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League of Legends is a hard act to follow. At 10 years old, it’s a cultural phenomenon, and it still has 8 million concurrent daily users.
Riot announced League of Legends: Wild Rift for mobile devices and consoles. It is taking Teamfight Tactics, Riot’s take on Auto Chess, to mobile devices on iOS and Android in early 2020. On the PC, Teamfight Tactics will get a new content drop called Rise of the Elements. Riot is joining the free-to-play strategy card market with Legends of Runeterra in 2020.
The tactical PC shooter codenamed Project A will launch in 2020. Riot is also making an animated League of Legends show, dubbed Arcane, for 2020. Project L is the code name for a fighting game (from acquired developer Radiant Entertainment). Project F is the code name for a project that lets players traverse the world of Runeterra with friends. And League of Legends Origins is a feature-length documentary by filmmaker Leslie Iwerks, available now on Netflix.
That showed that Riot’s 2,500 employees have been busy, and they have been working on more than new characters for League of Legends. After the announcement, I talked with Riot cofounder Marc Merrill about the big announcements in an interview.
Here’s an edited transcript of our interview.
GamesBeat: I was very curious from a business angle about the announcements this week, all the new games. I wanted to get a bit under the hood as far as your view. The angle is kind of like — I don’t know if you read that book The Innovator’s Dilemma by Clayton Christiansen at Harvard. He had that set of stories in there about why successful companies never really lasted, because they didn’t see the big disruption that came for their business. They would have a really strong single business, and then start up other businesses, but always compare them back to that strong business. They’d say, “Well, this doesn’t have a chance of beating that other business, so let’s shut it down and put more into the existing one.” You wind up with all these one-product companies. I wonder if that was a good description of Riot for a while. Would you have a reaction to that in particular?
Marc Merrill: That’s something we talk about a lot. But from our perspective, League of Legends has always been the proof point for the broader company thesis. It was always viewed as step one when we started the company. It’s just been far more successful than we ever could have imagined possible. And so it was always our intention to expand.
As the world has continued to change and evolve, we think it’s continued to evolve in a direction that’s more aligned with the approach that Riot has around trying to build a long-term direct relationship with players and create incredible experiences for them that start with games, but are much more than a game. We’re excited to now start doing that in some other genres. We’ve obviously learned a lot over the last decade. Our competencies are much stronger now than they ever have been. We have a lot of exciting potential to do incredible things for players.
GamesBeat: Is Riot a bit like Blizzard and Supercell, where they always talk about the number of games that they’ve killed, because they didn’t quite meet their standard? If you peek under the hood at Riot, was that also an explanation for the situation where you found yourselves, with just one game after 10 years?
Merrill: It’s really just around deliberate focus. We always felt that we needed to continue to invest heavily in League of Legends, continue to support that community in the right way. The easiest thing in the world — to recognize how much more potential League of Legends has, you just put your player hat on and think about all the features we haven’t delivered, and all the different pain points our players experience, as well as all the different content opportunities available.
We’ve never had a shortage of ideas. Our challenge has always been throughput. It’s a similar thing for a new game. There’s an opportunity cost challenge. We didn’t want to pull people off League of Legends to go start incubating these future titles when it would be a disservice to the commitment we’d made to that community, to continue to serve them.
That’s why we had to scale the organization. But in order to build new teams and tackle new genres — the players have incredibly high expectations in many of the areas we’re entering. You don’t just show up and build an incredible, world-class team overnight to be able to compete with the best titles in the world. That takes a long period of time. We’ve been fortunate to be able to take a long-term view of the future, to nurture the capabilities of the teams that are able to deliver these types of games.
But that’s why it’s a really exciting time for Riot now. We’ve been working on all of this stuff for a long period of time, and now we finally get to show it to the world and start getting feedback and start building additional communities.
A lot of the mindset, from an innovation standpoint, comes from our business of becoming the most player-focused game company in the world. We only wanted to be a developer originally. We only ended up building our publishing business once we talked to every publisher at the time and they laughed at us for having a free business model and not having single-player and things like that. We needed to build a publishing business to achieve what we perceived to be the opportunity.
Similarly, around esports, we talked to all the different third-party organizers and potential media partners, and nobody really believed or wanted to go invest where we thought there was an opportunity. We were forced to go build competencies and do a lot of things in-house that we didn’t want to do. We have 13 leagues around the world. Obviously it didn’t start with that, but we had to figure out what was even the right format, how to create the right fan experience, how to create team structure, how to bring in advertisers and sponsors, how to do broadcasts.
We never thought or even imagined that we’d be trying to go solo on all this. It’s just that necessity is the mother of invention. I think that’s been the continuing story for Riot. When we put on our player hats, we see opportunity all over the place.
GamesBeat: Is there a reason to start talking about all of them at once? I know some of them aren’t coming until 2020. Was there a reason to hold it all and then say, “We’ve got a bunch of games!”
Merrill: We started a lot of these games many years ago. It’s taken a long time to grow the teams of all the games, validate assumptions, figure out whether these products are worth continuing to invest in. Some of them, to your point earlier, have had numerous starts and stops. We still think the thesis makes sense, but it’s not working, so then we have to reboot and figure out if it still makes sense or not. Sometimes we’ve had to reboot the teams or leadership.
Over time, as we all started to get better as a company, as our teams started to improve, and as we started to figure out how to do a better job at these things, we were making a lot of progress in parallel. The timing worked out where there was a bunch of different games that would be ready to start coming down the pipe.
From an announcement standpoint, we think Riot is not really well-understood. A lot of people perceive us as the League of Legends company, or they think of us as a PC gaming company, or they think of us as just free-to-play or strategy games. None of that captures what Riot is actually all about. Riot is an organization that’s defined by the audience we try to serve. We try to cater to the gamers with the highest expectations, the deepest expertise. We’ll do any business, any game, on any platform to serve them well.
We never anticipated League of Legends to be so large. We thought it was a niche product. It just turned out that niche was far bigger than we ever imagined. It’s possible that will be true for our other games. Our other games are taking a very similar approach. We’re not trying to be something for everyone, but for the people who are really into particular genres, who have the highest expectations, we’re trying to be great for them.
Part of the rationale is that there’s a lot of games that come out, whether on the iPhone or the Xbox or Steam, that people buy and play briefly, but then they put them down and never come back. We’re trying to create games, only a few every decade, but when it comes out you know it’s going to be great. You know it’s going to be worth your time. You know that if you want a multiplayer online experience in a particular genre, you can have confidence and trust in the type of experience Riot will deliver.
GamesBeat: But it’s not a requirement that they be bigger than League of Legends, or that it be clear that the opportunity cost is better having people on this game rather than back on the League of Legends team?
Merrill: There’s absolutely no mandate that they be bigger than League of Legends. These games are going to be great for what they’re trying to do. It’s relative to the opportunity that we perceive. There’s the business analysis and that whole perspective, but the primary goal there is to make is sustainable, so that we can keep doing awesome things for players.
That’s how we think about esports. Historically, we’ve invested a lot for a long period of time, and now the revenues are really growing. We see it passing into profitability in the not too distant future. That’s phenomenal. But the market hadn’t developed at first. The only way the market could develop is by building an excellent experience first for fans and build those numbers. Then you have brands and various other people that weren’t consuming the product, weren’t the audience, learning that this is something great, something that can support brands in the right way. We can find good partnerships and good value.
These things just take time to nurture. Just like nurturing the community or a great organization. It’s hard to grow well and it’s hard to grow fast. It’s incredibly difficult to grow well and fast.
GamesBeat: Do you have a certain approach to that resource allocation? I forget how many people are at Riot now. Where are you right now?
Merrill: Roughly 2,500, plus contractors around the world.
GamesBeat: Of that 2,500, do you say, “We’ll take 250 and work on new games?” Is there a certain approach to that resource management?
Merrill: There’s a variety of approaches. The RTS game of resource allocation at a studio is a really complex and fun thing for anybody that’s into that. It has a lot of dimensions. One is, where is the opportunity? There’s a lot of simple frameworks. I’ll use one as an example, a two-by-two. What’s important versus what is urgent? There’s obviously stuff that’s highly important and highly urgent, that we want to get taken care of immediately. But with things that are highly important, but not urgent, we want to make sure we have enough people making progress on those types of things. And we want to minimize the stuff we work on that’s not important and not urgent.
I think a lot of teams can focus on efficiency rather than effectiveness. From our perspective, efficiency is something you gain over time once you validate that you’re moving in the right direction. We think there’s nothing so wasteful as efficiently moving in the wrong direction. You don’t want to put high-powered, incredibly scarce resources, great engineers and artists and designers on opportunities that aren’t worth it, so to speak. You have to be very disciplined about the success criteria and knowing when you’re making progress.
There’s no secret sauce to that. It’s this blended competence threshold. We have a sort of Pixar-esque product council that reviews a lot of things that are happening. We try to get a lot of different perspectives on what we’re doing. We don’t think anybody has a monopoly on truth.