LCS projects a profitable 2021 season, despite navigating covid-19 crisis

LCS projects a profitable 2021 season, despite navigating covid-19 crisis

Greeley’s statement confirms an earlier timeline shared in October of last year by Marc Merrill, co-founder of Riot Games, which owns and operates the League of Legends Championship Series (LCS). Back then Merrill told The Post he believed the league would start netting a profit “within the next year or two.” If it happens, the LCS will have answered a basic, fundamental question facing the esports industry: can a high concept, professional video games leagues work?

“It helps reassure fans and team owners and brands or people who have been invested in this ecosystem that it’s likely to be sustained for a long time,” Merrill told The Washington Post last October.

The primacy of video games as a form of mainstream entertainment is now beyond debate, and has been for some time. Last year, the Entertainment Software Association reported $35.4 billion in revenue for U.S.-based game sales.

Despite this, the sustainability of pro video game leagues very much remains an open question, especially given how often new leagues for traditional sports either fail (the XFL, twice) or operate at a loss (WNBA).

The LCS becoming the first top-tier esports league in the United States to become profitable is especially significant since the league offers its players the highest salaries in the industry. The average player salary in LCS is about $400,000 with the median salary being about $380,000, according to Greeley. This move to profitability would be all the more remarkable since, like just about all of the esports world, the league is heavily reliant on sponsors since the kinds of TV deals, and regular, in-person events with tens of thousands of spectators that feed the purses of traditional sports franchises have not yet emerged.

Some of the nonendemic partnerships LCS has closed are with Mastercard, Verizon, Bud Light and Louis Vuitton. Teams have also closed their own deals with brands like BMW, Snickers, and PepsiCo. In a move common to traditional sports, LCS will now also feature in-game banner ads, starting with Mastercard and Alienware. Rather than appearing on ballpark fences or hockey boards, however, the ads will display in the league’s virtual playing field.

“For partners, it starts to really bring us in parity with a lot of traditional sports,” said Naz Aletaha, head of global esports partnerships and business development at Riot Games. “Being on or next to a field of play is very commonplace in sports.”

In addition to heralding a new era, profitability will also enable Riot Games to pursue new initiatives and help build the competitive landscape more broadly.

“The best sports don’t just have the top tier aspects of the ecosystem, they don’t just have the NFL, they also have Pee Wee leagues, you build infrastructure in elementary school or clubs in middle school,” Merrill said. “It’s not just about the pipeline of players, but about bringing the great experience of the sport to a much broader group of players.”

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To maintain their timeline to profitability, the league had to pivot quickly earlier this year to maintain operations amid the coronavirus crisis. LCS officials were in touch with their Chinese and Korean league-counterparts (Riot maintains 12 leagues globally) during the early part of the year, staying updated on how the pandemic was playing out there.

On March 9, Greeley and his team decided to start taking safety measures by restricting fans from that weekend’s matches at Riot’s studio in Los Angeles. A couple days later, they extended the restrictions to press, content creators and nonessential staff. The league asked teams to scale back as well, including owners and their guests. That Friday, even after considering doing a remote broadcast from each teams’ facilities, they decided to temporarily suspend the season.

But by March 17, the league announced it would return the following weekend and was back, online, with a fully remote set up. The speed with which they could shift was due to a “pretty quick alignment with teams” and the fact that all players were based in Los Angeles, according to Greeley.

“100 percent, it’s proximity. League of Legends is a game that’s susceptible to ping differentials,” Greeley said, referring to how quickly data travels from a player’s computer to the game servers, where it is processed and rendered on screen. “All teams have situated themselves pretty close to Riot’s campus. When we went remote we were able to utilize those same servers.”

The localization of the league stands in contrast with other well-backed esports leagues like Activision Blizzards Call of Duty League and Overwatch League. Players in those circuits were spread across North America and, in the Overwatch League’s case, Asia. That spread of players and teams made coordinating fair match play a more significant challenge for those leagues as they scrapped plans for live events and resumed competition online.

“It’s a high rent district,” Greeley said about West L.A. and its surrounding environs. “But in this instance having everyone clustered so quick was a huge advantage for us.“

The LCS’s move to online was not without incident for some players and managers.

“I think they did reasonably well, given what they could do and the short turnaround,” said Counter Logic Gaming’s League of Legends General Manager Daniel “Tafo” Lee. “But not being in front of an audience, MSI [Mid-Season Invitational — an in-season tournament] not happening, when you put all that together, it’s really hard to be together.

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Lee added that Riot’s decision to change how team qualify for Worlds — teams now only qualify during the Summer Split, which began June 12 and runs until August 9 — further lowered the stakes of the early season.

CLG Player Ray “Wiggily” Griffin said the remote setup hampered his game preparation and in-game experience. “As a player, you’re kind of a competitor and it’s kind of hard to get into a competitive mind-set playing from home,” he said. “It’s hard to mimic LCS without being able to go to LCS. … I’m used to going to the studio, playing in front of people, preparing for a match. You have a routine and all of that changed.

“They tried their best to make it meaningful to players and fans, but everyone’s left with a weird feeling about it, especially the players.”

Griffin added that he noticed his ping was “very, very slightly higher” when playing from home. Griffin acknowledged it did not impact his gameplay, but that frames per second-related issues did.

“You had to stream a camera, and sometimes the PC would make it difficult for people,” he said. “You’re trying to focus on the match itself and you see your character jumping around. It’s hard not to get lost. The team has a whole strategy and it’s hard to focus on what you want to focus on.”

Lee said that the remote setup was a struggle for some players in other regards too. “Players lose their gym routine and food routine, so we started to deliver food to them and do morning exercises. If you’re just on your computer all day, it’s a haven for getting hurt,” he said.

CLG struggled during the Spring Split, coming in last place. But Griffin is undeterred. “Everyone’s hopes were pretty high going into this year, and we’re just trying to ride that and forget what’s in the past. It doesn’t define us as a team,” he said.

And just as Lee and Griffin are very much looking forward to moving on from the last Split, they are also looking forward to moving on from online matches, both for promotional and competitive reasons.

“Live events and activations are a key metric and comparison point because some people don’t know what an online event is,” Lee said. “Live events are validating and important if we want to continue to grow the industry.”

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