Inspired by the success of the VCT model, Riot Games introduces a new business model for professional teams in the LCS, LEC and LCK. The purpose of this change is to provide more predictable revenue from in-game digital item sales to ensure long-term sustainability.
LoL Esports strategy adjustment
In short:
- A new economic model: Inspired by the success of VCT, Riot Games introduces a renewed economic model for the LCS, LEC and LCK, aimed at making revenue through in-game digital items more predictable and sustainable.
- Collaboration with LPL: Evaluating the Equivalent Adaptation of Economic Models to LPL.
- Sustainability goal: The initiative aims to ensure that Riot can cover the costs of games, teams and partners while providing viable careers for LoL esports players.
- Dependence on sponsors: Leagues and teams depend heavily on sponsors, but the situation is improving with new partnerships and renewal of contracts with major sponsors.
- Adjusted strategy for 2025: Riot Games offers a similar partnership model to VCT for LCS, LEC and LCK, emphasizing revenue from digital content sales rather than sponsorships.
- Global Revenue Reserve (GRP): Introduced GRP to share digital revenue, rewarding teams for their competitiveness and popularity.
- Increase in digital content: Riot Games plans to increase LoL Esports digital content to support GRPs and encourage the growth of esports.
- A long-term commitment: Riot Games reiterates its commitment to esports, aiming to maintain its position as a global leader and ensure long-term sustainability for itself and its partners.
Inspired by the success of the VCT model, Riot Games introduces a new business model for professional teams in the LCS, LEC and LCK. The change is intended to provide more predictable revenue from in-game digital item sales, reflecting global fan support for LoL Esports. Riot Games is also working with LPL to adapt its economic model. These initiatives are designed to ensure the long-term sustainability of League of Legends esports, generating enough revenue to cover the costs of riot games, teams and other partners, while providing players with viable careers for professionals.
It allows for more predictable revenue for teams and a financial boost driven by in-game digital items that reflect the support of LoL esports fans around the world. The changes we are introducing to teams are aimed at keeping esports healthy and bringing it long-term sustainability. In this context, sustainability means that LoL Esports can generate enough revenue to cover the costs of Riot, our professional teams and other partners investing in our ecosystem, while also providing long-term careers for top professional players.
John Needham – President of Esports at Riot Games
Despite the challenges, League of Legends esports has achieved record success in 2023 and early 2024 with a significant increase in viewership. However, the industry has faced problems, leading Riot Games to cut its payroll by 11% in January. The league is heavily dependent on sponsors, but the situation is improving with the arrival of new partners and the renewal of contracts with major sponsors.
In addition to sponsorship, we are committed to creating other meaningful revenue streams. In-game digital sales represent the most measurable source of real-world revenue generation. We still believe that the strongest path forward for eSports is to monetize them more like sports, and share the revenue generated with our partner teams (…) based on the needs and realities of the ecosystem today. are very different. rather than a few years ago. Now is the time to realign the business model that powers LoL Esports to strengthen its longevity and make it viable and sustainable for us, our partner teams and professional players.
John Needham – President of Esports at Riot Games
Riot Games is adjusting its strategies for 2025 to meet the needs of the current ecosystem. A new partnership model is proposed, aligned with VCT, allowing LCS, LEC and LCK teams to benefit from a more stable income. This model focuses on digital content sales rather than sponsorship revenue, provides higher revenue potential and is less subject to economic fluctuations. Digital revenue will be shared by the Global Revenue Reserve (GRP), rewarding teams for their competitiveness and popularity.
This new model also changes how Riot Games allocates and shares digital revenue with partner teams. Historically, only teams participating in international events (MSI, World Cup) benefited from digital content sales related to these events. This meant that a maximum of 20-30 teams participated in the season’s digital revenue. Riot Games wants this revenue to circulate more in the Tier 1 ecosystem. To do this, Riot Games will create a Global Revenue Pool (GRP) that will centralize LoL Esports’ revenue and distribute it to the teams through three channels:
- Common Parts: 50% of GRP is donated to Tier 1 teams.
- Competitive Share: 35% of GRP is allocated for competition. This amount is divided according to competitive performance, in two stages: one according to ranking in regional leagues, and another according to ranking in international events.
- Fandom Shares: Rest 15% GRP depends on popularity. This rewards teams that develop a strong fandom for their players, their league and their team.
To bolster GRP, Riot Games will increase LoL Esports digital content released each season. Riot Games is committed to investing in esports, reaffirming its position as the number one esports in the world and aiming for long-term sustainability for Riot Games and its partners.
We fund esports for the long term. Our dedication to creating unforgettable gaming experiences remains, and our investment in esports will be unmatched in the industry. LoL Esports is the number 1 e-sport on the planet. It is home to a passionate community, the most recognized teams, the best players… and an unmatched legacy. We intend to establish this status and make it sustainable for current and future players. There will be other changes and adjustments along the way, always with the goal of improving our games, better serving our players, and achieving a sustainable ecosystem for Riot Games and our partners.
John Needham – President of Esports at Riot Games