Riot Games announced it will lay off approximately 530 employees, which is 11% of the developer’s overall staff. Those laid off include long-time and key employees. Riot Forge is closed; the final game released will be Bandle Tale from Lazy Bear Games. Legends of Runeterra has lost developers; remaining development will focus on PvE modes.

This continues 2023’s trend of monumental lay offs in gaming, as well as 2024’s trend of more than 5,000 announced lay offs in tech prior to the end of January.

The Riot Lay Offs

Recently appointed CEO Dylan Jadeja sent an email to all Riot Games employees in the early evening (eastern time) on January 23, 2024. Minutes later, the company posted both the text of the email, as well a press release aimed toward players, on their website. As stated in the posted version of the company email, this was done to preempt leaks and answer questions.

The email states that about 530 employees will be laid off. They will receive an email informing them of if their role will be facing lay offs, then meet with leadership within 48 hours.

Unusually in situations like these, laid off employees will receive a healthy benefit package which includes a minimum of 6 months of severance pay, a cash bonus equal to their individual 2023 Annual Performance Bonus target, payments to cover the loss of health benefits, and a preservation of their stock and some stock options, as well as more. All of this can be read below.

Finally, Riot Games announced that lay offs will not affect what the company sees as its core products: the PC version of League of Legends, VALORANT, Teamfight Tactics, League of Legends: Wild Rift, and their R&D department.

Currently, Riot Games’ lay offs are focused on Legends of Runeterra, the digital collectable card game, and Riot Forge, an arm of the company which teamed up with indie developers to make narrative-focused single-player games.

Analysis

This press release seems intended to head off investor and consumer concerns before the lay offs can affect the bottom line or sales. Most of the release is geared toward reassuring the reader about Riot Games’ new focus, the necessity of this decision, and that things will largely continue as before. It is unusual that Riot Games directly admits that it only shared this news to prevent leaks, and inform players directly. It’s deeply unfair to employees to trap them in days, and in some cases weeks, of purgatory all to prevent players from learning about the lay offs from secondary channels.

A little over a year ago, then-CEO Nicolo Laurent stated, “Last week, I just accepted the 2023 budget, and it’s the biggest of all time. Next year will still be the biggest.” It’s difficult to see where that budget was invested; from the public side, 2023 was a year that verged on a drought. Spending seems out of control, but are Legends of Runeterra and Riot Forge to blame?

Legends of Runeterra already existed on the edge of maintenance mode, and famously rarely received promotion or acknowledgement from Riot Games’ other arms. This team is losing a substantial amount of its workforce, including the artists that make a card game vibrant and alive. The press release may promise a new focus, but it’s difficult to imagine what could be next.

Jadeja said, “We’ve been subsidizing the cost of development on LoR [Legends of Runeterra] through our other games, but at this point, that’s just not a viable option.” But surely, isn’t this in some sense ideal? Riot Games’ requires a great deal of art; the beauty of a collectable card game is that all of the art that needs to be produced, as well as a great deal of narrative focus and exploration that other games depend on, can be produced in a very player-facing way. The art and setting development that would otherwise only be for internal documents, is now also a product. What one “loses” in direct cost is gained in spreading development costs and in further subsidizing those costs to players.

It’s difficult to imagine that Riot Forge was losing money. It produced critically and commercially successful games with indie teams, for indie budgets. So far as can be tracked from the outside, sales were solid to excellent. Was Riot Forge somehow operating at a loss — if so, how? — or is Riot Games looking for short-term capital for development of their major future games?

As the press releases describe, Project L, a 2v2 arcade fighter, remains in development. While it went unmentioned, the League of Legends MMO remains in development, and most current games receive some degree of regular update. This would be a difficult spate for even the largest companies to develop all at once, and current operations are under the cloud of parent company Tencent’s massive losses in China. While those fortunes had begun to reverse — as Tencent rose 4.6% in Hong Kong, following China seemingly abandoning new restrictions on mobile gaming — the company is still operating at a multi-billion dollar loss.

In light of this, it’s that Riot Games has chosen to save and highlight easily-monetized and esport-friendly games. Their lore and narrative focused arms are severely impacted or simply gone. They laid off Graham McNeill, the respected British science fiction and fantasy author, who has done significant work fleshing out their characters and worlds. It’s impossible for me to name them all, but artists such as Rachael Cross, Audrey Axt, Tyler Soo, and others have bee laid off as well.

Whatever experiences Riot Games offers from here will be impoverished without the writers, artists, and developers who made their world what it is today. Without them, Riot Games has much less to offer.

Source: Riot Games

Featured Image: Riot Games

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