Riot Games, a leading game development company known for titles like League of Legends, recently announced a significant restructuring plan involving the layoff of approximately 11% of its workforce, totaling around 530 employees. The decision, revealed by the Tencent-owned company, also encompasses the discontinuation of Riot Forge, its publishing group established five years ago.
Riot Games cuts 11% of its workforce
In a message addressing the impacted employees, Riot Games provided details about the severance package and additional benefits, including access to job placement services, counseling, visa support, and the provision of new laptops to replace work computers if necessary. The brunt of the layoffs was felt outside the core development teams. CEO Dylan Jadeja expressed the somber nature of the decision, acknowledging the difficulty of the moment for those leaving the company. He conveyed gratitude for their contributions to Riot and players, emphasizing the commitment to supporting affected individuals through the transition.
Simultaneously, Riot Games communicated the changes to its player base, asserting that the layoffs were deemed unavoidable but necessary for the company’s sustainability. Jadeja clarified that the decision wasn’t driven by shareholder appeasement or meeting quarterly earnings targets but was seen as imperative for the company’s viability. The organizational adjustments are anticipated to have an immediate impact on two key areas – Riot Forge and the digital collectible card game Legends of Runeterra.
Riot Forge, initiated in 2019 to collaborate with independent developers on new League of Legends stories, will be discontinued after the release of its sixth and final game, “Bandle Tale: A League of Legends Story.” Despite having launched five previous games, including Convergence, Hextech Mayhem, The Mageseeker, Ruined King, and Song of Nunu, Riot Forge couldn’t escape the broader restructuring. Legends of Runeterra, while not facing closure, is set to undergo adjustments. Jadeja acknowledged that the game’s performance fell short of expectations, leading Riot Games to reduce the team size and shift focus towards enhancing its single-player (PvE) adventure mode, the “Path of Champions.”
Unveiling a comprehensive shift amid reductions
The CEO admitted that some of the company’s substantial investments hadn’t yielded the anticipated returns, necessitating a reassessment of costs and a strategic refocusing. Jadeja expressed concerns about the company’s escalating costs reaching unsustainable levels, leaving no room for experimentation or failure, elements deemed crucial for a creative enterprise like Riot Games. This predicament, according to Jadeja, puts the core of the business at risk, prompting the need for strategic adjustments.
The restructuring at Riot Games aligns with a broader trend in the video game industry, where several prominent publishers have implemented job cuts. Epic Games, for instance, made headlines in September with the elimination of 830 positions. Other industry giants, including Ubisoft, Electronic Arts, and Activision Blizzard, have also undertaken measures to streamline their operations. The challenges faced by Riot Games mirror the complex dynamics of the ever-evolving gaming industry. The decision to discontinue Riot Forge and reevaluate Legends of Runeterra reflects the company’s commitment to adapt to market realities and ensure long-term sustainability.
As the gaming landscape continues to evolve, Riot Games, like its industry counterparts, navigates the delicate balance between innovation, financial prudence, and responsiveness to player expectations. While the announcement undoubtedly signals a challenging period for Riot Games and its affected employees, the company’s commitment to supporting the departing staff and strategic adjustments underscores a dedication to weathering industry challenges and maintaining its position as a key player in the competitive gaming market.
