Riot’s declining revenue and the role of merch
Ever since the introduction of Fortnite, League of Legends has been struggling with both maintain new player growth and overall player retention. Even with Riot’s recent emphasis on battle passes and events, they fail to match revenue anywhere close to Fortnite.
According to Superdata, Riot had made 1.4 billion dollars revenue for the year of 2018, 700 million less than the 2.1 billion they raked in for 2017. This data was highlighted in a recent reddit post, where many commented and supported the idea that Riot games finally introduce a better merch line. Follow up posts indicate the community’s interest in League of Legends merch, one redditor outlining his intent in regards to a plush toy having a skin code attached, which gain over a thousand upvotes in less than ten hours.
While skins are a great source of revenue and will always be a great source of revenue for Riot, Riot needs to realise there are other great sources to gain profit. This is especially so with the recent push by Tencent games to maximise revenue and profit, which led their decision to cut back on esports.
Riot has released some great merch in the past, and currently has some lying around, however, they can do so much more. Riot’s merch department lacks the ability to judge what the community wants, and drastically under produces the demand for merch. As one redditor suggested, there is a huge untapped market in the merch area, with plushies and collectable figurines being great possible additions. Not only would the expansion of merch please the fans, Riot would ultimately be able to increase their revenue, and hopefully, decide against cutting back on esports.
Note, the effect of merch can clearly be seen when comparing the revenue between Pokemon Go and League of Legends. While League of Legends is vastly more popular, Pokemon’s amazing merch line has allowed their revenue stream to triumph LoL.