Another day, another round of layoffs within the Western video game industry, this time as League of Legends and Valorant developer Riot Games has announced that due to their eyes for expansion being far wider than their stomachs, they have chosen to wright their financial issues to the tune of 530 job cuts across their entire workforce.
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This news was first announced in a January 22nd all-company email sent to Riot Games staff by CEO Dylan Jadeja.
Therein, the newly-appointed company leader – Jadeja has only held the role since September 2023 – confirmed that the studio would be “eliminating about 530 roles globally, which represents around 11% of our workforce, with the biggest impact to teams outside of core development”.
As to why these cuts were necessary, Jadeja explained in the most corporate of language, “Since 2019, we’ve made a number of big bets across the company with the goal of making it better to be a player. We jumped headfirst into creating new experiences and broadening our portfolio, and grew quickly as we became a multi-game, multi-experience company — expanding our global footprint, changing our operating model, bringing in new talent to match our ambitions, and ultimately doubling the size of Riot in just a few years.”
“Today, we’re a company without a sharp enough focus, and simply put, we have too many things underway,” he then admitted. “Some of the significant investments we’ve made aren’t paying off the way we expected them to. Our costs have grown to the point where they’re unsustainable, and we’ve left ourselves with no room for experimentation or failure – which is vital to a creative company like ours. All of this puts the core of our business at risk.”
“Over the past several months, we’ve tried to alter our trajectory in many different ways,” Jadeja further detailed. “We asked leaders to make tradeoffs in the things their teams are working on. We rolled out hiring slowdowns, and in some cases hiring freezes. We put an emphasis on controlling costs while strengthening our revenue growth. All of which has without a doubt been tough for our teams.”
“But as I’ve dug in with leaders across Riot, it’s become clear to all of us that these changes aren’t enough,” the CEO lamented. “We have to do more to focus our business and center our efforts on the things that drive the most player value – the things that are truly worth players’ time. Unfortunately, this involves making changes in the area where we invest the most — our headcount.”
As part of these staffing reductions, Jadeja also confirmed that Riot Games would be downscaling their dev plans for Legends of Runeterra that due to the game having “not performed as well as we need it to, despite our best efforts”.
Likewise, he also announced that the company would be “sunsetting [their publishing label] Riot Forge after the upcoming release of Bandle Tale“, as they apparently “don’t view this [endeavor] as core to our strategy moving forward.”
In a follow-up statement addressed to the public, Jadeja and Riot Games President Marc Merill further detailed that “With today’s moves, we’re going back to putting games at the center of everything we do.”
“Our vision for the future is bold and our commitment to our core live games – League of Legends, VALORANT, Teamfight Tactics, and Wild Rift – is more ambitious than ever,” they assured players. “We’re prioritizing these teams so they can focus on the content, features, and updates that directly respond to what you’ve been asking for. Expect events, modes, and long-term roadmaps that lead to vibrant (hopefully multi-decade) futures for these games.”
To this end, the pair also noted that “Our strategy will more tightly integrate esports, music, and entertainment with our games.”
“As we’ve grown, some of our efforts have become more isolated, and we aspire to more seamlessly blend gameplay, competitive excellence, and narrative depth in ways that truly make it better to be a player,” the duo elaborated. “Whether it’s the next hit from [the company’s virtual K-Pop band] K/DA, the story unfolding in [the Netflix animated series] Arcane, the intensity of a [Teamfight Tactics] Open, the one-of-a-kind chills of a [League of Legends] Worlds game 5, or the electric atmosphere of [VALORANT] Champs, our focus is on quality, impact, and unified experiences for players around the world.”
Winding down this second statement with an attempt to assuage fans’ fears for the studio’s future, Jadeja and Merill informed their playerbase that despite this setback, “[the upcoming League of Legends fighting game] Project L has been making great progress and we’re looking for more opportunities for you to try out the game (stay tuned for more updates coming later this year). Arcane Season 2 is on track for November 2024. Plus, we have a number of projects cooking in various stages of R&D.”
“Our volume of releases will never be massive,” they ultimately affirmed. “We want everything we deliver to be something that you can be proud of and excited to share with friends. That requires having financial flexibility to be able to take the time to make things that are truly great for players. We know we’ll still have occasional misses, but we want those misses to be for the right reasons, not because we prioritized the wrong things or had to rush projects out the door before they were ready.”
Per Jadeeja, Riot Games will be holding a ‘Riot WW Town Hall’ this Thursday to provide any and all interested parties with “more context into this moment as well as portfolio changes we’ve made”.
Interestingly, this move comes shortly after Riot Games’ China-based parent company Tencent lost roughly $424 Billion USD in valuation following the Chinese government’s December 2023 implementation of new regulations regarding predatory video game monetization mechanics and the offering of gacha mechanics to children – in other words, Tencent’s bread and butter.
However, as of writing, a definitive link between these two events has yet to be admitted by either Riot Games or Tencent.