Arguably the largest Esports League in the World Riot Games says they are “still investing millions into Esports without profit.”
Why isn’t Riot Game’s Esports division making money?
Because it’s all apart of the plan.
The Marketing department isn’t built to make money, the marketing department is built to spend money to bring in money to the core business. Riot Game’s core business is selling premium champions and skins.
But Esports can be a stand alone business as well. Look at Modern Times Group arsenal of Esports tournament organizations: ESL, DreamHack, ESEA, and now FaceIt as well.
But those tournament organizers are making millions to tens of millions where Riot’s core business made $1.6B last year.
So yes Riot could run their Esports division with the goal to optimize revenue making millions to tens of millions of dollars on merchandising, broadcast rights, and direct advertising. But they’d rather make it a more effective marketing department bringing in hundreds of millions instead.
But remember, when Riot says we’re investing in Esports, it’s not out of the goodness of their hearts, they’re investing in their marketing department. And that’s… ok. Happy 10 years Marc, Brandon, and the Riot Game team.