In early 2006, Marc “Tryndamere” Merrill and Brandon “Ryze” Beck of California left the monotony of their day jobs in marketing and finance and set out to create a video game based on the massively popular Defense of the Ancients (DotA), a fan-made modification for Blizzard Entertainment’s Warcraft III. Searching for talent to help them realize their goal, they recruited designers, programmers, and artists from large design studios, such as Blizzard, in addition to the creator of Defense of the Ancients and prominent members of the game’s community. This passionate group of gamers became known as Riot Games, which President Marc Merrill claims strives to be the most player-focused company in the world. After assembling their dream team of game developers, Brandon Beck and Marc Merrill sought funding for their premier game, now known as League of Legends, raising $1 million from venture capital firms who believed in their mission to create a truly player-focused game-development studio.
Founders of Riot Games Brandon “Ryze” Beck (left) and Marc “Tryndamere” Merrill (right)
In their efforts to keep players close to the development of the game, Riot Games made early versions of League of Legends available for testing purposes in 2009, at first by invitation only, but later available to anyone willing to test the game. Gamers familiar with Defense of the Ancients heard about the new game through social media and word of mouth, and a steady number of players began to play League of Legends. Once the game was ready for release Riot shipped League of Legends as a free-to-play title in October 2009, planning to monetize their game through in-game transactions that would unlock cosmetic changes to characters or help players level up faster than their opponents. Though this micro-transaction based business model had been done before, it had never been incredibly profitable outside of casual games on social networking sites and mobile phone applications. Initially setting a goal to reach 50,000 players, the game’s architecture was built to support this capacity. Riot Games’ lead designer, Tom Cadwell, explained that the company hoped it would reach 20,000 or 30,000 concurrent players within six months to “allow Riot to continue paying people.” In 2010, Riot began to face issues with the stability of their game, having to perform emergency maintenance multiple times per week in order to keep their game online. The problems stemmed from the massive number of players attempting to play the new hit League of Legends. Originally built to support 50,000 players, League of Legends was reaching a player base several times that figure. With their micro-transaction business model paying off, Riot hired engineers aggressively in 2010 in order to scale League of Legends architecture to meet the needs of their game’s growing audience.
With profits soaring and League of Legends’ player count growing, Riot Games’ future looked bright. Keeping their momentum moving forward, Riot Games decided to push their game into the growing industry of eSports, or professional competitive gaming. In July 2010, League of Legends began its first competitive season, assigning rankings to individual players by using a modified version of the elo rating system, which is a method for determining the relative skill level of players in a two-player game such as chess. The elo rating system has been modified by many game developers for use in team-based games. Along with the announcement of the season’s start, Riot pledged to hold a season finale tournament with a $100,000 grand prize at the season’s end in the summer of 2011. League of Legends continued to grow massively during its first competitive season as professional teams were formed in North America and Europe. Players on such teams began to use streaming services like Own3d.tv and Twitch.tv to broadcast themselves playing League of Legends in order to attract fans and earn income from their gaming. Profit sharing programs on these sites offered to split the advertising profits with the content providers in much the same way popular video streaming site Youtube’s partner program functioned. Remaining true to their goal of keeping in touch with their players, Riot encouraged players of their game to tune in and watch their favorite players in order to learn how to improve. Several professional teams began to earn enough income from broadcasting themselves playing League of Legends and sponsorships to play the game full-time. At the season one championship in July 2011, Riot Games crowned European team FanaticMSI the season-one champions in front of an online audience of over one million viewers, the largest audience a gaming tournament had ever seen outside of South Korea, where professional gaming tournaments are broadcast on national television and watched by millions.
In February, 2011 it was announced that Chinese media juggernaut Tencent Holdings, the third largest Internet company in the world behind Google and Amazon, had acquired a majority stake in Riot Games for $400 million, but that the management team within Riot would remain the same. With the backing of Tencent, Riot Games would undergo rapid expansion in 2011 and 2012, extending both its global presence and prominence in the young eSports industry. With the start of its second competitive season Riot Games pledged a groundbreaking $5 million in prize money for tournaments held throughout the season. The season’s championship tournament featured a $2 million prize pool, effectively making it the largest video gaming tournament in history.
Breaking their silence on the number of players signed up for League of Legends, Riot Games announced that they had exceeded 15 million players globally in July 2011. This figure put the game in the spotlight as one of the most played games in the world, yet just four months later in November the game had over doubled in size to over 32 million registered players, with over 11 million players each month. The success of League of Legends was due in part to their social marketing strategy and their involvement with the game’s community. All employees from top level executives to interns participate in daily playtests of their game. They are encouraged to interact with players on the game’s official forums, and dozens of employees receive paid trips to the tournaments hosted throughout the year.
Thousands of fans gather to cheer on their favorite team at a League of Legends tournament
With millions of dollars awarded throughout the season’s second competitive season and players flocking to League of Legends, the video gaming industry began a major shift to emulate Riot’s success, investing in eSports involvement for their own titles. Riot Games hosted the League of Legends Season Two World Championships in October 2012, awarding the underdog team Taipei Assassins of Taiwan the $1 million dollar grand prize in front of a live audience of 8,000 spectators at the USC basketball arena in Los Angeles, Calif. An online audience of over 8 million viewers made the event the largest video gaming tournament the world has ever seen. From their humble beginnings as a startup game development studio in 2006 to their current reign as the developers of the world’s most played video game with over 32 million players, Riot games has remained true to their promise of being a player-focused company. The future looks bright for Riot as they plan to kick off their third competitive season of League of Legends in which they plan to have 24 salaried teams play the game full-time and stream matches weekly, following the standard set by traditional sports.