nav
Business Operations Business Models

How Does League of Legends Make Money (Business and Revenue Model)

The League of Legends business model

League of Legends (LoL) logo
Here’s what you should know:
  • What is League of Legends, and how does League of Legends work?
  • How does League of Legends make money?
  • In-game Purchases (via Riot Points)
  • Ad Revenue (from YouTube Ads)
  • LoL eSports Live Events (Ticket Sales)
  • Selling Merchandise (Riot Games Store)
  • League of Legends profit and revenue
  • What is the League of Legends business and revenue model?
  • League of Legends funding, net worth, and valuation
  • League of Legends subsidiaries, acquisitions, and exits

How does League of Legends make money and how is it free to play? Well, here is the complete, in depth, breakdown of their four (4) revenue streams and the different products and services they offer, as well as the League of Legends business and revenue model, how much money League of Legends (LoL) makes per year, and how League of Legends works.

What is League of Legends, and how does League of Legends work?

League of Legends, also commonly referred to as LoL or Legends, is a free-to-play (F2P) online multiplayer battle arena (MOBA) game.

Developed and released in 2009 by Riot Games, League of Legends now has more than 150 million registered gamers making it one of the most played PC games in the world.

So, how does League of Legends work? You can play League of Legends by simply heading over to their website, tapping on “Play for Free”, creating a Riot account (if you haven’t already done so), then downloading the gaming software onto your Mac or Windows. Once downloaded – install it, create an account, and start playing.

In addition, you can also play their mobile app version of ‘League of Legends: Wild Rift,’ available in both the Apple App Store and Google Play store.

Some of League of Legends’ competitors include Fortnite, RobloxMinecraft, VALORANT, and other popular online games.

League of Legends: Wild Rift app in Apple App Store | League of Legends (LoL) Business Model | How Does League of Legends (LoL) Make Money | How Does League of Legends (LoL) Work
Source: Apple App Store | League of Legends: Wild Rift

How does League of Legends make money?

According to League of Legends, LoL has more than 150 million registered gamers on its platform; 117+ million of which are active monthly players. So how does League of Legends make money off these players if LoL is free to play?

Below is a breakdown of how much money League of Legends makes and its revenue model. Including all revenue streams and how much they charge for their services.

Because of the fact that Riot Games is the developer of, both, League of Legends (LoL) and VALORANT, both games’ revenue models for how they make money are nearly identical.

Here are the 4 ways how League of Legends makes money in 2022

League of Legends has a revenue model that makes money in four (4) ways; through in-game purchases, ad revenue, ticket sales from LoL eSports live events, and selling merchandise.

#1. In-game Purchases (via Riot Points)

One of the ways League of Legends makes money is through the sale of Riot Points (RP).

What are Riot Points? RP, formerly known as Riot Points, is League of Legends’ in-game currency that allows users to purchase and use this currency to buy things like skins, champions, chromas, and more in-game items.

Riot Points (RP) can be purchased in-game or at partnering retailers that sell Prepaid Game Cards. You can see how much Riot Points cost below.

How much do Riot Points (RP) cost? (Riot Points price)

  • $5 to $100 USD depending on how many Riot Points are purchased (prices may differ by retailer and region)
LoL Riot Points | League of Legends (LoL) Business Model | How Does League of Legends (LoL) Make Money | How Does League of Legends (LoL) Work
Source: Riot Games

Note: Aside from Riot Points (RP), League of Legends also has another in-game currency called Blue Essence (BE) which can be earned for free through LoL gameplay. Therefore, this currency does not make money for LoL.

#2. Ad Revenue (from YouTube Ads)

With a combined 6.84+ million subscribers across their 9 LoL YouTube channels, the League of Legends brand also makes money by monetizing the YouTube video content they upload to their channels.

These 9 channels upload content like live broadcasts of pro play across all global leagues including the World Championship. As well as weekly highlights, gameplay breakdowns, commentary, and more.

Which, to date, have tallied up a combined 2.44+ billion views across all 9 channels. Although it’s unclear how much YouTube ad revenue they generated from these views given it varies.

Note: League of Legends has 9 YouTube channels totaling 2.44+ billion views and counting.

#3. LoL eSports Live Events (Ticket Sales)

In addition to streaming tournaments, League of Legends also makes money through selling tickets to these LoL eSport events.

These events are live in-person tournament events where fans who purchase tickets can watch these gamers live at the venue – which is held in various parts of the world.

To give context to how popular these LoL eSport live events are, the 2022 World Championship was held at the Chase Center in San Francisco, CA – which holds 18,064 people and was sold out.

You can also take a look at the image below (a picture of an LoL eSports live event.)

LoL eSports Live Events | League of Legends (LoL) Business Model | How Does League of Legends (LoL) Make Money | How Does League of Legends (LoL) Work
Source: eSports

#4. Selling Merchandise (Riot Games Store)

Another way League of Legends makes money is by selling its own merchandise through its official online Riot Games Store.

Here, they sell branded League of Legends apparel, collectibles, accessories, and more that range in price between $5 to $940+ USD.

League of Legends profit and revenue

League of Legends earned a reported $1.63 billion USD in revenue for, developer, Riot Games in 2021.

Note: Because Tencent Holdings Ltd., the parent company of Riot Games, is a publicly traded company on the Hong Kong Stock Exchange (SEHK). You can find all of Tencent’s publicly released financial reports, including annual reports, through Tencent’s investor section on their website.

What is the League of Legends business and revenue model?

League of Legends makes money through a few revenue models that they combine within their company, they are:

  • Gaming as a Service (GaaS) business model
  • Free to play (F2P) business model
  • Transaction based business model
  • Advertising based business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

League of Legends funding, net worth, and valuation

According to Riot Games’ Crunchbase profile, the League of Legends developer, Riot Games has raised $21 million over 5 rounds.

In February 2011, Riot Games was acquired by Tencent for $400 million USD.

League of Legends subsidiaries, acquisitions, and exits

To date, Riot Games, the League of Legends developer, has made a total of 3 acquisitions, 21 investments, 6 lead investments, and 3 successful exits.