The love affair between Riot Games and Tencent is not just a pink carpet. While both companies have grown, there have been times when they viewed each other as enemies even though both sides worked together. Recently, The Information has published very little known information about Tencent’s acquisition of Riot Games.
Where did it all start?
Riot Games and Tencent were initially merely publishers and distributors of games, as Riot Games needed a partner in China to do so. However, Riot’s inability to capture revenue from China (70% held by Tencent) forced them to open an office in Hong Kong and slowly take over esports operations, separate from the Chinese tournament reporting. Country belongs only to Tencent QQ.
In addition, Riot also hired a former Tencent executive to monitor the publishing rights in this country, a decision that ran into other problems – Tencent wanted a mobile version for League of Legends, for example. Here is an excerpt on the issue:
Tencent leaders were saddened to learn of this and refused to cooperate with the new employee, who is considered an important link in Riot’s communication with Tencent in China. This problem was alleviated when someone else was hired and assumed the responsibility.
The two sides also disagree on when to release the mobile version for “League.” Tencent wants that game, because of the potential that the mobile market has. But the founders of Riot did not want to invest in the PC “League” in smartphones. So, Tencent has developed its own version of the Chinese mobile “League”, called “Honor of Kings.” This upset Riot – they consider this to be intellectual piracy.
Tencent’s mobile launch quickly became the world’s top-grossing mobile game, while “League of Legends” – Riot’s only successful game – peaked in 2016 and started to decline. back. Competitive titles like “PlayerUnknown’s Battlegrounds,” or PUBG, and “Fortnite” have drawn League players. Riot was forced to cut costs and lay off hundreds of global employees.
The competition begins
Tensions led to Tencent buying out shares of Riot employees, turning some employees into dollar millionaires. Some employees then decided to leave the company, no longer bothered by the amount of shares they had previously kept (as well as waiting to sell the shares for cash).
In addition, Tencent also compensated Riot with a sum of $ 200 million to alleviate complaints about Honor of Kings. The timing couldn’t have been better, as Riot started losing revenue in 2016 and was forced to cut staff globally.
Nicolo Laurent, the current CEO of Riot, writes things so that The Information easily summarizes what happened between the two companies over the years:
I acknowledge that a great relationship is nothing short of amazing, but we couldn’t be happier with Tencent. as a partner, publisher and owner (of Riot). As with all partnerships, there were times when we disagreed, but with the deep relationship we both have, all issues were pointed out and resolved quickly.
Riot’s revenue decline in 2016 and the resurgence of the Battle Royale series set off alarm bells for the company, but they’ve moved on to developing other games. Co-founders Marc “Tryndamere” Merrill and Brandon “Ryze” Beck left the management chair to move into development roles for future titles. If they want to survive, Riot needs to step out of their own shadow (and not just rely on League of Legends).
Source link: Fierce battle between Riot Games and Tencent before returning to the same house