Riot Games Tackles TV Production Its Own Way

vision of the future. I spoke with Mark Merrill, co founder and president of Games at Riot, and SHAWNA. Spenley, head of Entertainment, in a joint interview recorded last month at the Variety Gaming and Entertainment Breakfast presented by Pixel United. It's all coming up on this episode a Strictly Business. We're back with Riot Games executives Mark Merrill and SHAWNA. Spendley. Welcome everyone, looking forward to have a great conversation with

you guys. I'm sure you're familiar with Riot Games just because you've driven by that really cool logo on Olympic Boulevard. But there's more of a company, so as the co founder, once you set us up, and for those who don't know explain riot. Yeah right, it's a little difficult to explain actually, because you know, our roots and focus as a company really isn't gaming, but we do a lot of things, including sports, which of course there e sports, a lot of music, and now you know we've dipped

our toe in the water with entertainment with our cane. Clearly, you guys are not you know, just the average game studio. A lot of different pieces of the puzzle. And we're here, of course to talk about this gaming and entertainment convergence and our cane and what that represents. But I still

want to do some more table setting. League of Legends is obviously the biggest piece of this puzzle, so I want to make sure everyone understands that sort of underlying property before we talk about the I p um so,

the legal legends phenomenon. Just give the scope for this thing. Sure, um So, the easiest way to contextualize what leagal Legends is is really to compare it to a sport, because the game itself is relatively simple, and that there's essentially what you do as a player is you join up with another four players and you play against another team of five players. And you essentially are choosing what we call a champion to be for that game session, which

last ednywhere from thirty to forty five minutes. Uh. And then the depth of engagement really comes from the fact that you're leveling up, you're trying to kill other players essentially, if you it's sort of analogous to say basketball, where you know, the the court and the rules are relatively simple, but every game is different because they're so much player expressed creativity um. And so League has you know, little over three billion monthly hours of engagement uh, you know,

just playing the game. And so one of the things that's also important to understand about League is that it is a very hardcore game and that it is it's you know, we always thought about it as a targeting a niche UM and it turned out that, especially on a global stage, you know, that niche was much larger than we ever anticipated. And so the game operates as a service. It's completely free, and you know, you never have to spend any money in the game if you

don't want to. Uh. And our business has really premised upon actually selling cosmetic virtual goods, and so it was incredibly difficult to raise money back into thousand six until seven when Brandon I Are and twenty five start in the company. Because you know, two as one VC put it like, wait, you're gonna have a multiplayer online battle arena game where college age kids are killing each other online.

And then the way you're gonna make money, they're gonna play dress up doll and we're like, kind of but not really, and they're, yeah, good luck with that. Uh, and so you know, but it turned out to work. And the e sports market, I mean, in that report that Variety Intelligence just put out, we crunch the numbers on the size of this market. Uh, it's not just about playing the game, it's the people watching it. So that's like a whole secondary market that comes into this

for sure. And so we always thought about investing in the sports as sort of a feature of League of Legends, where it really enhances the experience of being a legal Legends player and fan um in a similar way to you know, oftentimes the way somebody will learn how to play American football is you first start throwing the ball, you know, with your parents or friend in the backyard or whatnot, and then you see it on TV and then there's leagues where you can start to learn and

you know, understand the complexity. League of Legends has all of that complexity, so it's very very difficult to learn. And so the way that the game really grows is once people get over the hump, you know, of learning how the game works, right, they start to appreciate how many layers of are and how fun it can be

to replay it. And so a lot of players love watching people who are incredibly good at the game perform at the highest level because they can pull off moves that you know, most of us normal humans are simply you know, can simply dream about, and so it's incredibly fun to watch. Got it now, Shaana, you're over at a little company called Netflix. Is everyone you've heard of that, right,

So that's a little bitty thing you're over there. Yeah, you're looking at the gaming market, you're looking at League of Legends. You saw a certain potential in terms of that,

I p I take it. Well. Yeah, So, so my role at Netflix was to run marketing for the all the English language content, all of the titles across film, TV, animation, everything, And so when you're looking at roughly a thousand titles a year, and I was there for fifteen years, so I I saw everything performed, whether it was our originals or or every frankly everything that we licensed to. And it's really a rare that you see I I mean, we all know this, but but i P of this

caliber that is completely untapped cinematically. So with over six million people interacting with League of Legends since its inception, it's it's incredibly rare that you would not have film or TV adaptations UM already in existence, and and League

of Legends as an i P is so massive. Again, being at Netflix, we started to see what was performing across all of Southeast Asia, UM, in Japan and in Korea, and so I started to pay close attention to this i P because it was pretty clear to me that there was this massive demand UM and and no supply.

And so I'm curious back at Riot what the decision making was like in terms of, hey, let's go do this convergence thing, let's transition the i P. What what kind of uh conversations went on internally that made you we gotta do this. You know, I would be lying

if I said it was incredibly strategic. Uh, you know, what it really was was organic and sort of birthed from love of the i P. Where you know, Riot has like nine people who paint all day long, and you know, so we have we're probably one of the largest you know, creative employers in the world, and so we have this incredible amount of this wonderful creative talent, and everybody at the company is very aligned around the mission, which is we aspired to the most player focused game

company in the world. And so for us, you know, as players are engaging with the game and loving it, and we're building the sports and they're developing these characters and people are playing. Everybody loved these characters, but you could only interact with them from this sort of third person isometric view. They were sort of tiny, but we all viewed them as creators, and our players viewed them as these real characters, and they were curious where they from.

And you know, so we wanted to start to build the muscle and other mediums to elevate our players are relationship with the i P and with these characters, and a lot of that started with music, and then it started with some storytelling and some cinematic trailers and whatnot. And then you know, Christian Link, who is one of the individuals who helped to build our music team, um,

you know, had this crazy idea. Well, first we started doing music videos, which was another crazy thing UM where he said, well, back in what if we made a full animated series, And we didn't even have dialogue in any of our trailers at that point. And so going from where we were to trying to create something that would be great and meet our players expectations in script

entertainment was a massive leap. And so but then we started just to experiment and do some tests and figure out what would it take and sort of work backwards from that goal of if we were to try to create something great that did justice to the league I p but was in well executed in the medium that other people could enjoy too, what would that be? And

really that was the journey of Our Cane. And I would be remiss to to you know, to mention or to not mention the our incredible partners with Fortish, which is our animation studio in Paris, our partners that did Our Cane. We worked at them on many of the music videos and a lot of different collaborations you know, earlier on and had this deep trust uh and you know, we had to figure out how to build this great animation pipeline with them in parallel. It took six short

years to the screen. But but again, I think it speaks to Riot's willingness to experiment and to there's just a ton of entrepreneurship, create an entrepreneurship inside the company. So in order to create something of that caliber, you really have to give it a ton of space to figure out its identity, and that's what they did. But it's interesting to me that you guys entrusted people who didn't really know TV animation to do this. I mean,

when you first heard that, what was your reaction? You know, to me, it's not that strange, because again I sort of felt like, you know, I was at Netflix for a long time and we did a bunch of stuff we didn't know how to do. And so the idea that they that they did the same thing, it's actually the d n a of a company that I love, And so it wasn't that strange to me. I'm sure it's strange to others. But but there was no market for animation of this caliber, like the let's leave the

budget to one side. We don't have to talk about that, but but just the ambition of it, it doesn't really exists in adult animation at all, and so I just was really inspired frankly that they were willing to do

something that nobody does. And part of that is really enabled by the fact that we're able to go long term and our business model, like you know, it's really centered around games and keeping players engaged, and then we build these around game businesses e. Sports, music, you know, consumer products, et cetera, and broader entertainment to keep people engaged and to elevate. But it's really centered around reinforcing gaming.

Got it? And SHAWNA At some point, I guess you knocked on the door at your old friends at Netflix. And what was the process of selling them on doing this? Well, it was fairly easy. I know a couple of people over there, so it wasn't wasn't as challenging as it might seem. But I think they it was for us, yeah, like who do you guys? Yeah, but I think, um,

they understood as soon as we came in. One of the things that really helped them get because they didn't really know the i P either, but was to understand how big our audience was in markets where I think Netflix wanted to grow, so I happen to know some of those markets, and so it was helpful I think to show um just our reach in Korea for example, and and not surprisingly Arcane's done exceptionally well around the world, but in markets where I think Netflix really was looking

to grow their subscriber based so I think it was just a perfect fit. Well, that would imply you saw data with regard to how this show performed. What was that. Now we get little snippets, you'd be surprised. I mean for somebody who was in that data for years, I we don't get much more than you all get. But they definitely gave us indications that it was a success and that it was doing well well. Also part of it was that you guys brought something to the table

in terms of getting the word out to talk about that. Well, yeah, I mean we have an enormous platform, like I said, so with you know, and eighty million people playing uh our games that are in this room terror, in this League of Legends sort of universe. We have um enormous UH platforms at our disposal too, So I think it allowed us to experiment in promotion to our base, which I think was why Netflix was so willing to disrupt

their all at once model. UM. Typically on Netflix, you would the show would be released all at once, and for our Cane, we released them in three tranches, which is very rare, but it was in large part because we had a bunch of promotional platforms that we were able to leverage on the game side and through the world.

And it was a huge credit to Netflix and to Amazon Twitch where uh to not shoot down the idea also around us doing a free broadcast for the first act, leveraging Twitch as well to allow our streamers to do it, because that really helped build hype an awareness in our community because again even our players like rioters, were skeptical

about our evolution into entertainment. A lot of our players where people were nervous as heck, like please don't screw up our I p you know that they love you know, when we're trying to move into uh you know or announce the animated series. Um. And then once people saw the show and it was great, big I really excited, which of course then hopefully helped to drive a lot of subscriptions over to UH the Netflix. Yeah, Netflix broke rules there's to do it. But I mean huge credit

to Amazon Twitch to let us do co streaming. I mean, we were able to really partner with a ton of different folks and getting this launched. So you launched the show almost a year ago now, right, yeah, just about and I'm just reous, Like, how do you feel now that you've done this and in terms of your readiness to do more validated? Is that is that the right word?

And relieved, you know, I mean delighted ye yeah, And just honored, I mean, and just so so proud of in particular Christian and Alex that the showrunners and just rioters in general who have poured their hearts to this hole in building this world in the c I P. And it's just really meaningful to them and to our players to not feel the oftentimes sort of skepticism and or stigma by sort of the broader mainstream, you know, how our gaming. You know, it's like when people embrace like, wow,

that's actually really cool what you're doing. It's like that is that's something It feels different than the daily experience of being somebody who loves games and where oftentimes, you know, people will be like hey, that thing you love doesn't have any worth, which we don't think is true. So I also think, look, I might be biased too, so

I'll own that. But because this was built by rioters for players, it wasn't an adaptation that sort of Hollywood rolled in and said, here, what we know, what we're doing, We're going to figure this out for you. It was very much a homegrown project that was built for players. And you know, I think at the time our employees would have been happy if it was on YouTube and just sort of they're out there for free. The idea

was that it was a gift to our players. So for us to feel like it's actually getting you know, winning Emmy's and it feels like it's part of the conversation was bigger than we could have ever imagined. Um. But I think to Mark's point, any whenever you're in a game company and you dip your toe into entertainment, there's this game curse that everybody talks about. So it's scary.

It feels like you're going to somehow upset your players in trying to delight them, you you upset them, And we're just really lucky in this case that we did the opposite well, and I think one of the key elements to balance is around that passion and deep understanding and love of the I P and sort of creativity, but augment with expertise and and you know, sort of like great experience and finding the right team composition to be able to pull something off is you know, I

think one of the most important things to building anything great. We'll be back in just a minute with more with Mark Merrill and SHAWNA. Spendley. We're back with Riot Games executives Mark Merrill and SHAWNA. Spendley. I'm sure a lot of people in this room could testify to it. Yes, we've seen that this world of gaming is massive in Hollywood, understands its importance. But transitioning that I P whether to the big screen or the small screen, it's a very

tortured history. I came up in this business covering television. I remember, I think NBC Universal, I saw them twice try this and failed that. No one remember defiance on the Sci Fi Channel? Yeah, I mean a lot of So were you not daunted by all that? We were incredibly daunted, uh and intimidated. Um, you know, But I think the thing that has often given rioters this sort of drive and perseverance to overcome a lot of obstacles.

Is that deep dedication and passion and mission orientation, and that we all share the same dream of sort of like what wouldn't it be great if you know and you know, just over this love of the I p um and you know, I think when you have incredible people and you know, a lot of constraints are difficult challenges, right, you can you know to quote of course, you know, you can give a uh, you know, great idea to a mediocre team and they'll make a videocre You can

give a mediocre idea to do a great team and they'll make it great. Okay. I also think, you know, these are not commercial objectives necessarily. They really are coming from this place of of building a better experience for players. And so Mark, who is steeped in gay times, and and me and my team some of them were here, are steeped in the storytelling. We're really connected in in what we're trying to do. I also think that's rare.

It's not sort of this separate P and L. It's not a separate business unit that has to kind of um recoup exactly so that ethos. I imagine it's fairly rare and it's important to us to keep that strong. Will there be a season two? Yes, we're already in production. Doesn't it doesn't happen quickly, So I'm just gonna set expectations now, hopefully quicker than six years. We think, we think the pipeline exists now, so yeah, we think half the time. So I think in twenty four we will

have season two. That is amazing and made all of us cry. We just finished the scripts, and just a few days ago we learned in a Variety exclusive that you guys hired a live action executive Geture. So clearly there's some broader ambition sins here. I know you're not necessarily going to speak to particulars, but do you guys have a sense now of like, Okay, we're going to ramp up a whole slate in the next ten years,

Like what are you thinking? Well, one of the things that's exciting is our Kane takes place in one area in our world and with eight characters, and we have close to a hundred and six characters now in a much larger world, and so the storytelling possibilities to develop who these characters are in the relationships and sort of the timeline is, you know, we think are vast and events and part of our challenges, you know, how do

we do that well? Um, And it's been really exciting for us to cultivate this again incredibly rich animation pipeline. But that's one that's one medium, and you know there are other, of course mediums that may be able to do an incredible job of telling these stories also, and

those are things that we're committed to explore. You say that, and I immediately think of two words, cinematic universe or Marvel this field of characters, Like are you looking to companies like that in terms of like, Okay, we've got to build this bible over X number of characters and wine number of years. We hear that phrase a lot inside our company too, and I think we try to just stay patient and pace it because we're obviously inspired by Marvel and Lord of the Rings and and Harry

Potter and Game of Thrones. They're they're incredibly inspired and clearly audiences are are asking for these interconnected, intertwined universes, so we we can only aspire to tell you know, phenomenal and great stories with this vast world that we've that you know, they've created that that I get the pleasure of working inside of UM our team. It's interesting. It's like we're not trying to tell too big of a story too quickly. We really like these little pockets

of the universe UM. But I think I think we have a very long runway with with i P like this. As you all know, Star Wars is fifty years old.

Lord of the Rings, it's older and UM and so multigenerational i P like this should go on for years, and so we want to be really patient and treated with care, and a lot of that goes into cultivating the internal organizational competency around how to have so many different creators and teams work effectively in a coordinated way within the i P. And that's quite a challenge, and you know, as we continue to grow, you know, we're

finding different ways to do that. But you know, I think we're benefited again by the ability for us to really think long term and UH and try to be focused on again investing in the i P rather than exploiting the i P for sort of the short term benefit. There's no immediate plan for you know, three pictures any year kind of a thing. I mean, we're not we're not in a pipeline way of thinking. We want no, we really want high quality X silent um, and we're

okay if it takes time. So you talk about the team, I'm curious what the infrastructure is. Do you have now a separate TV division, or you're bringing in lots of Hollywood types or you're like, you know, we don't want to be infected by the conventional wisdom. Well, no, we definitely want to learn from the tremendous expertise. So we brought in a lot of great people who have great backgrounds in Hollywood as well. But getting the blend right, of course is very important. But yeah, look, I think

it's funny. I remember being in a position being in a tech company and then bringing in a whole bunch of Hollywood and so it's sort of weird joining another company and being the Hollywood running in Like that was weird for me. But um, but I think our focus is really clear. Games right now are such a massive part of the entertainment ecosystem, and we all signed up to be a part of that ecosystem. So I think

from from our perspective. We're really excited to learn and develop together with game executives, and we're coming into it with a partnership frame of mind. So it's not it doesn't feel um odd at all, doesn't. I mean, it feels like we we are building a really strong team that partners together across both dimensions well, and when we're creating scripted entertainment, it's like our players expectations of course, and the audiences expectations aren't just set by what we do.

I mean they watch lots of TV and great movies, and so they're set by what everybody in this room does and what the whole industry does. And so you know, our challenge has been how do we create something that can you know, stand shoulder to shoulder with these other incredible properties, which of course is just is really hard. And so that's where you know, again, I think the luxury being able to take the time and find the right team and sort of experiment and learn has been

tremendously helpful. And in terms of those learnings, how do you study your audience and their consumption now that it's sort of bridging two different mediums or are you learning much about uh, how the best program to that audience. Yes, um,

you know, it's sort of the short answer. And you know, we've learned a lot also over the years around how e sports impacts the ecosystem and people's desire to play games or whatnot, how music does and um, you know, and and sort of adding in of course now TV, you know, animated with an animated series has has developed

a lot of learnings as well. And you know what's fascinating and perhaps unsurprising you know many in this room is, but also really exciting is a lot of people now want to work at Riot, like some of the best talent in gaming because of our came So it's not just what we've done, you know, from a gaming standpointy sports and people are like they're they're excited to work at a company that would have the perspective to do something like that or great and and that's really really

cool from a respective And so because you know, TV and film is just it's such great storied mediums with such you know, such rich history, such high expectations and like more established in a lot of ways as an art form, you know, compared to gaming. And I think many people are still starting to understand gaming or trying to, because it's a really big diverse industry that whether there's just very different different platforms and different business models and

different game types. And you know, my my business partner, Brandon Uh, you know, I used to talk about how playing games. You know, when people would ask like, hey, like should I allow my kids to play games? It's like, well, I think about games as having different types of nutritional value. You know, some games can be junk food, right, and others can actually be incredibly nutritious. And that's that's true.

And so you know, lumping at all into into sort of a big bucket of gaming that doesn't do justice to the nuance, which I think is probably true as it relates to entertainment. And so you know, we're just trying to learn and and align with you know, great people who again want to share that dream of elevating the experience and meeting these incredibly high expectations of the

audience we're trying to serve. Well. Uh, it's an interesting growth story and progress and we're looking forward to following it in the future. Thanks for coming in and talking to me. This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation with media movers and shakers, and please make sure you subscribe to the podcast to hear future episodes. Also leave a review in Apple Podcasts and let us know how we're doing