League Of Legends Creator Riot Secures $8M, Partners With Tencent

Riot Games, developer of upcoming multiplayer PC game League of Legends, has completed an $8 million financing round and announced its partnership with Chinese tech giant Tencent, which will provide online services for the game in China. In addition to new investment from Tencent, Riot secured capital from ongoing partners Benchmark Capital and FirstMark Capital. Riot hopes its upcoming game, which is styled as a successor to the wildly popular WarCraft III mod Defense of the Ancients, can bring to the core game market some of the business models that have proven extremely successful to casual and social games, particularly in Asia. Set to launch in October, the game, which the creators discussed recently with Gamasutra, relies on a free-to-play system that allows players to make small payments for additional characters and other convenience-related perks. CEO Brandon Beck says Tencent, which operates a number of successful online games, the QQ instant messenger service and the Q virtual currency in China, will help make Riot's game a success in the Asian market. "Tencent has a strong understanding of operating core games as live services, something they've been doing for a while with a lot of success," Beck told Gamasutra in advance of the announcement. "Fundamentally, at the highest level, our belief is that the game industry is undergoing a very strong transition from a packaged goods business to service offerings," he said. "The result is a significant amount of creative destruction and innovation." Riot president Marc Merrill said Tencent's involvement has strengthened some of the studio's own theories about the free-to-play revenue model, as well as assisted with various regional details. "There are some best practices and things to consider around designing the monetization model and getting additional comp data," Merrill told Gamasutra. "Because it is data, there's also a lot of validation." He noted: "Tencent knows their audience and digital goods, and after good, deep due diligence where they played the game and talked to us about our philosophy, there's a lot of synergy around how we want to create products based around the end users." Merrill added that the ongoing nature of such revenue models makes sense for online games that must be constantly adjusted and expanded. "We can use information from the audience to continue to improve the game, through bug fixing or adding content, because fundamentally it's all about the end user -- or it should be," he said. "This model helps facilitate that: We own the experience, there's no third-party intermediary who's filtering information, and we can release a patch tomorrow rather than wait months to bundle it in a discrete expansion that we also have to put on retail shelves."