“This isn’t to appease shareholders or to hit a quarterly earnings number it’s a necessity,” Riot Games stated in a statement.
Riot Games, a division of Tencent Holdings, will lay off 530 people, or about 11% of its global staff, the online gaming company revealed on Monday in a blog post.
Riot, headquartered in Los Angeles and known for its popular titles such as League of Legends, stated that layoffs will have the greatest impact on teams outside of core development.
Digital game producers are struggling to grow as audiences avoid purchasing expensive titles or stick to fewer games due to rising inflation. Early last year, Electronic Arts reduced its workforce by 6% and gave up some office space.
“Today, we are a corporation that lacks a clear purpose, and we just have too many projects going on. Some of our large investments aren’t paying off as intended. Our costs have risen to the point where they are unsustainable, Jadeja wrote in the letter.
According to a second blog post by Jadeja and co-founder Marc Merrill, the adjustments will allow Riot to focus on its portfolio of live games, which includes League of Legends, Valorant, Teamfight Tactics, and Wild Rift. According to the blog, the studio’s headcount has grown in recent years, and long-term sustainability requires a concentration on high-impact projects. This isn’t to appease shareholders or to hit a quarterly earnings number it’s a necessity, according to the site.
Riot will halt fresh game development under the name “Riot Forge” and remove some staff and features from Legends of Runeterra.
Tencent, which bought a majority position in Riot Games in 2011, also owns a holding in Epic Games, another US video game producer.