August 28, 2018
Citing Sustainability, Riot Discusses Rising Concerns About LoL Esports Costs
Summary:
Just over a year after kicking off franchise discussions for the NA LCS and in the midst of reviewing applications for its European league, Riot has come under increased community scrutiny for a slew of cost-cutting decisions in 2018 including holding events in smaller venues and most recently, choosing to not fly their English language casters to Worlds until the Finals.
Our Take:
Revenue generation for professional League of Legends has been a topic of discussion for years, but Riot has generally been relatively quiet on the topic and continued to deliver world-class esports experiences to fans which has not made it a hot-button one until relatively recently.
The general consensus is that Riot has been slow to monetize its esports product over the years and now finds itself in a difficult position as concerns about costs heighten in importance and reports have emerged that revenue is slowing at the company.
Riot is clearly in a challenging period and while how well a scaled-back Worlds experience is received will be a key data point for the company, what ultimately matters is how effectively it can make up for years of lost time on the revenue front on a go forward basis.
EXTRA CREDIT: Noted League personality and interviewer Travis Gafford held an interesting round table discussion about the topic last night:
The International 2018
Summary:
Dota 2’s biggest annual event occurred last week, with scores of fans dawning on Vancouver and tuning in online to witness one of the most sensational underdog stories play out. OG Esports captured the Aegis, netting a cool $11M.
Our Take:
What an event!
For the first time, The International was held outside of Seattle’s Key Arena, settling in the home of the Vancouver Canucks, Rogers Arena. In front of a packed house, OG Esports completed their Cinderella run, coming back from down 2-1 in the grand final against Chinese team PSG.LGD to win two crazy matches in a row and securing esports biggest prize pool.
At its peak, the English stream had almost 400k concurrent viewers, while the Russian stream (Dota 2 is massive in Eastern Europe) had about 280k. The total prize pool for the event surpassed $25M which represented a 3% increase from the prize pool of The International 2017. While still the most coveted prize in all of esports, this year’s pool represents relatively stagnant growth compared to 2017, which climbed by $4M from 2016, or 19%.
The Dota community rejoiced as Canadian hospitality — summarized neatly by Team Liquid’s Maroun “Gh” Merhej — was met with wonderful gameplay. The conclusion of this year’s event makes way for next years edition which will, for the first time ever, be held in Shanghai, China. Based on the passion displayed by the Chinese fans at this years event, we anticipate next year to be a smash success as well.