Riot says its esports business is close to breaking even

Riot Games' esports operation is not yet profitable, but the company says it is close. Speaking to GamesIndustry.biz, John Needham, Riot's head of publishing and esports, described the business as "super close" to breaking even after a series of changes made since 2020.

Riot has run its competitive scene at a loss for most of its history. Needham, previously the company's head of esports, has said in the past that the priority was making the wider ecosystem — the teams in particular — financially viable. The stated goal has since shifted to making esports a sustainable business in its own right.

From sponsorships to digital items

Needham points to the period after the pandemic, which he characterises as an "esports winter" in which sponsorship money thinned out and teams struggled to raise capital. Riot's response was to move the revenue model away from sponsorships and towards digital items sold in its games, with the proceeds shared with teams. Teams, in turn, cut their own spending.

The company has also loosened its grip on the competitive calendar. Organisations including Karmine Corp and T1 now run their own events, and Riot says it has become more permissive about teams entering third-party tournaments. Needham said Riot shared more than $100 million in digital revenues with teams over the past year for the Valorant Champions Tour alone.

Broadcasts built for players

Needham argues esports matters more to Riot than to most publishers because competition sits at the centre of its games. Riot's broadcasts skew technical by design: he said roughly 60% of the company's esports viewers watch to learn how to play better, which is why coverage leans on mechanical detail rather than the suited, traditional-sports presentation Riot tried in its early years and quickly abandoned.

Player numbers in League of Legends, Valorant and Teamfight Tactics are growing, Needham said, but esports viewership is growing faster. Riot's newest competitive title, the fighting game 2XKO, is being treated differently: rather than building a separate viewership product, the company says it intends to show up at established fighting-game events such as Evo.

On the betting sponsorships that drew criticism from parts of Riot's community last year, Needham said gambling activity forms around competition whether a publisher participates or not. Riot's programme requires an official betting partner to subscribe to its data service; those partners may use Riot marks on their own sites but are not promoted on broadcast, and the arrangement is used to flag matches showing signs of match-fixing.