Riot Games, the developer behind the immensely popular game League of Legends, declared it is laying off 530 employees globally, approximately 11% of its total workforce. The company also announced its shift in plans going forward. Read on to know more.
Riot Games Layoff Affects 11% of Workforce
Cites Shift Towards Sustainability and Focus on Fewer, High-Impact Projects as Part of the Workforce Reduction
Riot Games announced that it will be laying off 530 employees, with the biggest impact hitting teams outside of core development. This move was explained to be a part of Riot Games' strategic shift towards fewer, high-impact projects, as the company aims for a more sustainable future.
Riot Games announced it is taking steps to support the employees impacted by the layoffs. The affected workforce will receive substantial benefits, including:
● A minimum of six months' severance pay
● Cash bonus equal to 100% of employee's individual 2023 Annual Performance Bonus (APB) target
● Health benefits matching the severance pay duration
● $1000 USD fund for covering various expenses
● Equity, for those received Riot shares from vesting their single-vesting RSUs
● A laptop for job searching
● Career support for 6 months including, career coaching, networking, resume writing and review, and more to help them transition to a new job
● Enhanced employee assistance programs (including mental health benefits) will be accessible in a number of locations worldwide.
● 3 months' access to the Rioter Assistance Program
● Visa support, which includes supporting transitions to non-employment visas where possible
● Continued use of their Riot email address for a limited time.
Riot Games Looks to Integrate Esports, Music, and Entertainment With Their Games
In a statement addressing players, Riot Games clarified the necessity of this decision for the future of the company. They said its focus is shifting back to placing games at the center of its operations. The company stated, "This isn't to appease shareholders or to hit a quarterly earnings number — it's a necessity."
Riot Games affirmed that it aims to emphasize its core live games, including League of Legends, VALORANT, Teamfight Tactics, and Wild Rift. The strategy involved prioritizing the teams working on the aforementioned games to concentrate on delivering content, features, and updates based on player feedback.
CEO Dylan Jadeja provided specific details about the business circumstances leading to these layoffs. He highlighted the company's rapid growth, expansion into a multi-game, multi-experience company, and the doubling of its size in a few years.
However, Jadeja acknowledged that the company lacked a sharp focus, leading to unsustainable costs and a situation where experimentation or failure became challenging. The significant investments made since 2019 didn't yield the expected returns. It, therefore, posed a risk to the core business, according to the CEO.
"Our strategy will more tightly integrate esports, music, and entertainment with our games. Whether it’s the next hit from K/DA, the story unfolding in Arcane, the intensity of a TFT Open, the one-of-a-kind chills of a Worlds game 5, or the electric atmosphere of VAL Champs, our focus is on quality, impact, and unified experiences for players around the world," the company stated.
Project L "Has Been Making Great Progress"
Riot Games also mentioned they have projects in the pipeline, beyond live titles. Project L, Riot Games' upcoming 2v2 tag-based fighting game set in the world of Runeterra, "has been making great progress and we’re looking for more opportunities for you to try out the game," the company shared. A number of projects were also said to be in the research and development stages. However, no further details on the projects were disclosed.
Riot Forge Will Cease New Game Development
Two specific areas within Riot Games will be immediately impacted. These include digital collectible card game, Legends of Runeterra, and Riot Games' third-party publishing label, Riot Forge.
The size of the Legends of Runeterra (LoR) team will be reduced due to the financial challenges faced since launch. Despite efforts, LoR did not perform as well as expected, leading to a refocus on its Path of Champions PvE game mode.
LoR said in a statement on its website, "In alignment with the larger Riot-wide business changes going on, we needed to make some very hard decisions about the future of LoR. Starting today and continuing over the next few months, we will begin the process of reducing the size and scope of LoR to a team that is focused on sustainably making the game you love."
New game development at Riot Forge will cease after the release of Bandle Tale: A League of Legends Story. Riot Forge, henceforth, will refocus on projects underway internally at Riot.
"Forge was an experiment to see what would happen when Rioters partnered with their favorite indie devs and let them loose on Runeterra with their unique viewpoints, styles, and expertise. Across six titles spanning different game genres, regions, and characters, it’s been inspiring to see what these devs created in partnership with the Forge team," stated Riot Games.
Industry-Wide Job Losses In Gaming Expected to Last For Up to 2 Years
Game Industry Leaders Predicts Rough Year Will Last to 2025
Reports from industry leaders suggested that job losses in the gaming industry witnessed in the previous year are expected to continue throughout 2024 and possibly into the next year. Factors said to contribute to this trend include high-interest rates, an overabundance of new releases, and cautious investors.
While acknowledging the challenges, industry figures remained optimistic about the gaming industry's overall trajectory, emphasizing the sustained engagement and growth observed among gamers globally.
"If you look at gamers, they're happy. They're playing these fantastic games, and they're playing them in their hundreds of millions. And they're playing more than they were five years ago… and buying more. The industry graph is trending upwards. The games industry is in an odd place right now. But to those on the outside, it doesn't look that way," an anonymous publishing head told GamesIndustry.biz in an interview.
Another publisher boss said, "We need to get to pre-pandemic levels in terms of the release schedule, and that's probably going to take two years. You can already see publishers signing fewer games. That's happening everywhere. The stores are saturated, not just Steam, and the games just aren't delivering the levels they were."
One respondent CEO shared that, for some companies, survival during this period requires "bravery and toughness." "It's all about sustainability. For those who aren't profitable, and can't get that funding, it's a case of being brave... and getting tough."
Studios impacted include Borderlands developer Gearbox, Unity on its fourth round of layoffs, Lords of the Fallen's CI Games, and Dead by Daylight Devs Behaviour Interactive.
Source:
An Important Update about Riot’s Future
Changes at Riot and the Road Ahead
LEGENDS OF RUNETERRA 2024 - STATE OF THE GAME
League of Legends developer Riot Games laying off 530 employees
Games industry leaders braced 'for up to two years of pain'
Games industry leader predicts 2024 will be ‘the year of closures’
