Riot Games, the developer behind hugely popular titles like League of Legends and Valorant, announced major layoffs on January 22nd, 2023, cutting 11% of its global workforce. The layoffs come alongside a strategic shift for the company as it looks to focus more narrowly on its biggest franchises.
Riot Games was founded in 2006 and saw meteoric growth with the launch of League of Legends in 2009. The multiplayer online battle arena (MOBA) game quickly became one of the most played PC games in the world.
Over the years, Riot looked to leverage that success by expanding into new genres and platforms. It developed and launched additional titles like the first-person shooter Valorant, the digital card game Legends of Runeterra, and the fighting game Project L. It announced Riot Forge in 2019, a publishing label to help bring more League of Legends spinoff titles to market.
The company was acquired by Chinese tech giant Tencent in 2011, but has operated fairly independently. As of 2022, Riot Games employed over 3200 staff globally across more than 20 offices.
Layoffs and Strategic Shift
On January 22nd, Riot announced it would be laying off 530 of its employees, more than 11% of its total staff. The cuts impact multiple Riot offices in North America and Asia-Pacific.
In an announcement on its website, Riot framed the layoffs as part of a “new era” for the company where it will “sharpen [its] focus as a studio to deliver even more incredible games to players.”
Riot CEO Nicolo Laurent stated:
“These changes constitute an entire strategic shift for Riot. For the first 12 years of Riot’s existence, we grew very quickly and hired talented professionals who took big swings and built games that players continue to enjoy for years on end. To meet our greater purpose in the world we will change, but must preserve the core of what makes Riot so special.”
The layoffs appear targeted in particular at Riot’s publishing efforts. As part of the restructuring, the company is shuttering its Riot Forge label which aimed to publish smaller, single player League of Legends-related games with indie studios. Unannounced Riot Forge projects currently in development with third party studios will be cancelled or brought more directly under Riot’s management.
Laurent specifically called out Forge and some as-of-yet unannounced projects as targets for reduction, stating:
“Winding down Riot Forge was an extremely difficult decision for all of us. At Global Forecast hundreds of Rioters have been working with numerous development partners to release awesome new League of Legends games, but after careful consideration and assessment, we have decided not to proceed with them in their current form.”
Impact and Reaction
While 530 lost jobs is major news, Riot Games will still employee over 2700 globally after the layoffs. League of Legends and Valorant also both continue to perform well, ranking among the most played games in the world. So while painful, the layoffs likely won’t drastically undermine Riot’s business.
The cuts do however speak to the challenges of running a company focused on just a few hit titles. As Riot CEO Nicolo Laurent said in his statement about the layoffs:
“Maintaining focus allows us to execute on our ambitions at an incredibly high bar…Riot’s sole focus is now on League, Valorant, Legends of Runeterra, and Teamfight Tactics.”
Industry-watchers have noted that while Riot found success expanding into new genres like card games and shooters based on the League of Legends IP, truly new and innovative titles were harder to deliver at scale.
Riot has likely realized that a more focused approach plays best to its strengths in polished e-sports focused multiplayer titles. As games industry analyst Joost van Dreunen noted:
“The company took a page from others and sought to build a larger entertainment franchise around League of Legends. While it found some success doing so, creating innovative new games at scale is harder than it looks.”
While shelving Riot Forge signals a pull back on that kind of experimental approach, don’t expect Riot to stop making new games altogether. In his statement, Laurent said “Winding down Riot Forge does not mean we will stop exploring additional games in the League universe…But we will do so with discipline.”
The news also comes amid a wave of layoffs impacting the tech and gaming industries in early 2023. Major firms like Amazon, Goldman Sachs, and Microsoft have recently announced major job cuts as well. Gaming firms like Unity, Electronic Arts, and Gearbox have also seen layoffs of late.
Riot said the layoffs were “to meet economic realities” but also “sharpen its focus”, suggesting that while economic conditions may play a role, this restructuring is also a strategic choice by management.
While losing 11% of staff globally signals a major shift for Riot Games, don’t expect huge changes overnight. League of Legends, Valorant and other existing Riot titles will likely continue to receive updates and support as normal in 2023.
With the Riot Forge label shut down though, the slate of indie League of Legends spinoff titles previously announced are likely done for. Single player games with lower earning potential clearly don’t fit into Riot’s newly narrowed focus.
Going forward, expect Riot’s development to concentrate more on its core online multiplayer franchises. New League of Legends and Valorant content and updates will continue as planned, but truly innovative new IP outside Riot’s wheelhouse seems unlikely in the foreseeable future.
For now League of Legends remains one of the world’s most played games nearly 15 years after launch. And Valorant has quickly become a top contender in the competitive shooter scene as well. As the company doubles down to support those key money makers, massive new layoffs seem improbable. But with game development constantly evolving, only time will tell whether this round of cuts is the start of a major decline for Riot or just some necessary housekeeping.
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