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GLOBALOUTLOOK CORPORATESTRATEGY


COMPANYPROFILE


RiotGamesproves esports’ potential


LEAGUE OF LEGENDS’ POPULARITY HAS ENABLED THE US-BASED GAME DEVELOPER’S GLOBAL EXPANSION. ALEX IRWIN-HUNT REPORTS


bustling with action. A live audience ofmore than 6000 people had descended on the venue to watch the pinnacle event of the global esports calendar: the finals of the League of Legends (LOL)WorldChampionships. But those in attendance at


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‘Worlds’ 2020 were the lucky ones. More than 3.2 million Chinese gam- ers registered for tickets to the com- petition’s final match,while global viewership on streaming platforms peaked at over 3.8 million. “Watching gaming as a pastime


is nownormalised amongst younger generations,” says Remer Rietkerk, the head of esports atmarket intelli- gence firm Newzoo. “Esports pro- vides the whole competitive aspect, with narratives, heroes and all those emotional aspects that are a draw to traditional sports.” The global audience for esports—


which is split between enthusiasts and occasional viewers – stood at an estimated 495 million in 2020, and is forecast to grow to 646mby 2023, according to Newzoo. Amajor benefactor of the rising


popularity of Esports has been LOL developer RiotGames. The company generated awhopping $1.75bn from its flagship title in 2020, according to SuperData, a subsidiary of market research firm Nielson. “Riothas built the premiere global


esports ecosystem,so gamers are always very curious to seewhat they’re going todo next,” saysMrRietkerk. Nicolo Laurent, the chief execu-


tive of Riot Games, said in a press briefing ahead of the finals ofWorlds 2020, that he thinks entertainment is “evolving”, believing the future will be at the “crossroads” of gaming, sports and music.Heplans to focus


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t the end of October 2020, Shanghai’s newly built Pudong Football Stadium was


Riot’s research and development efforts to explore thisnewfrontier of the entertainment industry. “We’re going to go after that


world,” he added, highlighting that Riot will drivemost of its innovation in the opening ceremonies of its LOL world championships. But as Riot enters its fifteenth year at this fore- front of this new frontier of enter- tainment, howdid it become the powerhouse it is today?


Fromgreat idea to global success Riot Games was founded in 2006 by two University of Southern California graduate students, Marc Merrill and Brandon Beck, before launching LOL in 2009. Riot’s flag- ship title — commonly known as ‘League’ or by its acronym ‘LOL’ – has grown to become one of the most popular PC games of all time. While LOL was not the firstmul-


tiplayer online battle arena (Moba) game—which involve two teams of players competing against each other on a predetermined battlefield —Riot was one of the first developers to offer a free video gameand charge playersmoney for new characters and customisable clothing (skins). This ‘freemium’model is now


prevalent across the industry, and seen in rival games such as Valve’s Moba Dota 2 and Activision’s battle royale Call of DutyWarzone. Indeed, free-to-play games generated the vast majority (78%) of games revenues in 2020, according to SuperData. Riot has leveraged the LOL com-


munity and brand by developing new games, releasing its spin-off TeamFight Tactics in June 2019, its digital collectible card gameLegends of Runeterra and amobile version of LOL called Wild Rift. “We spend a significant amount of time, energy and resources to


make sure the gameis still vibrant,” Mr Laurent said ahead ofWorlds 2020. “You cannot build a sport with- out a great game,” he added, point- ing out that LOL has “hundreds” of developers who are passionate gam- erswho listen to the players and engage with the community. “Most games don’t really sustain


in the long-run. But at Riot, we really built the company, theDNA[and] the infrastructure to really focus on games. Not just for years, but for dec- ades,” he added.


Asia-focus Off the back of its success, Riot Games has grown toemploy more than 3000 people—nicknamed “Rioters”—acrossmore than 20 offices worldwide, including in Paris, Berlin, Sydney and Moscow. But while it has presence in the


world’s most popular destinations for foreign gaming investment, including London and San Francisco, it has aggressivelymoved into Asia- Pacific. In 2016, Riot opened its first international gamedevelopment studio in Hong Kong, later establish- ing a second in Singapore 2020. It has also builtphysical esports


infrastructure, investing $88.9m into a LOL ‘battle arena’ in Seoul, South Korea—a country which ishometo many of theworld’s topesports teams. According to data provider


Statista, the Asia-Pacific gamingmar- ket was worth $84.3bn in 2020— more than double that of North America’s, and almost half of the global total. China remains the larg- estmarket in the region, where Riot has an office in Shanghai.


Diversification Riot Games has also diversified its gameoffering to include another free-to-play shooter called Valorant,


www.fDiIntelligence.com February/March 2021


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