Gm, welcome to the lobby.

Riot Games changes esports revenue share model. Capcom boosts employee salaries while others are doing layoffs. And Roblox launches special event with over 80 different games along with a unique Walmart promotion.

Grab your coffee, ready up, and let’s drop in 🪂
Here’s what we have for you today:

1. Riot Games restructures revenue share model for esports teams 🤝

2. Capcom boost salaries amidst industry-wide layoffs 📈

3. Roblox: The Hunt limited time event invites and rewards players for playing over 80 different Roblox games (+ Walmart Promo!) 🔎

Before we jump in, here’s a few interesting links we enjoyed this week:

• Women in gaming & esports: Stereotypes are not inclusive, existence is not progress

• Monopoly Go hits $2B in revenue just 10 months after launch

• MrBeast announces Amazon Prime game show Beast Games

🤝 Riot Games restructures revenue share model for esports teams

Riot Games is looking to change the way the League Of Legends scene operates. This past week, Riot Games gave a look into their new 2025 esports strategy, to help keep League of Legends esports sustainable for the foreseeable future.

Previously…

Teams would pay a $10,000,000 franchise fee to have a permanent spot in their respective regions' league. Teams would then receive 50% of revenue, generally from sponsorships & media rights.

Teams that advanced to the large international tournaments such as MSI & Worlds would have a chance to earn some extra money through in-game items, customized to each team that qualified for the tournament. These options would only be available to the 20-30 teams that make each of these tournaments.

Looking Forward to 2025 & Beyond

With inspiration from the VCT model and how well that’s doing, Riot will pivot to shared revenue from digital content (typical in-game cosmetics) with the teams.

Riot Games is introducing the “Global Revenue Pool” (GRP), that’ll take the digital esports revenue and distribute it to the Tier 1 teams in three ways.

1. General Share | 50% - All Tier 1 teams will receive this no matter what

2. Competitive Share | 35% - This will go towards teams that are competitive and place well in both domestic & international competition.

3. Fandom Share | 15% - This will go towards teams that develop a strong & engaging fanbase around their League Of Legends team.

Added Bonus

An additional update that could be a major opportunity for the teams, Riot Games will be opening up additional sponsorship categories for teams to sell to potential partners. Such as CBD, beer & wine, “government entities”, and potentially gambling.

👀 Our POV

These changes that Riot is bringing to the League Of Legends scene are huge for the future of the esport. While organizations are looking for more ways to generate revenue, Riot seems to be one of the key publishers that are helping orgs find a way to stay afloat.

First off I love the added revenue share to teams that are competitive & develop a strong fanbase. One major issue with franchise leagues is that there’s no real incentive to have a great team or attempt to build a fanbase. You have the spot secured, so why even try? You’re not fighting to stay out of regulation. Putting up extra money for those teams that do try should help try and get EVERYONE to try and be competitive while also engaging with the community.

Like I mentioned a few weeks ago, in-game cosmetics are an easy layup and a great way for fans to support their favorite teams. Not only do they help generate revenue for developers & teams, but they work as free marketing for the esports side of the game. With in game items being open to all teams, I’m wondering if they’ll be given as much creative freedom as the VCT teams who were able to create their own player cards. 

This is a great asset for potential sponsors, getting their brand in the game and helping generate even more revenue for organizations 👀

- Justin Palacios (Private Lobby)

📈 Capcom boost salaries amidst industry-wide layoffs

It’s time for some good news in the gaming world! The past year has felt like a bleak version of “Groundhog Day,” with different gaming and tech companies having layoffs each day. The Western market has struggled to stop the bleeding of jobs, while Japan-based Capcom has decided to increase the salary of all its current and future employees. The company said it will raise wages 5% on average over the next fiscal year for current employees. Additionally, they’re boosting the base pay for new graduate hires by 28%.

Capcom has seen strong growth over the past fiscal year, largely thanks to the success of Street Fighter 6 and Resident Evil 4 remake. Their business performance report on January 31st boasted a 33.3% YoY increase in net sales and a 43.1% YoY increase in operating income. They’ve taken these results and doubled down on a promise from 2022 to continue investing in their people. As Capcom succeeds, so will the employees contributing to that success.

📊 A Side By Side

It’s wonderful to see Capcom using its success to benefit its employees. They made solid profits, and their company grew, so they’re rewarding those who contributed to the growth. I’d like to highlight other tech/gaming companies that made a profit but instead chose to have layoffs over the past year.

• Capcom: $236 million profit - Wage increases for all

• Electronic Arts: $5.8 billion profit - ~670 layoffs

• Microsoft: $72.4 billion profit - 1,900 layoffs

• Sony: Q3 FY2023 $1.9 billion profit - 900 layoffs

• Meta: $39 billion profit - ~20,000 layoffs

👀 Our POV

I’m overjoyed to see Capcom investing back in its employees during a time when many other companies have cut thousands of talented people, some of them friends of mine. While being profitable isn’t a guarantee that job cuts won’t occur, it should instill more confidence in employees than it currently does. Seeing companies with profits in the billions let people go is a perplexing situation that, while muti-layered, is discouraging. Capcom did an incredible job this year by reviving love for RE4 and iterating on the legendary Street Fighter series. They’re proving the model that investing back in employees can generate significant benefits for companies. 

I’m a strong believer that you win as a team or you lose as a team. It’s nonsense that certain executives should retain inflated salaries while talented teams get pay cuts or let go entirely. All companies should strive to be more like Capcom by rewarding their employees when the company succeeds. People ultimately do their best work when they are cared for, feel properly compensated, and have a sense of connectedness to the wins they secure for their company. Incentivizing good work with job stability and regular pay increases is a surefire way to keep a team happy and retained. It isn’t a silver bullet, but taking a “people first” mindset may benefit companies more than they think it will. Congratulations to Capcom and their team on a successful year and an excellent approach to compensation.

- Brendan Valentine (Private Lobby)

🔎 Roblox: The Hunt limited time event

Roblox The Hunt: First Edition has begun, the limited time event invites and rewards players for playing over 80 different Roblox games. Why is this a big deal you may ask? 🤔 

💎 Unique, Rare, & Limited

A first of it's kind event by Roblox, The Hunt is a limited time event running from March 15th to March 29th.

1. Explore the Infinite Vault 🔒
   This hunt will take you into the Infinite Vault, where you'll find futuristic treasures collected through Roblox space and time.
   

2. Complete Challenging Quests ⚔️
   Dive through an array of portals to find adventures and earn badges.
   

3. Collect Exclusive Rewards 🏅 
   The Vault is full of rare and elusive items, and your badges are the key to unlocking them. Can you get them all before the vault door closes forever?

BONUS ✨ 
Walmart joined the party with 15% off Roblox Gift Cards and a free avatar item inspired by The Hunt with purchase.

👀 Our POV

This event is really cool. Roblox has found a way to incentivize and reward their playerbase for exploring the infinite variety of Roblox games.

This seems like a perfect case study for how you can drive awareness and affinity for many experiences through one event or campaign. I love the Walmart gift card promotion with it as well, I'd love to see how that has performed.

I'd love to see Epic use this strategy for UEFN but even potentially creators and world builders. I could definitely see a group like Gamefam creating a questline and system that incentivizes players to explore their impressive game library. Although knowing them, this probably already exists 😂

- Zach Eller (Private Lobby)

💼 Job Board

• Business Development Lead, Game Technologies for a16z Games (Santa Monica, CA)

• Administrative Specialist for G2 Esports (Los Angeles, CA)

• Director, Public Policy Engagement for Epic Games (Remote)

• Product Designer for Allstar (New York, NY)

• Senior Partnerships Manager for Allied Global Marketing

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Disclaimer: our views are ours and in no way represent those of our employers.