Riot Games’ Relationship with Tencent Rocks Its Boat
Riot Games’ relationship with parent company Tencent Holdings has faced numerous challenges in recent years, according to a report by news platform The Information.
The report is based on interviews with over 40 people close to Riot and Tencent, including current and former employees, as well as statements from founders Marc Merrill and Brandon Beck, and CEO Nicolo Laurent.
Tencent’s Pursuit of Mobile Gaming Clashes with Riot
The article focuses on Tencent’s full acquisition of Riot in 2011, but the most interesting part is the clash between Riot’s declining playerbase and Tencent’s pursuit of mobile gaming.
When mobile gaming began to dominate the industry, Tencent approached Riot about turning its game, League of Legends, into a mobile title. Riot declined, stating that the game’s experience couldn’t be replicated on smartphones. As a result, Tencent created its own mobile game called Wangzhe Rongyao, which translated to English means Honor of Kings, in 2015.
Riot employees were unhappy when they discovered early screenshots of the game—which is now known as Arena of Valor in North America—because it seemed like a blatant rip-off of their intellectual property. Riot raised these concerns with Tencent, and Tencent responded by changing the game enough to sell it as a standalone product unrelated to League. Arena of Valor went on to become the most popular smartphone game in China by the end of 2017.
Shift from League to Other Games
In addition to the clash over mobile gaming, Tencent has shifted its focus to games like PlayerUnknown’s Battlegrounds and Fortnite, investing in the stock of both developers, Bluehole and Epic Games, respectively. This shift is due to the decline in League’s playerbase and profits, which has led to significant layoffs at Riot’s offices worldwide.
Although Riot CEO Nicolo Laurent claims that the declines haven’t been significant, former and current employees have reported that Riot held a company-wide meeting in March, warning of a deficit if the company continued on its current path.
Strong Relationship Despite Challenges
Despite the challenges, both Brandon Beck and Nicolo Laurent affirmed that Riot’s relationship with Tencent remains strong. Beck described the situation with Honor of Kings as a mere “bump in the road.”
Update: Riot Games responded to The Information’s report by stating that League’s numbers are still impressive and that the relationship with Tencent is the best it has ever been.
Riot Games, Tencent, League of Legends, mobile gaming, declining playerbase, stock investment, PlayerUnknown’s Battlegrounds, Fortnite.