Image: Riot Games
Arcane turned out to be a financial hit for Netflix, but not so much for Riot.
The League of Legends animated adaptation Arcane was reportedly a “financial miss” for Riot Games. According to a recent report from Bloomberg diving into the series’ whopping $250 million price tag, the series failed to generate enough profit for Riot to justify the cost of its production.
Netflix’s Arcane is a hit in Riot’s heart
A recent Bloomberg report claims that Arcane has failed to net enough gaming revenue via Riot Games’ MOBA League of Legends, and thus can be considered a “financial miss.” This is despite the series’ intense worldwide popularity, and nigh-boundless critical acclaim - even for its more controversial second season.
The report states that Netflix shelled out $3 million for each episode of Arcane, while Riot’s parent company Tencent paid an extra $3 million per episode for the series to air in China. This amounts to roughly half of Arcane’s $250 million spend - the rest of that money came from marketing and awards campaigns, putting the show “way over budget.”
Interestingly, the report also reveals that Arcane was meant to push Riot into becoming “the next Walt Disney Co.,” with Arcane being just the first of many new projects to be produced by its entertainment division. This was before the show’s budget began to bloat, and Riot not having a proper plan set in place to recoup the cost of making it pre-release.
Arcane’s so-called “financial miss” can be attributed to Riot not taking advantage of the show’s popularity in League of Legends itself. Bloomberg states that the game's developers were not given enough time to make Arcane-themed in-game items, and new sign-ups following the series’ launch proved to be impermanent.
Tencent then reportedly “started asking questions” about what Arcane added to Riot’s gaming business following the release of Season 1. Prior to Season 2, Riot gave its employees two long years to produce digital items themed after Arcane to sell in League of Legends. It appears that this strategy was too little, too late, however.
However, Riot seemingly views the series’ financial performance with a much more optimistic lens. The company's co-founder Marc Merrill posted on Reddit to address the report, saying “People who look at the world through a short term, transactional, cynical lens, really struggle to understand Riot. This has been true with various people trying to claim that high quality free games won't work, that esports will never work, that our music was insane, are now saying that Arcane wasn't awesome and worth it.
“These people think we make things like Arcane to sell skins, when in reality we sell skins to make things like Arcane. Riot is a mission driven company where Rioters are constantly striving to make it better to be a player. That is why we have successfully done that over and over again across multiple games and now multiple businesses / mediums - games, sports, music & animation. Do we get everything right? Nope. But we are not focused on the short term extraction of profits - we are focused on delivering exceptional value to our audience over the long term, again and again and again.
“To be clear, Arcane crushed for players and so it crushed for us,” Merrill finished.
Notably, Merrill did not outright deny the claims put forward by Bloomberg regarding Arcane’s spending and financial performance. The series is still set to receive more spin-offs in the future, so it can’t have done all that badly for Riot in the end.
