Riot Games is an American company specializing in video game development and eSports tournament organization. The company is known for such top games as League of Legends, Valorant, and Legends of Runeterra.
Recently, it became known that Riot Games has had one of the largest reductions since its establishment in 2006. 530 technical experts are planned to be laid off, which is equal to 11% of the total number of employees.
The downsizing is partly related to events during the COVID-19 pandemic. During the pandemic, interest in online entertainment significantly increased. However, with the lifting of the quarantine and the gradual stabilization of the situation, the need for all those personnel ceased to be economically justified.
Along with hiring staff, the company made significant investments, which did not pay off. This only led to serious financial losses and the need to invest even more for reorientation to new and smaller projects.
Riot Games CEO Comments on the Situation
The news about the reduction in the number of employees seriously affected millions of fans around the world. Games like Valorant or LoR have already become synonyms for tactical shooter and MOBA, respectively. Considering the extreme responsibility of such a decision, the company‘s CEO (Dylan Jadeja) gave comments on this situation.
He emphasized that the main company‘s goal is to focus on the audience’s requests and needs. It is necessary to determine which features really bring the greatest value to players. The resources that the company spends to pay 530 staff members are a solid sum that is currently critically needed for reorientation to new projects that will be more interesting to users.
In addition, Jadeja described in detail the difficult path the company took during the last five years to find new sources of investment. Without additional financing, scaling up the business and creating a truly ambitious product would not have been possible.
Which Games Are Affected?
According to Dylan Jadeja, changes will affect the following games:
- Legends of Runeterra (switching the focus to single-player)
- Riot Forge (the project will be closed)
The first game is a legendary title that features around 10,000,000 games per day and a peak viewer record of 66,130 (in 2020). Jadeja highlighted that LoR has always been subsidized via other Riot Games products. A similar subsidy scheme can be seen in the online demo, which does not make a profit but lives off the main projects.
This means that it is not the most favourable option regarding finances. As for Riot Forge, the CEO did not provide much information on this project. The only thing people found is that the project will wind down, and the publisher will focus on other games within the LoR world. Concluding his speech, Dylan Jadeja noted that these changes are a reality and a necessity, and they have to be dealt with.
Changes in Tencent Stock Quotes
Changes like those that occurred with Riot are not unique. Many technology companies cut jobs because of industry shifts. Among them are such technological giants as the following:
- Hasbro
- Amazon
What‘s more, the downsizing of such a large technology company coincided with other news from the Chinese gaming world. Those who follow the Asian gaming market know that recently, the Chinese game regulator became the object of journalists’ attention due to changes in its work.
It turned out that it withdrew the project, which was intended to reduce spending on online video games. After the project was first published, the market reacted instantly. In December, China’s gaming industry lost billions of dollars in market value.
However, after the project withdrawal, the situation changed. This had a positive effect on Tencent’s (the owner of Riot Games) shares, which rose 4.6% on the Hong Kong stock exchange the day after the news announcement.
