

Chinese company Tencent Holdings Ltd may not be a household name for gamers the same way as Electronic Arts Inc or Activision Blizzard Inc, but in recent years it has carved out a major chunk of the gaming industry for itself, with stakes in companies like Unreal Engine creator Epic Games and League of Legends developer Riot Games.
Tencent has owned a significant portion of Riot since 2011, and now Riot has confirmed that Tencent is now the full owner of the company. According to Riot, Tencent’s purchase of its remaining equity means that the studio will begin offering employees cash incentives for their work rather than the equity based rewards it had previously offered.
“Our majority investor, Tencent, recently purchased the remaining equity of Riot Games,” Riot said in a recent internal update (via Gamesindustry.biz). “This allows us to move away from a Riot equity program towards a cash based incentive program that allows Rioters (employees) to share in Riot’s success.”
The studio added, “Riot’s approach to compensation has always been about aligning the incentives of the company with Rioters, and also about ensuring that we compensate our talented team of professionals well.”
While your average consumer may not have even heard of League of Legends, Tencent has good reason to invest so heavily in Riot. According to a report by SuperData Research Inc, League of Legends brought in over $1.3 billion in revenue in 2014.
That revenue is made entirely from in-game microtransactions, as the game itself is completely free to play.
League of Legends was not the first multiplayer online battle arena (MOBA) game to hit the market, but it has certainly been the most successful.
What started out as a niche genre has exploded within the game industry, and several other major game studios are either making MOBAs of their own, such as Blizzard Entertainment Inc’s Heroes of the Storm, or they are taking MOBA-like features and implementing them in other game types, such as with Gearbox Software’s upcoming team-based shooter, Battleborn.
Despite an increase in competition, League of Legends continues to lead the pack, and it is consistently the most watched game on livestreaming site Twitch.tv.
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