Outside the gaming community, the name Riot Games is hardly mentioned but gamers, especially players of PC games may be quite familiar with the company. Emerging as one of the top game developers, Riot Games has contributed immensely to the popularity of internet-based gaming and transformed the gaming industry, in particular legitimising the eSports leagues as a professional occupation. In the words of Schloz (2019), ‘Riot especially [is] a pioneer in game developing, [content creation], tournament and leagues’. Consequently, Riot Games has impacted the sports and entertainment industry due to the high participatory nature of internet-based games.
Through examining the history of its development and analysing the business model, new insight can be provided through the growth of a new internet ecosystem. Thereby, primarily using game League of Legends as a case study, the transformative impact of Riot Games is evident through social and cultural changes.
What is League of Legends?
Whilst the company itself was first founded in 2006 by Brandon Back and Marc Merrill, their first game and arguably their most popular game League of Legends was released in 2009, downloadable on Windows and MaciOs. The game is an multiplayer online battle arena (MOBA), usually consisting of two teams of five players with the objective of destroying the enemy’s ‘nexus’ (home base) which can be reached through three different lanes, protected by towers minions which repeatedly and automatically spawn till the end of the match (Lucht, 2019).
The in-game matches can be sorted through randomisation through an algorithm or derived from an in-game friends list allowing self-organisation of teams which later can become professional through trials and practices, mirroring real-life sports leagues (Hagel, 2018). There are several compulsory ‘patches’ also known as updates available frequently through the year, such as new playable champions or game modes to keep the content fresh and new, attracting and maintaining their fanbase. In addition, each champion is paired with an extensive backstory to provide more depth to the game. Their periodic changes not only display new additions but also repairs reported flaws which may disturb the gameplay, enriching the gaming experience. In early 2014, approximately 27 million people played the game daily, 67 million monthly (Madhaven, 2020), double the viewership of an NFL game and 25% more than the most popular primetime TV show (Yang, 2015).
League of Legends is based on a freemium model, a combination of the words ‘free and premium’, meaning the initial service comes free of charge however if the user chooses there are in-game purchases that can be made to provide a ‘premium’ version of the software (Lucht, 2019). Many other applications use a similar model such as Youtube and Spotify, whereby you gain access to Youtube Premium and Spotify Premium respectively, which is usually the removal of advertisements to provide an uninterrupted viewing. Whilst there are no in-game advantages that can be purchased to guarantee instant wins, character skins can be bought with real-money to add a decorative element to the game which contributes to a large segment of their revenue (Yang, 2015). This strategy allows for the players to disassociate wealth and skill, resulting in higher satisfaction for a larger portion of the customer base (Lucht, 2019). By taking advantage of the consumers’ interest and enthusiasm for the game, Riot needs not rely on in-game advertisements but generates loyalty from their fanbase (Yang, 2015).
Impact of League of Legends
Observations establish the beginning of eSports in the 2000s, described as an “alternative sport realities, that is, to electronically extended athletes in digitally represented sporting worlds” (Hemphill, as cited in Karhulahti, 2017). More colloquially, eSports is commonly referred to as competitive gaming, or pro-gaming (Cacho-Elizondo, 2020) Due to contrary belief, League of Legends is not considered to be the first major eSport but rather StarCraft and Counter-Strike, however thanks to the freemium business model, the Riot-produced game soared in popularity as the aforementioned games required an initial purchase to play (Karhulahti, 2017).
League of Legends meets the specific requirements to be considered an eSport; direct competition between two or more players, compete on a fair playing arena whereby victory is determined through skill, substantial amount of pro-players which interests from traditional and alternative media in the broadcast of the match, physical and mental preparation involved and promotion of the traditional values of sportsmanship and personal growth (Cacho-Elizondo, 2020). The participants of the game have grown significantly since their first Worlds Championship tournament, garnering 1.7 million viewers live (Mitchell, 2011) to the most recent 2020 World Championship, drawing 3.8 million spectators (Dixon, 2020). Ranging through several prominent regions such as North America (NA), Europe (EU) and China (LPL) thanks to the ownership of Tencent allowing Riot legal access to the Chinese market, which makes up a noticeable portion of the fanbase.
Additionally League of Legends has revolutionised digital marketing, utilising AR technology to promote their game. Their 2018 and 2019 Worlds Championship Opening Ceremony blended the use of mixed reality technologies to appeal to the loyalty of their customer base. Though the underlying objective was to encourage the purchase of special ‘skin’ range (worth roughly $25 AUD per ‘skin’) through the formation of global pop group K/DA, consisting of American pop stars Madison Beer and Jaira Burns, as well as K-pop idols Soyeon and Miyeon, having notable figures represent particular League of Legends’ characters struck a chord with the community.
Using AR technology, Riot Games became one of the first companies to integrate AR seamlessly into a concert experience. Even without knowledge or previous experience with the game, Riot Games managed to dip into a larger community through the creation and promotion of the K/DA ‘skins’ range.
Their influence further escalated during the 2019 Worlds Championship with yet another newly formed group True Damage musical artists, involving Keke Palmer, Becky G, Soyeon, Duckwrth and Thutmose, this time their ‘skin’ design was in collaboration with Louis Vuitton’s designer Nicolas Ghesquiere, merging the borders of eSports leagues and luxury streetwear. The trophy case as well for the coveted ‘Summoner’s Cup’ was also designed by Louis Vuitton, enforcing the significance of the impact of League of Legends on the sports and entertainment industry.
Direct participation is the main method to experience, however it is not the only way. Internet-reliant games have brought on a new culture of ‘streaming’, the live spectating of another individual playing a game. League of Legends is the second most streamed game on the platform Twitch, purchased by Amazon for $970 million to ensure their place in the gaming community (Engerman, 2017). In real sports, it is not common for an individual player to be presented practicing alone, or even a team practice broadcasted is quite rare. However, with eSports, as individual players can stream in their own time and communicate with the viewers, the entertainment sector has been transformed by internet gaming. The multitask function offered by a stream opens up the possible audience (Engerman, 2017), something that was previously difficult to do in relation to traditional media.
A New Ecosystem
Although Riot Games were not the first to lay claim to this internet ecosystem, the company potentially has the most refined and effective system of most of the popular internet-based games. Stakeholders are perceived to be a crucial foundation of the eSports industry, “groups without whose support the organisation would cease to exist” (Freeman and Reed, as cited in Scholz, 2017), therefore important in determining the success of any organisation to survive the industry.
The primary stakeholder positions serve the stakeholder audience, which can be categorised using value chain logic (Porter, as cited in Scholz, 2017). These include:
- Game Developers
- Professional Teams
- Tournament Organisers
- Professional Players
Their service aims to provide support activities such as communities, hardware providers and infrastructure providers (Scholz, 2017)
In the ecosystem, secondary stakeholders may not contribute to the community but possess substantial influence, dictating the flow of change. Sponsors, investors, entrepreneurs, media businesses as well as the general public comprise a sizable portion of this sector (Scholz, 2017).
Scholz (2017) argues that the games developer is the most important figure as a stakeholder, as they are in charge of creating the played game. As the manager of balance in the gaming landscape, Riot Games best understands their role in the ecosystem and is able to benefit from their consumer base. For financial success it is imperative that the games developer comprehends their actions and subsequently the impacts. Blizzard Entertainment learned the lesson firsthand, allowing the game to grow without their influence, ultimately the profit made from the audience did not funnel towards Blizzard Entertainment (Scholz, 2017). Riot’s management of all League of Legends related games, furthering their physical and intangible reach through the creation of leagues in North America and Europe. Though this mirrors powerful sports organisations such as the Federation Internationale de Football Association (FIFA), Karlhulahti (2017) explains the role of Riot Games as an executive owner is vastly different. The openly profit-making aspect is a contrast to supposedly non-profit organisations like FIFA, along with their ability to develop, distribute and maintain their products. This can be seen in the case of Riot Games and Tencent. Even though Riot Games is fully under the ownership of Tencent, as the games developer or rather executive owner, they govern how the game style is presented.
Riot Games’ ‘regulation’ strategy, whereby the power of the game developers controls over every aspect of the game to the professional gaming scene, cultivating a ‘historically unique identity of esport’ (Karlhulahti, 2017, p.g 48). As Riot Games has absolute control over the product in technical, economic and political aspects, in the case where the company can choose to ban teams or players from ever playing the game, affecting their daily lifestyle as well. Whereas in physical sports, for example, the World Anti-Doping Agency’s examination of Russia decided the ban the country from major competitions such as the Olympics, but the players are not prohibited to play in their own country or incorporate the sport in their daily routine (Karlhulahti, 2017).
Therefore through the popularity and financial success of Riot Games, their efforts in internet-based gaming as had an explosive impact of influencing the sports and entertainment industry. Their game League of Legends has fostered new social relations within the industry and cross global borders, bringing forth a cultural change to this generation for sports.
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