Riot Games Announces Job Cuts, Focuses on Core Development and Live Games

Riot Games, the online gaming company owned by Tencent Holdings, has announced that it will be cutting 530 jobs, which equates to approximately 11% of its global workforce. The news comes as the gaming industry experiences a wave of job losses, with companies such as Amazon, ByteDance, Epic Games, Ubisoft, and Niantic all announcing cuts in the past year.

The decision to let go of a significant portion of its staff was made by Riot Games’ Chief Executive, Dylan Jadeja, who cited unsustainable costs as the reason behind the move. According to Jadeja, teams outside of core development will be the most affected by the layoffs. The company plans to focus on its portfolio of live games, including League of Legends, Valorant, Teamfight Tactics, and Wild Rift.

The gaming industry has seen a surge in hiring at the start of the pandemic in 2020, which has led to an oversaturation of the market and a slowdown in sales as lockdowns ended and customers held off on purchasing expensive titles or stuck to fewer games amid high inflation. Despite the abundance of highly-rated titles available, such as Baldur’s Gate 3, Zelda: Tears of the Kingdom, and Spider-Man 2, as well as new entries in the Super Mario and Sonic the Hedgehog franchises and surprise hits like Sea of Stars, Hi-Fi Rush, and Dave the Diver, Riot Games acknowledged that it had “more than doubled in headcount” over the last several years.

In a statement to staff, Jadeja acknowledged that the company was “a company without a sharp enough focus” and that it had “too many things underway.” As a result, Riot will be stopping new game development under Riot Forge and dropping some features in Legends of Runeterra, which has not performed as well as the company had hoped.

Tencent bought a majority stake in Riot Games in 2011, and the Chinese conglomerate also holds a stake in Epic Games. The job losses in the gaming industry are partly due to the mass hiring that took place at the start of the pandemic and the slowdown in sales as customers held off on purchasing new titles or stuck to fewer games amid high inflation.

Riot Games’ decision to cut jobs is not unique in the gaming industry. Last year, Amazon and TikTok owner ByteDance both downsized their gaming divisions, while Fortnite maker Epic Games, Assassin’s Creed developer Ubisoft, and Pokemon Go creator Niantic all announced cuts. The job losses in the sector are a response to the mass hiring that took place at the start of the pandemic and the slowdown in sales as customers held off on purchasing new titles or stuck to fewer games amid high inflation.

The gaming industry has been experiencing a period of significant growth in recent years, with the global gaming market projected to reach $209.2 billion by 2023. However, the industry is also facing challenges, including increased competition, regulatory pressures, and economic uncertainty. The job losses announced by Riot Games and other companies in the industry are a response to these challenges and a reflection of the need to adapt to changing market conditions.

Despite the challenges facing the gaming industry, there are still opportunities for growth and innovation. Companies that are able to adapt to changing market conditions and focus on delivering high-quality games and experiences to their customers are likely to succeed in the long term. Riot Games’ decision to focus on its portfolio of live games and stop new game development under Riot Forge is a strategic move that reflects the company’s recognition of the need to adapt to changing market conditions and focus on its core strengths.

In conclusion, Riot Games’ announcement of job cuts and focus on core development and live games is a reflection of the challenges facing the gaming industry and the need for companies to adapt to changing market conditions. The decision to let go of a significant portion of its workforce is a strategic move that reflects the company’s recognition of the need to focus on its core strengths and deliver high-quality games and experiences to its customers. The gaming industry is facing significant challenges, but there are still opportunities for growth and innovation for companies that are able to adapt to changing market conditions and deliver high-quality games and experiences to their customers.