guaranteed a spot in the LCS for more than a Split. It’s possible that TSM, for example, could have a completely disastrous Split and get relegated, essentially killing the team’s attractiveness to sponsors. As a result, sponsorship contracts were usually signed for a year at most, which is not a very secure agreement. This made it very difficult for team management to plan for the future, because they had no way to know if there would even BE a team next year, especially among the lower-tier squads in the various Leagues.

To alleviate, if not completely solve, the concerns raised by owners and scene insiders alike, Riot Games introduced several measures, effective with the upcoming World Championships, going forwards in the future.

First of all, 25% of Championship skins & wards sales’ revenue will be added to the Worlds prize pool. For example, the prize pool for Worlds 2016 will be directly increased with each sale of the Championship Zed skin.

Next, the Mid Season Invitational’s prize pool will be directly increased by the sales of the Challenger skin. Also, 25% of the revenue from Team Championship skins will go directly to the players who inspired them, their team, and league, applied retroactively, which means that Fnatic, TPA, SKT twice, and Samsung White players, their team, and the region, will receive a fourth of the revenue from the sale of their respective skins.

In the future, Riot Games is also planning to introduce even more revenue sharing opportunities, “such as team-branded in-game items and esports promotions, as well as improving revenue sharing on summoner icons (World icons increasing from 20-30% and regional league increasing as determined by each league).” The statement goes to point out that in 2017, each team will receive a guaranteed minimum payout, as determined by the needs in their particular region, with Europe being pointed out as an example, promising 100,000 euro for each team participating in the EU LCS, “of which 50% will go to players as supplemental income on top of their existing salaries.”

While it’s sad the these measures were only taken when the situation became a Public Relations nightmare for Riot Games, it is a right step towards the growth of League of Legends as an eSport. In the end, circumstances don’t matter. The only thing worth anything is what is done to fix the problem. Riot Games is making an effort to fix the problem and that is good.