The European League of Legends Championship Series (LEC) is reportedly incurring growing financial losses for Riot Games year after year. Details on the operational expenses were published by Sheep Esports, referencing the studio`s 2023 financial report.
The subsidiary Riot Games Limited oversees the distribution of League of Legends and Valorant in regions outside the US, covering Europe, the Middle East, Asia, and Latin America. Financial reports for this entity, which also manages broadcasts and esports leagues, have become publicly available. These reports indicate that Riot Games Ltd. has grown increasingly profitable, with a net income of €385 million ($438 million) against total revenue of €1.55 billion ($1.77 billion) in 2023.
Nevertheless, the esports segment, specifically the LEC, remains unprofitable and is becoming more costly for Riot Games over time. Expenses related to salaries, production, spectator events, logistics, and other components, alongside a drop in sales and contracts, resulted in the LEC generating a loss of €53 million ($60 million) over the period from 2020 to 2023. Losses for just the 2023 reporting period amounted to €28.5 million ($32.5 million).
Although Riot Games Ltd. covers the losses from its esports ventures, the company was compelled to implement significant staff reductions across studio operations, broadcasting, and event management. This action is reportedly due to pressure from Tencent, the majority stakeholder, which has been urging its owned companies to boost profitability.
The LEC is not the only league presenting losses for Riot Games. The LCK in South Korea, recognized as the world`s most popular League of Legends circuit, also reported a revenue shortfall of $35 million for the period between 2022 and 2024.
Finley Holt