Riot Games could be preparing to reduce its esports budget over the course of the next few years. The news comes in the wake of suggestions that the company is already cutting back costs on its esports production, which have stemmed from comments from League of Legends Championship Series shoutcaster Andy ‘Vedius’ Day.
During a stream over the weekend, Day stated that while he might be attending the League of Legends World Finals this year, he would likely not be flying out to Korea, where the tournament is being held. Reportedly, that’s because the broadcast will take place in Los Angeles, where Riot’s headquarters is based.
When asked why that would be the case, Vedius replied “because it’s cheaper,” stating that Riot has “always done the play-ins” from Los Angeles and that “I think they want to do the rest of it from LA too.” Fans later learned that only the on-stage interviewers, Ovilee and Sjokz, would be on-site in Korea throughout the tournament. Other casters and crew will attend the Grand Final, but the play-ins, group stages, and quarter and semi-finals will all have their English language streams broadcast from America.
This, combined with the Mid-Season Invitational being held in studios and the NA LCS Spring Finals taking place in a small, 1000-capacity venue, led some fans of the game to conclude that Riot is cutting back its budget. In a post on Reddit, the company’s head of global esports, Derrick ‘FearGorm’ Asiedu, responded to that suggestion, saying that the company isn’t simply looking to reduce its esports expenditure, but is “going to start exercising more discipline around holding ourselves to financial constraints.”
In a comment on Reddit (which you can view courtesy of this post) FearGorm says that the answer to the question ‘is Riot cutting back budget on esports?’ “isn’t straightforward.” Worldwide esports costs the company “way over $100m annually,” but Riot is “ok with costs continuing to be high.” That said, “we don’t want to continue to be in startup mode – we’re now a mature business and costs need to be more in line with revenue in the future: Now that we’ve built something awesome, we’re going to start exercising more discipline around holding ourselves to financial constraints.”
Simplified, while it might seem a poor omen for a company as apparently successful as Riot to be cutting back on one of its most public, but ultimately unnecessary, expenditures, all it really does is speak to more “mature” business practice.
— Ben Forbes (@draggles) August 28, 2018
FearGorm also suggests that Riot is in fact continuing to increase spending on esports, reporting that 2018’s tournament “will be the second most expensive Worlds yet.” This year is apparently “a transition year,” in which Riot is “experimenting with cutting back costs in some places to see how fans feel about it.” The company also plans to increase revenue over the next few years, and “over time you’ll see the moves we’re making to increase revenue.” Those look to include “digital experiences,” that sound similar to Blizzard’s virtual BlizzCon tickets, as well as “traditional sponsorships.”
It’s only if revenue “does not pick up enough” over the next “~3” years, that Riot will cut back their esports budget, but if current trends continue over that time “our budget can stay the same or increase.” Worlds 2018 begins in October, and will culminate in a Grand Final scheduled for November 3.