Riot boss reveals Valorant-inspired plan to keep LoL esports from dying
Colin Young-Wolff/Riot GamesJohn Needham, Riot’s President of Esports, revealed an extensive plan to make the LCK, LEC, and LCS more sustainable in the long term by changing the way teams make income. While it’s not identical to Valorant’s revenue share system, it’s pretty close.
It’s no secret that Valorant has exploded in popularity since its release, with the esports scene thriving while the game continues to gain momentum as one of the biggest competitive titles in the world.
And, though the way they went about creating a franchised league had its drawbacks, the teams who have those spots in VCT franchised leagues are supported by Riot as they continue to find ways to give orgs a piece of the pie. Anyone familiar with VCT Americas will have seen zellsis shilling the Sentinels bundle, and LoL esports is being set up to have a similar infrastructure.
John Needham revealed Riot’s plan to make the League of Legends esports ecosystem more sustainable with some detail on how teams in the LCK, LCS, and LEC will get stipends and revenue sharing.
Riot esports boss lays out plan to keep LoL alive
John Needham’s explanation is a bit wordy and stat-laden, so we’ll give you the short version of what these changes mean for teams and why this could create a more sustainable League of Legends esports ecosystem.
Needham claimed that revenue sharing for teams was overly reliant on sponsor dollars, and most teams didn’t benefit enough from their 50% share of LoL esports revenue to keep them afloat.
So, he’s outlined a model that’ll be proposed to teams within the LCS, LEC, and LCK for how to get them more involved in the profit Riot gets directly from microtransaction sales.
“Under this new model, LCK, LCS, and LEC teams will be paid a fixed stipend and share in revenue from LoL Esports digital content sales. This model shifts the revenue-sharing mechanism away from sponsorship sales as the primary revenue source and focuses on digital content sales, which are generally more resilient to economic downturns and have a higher ceiling than sponsorship, which is capped by inventory, categories, and market penetration,” Needham explained.
These shares will be evenly distributed on a global scale with all the major regions besides the LPL. As for why the LPL isn’t included, there hasn’t been anything confirmed, although Needham claimed to be “working with the LPL on how their business model may evolve.”
LPLConsidering China has a number of merchandising options other regions don’t like collectible player cards and China-exclusive esports Chromas, it’s safe to assume that the way revenue sharing works in the LPL is a different beast from the rest of the world considering how popular League of Legends is there. They’re ahead of the curve when it comes to monetizing their esports scene.
Needham has also proposed a GRP, or Global Revenue Pool, that takes all digital LoL Esports revenue (not profit, total revenue) and distributes it to teams with some being rewarded for certain things. Here’s how the revenue share works as per Needham’s proposition:
- General Shares: 50% of the GRP goes into General Shares and is allocated to Tier 1 teams.
- Competitive Shares: 35% of the GRP flows into the Competitive bucket. These shares are allocated based on competitive performance and are split into two tranches: one based on regional league standings and the other based on international event placements.
- Fandom Shares: The remaining 15% of the GRP goes into Fandom Shares. This bucket rewards teams for developing strong fandom for their players, leagues, and team brands.
It hasn’t yet been outlined what metric in which the fandom shares will be judged upon, but this lays down the groundwork for player skins like the LPL 10th Anniversary Chromas pictured above or team bundles like what we have in Valorant.
“The in-game LoL Esports content we’ve released the past two seasons (i.e., MSI/Worlds content, SKE emotes, Worlds Winner skins, etc.) has continued to set new engagement and revenue records, and we’re eager to continue that trajectory to support the GRP,” Needham claims. “We’ll have more to share about some exciting new digital LoL Esports products in development later this year.”
Considering China has already implemented esports skins outside of the typical Worlds-winning team and esports bundles, there’s a good chance players will have more ways to support their favorite team in-game soon.
However, there’s a catch to this:
“In addition to esports digital content revenue, we will contribute 50% of other direct revenues (sponsorships, media, etc.) once Riot recovers its annual investment in LoL Esports,” claimed Needham. That 50% split was unconditional before this proposal, and, if LoL esports doesn’t recover its annual investment, teams won’t see any of the sponsor money they did before.