- OverActive Media Corp. has voiced its support for Riot Games’ proposed changes for League of Legends Esports
- Riot Games’ proposed model aims to ensure the sustainability of League of Legends Esports, focusing on more predictable revenue streams for teams through partnerships and in-game digital sales strategies
- Riot has decided to offer a new partnership model with team partners where they will be paid a fixed stipend and share in revenue from League of Legends Esports digital content sales
- OverActive Media Corp. opened trading at $0.49 per share
OverActive Media Corp. (TSXV:OAM) has voiced its support for Riot Games’ proposed changes for League of Legends Esports.
The Toronto-based global e-sports and entertainment company responded to a blog post by John Needham, Riot Games’ president of e-sports, expressing full commitment to working alongside Riot Games in this transformative process.
Riot Games’ proposed model aims to ensure the sustainability of League of Legends Esports, focusing on more predictable revenue streams for teams through partnerships and in-game digital sales strategies.
“We all – leagues and teams alike – are overly reliant on sponsorship as a revenue stream,” Needham wrote in his blog post. “The sponsorship business across the industry slowed down in the wake of a post-COVID global economy, and we saw some team organizations struggle to operate sustainably.”
He added that the economy has recently regained traction, bringing an uptick in sponsorship across the ecosystem. The likes of Progressive, Coinbase, and Honda among others have come on board to sponsor League of Legends Esports team organizations. In the first few months of 2024, Riot has welcomed new partners.
Riot has decided to offer a new partnership model with team partners. In the current League of Legends Esports partnership model, teams committed to pay around US$10 million to participate in a league and receive 50 per cent of certain revenues (not profits) generated by that league.
Most of this revenue has historically come from sponsorships and when Riot first introduced this model, abundant access to capital allowed teams to spend in excess of the revenues they were generating. Over time, access to capital became limited, revenue growth didn’t catch up to cost growth, and team cash reserves were exhausted.
Under this new model, teams will be paid a fixed stipend and share in revenue from League of Legends Esports digital content sales. Riot explained that this model shifts the revenue-sharing mechanism away from sponsorship sales as the primary revenue source and focuses on digital content sales, which can be more resilient to economic downturns and can have a higher ceiling than sponsorships.
Riot Games is a video game developer and esports tournament organizer founded in 2006. In 2009, the company launched its debut title, “League of Legends,” which has gone on to be one of the most-played PC games in the world.
OverActive Media Corp. is focused on e-sports, video games, content creation and distribution, culture and live and online events. Its business activities consist of owning and operating an integrated portfolio of e-sports teams, as well as audience engagement.
OverActive Media Corp. opened trading down 7 per cent at $0.49 per share but its stock has risen 161 per cent since last year.
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