The Man Who Made League of Legends | Ep. 082 Lemonade Stand 🍋

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Uh, one of the co-founders of Riot Game and Mark Merrill has joined us today for, I think, a pretty, uh, pretty wide-ranging, interesting interview. The man responsible for Brandon's grades in college. This is a wide-ranging. Interview talking about the building of Riot Games, the state of the current games industry, the future. It's incredibly interesting and we hope you enjoy. Welcome back to Lemonade Stand, everybody. We have another exciting guest this week. Uh, we are joined by Mark Merrill, the co-founder of Riot Games. And I was going to attempt to read off your other titles, but I thought a good place to start was you just briefly explaining your trajectory at the company. Because my understanding is you kind of pulled back and left for a while, came back. Can you just explain, like, what you do at the company now and, like, what led up to that? Sure. Yeah, well, you know, started the company back in 2006 with my business partner, Brandon Beck, uh, and then grew it for many, many years. You know, we created League of Legends, uh, you know, we created LCS and OEC and a bunch of our broader esports leagues and, uh, Arcane and, you know, games like Valorant and Teamfight Tactics and Legends of Matera and now Riftbound, uh, as well as League of Legends. Uh, and now 2xKO. So we got a lot of stuff that, uh, we've launched over the last 20 years. Uh, but Brandon and I stepped aside as co-CEOs, uh, at the beginning of 2018, uh, sort of went into founder mode, you know, were chairman of the board for a little bit, uh, but had to come back in operationally a couple years later. First, it was, uh, to sort of try to mitigate a couple things that were going off the rails, but then I continued to get more and more sucked in. And, um, for the last, like, five years have been sort of full-time and we had to replace part of the leadership team and, you know, start a whole new chapter of Riot to really get back to our fundamentals that, uh, really built the place and I think are really important for the long-term. But so can I ask you, you're not CEO of the company right now, right? Correct. But you are sort of a key executive leadership decision-making role. Yeah, I'm the chief product officer. I'm also the co-chair. And so, you know, as Brandon and I are essentially our co-chairs, we, and one of the things that boards do is we hire and fire the CEO, uh, as well. And so it's sort of an interesting thing where, um, you know, essentially Dylan, Jadeja, or RiotCF, uh, CEO, who's our former CFO, uh, and I essentially sort of co-lead the company now as well. Uh, very similar to how, you know, Brandon and I did, you know, for many, many years when we were operating together from 2006 to 2018. So yeah, companies go through interesting chapters and different eras, uh, and, you know, could get into a lot of stories about that to the extent it would be fun and interesting. We have a million questions. So thank you so much for joining. We all have a long history with Riot Games and League of Legends, and it's all part of our business. We have a lot of questions, but where do you want to start? Well, I, I, I think from what you just said, I, I'm curious why you want to be so involved still in a way, because it's been so long. Like I heard from an employee that you still, there's like, uh, this thing when you got hired at Riot called D-Noob and it's like your onboarding process and you still go to every single one or, or, or like you attend and introduce the new employees to the company. Yeah. And I think for some, somebody that's like this far into it and to hear that you came back and you're describing like falling, like kind of falling back into it, why you're so engaged. Yeah. This is sort of a long story, uh, you know, around the why, but, uh, you know, Riot is a mission driven company. So, you know, when Brandon and I started the company, you know, we wanted to build what we originally called was, you know, sort of the most player focused game company in the world. And cause we felt underserved as players where, you know, we, uh, loved games like Starcraft and Warcraft three and EverQuest and, you know, all sorts of these great online games and Counter-Strike and whatnot, eventually Dota. And, uh, as players who were spending way too much time, you know, compared to other things we were probably supposed to be doing, whether it's school or work or whatnot, uh, playing online games, talking about online games. We would often, we would care very deeply about these games that we'd play and we would want to help these games succeed. We'd evangelize to our friends. We'd go on a message boards and we'd write big posts about different ideas that they could do, or we'd try to volunteer for them. So, we'd try to volunteer in different ways. And, um, the vast majority of the time we felt that a lot, a lot of times the companies really didn't care or acknowledge the types of things we were saying or sort of perceived that we as players didn't really matter. And we really didn't understand for a long period of time, sort of why that was the case. And anyway, to make a long story short, we sort of aspired to build a company that would, you know, try to put players at the center of decision-making and that ended up becoming Riot, uh, and drove, you know, that sort of experience as players. We tried to really anchor a lot of the core philosophies that we think are really important to the organization. And then, you know, we started the company at 24 and 25. We were totally underqualified what we were trying to do. Um, and, you know, made tons of mistakes, of course, but we're fortunate enough to build League of Legends after raising some money from VCs. Can I ask some of those mistakes? Do you mind if I just like, what, what is the mistake that jumps out to you from 24, 25 starting this brand new company? What, what is something you remember painfully? Well, so Brandon and I didn't really even trust ourselves, you know, as sort of executives and, or, uh, product leaders, in fact, and game developers, because, you know, even though we both loved games, we had never actually, uh, like worked on any software as professionals. Yeah. And we had never started a company before. And so, um, you know, the guy that we had hired to, you know, sort of check the box from a credibility standpoint, because we need to put on slides and we're going to raise money to angels and potential VCs and whatnot. You know, they'd obviously be like, well, what do you guys know about building games? Like, how are you going to possibly do this? Or pull this off? We'd be like, great question. This guy is this expert. And we found him, um, because everybody that we knew in the game business wouldn't join the company. So we found him through a recruiter and we did this whole process. And once we actually raised a small seed round, he agreed, oh, wow. Okay. Like I'll come be, you know, sort of this third, uh, you know, sort of this first key hire to be your EP and CTO adult in the room or something. He's like more of the game developer, sort of executive producer and CTO. Um, but within three months, he literally was going behind our backs, going to EA and, or sorry, to, uh, to Microsoft and to PlayStation and being like, Hey, I got this little studio. And rather than doing what we had just raised money to go do, which is build league and build riot and do this thing. He's like, I will pitch you guys some Xbox live games or some PlayStation games or whatnot. And of course, once we found that out, you know, we're hiring people trying to go do a thing, trying to make progress, you know, daily on everything that we're doing. We have a fixed amount of other people's money that we have to allocate effectively to solve problems and make progress. And, uh, so we had to move in a different direction trying to pitch like this studio working on something other than league of legends. And so we're like, wow. So, you know, of course had to, yeah, permeate this employee moving in a different direction. Right. And when that happened, of course, it was a terrible conversation with our board, which is made up of angel investors that their number one concern was our credibility and ability to do this. And so he fired the guy, he was supposed to be the expert. No, no, no. Trust us. He's actually, he had no idea what he was doing. We're like 20 year olds got it. Yeah, exactly. But it was a great forcing mechanism for us to roll up our sleeves and then be like, we have to go figure out every single thing about everything or else we're going to fail. And if that lesson didn't happen so early, we absolutely would have failed. And, you know, I could get into tons of stories as to why, but that's one example. We then, you know, uh, aspired to try to mitigate risk by just focusing on being a game developer, uh, because being a publisher, you know, you're not going to be able to do that. You're not going to be able to do that. You're going to be able to do that. And taking the game to market ourselves really increased scope, increased risk. We had to have a backend technology platform, right? With an account system and chat and matchmaking services. And we had to write all this other software. We didn't want to do that. So we wanted to, we pursued this parallel financing strategy, talking to VCs and talking to publishers, but every publisher that we talked to at the time in 2006, 2007, they're like, what do you guys mean? You're going to make a game that's free. Like that's insane. And they're like, well, you're going to be PC only. Like, well, you're going to be a game that's free. And they're like, well, what are you talking about? They're like 80% of all game hours are single player, you know, and like consoles, the future, like look at the math, you know, all this different type of stuff. And so, and then people were like, Hey, what about mobile? And, you know, and so, and these are smart people with experts and, and we're the newcomers to the industry. Right. And so of course that can often shake your confidence and whatnot, but, and I could tell so many stories about this, but we then realized we had, we couldn't give the publishers the keys to the kingdom because then we would fail because they had no idea what we're talking about in terms of putting players at the center, operating with sort of this direct to player philosophy. regular patch cadence you know just doing things very very differently free game right where we'd sell virtual goods all cosmetic they're like that's dumb and most vcs told us that was dumb also because they were like one vc put it pretty succinctly they're like wait you're gonna make a battle arena game where 19 year old college kids are killing each other online but the way you're gonna make money is you're gonna play dress-up doll and we're like i bet he thought he cooked when he said that we're like kind of not really and they're like yeah good luck with that right and so you know classic entrepreneur story we're used to you know getting everybody to tell us no and why the thing doesn't make any sense and all that but the thing that gave us conviction to continue to go and be like we think this actually does make sense is we'd put our player hats on and we're like yeah but this makes sense to us and so if we could solve that and if we could do this and if we could do that then wouldn't that be amazing and that orientation and perspective has always been this guiding light and north star that i think has helped us figure out how to build a company how to build products how to build esports how to go build arcane how to build music like whatever it is it's we've found over and over and over in all these different areas the things that we can't sacrifice is that passion is that player understanding is the immersion in our community and caring for the ip we can augment with craft we can augment with experience and different people but you can't teach somebody to care and so this can i ask you directly though doesn't that get a lot harder the bigger you get absolutely which is what the perennial challenge has been and why i came back you know it's because this is like my dream company and my dream industry way beyond my wildest dreams what we could possibly accomplish and with scale and different challenges when things start to go off the rails you know in different ways or there's decisions that are being made that you don't necessarily agree with what i it's interesting to be like well is this just what happens as companies grow like are there ways we can solve this problem or just is is the sort of slow descend into mediocrity inevitable or are there things we can do to count on it right and that you know i think that that sort of anger and or frustration and sort of desire to make it better to be a player is the thing that people keep you know pulls me back in over and over and many people and is the engine that drives so much of so many rioters day in and day out to sort of try to solve problems do the hard things figure out how to you know do right players despite all the challenges despite the entropy that exists in the organization and how in the fast-moving world where the bar is only going up so i i i think i want to acknowledge that what you're you seem to be successful in what you're saying through i talked to like a handful of employees before we did this interview and the sentiment of this like framing of oh look at it from the player's perspective the player is king like that that is still holding strong now which i think is like really impressive to hear to like be able to maintain a value for that long after you've that i've got from employees is that at over time internal vibes at riot have shifted and uh i can say this is somebody who worked in esports for a long time and saw riot as this uh crown jewel of a company and career not to say that it's you know not still a great place to work uh is that this is like my forever career once i land there yeah and that sentiment shifted and i think that's a lot in the past like five to seven years and it no longer feeling like it's this special place that's above all these other gaming companies i wonder if you can do you feel like that sentiment is like fair do you like because you sit at it from a very different perspective totally this is why i had to come back um you know and because i you know succession planning is really hard and uh you know i thought we did a great job of it previously and i thought you know that part of the goal was to institutionalize the things that make the company special and we didn't succeed at that and um and so you know part of what you're talking about when you're talking about vibes is i interpret that as culture you know it's sort of this invisible framework where everyone just kind of understands what's expected what's important where we're all aligned you know oftentimes where we we don't need these incredibly robust processes and super detailed frameworks those other things because it's like yep like we can align quickly on what matters for players so we can go make good decisions etc that to your point is very hard to scale and culture is an outcome of your leadership your strategy the structure you put in place your systems and of course your people and it's about how people actually behave on the day-to-day and does the company incentivize the right things and do we punish the wrong things etc and and how and what do we reward and that goes to all these systems and structural designs and when there were significant structural and systemic changes and energy changes that were put into place it had a tremendously negative cascading implication give an example like yeah well so just to make it a little more tangible yes so riot was originally built as a matrix right we had a philosophy around organizing work by audience need and so you know the principle is league of legends player and that means you know every aspect across the whole value chain from software creation to ip development to how we build should be oriented to publishing to distribution to marketing should be like how does this thing manifest for league players and then the same thing would be for the val player right or the tft player or whatnot because everything starts with them and that i think is paramount and absolutely critical to remain true in order to have these dozens of teams or hundreds of people or you know thousands of people that have all these different capabilities across marketing and publishing and esports and international and different languages and time zones and engineering be able to collaborate effectively to do great things for players and so the company changed the org structure with the goal of simplifying the org and you know created five what are pillars where's the name for it another word for pillar is silo you know so it's it was games it was esports it was entertainment it was publishing and it was enterprise and then there were presidents that were named for these business units those aren't business units those are functions right and and that have different capabilities and then the systems that were evolved were to create essentially like to manage the company through budget and headcount and what that did also was then create this system where you could create a system where people wanted to they started to be rewarded for having more scope oh yeah rather than solving problems for the audience and delivering value that is catastrophic to culture right and then there were distance created between say development and publishing right which are two sides of the exact same coin right because you need to build the thing if you're if you're a dev and you're thinking all day long about you're obsessing over the problem and how do we go do this thing well you need comms marketing etc communication to deeply understand that be on the same side of the screen and be able to do the same thing and be able to do the same thing with you and help players understand what we're trying to do and why right in an incredibly authentic way and when they're you know they have different incentives and different goals and it's in a different building you don't know each other they're working on some other campaign that has nothing to do with the thing you're doing right like that type of friction started happening all over the place which then led to bloat right and then these incentives we grew cost 45 one year which is insane on a large company the cost of the company grew 45 one year one year this covet era is this this is before covet right because the conclusion was wow everything we do works because it was you know at the time and therefore let's go give everybody this huge amounts of budget and go and just do more right and you know a lot of the industry i think was suffering from some of that same dynamic and some of this correction that's happening i think manifests i'm sure differently different companies but in our case it was from this type of stuff right and that then caused a bunch of talent to leave meanwhile in the sort of the you know 2020 2021 era 2 vcs pulled up a money truck outside of riot also and we're like you guys are the best company at doing live service stuff like let's give you these massive checks go please start these companies so a lot of ex-riot companies and startups were founded oftentimes without an incredibly compelling idea or strategy for how they would go build audience in the game that they'd even build and whatnot and um and so a lot of rioters were leaving they're sort of this this dual situation or really three things like leadership change massive structural changes you know and then a lot of incentive for people to leave and where people are like hey we're making all these changes that i think are really going to fundamentally break some of the elements that are really important organization i don't believe i'm out and so we've been working on correcting these things and we've made huge strides over the last three years in particular but the yield on all this stuff is deferred and it takes time but i'm incredibly confident in terms of where we're going organizationally and we can look across a lot of what's happening in our in the vast majority of our games and the direction the quality decision making 19 percent of all new riders that have been hired in the last two years are boomerangs people that have been at riot before and are coming back so the gravitational pull rather than repelling people has actually reversed and people are coming back and because they hear it they talk to people they sort of understand oh we're getting our mojo back right leagues up valves crushing rift bounce crushing tft you know has some challenges right now with some of the real conversion but in general is an incredible game right like i could go through the whole portfolio and there's just awesome stuff happening um we got awesome stuff happen on the entertainment side our r d pipeline is incredible you know which of course you know people don't have exposure to you know but um but that's all happening but again the yield is deferred right and so but those types of things i was like you know riot's too cool to have these things happen and you know so uh but you know i couldn't just criticize and you know on the sideline and you know worked with my wife and whatnot who is also an entrepreneur to be like hey can we does this make sense to go back you know and sort of do this stuff and and when all the conditions sort of lined up on the family side and you know we're able to you know bring dylan in and sort of way uh you know we've been doing a bunch of country uh you know cultural and company-wide transformation stuff which i think is having positive yield and we got a lot of cool stuff coming so i mean it's interesting you mentioned the r&d pipeline and like what people don't have an eye on because i can understand the general sentiment of like you're making giant changes at the helm of a company that takes a long time for those things to make their way throughout the organization i think maybe unfortunately the big public stories around riot right now are things like live development on 2x ko being canceled totally and i did want to ask about that specifically because uh one uh one employee had talked about the feeling of that game being held to expectations by people higher up that this needs to hit some sort of why isn't this performing in the realm of a league or a valorant yeah when that game it's a fighting game at the end of the day totally and like let's say that game like we'll call the ceiling of a fighting game street fighter like let's say 2x ko is like street fighter level successful it's nowhere near league or valorant so i it what what were kind of the internal expectations for that game the justification of like such a big budget the long development timeline i would also be curious how much of the decision around sunsetting that game came from what you're talking about of needing to reset broader culture versus this in a microcosm as a business yeah so yes to both things right so um so 2x is a really interesting story right because the original premise right for 2x was hey like let's kind of take rising thunder simple controls cool uh awesome you know concept relating to like sort of a 1v1 fighting game that's sort of easy-ish to play right but still has depth and sort of mastery based on all sorts of different types of things let's you know have the league ip with the you know with the cannon brothers and you know add a cool sort of riot style competitive ecosystem and so and let's go you know and you know we bought radiant you know back in 2015 when we started partnering with the cannons and to the point around scaling and then different sort of leadership paradigms and different goals and whatnot with changes and leadership or whatever there wasn't alignment on the strategy right which then caused managerial sort of fracturing right and the team to kind of be on their own and to hear from different people and to hear from people at the company should we are we doing that are we moving fast are we doing the sniper shot that needs to be incredible you know there were all these different statements around and so you know we've got nobody to blame but ourselves right it was um you know i think we had a window to do some great things to really help uh you know the fighting game community and then street fighter 6 came out right which was something like eight years after we started working you know on 2x and so you know but we had an awesome development team of really talented people that did great work that made a beautiful game you know and so you know and we'd already communicated all this stuff to players and so we're like you know what let's just keep going and let's give it to the community let's see what happens right um and you know and so one thing that's important with 2x right is uh you know it clearly wasn't it resonated with some players right but not nearly enough players to your point in order to justify the type of sort of live service sort of long tail uh approach that the game was designed to do and so we're like let's just pivot let's sort of create this box let's give everybody a refund and you know say hey you know sorry for that we weren't able to achieve the this incredibly high aspirations that we're trying to do you know for the fighting game community but we love you guys you know appreciate hope that you'll play this game like many other sort of box games for years to come and uh you know here you go um and sort of sorry we let you down right is sort of the the orientation of what happened there um you know and so but again to the point around like yield being deferred the these things these these games and whatever like they take a lot of time right there's a lot of complexity and um you know just like the r&d pipeline like we always have to operate sort of many years ahead of sort of where you know and what players are experiencing at any given moment in any particular game um you know so it's it's it's really not reflective i think you know of sort of where we're going and the different things that are happening uh you know will happen in the future in that long trajectory of that game's development what do you like if you could go back and change a couple things what would be like the key points so you think that sent it in the wrong direction was it a broader company culture or were there a few things with how you guys approached that specifically that just ended up going down or was it street fighter 6 just banging no it was if i think if we came out like you know an idea like we should have uh sort of years before street fighter i think we would have really made a really significant impact um you know on the community but step one is we have to be aligned on the product strategy who's the player what are we doing what are the critical choices and then are we building are we actually building that thing right to sort of really be clear and then are all the different aspects of the company aligned is what we're doing is why right and then let's support the team and help them to accomplish you know what we're trying to accomplish but that wasn't happening and that's part of that fragmentation exactly it was sort of very inconsistent right because acquisitions are difficult also because there's you know there's expectation management and alignment and you know when it's when something is more homegrown it's it's sort of easier from a cultural alignment standpoint the expectations are aligned whereas uh in an acquisition like riot hasn't been very good at acquisitions um you know we could talk about hightail right and whatnot and so um and again a lot of this is like the hey wouldn't it be cool if we could you know manifest these incredible player dreams right and even making it better to be a sort of a minecraft style player etc and but execution is the thing and so you know it's not like we have any short of ideas we have a throughput problem and the whole company's focus needs to be around creating excellence because the world doesn't need more mediocre shit right like to your point there's 20 plus thousand games launched on steam every year there's a bajillion streaming services there's youtube there's all these sports there's incredible amounts of music there's netflix etc there's podcasts there's podcasts riveting podcasts you know but the point is is like it is a very competitive media environment right and so and we need to make something so compelling so cool right that like millions of people need to spend tons of time and often like associate their identity with loving this thing right being like i'm a league of legends player i'm a valorant player it becomes a meaningful part of their life that is an incredibly high bar right we have to you have to deliver real value and that's what riot needs to be tuned and optimized and focused on doing right so we're going to take big swings we are taking big swings you know in that but that also doesn't mean taking forever you know which is a whole other thing right so that's why execution matters which is why the strategy the structure the systems the people and how we operate you know really really matters and that's why cleaning up a lot of how we've been operating is so important you know as we continue to evolve i want to drill into that sort of to go off of what aiden said in your answer to the question which is that i think there's this perception about 2x ko that you guys would simply not be happy if it was a single rather than a home run like that yeah that if it really delivered but it was for a small amount of players that that would not and is that you're saying that's not the case but it's not true yeah so as an example right so but i understand why people perceive that because that was some of the messages that the team was getting at various points in time right and so the you know one of the things that dylan and i did when we sort of revised the strategy the companies we made it three things right first of all we changed the mission to again get back to the simple thing around we're here to make it better be a player not about us about them right then we created what we call the evergreen strategy it's three things and riot should only do these three things one live games green it's simple it means every game right league val tft legends of intera rip down etc needs to be effective and healthy and meeting the needs of its players right and that means effective team it means you know solving you know serving players that doesn't mean infinitely profitable means sustainable because the whole point is keep serving players that's it which means break even or better you know we'd like it to be better but the point is is keep serving players because when you take the long-term perspective just like with league league didn't it wasn't pokemon go you know like it was incrementally bigger in month two than month one and then incrementally better in month three right we grew not because we're great at acquiring players we're great at not losing them right it was so much value and players believe wow we're adding content and these champions are cool and i'm having fun and i want to go bring in my friends and oh my god they're doing esports and these events are crazy and the april fools thing and you know and like they were having fun and pulling people in that's what we need to do because once we are stable and consistent we're going to be serving players we can then do lots of things and the the universe opens up for the team whereas if your team's massive and we're way underwater and we have no chance to get to green what are we doing right and it's so a lot of people will be like oh you need to market marketing is irrelevant if you don't retain players people have too many other options you know and this is a really important thing for everybody to understand just from sort of a you know business product perspective etc is you know like there's a reason we don't go do super bowl ads or whatnot for league or for valorant whatnot because those games are not for everybody these are hardcore games right and if we like spend a bunch of money to go get all these random people to come try and download the game because we have some sick trailer makes it cool they'll just bounce because you know you got to want to grind ranked and you got to want to understand these things and you want to want to master these champions but if you love mastery and you love competition and you love sort of mmo style pvp that sort of boiled down into a 30-minute session it's the best game in the world for that and it needs to be right but like that's the orientation for every product we have to be be incredible at exactly what we're trying to do, but we shouldn't try to make something for everybody. And so anyway, these are the types of things that we had to go make true within the company again because we weren't always operating consistently with these types of principles, right? And these things are becoming more true again. So I believe you, this idea of like just making a game that is sustainable, but with the amount of investment that went into 2xKO specifically, I'm wondering what is like, like if we could pick a number, like what would have been the number that like keeps that game alive? Well, at their cost structure, it would have been in, you know, in the high hundreds of thousands, like it was, or if not millions, like it was, it was, you know. The problem seems to be it was too expensive. Too expensive, too big a team. Yeah. And so, and there's a bunch of reasons as to how to make, you know, compelling things for less, right? And like there's a whole craft and competency around that. And it's one of the reasons that there's a lot of churn in the industry, right? In a lot of ways, like a lot of these teams are too big, you know, and taking too big of swings for 2xKO. Too long with too much money. And that is a problematic challenge, right? And so a lot of, as a lot of these big efforts fail, like companies are, of course, retooling and being like, all right, like what else? What do we do from here? Anyway, we can get in all that. But like that, but demand is still growing, you know? And so like on a lot of the demand is often being captured by other great experiences. Boardogs, right? It comes out, right? Or all the other games in the indie scene or whatnot. Like there's. There's, you know, or some of the big live service titles that are incredible and, you know, have a large gravitational pull, such as League and Valve. And, you know, insert, you know, you know, wow forever. I'm playing the shit out of that again right now, you know? And anyway, all these types of things. Well, I want to dive into it. I think that's a really, I would love to hear your take on this, given your position. State of the industry right now is a tumultuous time of rapid change. Many, many layoffs across the industry. Things moving countries. Live service changing. The business model changing. Yep. Give us your thousand foot view of the games industry right now and what you think is happening. What is the tectonic plates that are moving? Yeah. So I think a lot of companies really overinvested and really took some big bets and just weren't that effective, right? Like they, I think oftentimes lost sight of sort of, you know, who the core player is or built things, you know. Do you have an example in mind or do you want to say? You know, like a lot of the big high profile, you know, sort of challenges, you know, that sort of maybe sort of come out. You want to go to an audience or just don't, even though they cost a lot, right? Like, like, you know, those types of things are what happens when you, when you take big swings and you're just totally wrong, right? And you miss. And so that's happening all over the place, right? Which is then, of course, causing companies to pull back and to reevaluate. And then also, of course, the VC capital, which was funding a lot of the boom in and around startups, such as like a lot of the X Riot Studios and whatnot, a lot of that capital is dried up, right? They moved on to AI and different things like this. And so therefore. You know, unfortunately, for a lot of really talented devs, right, that have been pouring their hearts and souls into creating awesome things, really believe in what they're doing, right? Like there's a lot of jobs being lost, right? And a lot of sort of retooling. But, you know, I think the sort of positive silver lining, right, is, again, demand is still high. And but there's just the bar is going up for what it takes to actually deliver something that will break through. There's a lot of great games that, you know, get made. There's a lot of great games that have been shipped and that just can't find an audience to become sustainable or to justify the continued existence of studios, right? And so making a great game or a very good game is necessary, but insufficient, right? You have to have mechanisms to sort of have enough of an audience or to keep bringing people back, right? And so the again, the silver lining on that is competition is good for the end user, for players, right? And so companies are forced to innovate, to force to think about how do we get better? And, you know. And it's like, it's going to be solved, the demand is going to be met by the indie scene or some of the big companies that can figure it out, right, or competition from international markets. You know, there's a lot of great capabilities coming out of Asia, as an example, and a lot of great games. And so that's just what's happening. It's this changing dynamic to sort of better fit the sort of supply side with the demand side. How do you think about that from a really big company, though? Because you mentioned the indie scene. It feels like it's a, well, it's still obviously challenging for each individual developer. But on the whole, indie has taken up a larger and larger share of people's play time. And that's going to continue. And you see games like Peak or these small teams or solo dev teams that are coming out and getting millions overnight through word of mouth. How, you know, you're a bigger ship that's harder to steer. How do you think about this competition coming from all these angles? Yeah, I'm way more concerned about the sort of competition coming from the indie scene than I am from, you know, the big incumbents, you know, and like, you're going to have your big GTA sixes that are going to crush and suck the light out of the universe for a while, because it's going to be awesome. You know, and or the wow. Forever's, you know, and I'm thrilled that they're, you know, having a resurgence and, you know, stuff like this, too. And so those types of things can and will happen, you know, but I think a lot of the new growth and a lot of the innovation oftentimes is going to be driven by the smaller players. And one of the things that's happening right is smaller teams can punch above their weight and do a lot more than ever before because of the increase in improvements and tools and capabilities. And so and I think that that's awesome as a developer, right? Like that small elite teams can go do it. But right again, that just also means increased noise. And so there's a lot more games. A lot more expectations that will keep going up and it's hard to get noticed. And so how do you break out? Right. And that is a that's just a really difficult thing that many companies are also going to try to really struggle, which will likely lead to new innovations in distribution, right? Or some new publishing mechanisms or interesting labels that are like there's gonna be all sorts of interesting innovation. Or, you know, again, if you build something that's so incredibly cool that it just sort of, you know, lights the Internet on fire because of how connected the world is, you know, it's not just a little bit of a thing. It's a little bit of a thing. And that's because it was mind blowing, right? Because nobody had seen anything like that before. And it's obviously hard to hit something of that caliber, you know, but the point is, is if you build something truly great that really resonates, it can move fast, right? And you're seeing that with our graders that popped or, you know, war dogs or those types of things. But it's very hard to sustain, you know, over the long run also. And so a lot of those games also will pop, but then, you know, sort of fail to sustain over time. So with those games, I think they, in a way, they only need to pop at the beginning a lot of the time because they're not free-to-play games. Totally. And it seems like the core thesis for you guys for a long time was free-to-play model, cosmetic items, that is what will sustain us. It seems way harder to do that now. Yep. Is that something you guys are considering changing for other projects? So we've never had a strategic imperative to only make free to play games. Okay. So, you know, a lot of times, like even when we're just a League of Legends company and we used to say that the S in games for Riot Games was aspirational, we would jokingly call ourselves Riot Game, you know, we would have these presentations internally, right? Where we'd say like many companies or many other, you know, the media or whatever, they want to like brand us as, oh, it's a MOBA company, right? Or we're a strategy game company, or we're a PC game company, or a free-to-play company. And we're like, no, we're not any of those things. We're not defined by genre, you know, or platform, or business model. We're defined by one thing, the audience that we're trying to serve, right? People who love games, who are like us, right? Who want to make, who believe games are a meaningful life pursuit, that want to go to these like awesome esport events, that want to go deep, that are the most educated on the market. And we'll do any game, any genre, any business, any business model to serve them well. That's why we built our cane. That's why we built e-sports. That's why we do music. That's why we're doing different genres, right? Like it's all because of that aspiration. And so, and we are working on things that are not free to play and, you know, because the business model should fit the game and it's the type of lazy thinking that can also happen right at an organization that isn't, you know, incredibly tuned to the nuances of what actually matters where, you know, that can become a meme internally oh like we have to make everything free to play or we have to go do xyz it's like no we don't right and that's where the sort of trying to build the mechanism to really empower our teams to have great player empathy to do the thing that is great and feels great for players that is why that matters so much that's why i go to denube every week you know and talk to every new rider and all this but that is also not a scalable system like i do those things for all these reasons. I'd like to meet writers, but we need to help build these systems and structures and train lots of leaders to help make great decisions throughout this now 4,500 person company. You know, there's 20 offices around the world with a lot of different games. Like, and that is just, that's a challenge that, uh, you know, we're still working on 20 years later. If you run a small business, you know, that having a clear picture of your finances is invaluable. Holiday drinks are now at McDonald's. Like the new Red Bull Frosted Cranberry Energizer. It's Red Bull meets cranberry flavors, topped with cold foam and sprinkles, made to charge your holiday spirit. Now at McDonald's. This episode is brought to you you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed Sponsored Jobs. Get a $75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs. How are you thinking about game development, like team size, both with the indie size, the indie competition, but then also what you're saying about 2xKO, how ultimately just with the size of the team, it needed however many more times players. Is there now a sense of shifting how you develop games of keeping the teams smaller or maybe smaller for a longer period? And then you churn, you open a money funnel and pour it at them. Like how do you do this and compete against indies? Because presumably you're not just going to break the company into a hundred five person teams. Totally. All of our successful games have had like reasonable team sizes at launch and then scaled into the growth where you're trying to like hold onto the rocket ship, so to speak. And that's a way better approach than sort of over-investing in advance before you really validate that the thing can sort of work into the same. Because then the recalibration is terrible and really painful. But that of course is a challenge for teams too, because launch is the start, not the end, right? And that's oftentimes after a multi-year challenge of like painstaking tons of work, thousands upon thousands of decisions and all these people pouring their hearts and soul into making the thing, but you got to have a lot of gas in the tank, you know, as a team to be like, all right, like the second we go live with players, right, which really is beta, it's go time, right? And so the, the, the muscle also of deploying internally and getting play tests and constantly patching and validation and like your feature development velocity goes to near zero the second you have real players because bugs show up, right? It's like running through the pipes, you know, water through the pipes at first time and shit starts to break everywhere, you know, and everybody's got to respond and all this. And so, so I think it's really important that teams are thoughtful about what does it actually take to build something that is truly great, that adds a lot of value to players that will make it better to be a player in a particular genre, but don't get too over their skis where it becomes like this impossibly high hurdle, uh, you know, before you can really sort of lean into hitting green, hitting sustainability, and then continuing to invest and grow and evolve. Like all of our games are like the biggest they've been like after year five, right? Like they, they keep growing and growing and growing. That's why the whole point is like, if, if you do a good job of retention, that's what really makes the business work in a live service business model, right? And if we had a box model, as an example, it's totally okay, again, to sort of, have a big spike like Baldur's Gate three or whatever you sort of play the story or, you know, several times or whatnot, and then you're done. Um, but that's a, that's just a very different sort of content type, very different development challenge. Um, and of course can, you know, make incredible products, right? And I think one of the things you're seeing as the market is also kind of retooling on the supply side is there's going to be fewer games that are trying to take those incredibly huge swings on the live service side. And I think that's good. How, how do you, uh, how do you justify an MMO then? I know you can't talk too much about an MMO, but there's no way to launch an MMO with a small team. And then that's the starting line, right? I don't know if that's true. Um, okay. And so, you know, but yes, player expectations are incredibly high. And so it's why we have to be excellent. Um, you know, and, uh, and that's a hard problem, you know, but we gotta be, we gotta be really smart, uh, and really thoughtful and really effective. And, you know, fortunately I think we have an incredible team that is, uh, is building something that, you know, I think has a real shot of, uh, of, you know, of adding real value to the community. Um, you know, but all these things that I'm saying, you know, need to be true for that team also. Uh, and so, you know, I, I can't wait to show and share how we're thinking about this and what everybody's cooking on, uh, you know, when the time's right, right here on the show. I do unfortunately have a follow-up question about the MMO, not about the game itself. You know, because I, uh, this is something I've been thinking about a lot, uh, over this year, because we've talked about Roblox a lot. Yeah. And I've been learning a lot about the Roblox like ecosystem this year and how dev teams work within it, how like trends pop up within that community, the scale of the user base, the way everything is monetized. He's been grinding Roblox games. There's kind of like, I press to impress everything. Yeah. Hitting people bats. But this general idea of like these like flash in the pan games, which kind of aligns with the, the broader indie market in a way to, uh, or if this trend of friend slop, if you want to call it, uh, and in this kind of like attention deficit economy where you're competing with trendy games like that and tick talk and Instagram reels, the idea of launching an MMO that isn't hedged by nostalgia, like wow is because I think part of the reason I would say maybe all of the reason wow forever can really be successful is how many people are hopping on wow forever that never played wow. Growing up your fucking mouth. It's a great game. I think a fair amount actually, but I, but, but the lion's share for sure is, you know, people that are in their mid thirties. Yeah. And I, I think like, I think the argument I'm trying to make is like the, the crowd that seems particularly primed for the MMO experience is older now and inherently has less time to spend on these things and already has. Wow. Sure. So, and then for the younger, newer generation, they are less primed for the fact that you're launching an MMO into that market. Yep. Why do you believe it will be successful? Because you obviously do. Totally. Um, so, you know, I, the, the, the good answer to this question, I can't get into, right. Because it, you know, in terms of all the details, um, you know, but I don't disagree with a bunch of your concerns, right. There's all sorts of smart reasons as to why we shouldn't do what we're doing. Um, but there's a lot of stuff that we're doing that nobody knows also that I think, you know, when we're able to do it, we're able to do it. So, you know, you know, I think has some good answers to, to what you're talking about, but, um, but other things that I think are important too, is, and to your point, like MMOs are insane, right? Like the scope, the expectations, the challenge, right? Like the argument that they're niche, all these different types of things, et cetera. Um, but there's lots of decisions you can make, you know, to, uh, you know, in terms of how to approach it, you know? And so, um, one thing, right, is we've been building this world of Runeterra for 20 years, right. And sort of pouring our hearts and soul into it. And there's an awful lot of players around the world that have developed deep affinity and love for these characters, for this world, for our factions, right. And that fandom is expressed in so many ways through League and through Riftbound and through, you know, all these other things that we're doing, all of our, all of our great games and arcane, you know, and, uh, people want to live in that world, right. And, and we want to deliver the ability for people to do that. Um, but there's more, right? Like there, and so, you know, it's like, we didn't want to even try to go take on this sort of insane space until we had a global fan base, right. Of hundreds of millions of people and a big balance sheet and great revenue streams and an incredible team and great technical capabilities and, and, and, and, and I could go on the list or whatever. And so the challenge is around, can we do justice, right? And if so, how, right. And it's a mistake to try to make absolutely something for everybody. Right. Because like we just talked about, you often end up making something for nobody by trying to sort of make it too watered down. Right. And so there's some really hard problems, but, uh, you know, but again, I'm, I'm, that's the type of stuff that is worth getting out of bed every day and sort of, you know, going and trying to tackle these really hard problems. And in every single situation, building league, building riot, building Val, building TFT, building these boards, building arcane, they all felt crazy and stupid in a bunch of ways. Like people internally were like, why are we, what are we doing? Trying to go make a fucking animated show, right? Like why are we trying to go Hollywood? We're like, we don't, we're not trying to go, what are you talking about? Like, it'd be awesome for league players, right? Like, you know, and, but it has to be great, right? The bar is incredibly high. Cause we're not just competing with, you know, our own stuff, right. Or our trailers that we make, right. Or other gaming adaptations and whatnot. We're competing with the best shows in the world. Right. So we have to do something that's really compelling, like, but we did, you know, and you know, if we want to sort of unpack like what it takes to do that, it's the type of things that have to be true for us to do it again in this different way, you know? And then same thing with e-sports, right? Where people internally were like, this is a distraction. Why are we doing all this stuff? Oh yeah. Yeah. Because, but we're like, but it elevates the game. It's, we, we thought about e-sports as a feature. It's like, it makes it so much better to be a league player. There's always stuff to talk about. There's an aspirational path. You can go pro. There's organized play as an ecosystem. There's stuff happening at the collegial level. Like, of some, right? Like, and, but anytime you do something new, anytime you do something risky, lots of really smart people can point out all sorts of reasons. why the thing doesn't make sense or shouldn't happen you know and oftentimes they're correct about their critiques and criticisms but then that's part of the fun and the challenge right which is like cool how do we figure it out and win anyway you know and like we need people who are who want to go do that right and that's what the team is made of and that's what rioters have in their dna and need to have in their dna i have the opposite question about the mmo which is that we're both in our 30s right or mid 30s and we grew up with you play a wild club i can't wait for a while so here's my opposite question is that uh wow hit our group like cracker are you worried you're going to ruin lives if this is successful um yes actually my son is 13 yeah and he loves league and he loves valley loves her ip and like my wife for school my wife is like you know like yeah it is a you know appropriately right and um you know it's like it's so you know it's why parental controls matter and it's why we got to empower people you know it's like it's like and it can go through all sorts of things right like and it's why making it better be a player it also means respecting players and respecting players right and like you know what else can we do do we need more reminders be like hey time to go touch grass right or different things like you know we don't want to be you know this sort of overly parental person trying to tell players how to do you know but when you're not 18 or whatever right like you know some mechanisms to help make good decisions or even when you're above 18 right little minors or nudes is maybe maybe important right and so we don't like we're not a social media company right that like optimizes every single component of what their company is to engagement right that's like if that number doesn't go up we are failing right there's no god metric right we're like well how many hours in a month is optimal right for a league player or val pair to play right if it goes up is that good maybe right it's like here's what the baseline is right and we can sort of look at it over time but we got to look at all sorts of stuff right and it's like if it starts to be too high for too many people when there's obviously a bell curve or distribution it's like is there something we can do is there a problem right that could be happening and then what's our role right in engaging in that but like it's very important that we ask ourselves those questions and we're not always trying to extract and like drive our poo up which is average revenue per user or whatever drive you know you know game hours up right it's we've got to be like hey like let's be long term we want a long-term relationship with players right like most of our players never spend a dime remember like all of our games we have now except riff bound which is physical cards are completely free right so nobody has to spend a dime ever to get all this insane value that we deliver all these patches all this content all these incredible games all these incredible servers you know all this stuff all these people to play with your and all this but if you happen to like our stuff maybe you'll like this different outfit you know for a character or maybe you'll like this gun skin or whatever and like but if we if you don't that's cool maybe you'll like this other one right or if you can't do like this you know i spoke at ucla one time and this student came up to me after and she she's like you know was very excited to talk to me and just said hey i'm a poor college student i've been playing league for five years this is you know back in like 2013 or 2014 and she's like i never spent a dime and in your games and i love them and i met all my friends at ucla here because of league and all this other stuff and so i made this ash and trindamere doll just to say thank you for you because you know i'm gotta go by trindamere my wife is sort of known as ash and uh you know and it's like that's what we're doing right and like people who do spend you know thank you high five right like glad we're meeting your needs we want to keep making a better player we want to keep doing stuff like our camp we want to find ways to sort of you know take this trust you're having an investment to do all these other cool things right and it's just really hard but like that's also the sort of virtuous cycle that can happen when you have a great company full of great people that are mission driven that want to make a better player that want to go through the pain if we do a great job with a business model that aligns our interests with that of our players that's a positive virtuous cycle you know but that thing is fragile right and so as a founder yeah like when it's when there's entropy and it starts to fray it's like god damn it guys like we gotta fix this you know because it's too cool juxtaposing league against other large games like take counter strikes monetization take uh gotcha game monetization like i i believe that sentiment but i'll take the the hater tweet response i can envision in my head he's like you you fucking sold a five hundred dollar ari skin yeah so how is this going to work out for you guys i'm going to ask you that you know within the structure that you just laid out how is something like that justified yeah so the philosophy right on that is there's price discrimination right which essentially means just a basic economic concept which means that there's value all across the pricing curve so most of our players will never spend a dime awesome high five there's all this value right you can unlock stuff you get skins all these other things you know but then some players right actually want to spend a bunch of money and some stuff you know that can be quite exclusive you know like we'll talk a little bit more about it in a little bit more detail but i'm going to talk a little bit more about it in a little bit more detail but i'm going to talk a little bit more about it in a little bit more detail but i'm going to talk a little bit more about it in a little bit more detail but i'm going to talk a little bit more about it in a little bit more detail but i'm going to talk a little bit more about it in a little bit more detail but i'm going to talk a little bit more about it in a little bit more detail but i'm going to talk a little bit more about it in a little bit more detail which we totally understand other people are like i think it's super cool and i want that and like that's crazy i can't afford it totally we get that but it's totally optional right it's like you don't need to go buy the like louis vuitton purse you know or bag or shoes or whatever like all this stuff's optional if i don't have the 500 fake or are you skin i'll get bullied at school i will lose my mark merrill yeah people talk trash in lane right you know but like you know some people may be funny if you have the skin right i have the skin you know and you know uh yeah some people have been like yeah you know yeah but also people you know some people jock it and whatever but like it's just you know not everybody needs to love everything it's just a really important concept both from a game perspective or from a content perspective right and so it's just like a league right we want to make a champion that like resonates with like every champion should resonate with somebody right but not every champion will resonate with everybody some people love to play riven right some people love to play alistar right for example yeah exactly like we could go through like really like the fucked up guys you'd never hang out with play singed totally singed yeah don't chase and maybe we should hardware ban them yes that's the appropriate response yeah yeah i think maybe get me in there get me in there yeah see yeah get that anti-cheat on the root level to brick their pc we'll go into freak's basement we'll tell them to you know okay great uh i okay this is a big this is a big topic i i kind of i wanted to get to kind of your guys's relationship with uh tencent and mobile games uh i want to start with wild rift sure and i would say the streets the narrative that i have been told yeah is that a long time ago tencent uh who is this giant chinese gaming company that is a majority owner of right games yes um right they uh they asked you guys to make a mobile game a long time ago and you guys said no like we didn't want to focus our work on that so they're like all right and then they green light honor a king and now for people who don't know especially if you i mean if you don't live in china honor of kings is gigantic i think like by yearly revenue it's like the largest game in the world in the world totally uh and i think also known as arena valor yep yeah it's got two it's kind of weird it's so so now the scene that that game got so big and then you guys try to take on wild rift years later are there any like regrets or i think it's worth saying for the audience that honor of kings is essentially league of legends like right from a from a site perspective you couldn't tell the difference yeah yeah well and it's like it's our exact same mechanics like all the design innovation and the exact same lane spacing and like we can go into the map it's the exact same right so so they basically but it's sort of changed a little bit over time because you know some stuff i can get into but yeah they green light a mobile game that they also own well they asked us they they for permission to make it because when we said no when they said because just to jump in on that you know yes they said hey there's this whole trend in china right where like these successful pc games you know sort of this mobile market is exploding we think it's important to try to find a way to go do this and you know like will you guys do it and we're like we suck at mobile we don't know anything about it right and you know so totally understand the sort of opportunity in trendline but like that's not us right we will not do a good job at solving that problem right and they're like we respect that it makes sense you know and by the way we had tons of cool stuff in the pipe like val and all these other things you know and um and so you know and again like there's only so much capacity that we can go take on and we're like we're not going to do that we're not going to do that we're not going to do that and again you know like riot doesn't make decisions about what to go what to go work on based on like some charts or trend you know it needs to be like we actually think we have a deep understanding of a player need and whatnot and so it needs to be a little more organic but anyway so we say all that right and they're like totally respected and they're like can we go build some mobile mobis right and we're like yes and so then we're in the nine of them and all of them failed and then one as it was already live and sort of said well let's just let's just copy leak you know and so they released a patch on a live one that was that right and that was utter kings right and then that started to be like the word on the street oh my god like league is now moving and then it you know and so so that was the like wait what's happening what you know and so with so anyway that was that became a whole thing um yeah what is the what is the whole thing look like yeah can i keep it can i keep it 100 with you because from my perspective it's like you're in this weird spot where the i cannot express to people how large this company is the gigantic right they're the largest tech company in china yeah yeah and so they're the majority owner of riot and so the quick background and context on how we got in touch with tense in the first place right was they found us when we were a startup in 2008 right so when i was talking about how brandon and i were idiots and running around and making every mistake i didn't know anything um all of a sudden out of the blue come this massive chinese company at the time they're like 50 billion which is still huge you know now they're like 700 billion or 600 billion or something insane you know and um they're like hey uh you know like we heard about you guys we're like how you know because you know we were sort of the ear to the street small startup yeah they really were they were scouring the world looking for titles to license to try to bring to the chinese market right and most of the content that was developed in the west right wasn't built as a live service for online play free to play etc the reason free to play took off in asia was because piracy was so efficient right like you couldn't have a box product right and so uh all the box games but all the content from the west was built as a box right for console and for pc and sold at retail and whatnot and so that's also why they were interested in us they're like well let's just like very cheap to require the rights to publish this in china so if it becomes a thing like yay and uh but that was great for us because we're like wow momentum hey you're going to be able to do this in china and so we're like well let's just like let's just like very cheap to acquire the rights to publish this in china so if it becomes a thing hey bored look china thinks we're going to be successful right and so we're like you know and they gave us a little advance on future revenues and that was very helpful right because every little bit of momentum sort of helps you survive and fight another day and that was the original relationship right a publishing deal in china then fast forward to 2011 right we're venture uh majority controlled at the time brand and i for some entrepreneurs um you know had to sell a majority of equity in the company in order to raise enough funds to try to get the product to market and we had to raise a second round because we also had to be our own publisher because we talked about in terms of couldn't give our keys of the kingdom to publishers and so we had to build our own platform we did that took a market right league is growing and doing really well and vcs go well i think it's time to sell the company right and we're like well we think we're just getting started you know but vcs are measured on investor rate of return right the denominator in that equation of irr right is years since the investment right that's very sensitive so the vcs were like this is great we who knows what this thing's gonna happen but this is pre-korea pre-china pre-esports pre-all sorts of stuff right and um but brandon and i always had the philosophy too that like if there are other people that are better than us to do anything we're you know that we're here to do awesome right like because it's where it's fiduciary we're shareholders we got to do the right thing for players and you know we always assume that like there's got to be people better than us because we don't know what the hell we're talking we're doing you know from day one and um so anyway so but tencent at the time like we go to the this road show they're like they actually got a board observer seat um in our second institutional round where they invested alongside our vcs because our vcs actually you know had done some work with tencent before and dug them they had a relationship and then they're like wait what are you guys doing trying to sell this company like we think you're just getting started and so tencent actually bid to try to acquire a majority of riot to prevent us from being acquired by an ea and activision a western media company etc wow to be like they're going to screw you up and we want to keep you guys independent at arm's length and keep a board structure in place and not have you come report to vp of such and such right and we were always like but that's super unusual like nobody does that right and fast forward like why our founders still here you know etc 15 years post-transaction because that's been true and so it's been this really interesting sort of hands off like arm's length relationship for a long time now and i think it's a really interesting way for us to kind of be able to be open and open and open up and open up and open up and open up and open up and open up and open up and open up and really evolve the way that it has but to the point around honor king etc like any sort of long-term relationship right there's challenges that can emerge from time to time and you know uh when challenges emerge in any important relationship right you have lots of different options in terms of how you react to that dynamic right and it was a an opportunity for us to kind of realign on uh all sorts of things and i think it's a really important thing to do and i think it's a really important of things you know and uh you know so but yeah that's um and and so now it you know even though it's sort of strange that there's this derivative version of league that is you know super massive on mobile and all that um in aggregate right for riot and for tencent and all that it's of course growing the pie in a great way they did a better job of course of actually meeting players needs than we would have because we weren't doing anything so long-winded way to say so why wild rift right because one of the things we also did as part of this whole uh negotiation discussion alignment about how do we where do we go from here and whatnot was we need to really diverge the products over time right and so um so we wanted to deliver to players a more authentic league of legends type experience on mobile which is what wild rift was right um we could actually use our champions we could actually use our ip we could uh make kits that were more specific and so vein felt like vein and you know all these other things and so uh so that's where we're at and i think that's where we're at and i think that's where we're at where wild rift came from i because it's not lost to me that you're you know you're using some very polite language to describe the situation and i'm not saying that these aren't the right decisions of the right call or something like that i think what do you have any thoughts on this dynamic of chinese gaming companies seemingly being able to get away with an aspect of like copyright infringement that let's let's step away from riot and tencent entirely let's go to a game like crossfire crossfire for those people who don't know is an incredibly popular game in china that's basically counter-strike it's very it's very similar the same style style game and there is like there's a map in crossfire that's just re-skinned dust too and you know valve doesn't strike me as the company the type of company that's going to spend a bunch of time trying to like take legal action but particularly against like an american company taking legal action against a chinese company is very unlikely to be successful in the first place well one thing on this just as a quick aside and then you know i definitely keep going to the question but and also interesting enough like you have to get approval as a non-chinese company right and you need to partner with a chinese company to even launch your game in china which is the whole thing right and so like it's a quite very protectionist system except steam somehow circumvents this entire process and so you know valve is sort of benefiting from this interesting little weird thing too where like players and you know install steam all over china and all these games that are sort of launched on steam whatever they can sort of go to china and get a bunch of chinese players and circumvent this whole process in a really interesting way so yeah so there's sort of this interesting dynamic where yes there's that but there's also this they might not want to upset that that's right that carve out interesting okay uh i see i guess it's funny because i have a small tangent of my own is like i got really curious about the way you publish league in different regions when i was a kid and i made accounts on like the garina sea servers cool and i made i like faked a chinese passport to make a chinese league account like like when i was like 13 legit because i wanted to see what the player experience was like on these other places i'm like see that's entrepreneur type stuff right like i mean you can't you can't help seriously but i'm like but i mean like when you have high edt and you can't help yourself but be like ah like because you're curious about a thing i think that's cool i think what what what made me so curious is like you can't help yourself but be like ah like because you're like it's not lost on me as a league player and is like oh millions and millions of people play this game in these other countries that i don't see listed on the region list in my client how do they play the game right and how big is league yeah and then by the way the green and south is a thing that's a whole nother story yeah i've heard it's crazy it is yeah uh but this is also just the craziness of being an entrepreneur in the first place right like brandon and i were just trying to make a small game company to build games right and then next thing you know problem after problem after opportunity after like every new success or hurdle or challenge we go we're going to have to figure out how to do it right and then next thing you know creates it's like we crest the hill and then there's 10 more right and it's every single time over and over and over and like we never imagined we'd be sitting in these seats doing this different type of stuff too right like you know and like building our cane you know having players mad at us for you know all sorts of different type of stuff like becoming the ncaa we're at the sanctioned teams all around the world we're like we should figure out how to build sports anyway but like yeah there's all just craziness on that front but even the green thing or south asia or all this complexity internationally right it's like we had to figure out how to go deliver this these products and this value to players and there's lots of different decision making frameworks that different leadership teams and different parts of the world have right and i think what's crazy for those people that don't understand is like they're for these other regions there was basically different clients for for their version of league of legends and in the china one i thought it was so crazy one when you boot it up it's not like the other ones where you oh you connect to the north american server and you're just in on the china one you pick from 30 different chinese servers to connect to right and then um what i thought was crazy at the time that i didn't understand was oh so many of the characters have different artwork to like meet different chinese laws and publishing standards yeah and i thought that was so crazy so like carthus has gloves right and the collar pulled up but his face is really dark right you know because carthus is a lich right and skeletons are uh one of the like the banned content types for by the ministry of culture in china right and so yeah there's all sorts of localization requirements and challenges whether it's language you know and uh you know there's just a lot of complexity that oftentimes to your point is sort of very hidden from uh from you know how how players experience the game that of course can increase cost and complexity and sort of reduce uh market footprint size which is also where as there's more connected systems and it's sort of easier to do broader distribution you know and like different companies solve different parts of the value chain like a good payment system or different metalware or awesome engines where it reduces complexity for the developers which makes it easier to do broader distribution you know and like different companies solve different parts of the value chain which makes it easier to build higher quality content do more things deliver easier to build higher quality content do more things deliver more for players and that's where more for players and that's where more for players and that's where like that trend is just continuing like it's way easier to build and put stuff online now than it was when we were starting the company and we had to like write our own services on hardware that we ran our own like we had our own data centers we'd rent you know space in and we had like we had our own ops team that was management because pre-cloud yeah you know and so anyway i i guess to close the loop on my question from earlier is like how do you feel about this seeming environment to me where these giant like giant chinese games can it's more than just like like valorant is a tax shooter that is heavily inspired by counter-strike i wouldn't say it's copying counter-strike totally but there are a lot of chinese games that i've seen that like oh that's league that's that's valorant that's counter-strike and it's like one to one wait i want to add on that because it's not just china now it's like roblox games will come out like perfectly or there'll be an indie version or we're going to era because the tools are so cheap totally that anything innovative can get copied instantly yeah it's like pal world right whatever they're like oh thanks pokemon you know like let's just go like launch a game yeah but i mean like blizzard did this at games workshop right like you know it's like you know anyway it's uh right and games workshop was like thanks tolkien you know like so you know it's there's just and again i don't actually want to equate the games workshop to tolkien or blizzard two games workshop to china to sort of one-to-one copies because there's there's a range right of inspired by and sort of building a product which is different you know but starcraft is pretty inspired by 40k right and so in tyranids and whatever and like but it's to your point sufficiently differentiated right like copyright law you know has sort of two main tests right it's like a substantially similar you know test and you know uh you know and then there's like audience confusion there's there's a couple different tests that are sort of relevant on that and so a bunch by those measures of course yeah there are a bunch of products in particular that really would fail those tests but it's expensive to go litigate and well what's the core system and are you actually gonna be able to do anything about it right and you know in certain markets that's difficult right or in certain platforms right like what are you gonna go after the 14 year old that's like building the roblox thing that's like right you know and like yeah yeah like well you know and so you take one down 100 pop up anyway you're that's right you know and or like there's a bajillion like you go to etsy right and or all these different you know stores or red bubble right and there's 20 000 like league of legends vendors that are selling stuff my fish shirts i'm making a lot of money on those so and you know on the one hand it's like look you know we also want to empower our community right and creators and so we we create all this like uh creator safe music for people to be able to make content on and or you know try to empower the community to go we're like look we're not we don't care if you make some fucking bracelets or different things or go sell an event like in fact we have halls you know filled with like player vendors at our esports events whatever too you know but we'll also have you know some official stuff like you go to a dodger game you want to get the dodger hat you know we want to provide that stuff too but like again that's kind of like of different experiences sort of like price discrimination right where and riot thinks about what's our role in the community right we don't own the community we're part of it we have a role to play to help nurture it and to help create these opportunities for different creators and members to be part of it to help enrich it in a way that hopefully the whole is greater than the sum of its parts and that's how we add value you know and that's how the community can add value to each other and you know but like how that manifests may be different per game you know but that's anyway um you know there's just a lot of complexity across all these things you know but we don't want to be the music industry right going crazy and dmca takedowns and blah blah but we do need to enforce r.i.p because we don't right we can actually lose our rights you know in different jurisdictions and things and so like there's this it's just another example of like all of this complexity we got to figure out now to make you know make good decisions on um but the thing that really matters is making great games and great experiences for players right and that philosophy of trying to make it better to be a player right and then it's how to build all these different capabilities all across the organization again which is why the like structure and system stuff i talked about like the good decisions are relative to who the player is right and whatever their context is like the league player in korea has a bit of a different experience than in china or in la or in europe because in korea there's 25 000 pc bongs just in seoul you know and so people like half the game hours are played you know at some pc bong and different machines and whatnot and so we have to navigate all that stuff to make it better to be a player right and then it's how to build all these to to actually create a global title that resonates all around the world and crosses cultures but when we do it's freaking awesome because it brings everybody together right and you can wear a timo hat and go to shanghai or go to seoul or new york and whatever and people be like yo and like and you got this instant bond like that woman you know who i met at ucla said right and so that's like when people go back to the oh we're this evil company trying to extract from my perspective right again not to say we've made a you know every perfect decision or whatever but like nothing could be further from the truth from what riders are trying to do every day you know like it is a service oriented we're here to do awesome stuff and yes if we do awesome stuff with a smart business model hopefully players will reward us with money but like people don't get out of bed you know to go try to tackle like say this mmo problem or all these different types of things if they're not incredibly passionate about trying to solve those really hard problems right or if they do they don't last right you guys have probably heard the expression around like missionaries outlast mercenaries absolutely true right and when some is like coming to riot because it's good for the resume you know it's often not the great fit and you know as we are really great organizationally you know and all that uh our teams will keep improving as more and more people that have that passion are sort of then learning the craft and making great decisions and all that different type of stuff and so and that's the journey that we're always always on and hopefully we'll always continue to do all new holiday drinks are now at mcdonald's like the frosted cranberry splash with sprite the red bull frosted cranberry energizer and cookie butter coffees it is the season for seasonal drinks at mcdonald's this episode is brought to you by indeed you're ready to level up your business but the pressure to find the right person to make that happen is intense indeed sponsored jobs can help carry the load it boosts your job post to help it reach quality talent fast cut through the chaos with indeed sponsored jobs get a start at mcdonald's and get a start at mcdonald's and get a start at mcdonald's $75 sponsored job credit at indeed.com slash podcast terms and conditions apply hiring now then this is a job for indeed sponsored jobs sam's club is the club for every holiday club guess who's joining the club this season walmart plus yep sam's club plus membership now comes with walmart plus at no extra cost two memberships one great price just 120 bucks a year can save you time and over 700 dollars want to get in on the membership duo of the century visit sam's club.com come join us sam's club annual plan only auto renews tnc apply estimate based on average combined walmart plus and sam's club plus savings among members of both for one plus year versus non-member or club member pricing slash fees excludes membership fee see walmart plus terms and sam's club terms for more info i'm curious there's so much of a different culture in gaming in china or asia or name whatever country right and the most obvious one is what you just said mobile right um or pc bongs which are like pc cafes yeah uh or versus you know american gamers seem to be very different is that affecting how you guys design games when you say we want to make something the player absolutely loves well that's going to be very different for per person so how do you navigate that so generally no so we think you know chess is chess is chess right you don't make a global esport by changing the game you know to accommodate local tastes and nuances and all that and like this these american-made ips resonate pretty darn well all around the world you know and so but how a player gets into the game the around game does need to change right because the local distribution the language the how we service the laws right like we need a korean social security number to make a league account and create right or a valid account or whatnot right and so there's all like we had to build custom pc bong software to help pc bong owners administer like land events right and we changed our business model right we're going to go into a land cafe you know and all the champs are unlocked and different things right and so because we have to figure out how to align everybody's incentives and all this other stuff too um and because the pc bong owner is paid per hour by people who are renting the machine right and then whatever game they're playing they will get a cut of that you know and so um you know we got to figure out all these interesting things that we had no idea about right when we were you know just getting started um but what we don't compromise on is the game but we do need to ask ourselves right and we try to test and validate you know are there really significant regional differences but a lot of people and a lot of publishers in different regions will tell you chinese players are super different all this stuff and it's we totally disagree like we think people dramatically overestimate that player motivations are the same you know exploration and mastery or progression or competition or whatever it is you know they may be different populations they may have slightly different aesthetic tastes or art tastes or like you know different things too but like the core yeah is you know it's the same stuff there may just be you know cultural nuances in a particular market right as to like why a particular sport took off in one region and sort of not another and all this but like say you know soccer versus baseball versus whatever and it's like games are the same thing and so uh but you got to navigate all those and you got to be curious you got to ask yourselves questions but like you know and again there can be some regional differences um well can i tell you what this is like there's like mahjong culture in china right and so like a lot of people are sort of used to playing strategy games right and like there's a lot of women who are in these mahjong clubs right that it's like pretty adjacent to tft you know and so like seriously you know like so mahjong club women into tf that's literally like seriously like that's a thing in china and so that's fascinating right but tft is still tft You know, and so, but it's the, what makes Mahjong cool is the strategy and the social aspect and sort of what's happening in the decision making, just like what makes TFT cool, you know? And so, but that preexisting affinity for something similar can help, you know, but like if, if there's a market or a region that hasn't sort of caught on to a particular game type, it doesn't mean that it won't. It just maybe mean that it hasn't for various reasons, didn't have the right product or the distribution wasn't right or whatever. Like card games, physical card games are sort of a nascent market in China, right? And obviously they're massive in Japan. They're massive all over the world, right? Magic and all this. Does, do we think that card games won't become successful as like in sort of game share compared to the small base of it is now? Like I think card games are going to likely grow in size in China over time because card games are frigging awesome. Right. You need to package them with cigarettes because when we went to China, I would go running along the river and it was just Mahjong clubs of men smoking cigarettes and playing Mahjong just as far as the eye could see. Right. But so, but it's kind of like, well, what's the right distribution mechanism, right? And so in like, how do we go connect culturally in a way that people go, oh, this is awesome and cool. Right. But like the league IP is huge in China and other, but like, and so you think Riftbound would, you know, have a bunch of opportunities and all this. But we think long-term, right, we got to figure out a bunch of these things, but like some short-term lack of it blowing up doesn't mean it doesn't have potential to, you know, over time, right? That's kind of, again, good. It goes to how we think about green and long-term being sustainable and all that, you know, and why it's so important to like keep trying and keep improving the product and all this. And by the way, Riftbound was derived from like all the learning that we had in Legends of Runeterra, you know? And so Legends of Runeterra, by the way, is sustainable and cool and doing great, you know, for what it is now. Path of Champions, Pivot, all this other stuff, you know, the community stable and, you know, it obviously inspired where we learned a ton about what we could do at Riftbound. And that's another way we sort of think about this type of stuff, right? Like, no, it's a good example of a game that that is like a. Single or double, you've kept going. I forgot about Runeterra. It's actually crazy. I thought Legends of Runeterra was got canceled at some point. I didn't realize that it is because people freak out, right? And they go out, you know, and even we say, here's what's going on and people, you know, guys falling. And so, yeah, right. And it's like, OK, maybe, you know, we'll see over time. Right. And that's where we just have to take our lumps. Right. And a lot of times when people are angry and they're shouting at us in social media and or tweets and or Reddit and whatever, it's actually because they care. Right. It's like it's me and Brandon back in the day in college and or when we're in our 20s and we're like, what the fuck is this company doing? You idiots. Right. Like, don't you know, I love this game, you know? And so we're like, we know, dudes, we're sorry. Right. Like, we're trying. Right. We're working on it. Right. Like, that is the feedback loop and how rioters feel. Right. And it's like another way that I talk about social media is it's kind of like a microphone to a mob. Right. It's like you go to the Coliseum. I went to USC. And you're watching a USC football game. And, you know, somebody throws a pass and a guy's about, you know, in the open, you know, open in the end zone and drops it. Right. A bunch of players. Oh, you know, they'll be like, you know, and they say, think, well, social media now lets you tell that person directly how you feel about them in that moment. But you go see that player at a bar later on. Ninety five percent of the people that like send that to you would be like, yo, what's up? And like, want to give a high five or be like, dude, you know, and be like, hey, man, like, well, next time. So, you know, humans in person. Way different. Right. Then. And so and that's a thing that we try to remind ourselves. Right. Because, again, we've gotten lots of death threats. And so if I'm a writers and all this stuff and the Internet can do the Internet thing. But like. It's it often comes from a place of passion, you know, and not all, of course, because people can very much cross a line and have and do sometimes, you know, but not most. You know, the vast majority of people are are, you know, super reasonable and just sometimes they're super frustrated. Right. And that's where we just think if like if they could walk around, ride and talk to riders and see all the stuff that everybody's doing. Right. And, you know, I think I think they would feel good about about what's in everybody's heart. So. Well, speaking of the online mob and speaking of regional differences, I do have a more challenging question for you, which I want to ask about, which is gamer attitudes towards A.I. and development, which is like the big question in game development right now. The technologies are so new. No one knows how it's going to impact gaming. Obviously, there's a huge we went to China recently. Yeah. Massive regional differences in how they approach in China. It seemed to be they're going ham. They're going ham. It's everywhere. And then we saw. The Gamescom or something recently, so many Chinese developed games in the trailer. So, yeah, I mean, you know, you don't have to be your official position here, but I want to hear a sort of riot at a high level how they're thinking about this technology and what it means for gaming going forward. Yeah. So, you know, I think a lot of people's concerns are sort of appropriately focused on two main concerns. Right. One is like, hey, we don't want bullshit. Right. We don't want A.I. Slop. We want quality. Right. And we value the art. Right. And the sort of human decision making in terms of all these taste calls and all those other things. Right. And by the way, we care about the developers. Right. We want these awesome people to be able to continue to make these things that we love and whatnot. And we are completely aligned with those two concerns. And so and right. Like also to your point around, well, look at what China's doing. Also, the world's expectations, like we talked about before, are going to keep going up. Right. Because the world is not dynamic. And whatever we're doing today may not be sufficient for us to continue to surprise and delight and meet player expectations tomorrow. So it's a really. It's a really interesting challenge for the whole company and the whole industry to think about what are the implications and what do we do with it and how do we continue to make it better to be a player. And, you know, I think it's a it's a complicated issue across all those dimensions. But I think, you know, ultimately, you know, I fundamentally believe that like A.I. is is is going to empower great creators to do incredible things. And so like the taste piece and the creativity piece. And what not is not. Going to go away. Right. And so I think a lot of the concerns relating to that that a lot of people have, I think, are a little they're they're warranted when companies take the knee jerk reaction of being like, we have an opportunity to improve our margins and cut a bunch of costs and make our teams tiny. You know, whatever it is, you know, but like I think pretty quickly people are going to figure out that like, oh, there's like you. The human taste and judgment and artistry or whatever is is absolutely priceless and can't be, you know, sort of substituted. So how do you actually incorporate it into the company? Because there's, as you just pointed out, a wide range and many most people listening, I'm sure, have experienced a company, whether they're at it or, you know, it's a product they're using where it's just kind of become A.I. ified and everything is A.I. And it's clearly being forced on everybody from top down versus letting people find it in their own ways. And, you know, where are the ethical limits for certain areas? How do you, you know, data? Yeah. How do you how do you decide how this thing is actually being disseminated? Yeah. So, one, we don't force it, you know, so I think that's already sort of differentiates us. But two, right, like it's trying to create mechanisms for learning, you know, and this goes back to the philosophy around make it better to be a player and, you know, create. And so, oh, I never finished my description of our evergreen strategy. The three things. Number one was live games green. Number two is create new genre defining games and experiences really hard. Right. But that's the aspiration we should do. And number three. Number three is build the best place in the world to make the best games, though. That's what the company's all about. Right. And so if we want the world's best creators to make the best games. Right. Like, well, we need to explore and have tools and have freedom. And, you know, and so we need to have some data architecture and frameworks and people to be like, what's appropriate for us and our team in particular areas. And so there's a lot of curiosity. There's a lot of exploration. There's a lot of stuff like that that's happening, you know. And then, of course, there's also a lot of like nice stuff that, you know, where people can set little reminders that go through your G suite and whatnot and like automate some shit. That you hate to do or whatever. And so like, but those are not the types of things that I think are actually, you know, really concerning people. But again, one is, you know, a lot of people are exploring and they are sort of playing around with different things and all this. But, you know, we're not shipping stuff to players, you know. And, you know, at the end of the day, we're not forcing anybody to use it. But I think the world is going to keep evolving in different ways. And I think I think everybody in the industry is exploring in different ways, even if they're not really talking about it. Sure. Just given our time, I really think we should talk about esports. Yeah. Our background is all so. Intertwined with esports. And I think even with league esports and how that all ties together. Again, I first met you. You don't remember this, but at 2011, I was working for Team Liquid covering StarCraft. And there was a tiny little booth in the corner, which is your guys's first world championship. And you had Freak, I don't know at the time, giving piggyback rides. And you guys were so excited over there that I was, you know, I walked over with some StarCraft pros. We watched and that got me in the league. I mean, I literally was that day. I was there. You guys made it such a big deal. And so it grew from that to a extremely big. Big thing. But the esports industry in the interim has become various levels of catastrophe. Up and down and up and down. And so I want to hear your POV on the esports industry as it stands now. Not only from what Riot sees, but what you see in the broader industry. Because it feels like it's in a lull. It's a downward post COVID situation. And what are your top three favorite things about Overwatch League? Yeah, I'll start with your question. So, you know, I think the reason it feels like a lull, right, is because the hype train got way ahead of where it was. You know, the COVID problem for a lot of industries, right? Yeah, well, somewhat, but also just like an advance, right? And like Brandon and I were always trying to pump the brakes for different people. And, you know, various other companies were always trying to sort of pump up expectations and investors and all that. And, you know, different approaches. And I think Riot to some extent benefited from other companies making big investments and, you know, having a very commercial lens to it. to sort of elevate the awareness to advertisers, sponsors and potential team owners and whatnot. But you know, our focus was always like, let's nurture. And I use that word deliberately because it has to be an ecosystem where all of the key stakeholders have a mechanism that works and is sustainable for them, right? It's sort of like the live game screen concept where it's players need to be able to quit school or their job or whatnot and have a full-time career. So they need some amount of stability, right? Which means that they need teams that they can join that are sufficiently capitalized that can afford to pay them a living wage, you know, or better, you know, to compete for talent to then have it be something that is real, you know, and in order for that to happen, right, those team owners need to be able to have a revenue stream, right? And so is it tournament winnings or sponsorships or what's the right deal structure or whatnot? And, but in order to do that, right, we had to number one priority always is make a sport that's so cool that people want to watch. You know, because it all that, that viewer, that watch and, you know, how many people are into it, et cetera, is what then is a starting point to attract the sponsors who want to go reach those people who can then go help fund the e-sports teams who then can fund the players to then join the team, et cetera, right? And, or Riot can subsidize it, which you've done for many years and all this other stuff, but our, you know, league and Val in particular have become very sustainable over time as a result of this. But many, many years ago, right, we used to joke that it was sort of the black hole of money vortex or all that, but we were investing for the long-term, right? And so, but as league, you know, and world started taking off and all this other stuff and numbers started to get, you know, pretty big and all this, a lot of the people were observing that, right? And then investors were rushing in and throwing a lot of capital around, right? Which then it would flate a lot of valuations, right? And then as teams are flushed with cash, what do they do, right? They of course went to go compete with each other to get the best players, right? Which then made salaries go through the roof and all that, right? And then that became sort of the new normal, but it was funded, not by revenues that were necessarily sustainable, but it was funded by investment dollars. And that wasn't the best ROI players did well, right? For that window. And all this, I mean, Bjergsen got a Honda. It was crazy. Well, Faker, I know he is. Yeah. No, he totally is. Right. And he got a G wagon and other stuff like people, you know, they gave him all sorts of stuff, right. But like, he's got a building named after him, you know, and he's amazing. Um, as are many other players too, but like, um, but that was sort of this bubble that existed and it was driven just by the overinflated expectations for growth, you know, and sort of revenues over a particular period of time. And so as those, as that rate of growth didn't manifest to those investor expectations, the investment dollars then dried up, which then had the net effect of having teams pull back and reducing salaries and different things and less events and, you know, yada, yada, yada. Right. And so that's what happened, but there's still a bunch of stuff and a bunch of activities and a bunch of healthy leagues that are happening and all this too. And there's, you know, EWC coming involved. There's other sort of groups that are trying to add some dollars and add the ecosystem and, you know, but it's normalized more for what is actually more sustainable, you know? And so I just think it's important for anybody to recognize that like sometimes, and, you know, and we could again, debate whether like AI as an example is going to hit these insane growth rates that, you know, are justifying these multi-trillion dollar valuations or whatnot. Right. You know, just like the 2008 bubble and all this other stuff, it's like sometimes a lot of these economic resets, right. Again, they're driven by, by overinflated investor expectations. Right. Um, but it doesn't mean that the underlying fundamentals of the.com bubble, for example, right. That's right. Yeah. You know, and so that's just something for everybody to be aware of, right. Especially as you're doing investments. I maybe push back or clarify about the, the, the sustainability part. When you say sustainable, do you mean for, for riot or for the teams? Because as the ecosystem has kind of, uh, changed and maybe receded in the case, I think I understand league, uh, the landscape of league at like a bit better right now. Uh, the teams in like an NALCS or an EU LCS, forgive me. I know the names adjusted, uh, are not doing very well. Now these spots, like some teams are forfeiting their spots or trying to give away the spots because they're not performing well. So when you say sustainability, I'm just curious what you mean. Yeah. Well, so this goes to, well, how much are they spending? Right. And versus how much are they bringing in? Right. That's his basic business one-on-one, right? Like, are you making more, right. To be able to be. Profitable at all to be sustainable or not. And sometimes if teams have gotten to ahead of themselves from a cost perspective and sometimes, right, like they signed deals or done various things where they can have commitments that are, you know, unsustainable for them, right. Then that can, you know, have this sort of impact, but the demand is there, right. Both in terms of other teams and, or, or, but it's like, it's kind of like what's happening across the game industry in general. There's sort of this reset and recalibration of like, what's the appropriate size and what's the appropriate types of payroll that can, that teams can actually afford based on where they're at. And there's, you know, there's sort of the entrepreneurship where certain teams are doing much better than other teams. Well, why that, you know, a lot of some teams are way better at marketing and building a brand and differentiating and creating content and, you know, all sorts of things, right. Like a hundred thieves built, you know, a whole clothing line and a bunch of content, like there's all these different things that different teams are exploring, but like, that's the type of stuff that is being explored. Right. And, you know, if you look at like major league baseball as an example too, right. And so I'm an owner of an LAFC, uh, you know, which is a major league franchise, you know, and like in all these major sports leagues, NFL, NBA, MLS, et cetera, there is a significant differentiation between the top teams and the bottom teams and the sort of the median or sort of, you know, in the middle and whatnot. And like, that seems it's a very similar dynamic of what is happening in, you know, the various esports. They all have that TV revenue buffer that allows it. It doesn't exist really in esports. Well, it does in Korea, right. For us with LCK and whatnot and other things. And as the global distribution market for content continues to get more competitive and whatnot too, like, I think the long-term trend is good because what is the type of thing that actually helps drive people to actually watch, you know, at a particular moment in time, well, sports, right. Like it continues to demonstrate that like, when you have a good sport and good product, people will come and watch in the West in particular, right. Like there is a sort of TV and or distribution broadcast gap relative to say what's happened in China or Korea, you know, currently, but that doesn't mean that that will always be the case, you know, as well. And the, the, you know, YouTube versus, you know, Twitch versus Netflix versus other distribution providers, et cetera, like as those ecosystems continue to evolve and their strategies evolve at so, and their content acquisition strategy evolve, right. So too may, you know, these different types of dynamics. You're setting up for a big bidding, more with Netflix. No, I'm just saying it's like, it's just, it's still the leather helmet days, right. Like in terms of like, what is e-sports going to look like over the 21st century, you know, and how it's going to manifest. Right. And so, um, but I also believe that there aren't going to be tons of them, right. Just like there aren't that many big sports leagues. Right. And I believe that part, like the era of every game, trying to turn their game into an e-sport is like it nonsensical to begin with, but it was, yeah, it was just never going to be that way. But the community needs to decide. I think what I'm wondering is when you talk like, Korea and China makes sense to me, but I look at something like NALCS and what, and I, this is the lowest viewership year I think ever right now. And I'm wondering what realistic path the team in that league has to any revenue at all, because not, not saying they can't do anything. Right. But if I give you the example is like, uh, if you're a CS team, I think you have a pretty reasonable path to how you can monetize within just the scope of that game's ecosystem. You can make a team that's good enough. You can qualify for the major. And if you're good enough, you get to a certain stage of that tournament and you get sticker revenue. Right. Well, it's feast or famine, right? If you qualify. Yes. Right. And then if you place well, right, you can get a bunch, right. Whereas like if you're part of the LCS, right. Or part of the LEC or part of the LCK or whatnot, you also get game revenue, right. If you're part of Val, right. Like, you know, like we sell digital content that we split a lot with the teams and like those things are starting to do incredibly well, you know? So there's all sorts of other different revenues, streams and just sort of distribution and broadcast, right. And riot, right. Like we obviously have an important role to play to your point to find the right mechanisms to help our teams, you know, uh, sustain and survive. And it's not our entire responsibility to solve all of their problems though. Right. Like that's kind of the point around, you know, like a T one, right. That one has nurtured, you know, faker and has this, you know, an incredible track record and all these other things. Right. And it happens to be in Korea, you know, uh, compared to some teams in the West and whatnot, like, but even in the West, right. There's high differentiation between like a cloud nine, you know, compared to, you know, well insert whatever, yeah, insert, you know, whatever team that you think may be having some challenges, you know, and, um, and like, you know, part of how we think about it is we try to help them learn also how to from best practice standpoint, apply some things that can also help them make good decisions from an operating perspective and, or grow their own. fan base and different things i got too but like sometimes and this is one of the healthy things about competition right like if a team just like if a company or a game right isn't able to sort of you know sustain maybe a different company or team or game or whatever will do a better job right and so that's why there's also i think some amount of churn is healthy but i totally recognize your point right where different esports ecosystems have different dynamics um and one of the sort of philosophies that we've chosen as compared to a dota you know to or a cs right is sort of when you're in our ecosystem you know sort of a larger sort of guaranteed floor compared to what you would have ncs um and with still incredibly high upside you know but uh you know it's that like achieving that high upside often is a longer term thing from building like a real brand franchise that does incredibly well i think for for what it's worth i always really respected your guys's decision to not follow the inflation of like ti's approach right where like it obviously had to go down at some point and i think for the broader non like ti is the world championship for dota they had a system that allowed their prize pool to get to like 30 40 million dollars and a lot of the hype behind that tournament especially if you weren't a hardcore dota fan was just the amount of money that was at stake right and players would fund it but as soon as that money evaporated it changed the whole ecosystem of that game totally and uh which fortnight which had a huge yeah that 100 million dollar tournament for a while that eventually that'd go right but those are marketing events right like essentially which is just not the way to do esports from my perspective you know like you can't force an esport right and like riot made some of this mistake you know when we're like watching wild rift right you know which endlessly fresh you guys try to force an esport for wild rift dude yeah yeah we made that mistake everyone's throwing a million money at a tournament it never works i know okay i have a question that i would be remissed if i did not ask my esports career i came up around a lot of dota guys i worked it i'm trying to get signed he's very good at mario kart we're scouting you i i worked around i worked around dota guys a lot i worked at beyond the summit i worked on dota events worked on other games um but something that they uh not my co-workers necessarily i would say like people in the dota space would bring up all the time when league came up yeah was that you and brandon a long time ago took down the dota forum i think maybe play dota and like had the person who runs that or he was working with you yeah it all of the like data it was dota allstars.com and wasn't play dota yeah so dota allstars.com all of the forum and player data about uh like characters and all these things that the community had access to at the time went away and was replaced by like an advertisement for league of legends and so there was this simultaneous loss of like community data and also like a forcing upon of like this new game yeah this is the story as it's been presented to me right and i would love to hear your perspective correct a record or how you feel about that decision at the time yeah so first of all that's not exactly at all what happened um but i exactly suspected the jada dota players totally gave me their perspective totally well here's the thing right like the thing about the internet also is sometimes when you repeat a story enough right it's like the legend grows in the telling and or the meme or whatever if especially if it's premised upon some false premise in the first place if it's not corrected right ever to and even if it is corrected people just believe whatever they want to believe it'll just keep going it becomes reality i would say i would say as three influencers yeah i i am a i hate this phenomena like it is it is it is an infection in social media now like particularly well it's the same thing that happens in politics yeah yeah you know like it's it's well and again like and even the early internet right like we were all members of the early internet and things like this and dota and league and all this other stuff like was had some of these different dynamics and all this but but to your point so you know so pendragon right uh steve mescon right uh was known as pendragon right and he was the you know back at the time like the the 16 15 year old you know who built dota allstars.com right and you know he was this passionate community member right he met first steve feek right who was ginsu you know who was the mod author of dota allstars who was the guy who created dota allstars and sort of evolved it from ewells dota you know back in the day by increasing the item uh or sort of created the item combination system right increased the level cap from 10 to 25 you know his bowling ball was named roshan which is where roshan came from all this stuff you know and so um anyway mescon hit up pendragon right hit up feek ginsu at one point and was like hey dude like this game's awesome whatever like let's build a website i can help you with it and all this and so he was like cool so mescon starts building this website and all this it's dota allstars.com it starts to become you know this community site and he's volunteering you know dozens of hours a week uh he's you know there's this community members that are showing up he's getting servers donated from like a guy that works at google and all these other places and again it's like a teenager you know and uh then ginsu transitions the map to ice frog you know who does an incredible job of taking you know dota to higher and higher heights and you know and this is sort of the dynamic and then you know pendragon and and uh ice frog sort of work together to sort of help steer the community and this is all like 2007 six maybe this would have been yeah between 2004 five six you know up to probably seven like all around in there it's sort of depending on what era you know we're sort of talking about there and anyway that was a dynamic for a while right and like dota was this cool mod of course of warcraft 3 that was growing virally that you know brandon and i played and so many other people played we're like oh this game's awesome right and but it was this was part of the thing we're like wow this is this awesome game that we think is like this birth of this new genre you know we called it moba which is kind of stupid you know it's in it for multiplayer online battle arena whatever but like we were like this thing needs to become its own game you know it's kind of stupid you know it's kind of stupid you know it's you know and that was sort of you know part of the product inspiration to help inform league of legends you know and um and of course it's sort of the first product that riot was aspiring to build to sort of be the sort of validation point around you know a great company that could player put players at the center and do these things right and so so the the myths around you know ice frog pendragon are pretty interesting right and i've and i've never corrected the record despite the fact that it burns me up inside because pendragon is totally wrongfully branded as doing this and that's not how it went down the reality was so that's gone who uh also then later on was working at zappos right which for those who remember it's this online shoe company which was renowned for their customer centricity he's a true believer like he is a community serve do the right thing for customers and later when he came to riot became one of our critical employees that helped really drive and cement and codify this insane passion and mission that we all have for doing the right thing for players like he was instrumental and you know i could go on and on about about some incredible things that that's steve pet dragon did for for players and so uh but right as dota became more and more successful right like there were always discussions and like and these guys would be getting hit up by different developers different points of time to potentially go try to commercialize dota right and so not a novel idea right and so you know there was demigod you know and then there was s2 games that was making han and what yeah you know here's the new earth right and so what happened right was um i met so once we so we hired ginsu back in like late 2006 he was one of the like we'd already started the company already raised money and all this and um you know like there were it was the third ginsu you know that i sort of tracked down the right person there was a guy impersonating him in brazil you know all sorts of things and but he was a student at the university wisconsin and um anyway uh you know he just one day he was just like i'm kind of done doing this dota thing and you know moved on and was just like dabbling on games on the side and all this but you know amazing human but uh he ended up was like wait you like actually want to give me a job as an associate designer to come work on okay that sounds cool you know and so um so ginsu joined you know and then we were talking about it he's like dude like this you know pendragon's amazing we should chat with him and so we got in touch with pendragon right and he's like yo guys like this is not cool like you can't just like have to go make a game inspired by dota like what the heck and we're like well we're trying to respect dota we think it's awesome and all this other stuff we think it's this whole genre right and he was like really uncomfortable the whole thing and so meanwhile he hits up ice frog and they have some conversations and i'm not going to get into all the different details but long story short turns out ice frog is working at s2 right working on han you know and uh and so when pendragon found that out right we were trying to get him to hire to join riot right and he was telling us no and turning us down you know they were having a bunch of discussions uh ice frog tried to go buy the website from him you know and said oh my grandma left me some money and so here's 25 grand let me go buy the website from you and he's like yo dude like we agreed we're not gonna do this whole thing you know and what do you like why like sure and that's what he said right but and he wouldn't acknowledge that the money's from s okay yeah i don't know you don't know but i don't know the idea is that he's okay right but either way when pendragon found it out he was like you know and sort of validated that that he was there he's like that i feel betrayed you know and so then uh you know was like no i don't want to say the website so ice frog built his own website right and then said the whole positioning of this guy's bad and doing this thing and pendragon went okay right i'll join you you know and then came and then you know it was sort of this obviously fracturing the community and the positioning was that pendragon is a guy who sort of did all this stuff and that's not how it went down and so um you know he's obviously gotten lots of hate and lots of death threats and all sorts of stuff for for many many years and you know in reality like he's this super player focused customer-centric guy right who was pouring his heart and soul and building this website and really believed in the like you know we should not commercialize thing and then um you know everybody you know the incentive and temptation of sort of you know people getting jobs and and you know evolving i think was was sort of a thing and uh but his whole frame was when he was getting assassinated you know character wise by this framing of what didn't actually happen he said you know and told me he's like let them have their hero you know and i was like dude like it's full-on dark night he's fucking bad like seriously like i even wrote a letter at one point all this stuff that i was like i really wanted to publish it back in like 2010 or whatever you know and i felt like uh what commissioner gordon or whatnot where i'm like this is so effed up they need this you know and like but you know he's just that's his deal he's like it's better for dota for them to believe for it just for it just to be what it is and for me to like just move on and whatever and not like not do the thing so i'm just gonna you just gonna take the site down and just move and we're just gonna move on and so that was that's what he did i mean in the long run it worked out for everybody right like the both games and that's that's why like you know i'm actually saying this now 20 years later whatever because um you know it's just i think pendragon's an awesome person he's done an incredible thing for you know league players and for riot and for i think for dota actually he was you know really an awesome pioneer around community and helped inform a lot of this like incredible frameworks you know that still inform riots thinking today and um anyway now he's actually building this medical company and he's like this awesome guy yeah he's and he's just like his mission in life is to go help people and build communities right he's trying to actually take on the fda and not take on but like help uh create mechanisms where a lot of great things that could help lots of people are not able to get to people for reasons that are not awesome and he's trying to find ways to get those things to people that would benefit from those things so mark you've been incredibly generous with your time uh we could probably talk about esports for five more hours easily but i do have more esports questions yeah yeah we can talk we can talk all sorts of stuff you know i am uh i do have a level 20 because it's currently level capped uh in wow forever druid okay on pvp we're back i've got i've got five on five set of the fang so i can actually turn into a snake which is kind of cool and a little bit crazy like they're doing some fun stuff and uh you know like i said it was a fun thing not like rmo it's good well they're doing they're doing some cool stuff but no i'm glad i'm glad that you know that blizzard's having the success they're having without forever and there's momentum and the community's vibing again and i and i hope it's uh really successful for them so and i will definitely play it on launch well thank you so much yeah thank you guys thanks for having me thank you mark merrill and we'll see y'all next week bye everybody awesome if you 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