Video games developer Riot Games has become one of the latest tech firms to announce a raft of layoffs at its company.
Riot Games, which is owned by Tencent, told employees last week that it is “eliminating about 530 roles globally” which represents around 11% of the company’s workforce.
The company said in a blog post that its strategy going forward will see it “more tightly integrate esports, music, and entertainment with our games”.
Riot Games added: “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 company’s blog post continued: “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.”
Founded in 2006, Los Angeles-headquartered Riot Games is the developer and publisher behind hit games like League of Legends, Valorant and the award-winning Netflix animated series Arcane.
In addition to its prominent positioning in the video games world, the company has also been ramping up its activities in the music business in recent years, having become fairly well-known for working with superstar artists such as New Jeans, Imagine Dragons and Lil Nas X.
Plus, in November, Riot entered into a strategic partnership with BMG. The two companies also extended their global publishing administration deal.
According to Riot and BMG, their “collaborative” new venture will focus on signing and servicing songwriters to frontline publishing deals with BMG.
Riot’s owned music catalog recently surpassed 10 billion streams and received RIAA Gold-certification for both League of Legends, The Glitch Mob and Mako Rise (feat. The Word Alive) and League Of Legends & Against The Current Legends Never Die; and Platinum-certification for the hit single POP/STARS (feat. Jaira Burns) from its virtual pop group K/DA.
In October, Maria Egan, the Global Head of Music – as well as events – at Riot Games, joined the MBW Podcast to discuss what the music industry can learn from the world of video games and e-Sports.
Discussing the origin and success of K/DA, Egan explained: “They’re unbelievably talented, the folks working on music at Riot, and they came up with this idea that they take five of the most popular champions within League [of Legends], these female champions, and make a pop group. In some ways, it was a marketing stunt. It was a one-off thing that was supposed to be a big surprise reveal for Worlds on the stage in Korea. And the song just blew up.”
Commenting further about the opportunities around virtual artists at Riot Games, Egan said: “There’s a way to monetize all of that investment in [virtual bands, but] if you’re just dealing with streaming economics, you can’t really spend millions and millions of dollars on [computer generation] and artwork.
“You have to work within the music industry economics. It’s hard to do things that are [at] a really, really high level of execution. But because we [at Riot] have a whole other ecosystem that music is powering, we can do things at a level that just blows people’s minds. For me, that’s one of the funnest things about it – you can dream really big.”
“Today, we’re a company without a sharp enough focus, and simply put, we have too many things underway. 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.”
Dylan Jadeja, Riot Games
In a letter sent to the company’s workforce last Monday (January 22), Riot Games CEO Dylan Jadeja, said: “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. 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.”
Added Jadeja: “Over the past several months, we’ve tried to alter our trajectory in many different ways. 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. 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.”
According to layoffs.fyi, a website that tracks job losses in tech, the tech sector has laid off nearly 24,934 employees in January so far.
The changes to YouTube’s music team arrived in the wake of a wave of job-cut announcements in the music business, notably Universal Music Group’s plan to cut ‘hundreds’ of jobs in Q1, primarily in its recorded music division.
Spotify, meanwhile, announced 1,500 layoffs this past December, or around 17% of its workforce, in what was the third round of layoffs for the company last year. In all, the Sweden-headquartered music streaming service shed some 2,300 jobs in 2023.Music Business Worldwide