Riot Games, the video game developer behind the hugely popular League of Legends, announced major layoffs on January 22nd, 2024 cutting 11% of its global workforce. The layoffs come as part of a major company reorganization aimed at improving focus and operating efficiency.
Background
Riot Games was founded in 2006 and saw meteoric growth with the launch of League of Legends in 2009. The free-to-play multiplayer online battle arena game quickly became one of the most played PC games in the world. Its success has funded Riot’s expansion into developing new games, esports leagues, entertainment content, and more.
While League of Legends remains popular, Riot has struggled to replicate its success. Newer titles like Valorant, Legends of Runeterra, and Teamfight Tactics have found audiences, but none have matched League’s playerbase or revenue.
Riot Games is wholly owned by Chinese tech conglomerate Tencent Holdings. While Riot operates independently, Tencent expects a certain level of performance. Revenue growth has slowed in recent years as the League player base plateaus. This likely informed the decision to restructure.
Restructuring Details
In total, Riot will cut 530 jobs globally. The layoffs account for 11% of Riot’s employees prior to the restructuring.
Riot also announced they would sunset their publishing label Riot Forge, which collaborated with third-party studios to develop League of Legends-based games. Their current slate of Riot Forge games will still release as planned.
Additionally, Riot plans “strategic changes” to reduce complexity, improve focus, and increase player value. They did not share specifics but said they would have more details in the coming months.
In a letter to employees, Riot CEO Nicolo Laurent stated:
“This isn’t to appease shareholders or react to outside pressures. This is about focusing on what players want and improving how we deliver it.”
He went on to say:
“Riot’s priority will always be player experience first. This realignment will sharpen our focus to deliver even more outstanding games to players.”
Impact on Games & Projects
Riot emphasized that game development would continue largely unaffected outside of Riot Forge’s cancellation. Their current games will see continued support and upcoming titles are still in the works.
That includes major 2024 releases like the League of Legends MMORPG codenamed Project L, the League fighting game codenamed Project L, and the League single-player RPG codenamed Project F. The latter two projects fall under Riot’s new Riot Experience Labels initiative announced last October.
Riot says these upcoming games are progressing well. Project L aims to enter closed beta later this year.
However, the layoffs will undoubtedly slow down departments across the company to some degree. Support and quality assurance may take slight hits even if development continues full speed ahead.
While Riot looks to focus internally, they also reduced funding for Riot Games Social Impact Fund from $10 million down to $3 million annually. The fund supports nonprofits and charities using technology for social good.
Fallout
The reaction from players and industry analysts paints a complicated picture.
Riot’s games retain devoted fanbases. Some players expressed disappointment at the loss of jobs but maintain trust in Riot to keep delivering quality experiences.
However, critics see this as a move solely aimed at juicing profits for shareholders at the expense of workers. Riot pulling back funding from their charity initiative reinforced this belief for some.
Gaming industry layoffs frequently spark reactions like this as developers tout “focusing on fans” while cutting costs. Whether it proves true for Riot remains to be seen.
Additionally concerning is this marks one more AAA studio downsizing as the video game industry copes with economic instability in early 2024. Just earlier this month, Microsoft and Sony made major cuts of their own. Some fear a regressing market could claim more jobs before conditions improve.
Riot stated laid off North American employees would receive a minimum severance package including:
- 10 weeks of pay
- Equity vesting
- Medical benefits through October 2024
- Mental wellness support
- Immigration support
They did not share if international employees would receive similar terms.
What’s Next
In their letter, Riot stated their goals for 2024 focus on three key areas:
-
Improving game quality and players sentiment
- Deliver more value to players through better experiences and support
-
Investing in future gameplay innovation
- Continue developing the ambitious pipeline of new games
- Make progress on advanced gaming technology
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Increasing operational excellence
- Work more effectively by eliminating complexity
- Be responsible with player investments
Achieving these goals now falls on Riot’s reduced staff in 2024. With major games like Project L slated to launch in the next couple years, we’ll soon find out if this gamble pays off by energizing the company culture and output.
Or Riot risks players losing faith if these restructuring efforts hamper support for current titles or slow down developing new ones. For Riot’s sake, the cost-cutting can’t come at the expense of fan satisfaction and trust long-built on consistent delivery of highly popular games.
Other studios acquired by major corporations faced similar inflection points and stumbles. Depending on who you ask, this re-focusing sets the stage for either a Riot resurgence or the beginning of an identity crisis for the iconic studio.
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