Winter is coming…or is it?
I want to start with what’s working, as we believe the imminent demise of esports has been overstated. Our community engages with the sport more than ever. The 2023 season and 2024 start have had milestones that give us so much confidence in the future. Our 2023 global event viewership was incredible, with new formats at the Mid-Season Invitational (MSI) and Worlds, combined with deeper co-streaming integrations, driving 58% and 65% year-over-year growth in Average Minute Audience (AMA), respectively. In aggregate, regional LoL Esports leagues also saw AMA growth in 2023, up 16% year-over-year. LoL Esports was the star of the show at the 19th Asian Games, where Team Korea took home the gold.
In 2024, we launched with record-breaking viewership numbers, and we can’t wait to debut our hall of fame (Hall of Legends) plus spotlight the best competition that LoL Esports has to offer at MSI in Chengdu and Worlds across Europe, culminating in the iconic O2 Arena in London.
For all the highs of 2023, however, the industry faced several business challenges, and we have not been immune to them. Most notably, in January, we made the difficult decision to reduce our workforce by 11%. This reduction impacted all areas within Riot, including esports, and we are in the process of adjusting so we can deliver the esports you know and love, but with a focus on what moves the needle for the ecosystem at large.
Many of the challenges I outlined last year are also still true today. We all – leagues and teams alike – are overly reliant on sponsorship as a revenue stream. The sponsorship business across the industry slowed down in the wake of a post-COVID global economy, and we saw some team organizations struggle to operate sustainably.
In recent months, however, we’ve been happy to see the economy regain traction, bringing an uptick in sponsorship across the ecosystem. We’ve seen Progressive, Coinbase, and Honda, among others, sponsor LoL Esports team organizations. In the first few months of 2024, we’ve welcomed new partners like HP’s Omen and HyperX, Uber, AT&T, Pagoda, and Heineken to our shared ecosystem. Equally importantly, we recently extended and expanded agreements with some of the most iconic brand partners in our portfolio: Kia (since 2019), Mastercard (since 2018), Mercedes-Benz (since 2020), and Red Bull (since 2019). We’re humbled by this growing roster of regional and global partners; they share our deep passion for games and sports and elevate the esports experience every season.
In addition to the sponsorship business, we remain focused on building additional, meaningful revenue streams. In-game digital sales are the most scalable opportunity to drive meaningful revenues (see below). We still believe that the strongest path forward for the esports business is to monetize it more like games, sharing the upside with our team partners.
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