Free services – the key to business success?
Free services and extraordinary revenue sounds like a contradiction to me, but that is not the case when it comes to video games especially when we talk about the most popular game of the world: Riot Games’ League of Legends. This company was founded by two successful entrepreneurs, Marc Merril and Brandon Beck, who specialize in entertaining and marketing strategies. League of Legends boasts over 26 million daily players and over $624 million in micro transaction sales only last year. Besides the new spin they brought to the MOBA gaming genre, the two media and marketing specialists brought a great innovation in the way they did business by making the game free of charge.
At the time this game was being launched players had to pay around fifty dollars in order to play their favorite games on PC or on a console. League of Legends became a hit and it opened the doors for a new business strategy that focused on making profit out of micro transactions. For instance, players that wished to play using an exclusive Riot Singed skin had to complete hard to find difficult missions, participate to a League of Legends meeting or pay for it. It is easy to understand how Riot managed to gain great revenue, considering the fact that its stock value increased exponentially over the years. Tencent bought a large part of Riot Games stocks in 2011 with a staggering sum of $400 million.
In fact, this type of strategy is no longer unique on the market especially when it comes to online services and games. If your brand manages to gain such a great exposure like LOL did in the past few years, the fact that you charge nothing for your services is not going to make you lose nothing. Entrepreneurs should throw their idea that charging everything will bring them more revenue, because nowadays, popularity and millions of users is what matters, because that is how you make real money. The League of Legends has become such a great business opportunity that many online platforms such as lol-skins.com offer Riot Singed skins and other special and rare LOL skins in exchange for various sums of money that can reach a couple of hundreds of dollars and usually depend on the rarity and popularity of the skin.
Few people understand just how popular League of Legends has become along the years with its simple, yet efficient business strategy. Besides the fact that it promoted the idea of free gaming, the Riot Games also focused on creating a community feeling in an attempt to get close to its customers and encouraged them to complain in order to meet their requirements. If you wish to understand the extraordinary success this company has, you can only check out their numbers. League of Legends truly is the most played video game in history with three million people playing LOL at any given time in a summer day with a peak that reached 12 million at some point. In business, charging and especially overcharging is not always the best idea.