In a new paradigm shift, the League of Legends Esports (LoL esports) is introducing a fresh business model to its major leagues- League of Legends Championship Series (LCS), League of Legends EMEA Championship (LEC), and League of Legends Champions Korea (LCK).
The new framework closely replicates the one adopted and successfully rolled out with the Valorant Champions Tour (VCT), especially concerning revenues generated from in-game digital merchandise. This information was confirmed in a public statement by John Needham, the President of Esports at Riot Games.
The objective of this makeover is to ensure the stability and longevity of LoL Esports. It aims at generating sufficient revenue to meet the expenditure of production, teams, stakeholders, and everything in-between.
LoL Esports rolls out a new VCT-inspired business model for LCS, LEC, and LCK
The revamped model implies paying LCS, LEC, and LCK teams a predetermined stipend as well as sharing profits from the sale of digital content.
This pivot swings the referees focus from patronage and toward digital content which ,according to John, offers stability and is scalable.
The formulation and execution of a Global Revenue Pool (GRP) leads to the distribution of digital revenues among the teams.=The parameters for distribution include tiers, performance metrics, and fan engagement initiatives.
Riot Games is committed to increasing its revenue share and creating more digital content to further buttress the GRP. Furthermore, it aims to contribute 50% of other direct revenues such as sponsorships and media, post recoveries of its investments.
The main thrust of this model is to stimulate competitiveness and promote fan base growth, leading to mutual benefits for leagues and teams involved in LCS, LEC, and LCK. Results of efforts to adapt the LPL’s business model for future development are awaited, assures John.
It should be noted that this public announcement did not make mention of the minor regions, which include the Pacific Championship Series (PCS), the Vietnam Championship Series (VCS), the Brazilian Championship of League of Legends (CBLOL), the League of Legends Japan League (LJL), and the Liga Latinoamerica (LLA).
The VCT-like business model adopted by the new LoL Esports will likely result in a surge of digital content featuring teams and players. This can span a wide array of items such as player cards, emotes, icons, chromas and skins.
The Valorant Champions Tour (VCT) is an esports competitive circuit nurtured by Riot Games for its first-person shooter game, Valorant. Fans can indulge in a variety of digital content in VCT: player cards, gun buddies, sprays, weapon skins and team capsules, to name a few.
By purchasing these team capsules through in-game transactions, fans can extend their support to their preferred teams. 50% of the income derived from each team’s collection is shared amongst the teams throughout the season.
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