The Economic and Behavioral Success of Riot Games In an Undifferentiated Video Game Market

• Main Author: Yakobi, Maxine J
• Format: Others
• Published: Scholarship @ Claremont 2014
• Subjects: Economics; Behavioral; Video; Game; Organizational Behavior and Theory; Other Business
• Online Access: http://scholarship.claremont.edu/scripps_theses/349; http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1525&context=scripps_theses

The vast success of Riot Games is relatively undisputed amongst financial analysts as well as online communities despite there being little information publicly available that specifically addresses how their game has differentiated itself in a homogenous market. Additionally, there is little information that addresses the opportunity cost of paying money for components within this specific server for advantages within the game. I believe there to be something functionally unique about Riot’s business in particular that allows for it to acquire steady fiscal growth from people investing their money into effectively a “free” online game and I would like to explore what that is. Therefore I wish to answer the question of why is it that Riot, despite having a relatively undifferentiated product within the MOBA game industry, exceeds all other companies in both player commitment and financial investment to their free-to-play product. My surveys will aim to address the reasons why players choose to invest both their time and money into the game and shed more light on the efficacy of the incentive structures in place. Through survey data and information gained through interviews I will form base comparisons between player preferences and then track the incentive structures across the MOBA industry. Using comparative analysis between the player-reported incentives which drive their behavior, the information gained through conducting personal interviews with Riot Representatives, and careful analysis of consumer trends with regards to League of Legends and the eSports franchise as designed by the Riot Games industry, I will attempt to find correlations between the player’s perceptions of Riot’s product and the incentives within the game. If consumption and growth patterns show correlations to the growth exhibited by the company that prove to be significant when compared with player preferences, those points could potentially explain the success that Riot has seen over the duration of the past five years of the company’s existence.