Entrepreneurs: Riot Games: Against Prevailing Wisdom
by Miki SaxonWhen Riot Games was founded in 2006 by Brandon Beck, and Marc Merrill it was done out of frustration. They wanted a game that would embrace fans desire to engage in that game, rather than being forced to dump it for a new version.
League of Legends was launched three years later; it was launched ignoring prevailing wisdom about how to make a game pay, i.e., no hardware, free download, players couldn’t buy extra power or skill for their avatars and time to grow organically.
“People told us when we started that if you don’t charge up front, or if you’re not selling extra power or stats, it won’t work,” Mr. Merrill said. “But that fails to account for the coolness factor. If you’re really into cars, you don’t mind spending $50,000 to soup up your Honda. That’s the player we’re tapping into.”
Riot now has 1500 employees and is on target to break the billion dollar revenue mark.
The company says there are now 67 million active monthly players around the world, and in August alone this crowd spent $122 million, according to SuperData.
Riot Games doesn’t have advertising on its site; it focuses totally on its users believing that if they are happy revenues will come.
“Whenever I talk to executives at Riot, it’s like a mantra: ‘Revenue is second, the player experience is first,’ ” said Joost van Dreunen, chief executive of SuperData. “The paradox is that by putting revenue second, League will be one of the very few games to bring in $1 billion in 2014.”
Moreover, although it isn’t paying off immediately, Riot Games is working diligently to build LoL into a major e-sports presence.
Dozens of those players are now in Seoul, at the fourth world championship. On Oct. 19, the finals will be held in a stadium built for soccer’s World Cup, with 40,000 fans expected and many times that number watching online. Last year, Riot Games says, 32 million people around the world saw a South Korean team win the Summoner’s Cup, along with a grand prize of $1 million, in the Staples Center in Los Angeles. That’s an audience larger than the one that tuned in to the last game of the N.B.A. finals that year.
And while most of Riot Games’ 1500 employees are in Santa Monica, the bulk of its players are in Asia.
Sometimes it pays not to listen to the experts.
Flickr image credit: Chris Yunker