League of Legends Creator Unveils New Titles to Avoid Being One-Hit Wonder

(Bloomberg) -- Riot Games, which spent the past decade relying on one product, is finally looking to expand.

The Los Angeles-based creator of League of Legends said Tuesday it’s working on six new games. They include Wild Rift, a version of its flagship title for mobile and console devices that will debut next year, and Legends of Runeterra, an online card game featuring the company’s universe of characters.

The bigger portfolio, which will include shooter, fighting and adventure titles, means more competition for giants such as Activision Blizzard Inc. and Electronic Arts Inc. It’s also a growth opportunity for Riot Games’ parent, Chinese internet giant Tencent Holdings Ltd., which has seen its game revenue and online ad businesses in China soften.

League of Legends generated $1.4 billion in revenue last year, according to Nielsen’s SuperData Research. Over 100 million people play the game, which takes place in a fantasy world of battling demigods and dragons. At one point in August, more than 8 million were playing at once, the company said, setting a worldwide record for computer games.

That makes this a good time to expand, according to company co-founder Marc Merrill.

“League of Legends started as this tiny, kind of janky game, and has evolved into this global phenomenon,” Merrill said in an interview. “‘We view the next 10 years, all these games coming, as sort of the proof point. Is this crazy idealism that led to this company? Is that what people really want?”

Several of the new games will be based in the League of Legends universe. A second, new mobile game is a spinoff of a current League of Legends mode called Teamfight Tactics, where players battle seven opponents on a rotating basis. The company is also creating an animated video series featuring its characters, for an outlet that has yet to be determined.

Riot has taken its time developing new products to create games that differ from its lone product and those of competitors, Merrill said.

Unlike League of Legends, which can take more than an hour to play, the mobile versions are designed to run 20 minutes. The shooting game is being engineered to thwart aimbots -- outside software that gives an unfair advantage to players who use them.

The new-product announcements, made during an hourlong webcast, are part of a 10-year anniversary celebration for League of Legends. The bash includes matches featuring some of the game’s original players, special gifts for online fans and the introduction of a new warrior, Senna, whom fans know since she’s been trapped in a lantern in the game for years.

Riot Games was founded in 2006 by Merrill and Brandon Beck, two former University of Southern California classmates. They were dissatisfied with the industry model of releasing new versions of games once a year.

They developed a title that’s free to play and updated regularly with new characters and experiences. Riot makes money when players purchase gear in the game, such as costumes for characters. Prices range from $4 to $25.

In League of Legends, two teams of five players compete to destroy the other side’s crystal-shaped nexus. The characters, which have their own powers, battle each other and waves of foot soldiers, called minions.

In Legends of Runeterra, which enters beta testing this month, players won’t be required to purchase packs of random cards, as they do in other games, such as Activision’s Hearthstone. Instead, Runeterra will be free to play, with contestants choosing what to purchase.

“Unless we’re going to do something that we think is really going to elevate the experience, let’s not bother to do it,” Merrill said of Riot’s philosophy.

Merrill and Beck sold the company to Tencent in a pair of transactions that began in 2011 because their original investors wanted out and the two didn’t want to pursue a public offering. Merrill and Beck share management decisions, along with Chief Executive Officer Nicolo Laurent, who’s been there for 10 years. Merrill describes himself as more of the product developer, while Beck is the corporate strategist.

“We would have made a terrible public company,” Merrill said. “We are pretty idealistic. We’re also very long-term or have attempted to be very long-term.”

All has not always been sunny with Tencent. After unsuccessfully prodding Riot to launch a mobile game, Tencent in 2017 introduced its own, Arena of Valor, with characters that look like those in League of Legends.

Merrill describes that as a “trying time in the relationship,” but adds that the parties have since reconciled.

Today, Riot has more than 2,500 employees and two dozen offices around the world. Its headquarters are a triumph of nerd whimsy, with giant statues of League of Legends characters and a piratey coffee shop named after one of the cities in the game, Bilgewater Brews.

Riot is a pioneer in esports, where fans watch pros play online and in arenas. Two years ago, the company sold 10 North American League of Legends franchises for $10 million each. Its annual World Championship, held in November, is considered the Super Bowl of esports, with fans selling out stadiums.

Merrill said it’s too soon to say if any of the new games will turn into professional competitions. “We don’t decide if something is an esport, the community does,” he said. On Friday, the company weighed into the controversy over Hong Kong protests, saying its esports broadcasters and players must refrain from discussing politics and other sensitive topics.

In recent months, the company has also wrestled with discontent among some Rioters, as employees call themselves. Over the past year, a number of former female employees sued the company, alleging gender discrimination in pay and promotion, and sexual harassment. In May, dozens of employees demonstrated in the company quad over the “bro-like” culture and clauses in their contracts that require them to settle workplace complaints through arbitration.

The company settled the suits in August for undisclosed terms. It has also added a chief diversity officer and said it would focus on greater workplace inclusion.

Merrill said the past year was a “challenging period” for him and the company, but also a moment of reflection and change.

“There’s a lot of defining moments as companies evolve and grow,” he said. “The optimist in me says that this will be one for Riot.”

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum, Sam Hall

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