Business
Riot’s $250-million ‘Arcane’ TV series was a Netflix hit, financial miss
When Riot Games first decided to make a TV show inspired by its hit game “League of Legends,” the video game publisher took the unusual step of developing and financing the project on its own. While most of its peers license titles to Hollywood studios that have experience making TV, Riot wanted to maintain full control.
The company envisioned the show, which streams on Netflix, as a gift to fans, one that would also drive more people to play “League of Legends.” Now 15 years old, that game remains one of the most popular titles on the planet, but its player base is slowly shrinking.
Riot believed the show would be the first of many produced by its new entertainment division, which would transform the Los-Angeles based company into the next Walt Disney Co.
But “Arcane” went way over budget. Riot invested unprecedented sums and years developing the project. In addition to the production costs, the company put tens of millions of dollars more into marketing the show, as well as on a campaign for awards. All told, Riot spent about $250 million on two seasons of the series, “League of Legends” executive producer Paul Bellezza said in an interview with Bloomberg.
Netflix paid Riot about $3 million an episode to air the show, with Tencent Holdings Ltd., the Chinese technology giant that owns Riot, paying an additional $3 million for the rights to show it in China, according to Variety. Those payments amounted to less than half the total cost.
Four people with knowledge of “Arcane’s” production said the company didn’t have a robust plan to recoup the cost of the show before it launched. A spokesman for the company said that while the show itself wasn’t profitable, it added to the business in other ways. The company had one of its highest grossing revenue periods in the past month. “‘Arcane’ was a success when we look across all our internal measures,” the spokesperson said, adding that the second season is “on track to be at least break-even for us financially.”
Riot fired 11% of its staff at the start of the year, saying it wanted to put games back at the center of its business. The company scaled back its Hollywood ambitions in recent months, ending “Arcane” and pausing development on other adaptations.
Riot reorganized its entertainment division and President Shauna Spenley left, as did Ken Basin, the author of a book about how to make TV shows who served as head of operations for the film and TV unit.
“If they had seen an absolutely ginormous increase in revenue, in profit, they would have done more,” said Simon Pulman, who co-chairs the media and entertainment group at the law firm Pryor Cashman LLP. “It’s as simple as that.”
Video game publishers have turned their biggest hits into films for decades. The early results were poor. Nintendo Co. had such a negative experience with 1993’s “Super Mario Bros.” that it took the Japanese company three decades to allow another to be released. Yet, in recent years, the adaptations have started to win over audiences and critics. Universal Pictures’ take on “Mario” last year grossed nearly $1.4 billion at the box office.
Publishers have historically licensed their characters to Hollywood studios, offloading much of the financial risk. Lately, publishers have been mulling over how to bring those theatrical audiences back into their games, where they can spend money on digital items.
Riot has a history of spending generously on keeping its millions of players engaged and happy. Riot’s esports arm wasn’t profitable more than a decade after launching, for example.
The company decided to finance “Arcane” to ensure the quality of the project. In 2020, it hired Spenley, who previously worked at Netflix Inc., to build out its team. She then hired Brian Wright, another former Netflix employee. Riot doubled the size of the group tasked with connecting its games to the entertainment industry to more than two dozen people. Managers expecting to bring in new employees were told to budget for $250,000 a person.
“For us, what’s most important is fostering long-term player engagement and retention,” according to a Riot spokesperson. “Riot’s focus has always been on creating games and experiences that players want to enjoy for years, and ‘Arcane’ is part of that larger vision.”
“Arcane’s” very existence was controversial among some employees. Some Riot employees resisted the mandate to funnel resources into the show, according to six current and former staffers. The pricey passion project, backed by former Chief Executive Nicolo Laurent, sapped precious resources from “League of Legends,” Riot’s most important business. Laurent was trying to increase Riot’s valuation by diversifying beyond games.
The first season of the show was a critical success, earning four prizes at the 2022 Emmy Awards. It also topped Netflix’s chart of the most-watched titles in dozens of countries.
Yet interviews with Riot Games employees and industry analysts indicate it was a commercial failure for the company. Riot spent so much of its own money developing and marketing the show that it didn’t make money from the production. The show also failed to convert many new players or get existing players to spend more money on “League of Legends.”
Leaders on “Arcane’s” first season didn’t give Riot’s in-game item designers enough time to make new, “Arcane”-themed items or characters for sale in the game. While new players signed up for free “League of Legends” accounts, not very many stuck around, according to two people with knowledge of sign-ups. The game is famously complicated to learn and its community can be hard on new players.
“We were really surprised with the success of Season 1,” Bellezza, the “League of Legends” executive producer, said. That’s “why we probably missed an opportunity to do some in-game activations around it.”
Between its first and second seasons, Tencent started asking questions about what “Arcane” was adding to Riot’s core video game business, according to two people with knowledge of the relationship.
For the show’s second season, Riot planned to redouble efforts to funnel “Arcane” fans into “League of Legends,” where they could purchase themed digital items. The game is free but earns billions of dollars yearly through the sale of in-game cosmetics and characters, according to current and former employees.
This time Riot gave employees two years instead of just a few months to produce digital goods players could spend on. Eight new costumes based on “Arcane” characters were released since November, each selling for the equivalent of $10 to $14.
One skin for protagonist Jinx, which players can purchase chances to win, may cost up to $250, according to some estimates. Another character, Ambessa, costs the equivalent of $9.30. A high-budget music video accompanied her launch. Many employees questioned whether Riot would have been better off just improving its video game and designing items employees knew players would like.
Over the last few years, video game companies are asking more questions about how to get fans of their games’ TV and movie adaptations to play their games, said Pulman.
Hasbro Inc. spent years producing and financing film and TV projects based on its toys, including the successful “Transformers” film franchise. While the company will still license its games for projects, it won’t fully finance them anymore. For its upcoming Netflix series based on the Magic: The Gathering card game, Hasbro is taking a more targeted approach to attracting new audiences.
“Just getting an epic show isn’t enough,” said Rebecca Shepard, vice president of the “Magic” franchise. Hasbro is considering digital play experiences and merchandise for existing players as well as people who might be intimidated by the card game.
D’Anastasio writers for Bloomberg.
Early in April, Ruben Hallali got an unusual alert on his phone: The evening temperature at Paris Charles de Gaulle International Airport had jumped about 6 degrees Fahrenheit in seconds.
Mr. Hallali, the chief executive of the weather risk company Sereno, had set up notifications for extreme weather swings. Then, nine days later, it happened again.
“It was an isolated jump, at one single station, early in the evening,” said Mr. Hallali, who added that he noticed another strange coincidence about the spikes: The timing was just right for somebody to reap a windfall on the betting site Polymarket.
He wasn’t the only one who sensed a problem. Météo-France, the country’s national meteorological service, filed a complaint last week with the police and local prosecutors, saying it had evidence that a weather sensor at Charles de Gaulle, the country’s largest airport, may have been tampered with.
The temperature swings, experts said, coincided with a period of unusual activity on Polymarket, one of the leading online prediction markets, which allow users to wager on the outcome of virtually anything.
One increasingly popular area is weather betting, where speculators can make real-time wagers on temperature readings, rainfall totals, the number of Atlantic hurricanes in a year and much more — with payouts in the thousands of dollars and higher.
As the stakes rise, so has the temptation to tamper with the instruments used to generate weather readings in hopes of engineering a lucrative outcome. Experts warn that this could have dangerous ripple effects, like degrading the information that underpins safe air travel.
Temperature data is used in a host of calculations at airports, helping determine correct takeoff distance, climb rate and whether crews need to apply frost treatment to planes. It’s crucial to airport safety, Mr. Hallali said.
“The Charles de Gaulle incident is not an isolated curiosity,” Mr. Hallali said. “It is what happens when financial incentives meet fragile data infrastructure.”
On April 6, the temperature reading at Charles de Gaulle jumped from 64 degrees Fahrenheit to 70 degrees at 7 p.m., before slowly falling over the next hour, according to data from Météo-France.
On April 15, the recorded temperature climbed even more sharply, from 61 degrees at 9 p.m. to 72 at 9:30 p.m., then dropping back to 61 a half-hour later.
In both instances, the spikes set the high temperature for the day, the metric on which some Polymarket wagers rest.
Laurent Becler, a spokesman for Météo-France, said the service contacted the police after noticing the discrepancies in temperature data. He declined to comment further on the case, saying it was under investigation.
Mr. Hallali said that after the first instance, experts and commenters on the French weather forum Infoclimat began to search answers. Theories were floated, including user error. But after the second spike, commenters zeroed in on the unusual Polymarket wagers, which totaled nearly $1.4 million over the two days, according to the company’s data.
The sums bet on April 6 and 15 were hundreds of thousands of dollars higher than on typical days this month.
It is not the first time that strange bets on prediction markets have raised accusations of insider trading.
On Thursday, a U.S. Army special forces soldier who helped capture President Nicolás Maduro of Venezuela in January was charged with using classified information to bet on outcomes related to Venezuela, making more than $400,000 on Polymarket. Late last year, another trader on the site made roughly $300,000 betting on last-minute pardons from President Joseph R. Biden Jr. before he left office.
Polymarket did not immediately respond to a request for comment. While the site used to tie some bets to temperature readings at Charles de Gaulle, this week, after Météo-France filed its complaint, the platform began using temperatures taken at another airport near the city, Paris-Le Bourget, according to recent bets on the site.
Representatives for Charles de Gaulle airport declined to comment beyond saying that the case was under investigation. The airport police also declined to comment. The Bobigny Public Prosecutor’s Office, which is handling the case, declined to answer questions about the investigation but said that no complaint had been filed against Polymarket.
As to how the instruments could have been tampered with, a number of theories have been offered online, including by use of a hair dryer or a lighter. Mr. Hallali said that the precision of the spike on April 15 suggested the use of a calibrated portable heating device, although he declined to speculate about what kind.
“Markets are expanding into every domain where an outcome can be observed, measured, and settled,” he said. “As these markets multiply, so does the surface area for manipulation.”
As the war in Iran strangles the flow of oil around the globe, California’s jet fuel reservoirs are running low.
The state — which refines much of its own fuel in El Segundo and elsewhere but still relies on crude oil imports — has seen its jet fuel stock decline by more than 25% from last year’s peak to a level not seen since 2023, according to data from the California Energy Commission.
The supply is shrinking as a global shortage is already affecting travelers’ summer plans with canceled flights and higher fares. It could even affect plans for people coming to Los Angeles for the 2026 World Cup, which starts in June, said Mike Duignan, a hospitality expert and professor at Paris 1 Panthéon-Sorbonne University.
“People don’t know exactly how this is going to escalate,” he said. “There’s a huge black cloud over the sea for the World Cup and the travel slump that we’re seeing is all linked to this oil shortage.”
As fuel supplies shrink, flight prices are rising. Airlines are adding baggage surcharges to cover fuel costs. Several routes leaving from smaller California hubs, including Sacramento and Burbank, have already been canceled.
Air Canada has suspended flights for this summer, cutting routes from JFK to Toronto and Montreal.
“Jet fuel prices have doubled since the start of the Iran conflict, affecting some lower profitability routes and flights which now are no longer economically feasible,” the airline said in a statement last week.
Europe had just more than a month’s supply of jet fuel left last week, the International Energy Agency said. In an effort to cut costs, the German airline Lufthansa slashed 20,000 flights from its summer schedule this week.
Without a fresh oil supply flowing through the Strait of Hormuz, the situation is unlikely to improve, experts said. The oil reserves countries and companies have in storage are helping fill shortfalls, but the squeezed supply chain could still wreak economic havoc.
“When there’s a shortage somewhere, everything is affected,” said Alan Fyall, an associate dean of the University of Central Florida Rosen College of Hospitality Management. “Airlines are being cautious, and I would say that is a very wise strategy at the moment.”
California’s jet fuel stock reached its lowest levels in two and a half years at 2.6 million barrels last week, down from a peak of more than 3.5 million barrels last year.
The California Energy Commission, which tracks fuel inventory, said the state’s current jet fuel stock is sill sufficient.
“Current production and inventory levels of jet fuel are within historical ranges,” a spokesperson said. “Although supply is tight, no structural deficit has emerged yet. The present tightness reflects short‑term global market stress. As long as refinery operations remain stable, California is positioned to meet regional jet fuel needs.”
Europe has been affected more directly because it relies on the Middle East for the vast majority of its crude oil and many refined products, experts said. California gets crude oil from the Middle East but also from Canada, Argentina and Guyana.
The state has the capacity to refine around 200,000 barrels of jet fuel per day, most of it from refineries in El Segundo and Richmond.
The amount of crude oil originating in the state has been declining since the early 2000s, as state regulations and drilling costs have led to more imports.
California has become particularly vulnerable to supply-chain shocks like the war in Iran, says Chevron, one of the companies that provides jet fuel in the state.
“The conflict in the Mideast Gulf has exposed the danger of California’s decision to offshore energy production,” said Ross Allen, a Chevron spokesperson. “Taxes, red tape and burdensome regulations cost the state nearly 18% of its refinery capacity in just the past year, and we urge policymakers to protect the remaining manufacturing capacity.”
In 2025, 61% of crude oil supply to California’s refineries came from foreign sources, according to the California Energy Commission. Around 23% came from inside the state, down from 35% five years ago.
The state’s refining capacity has also been declining, said Jesus David, senior vice president of Energy at IIR Energy. The West Coast region’s refining capacity has decreased from 2.9 million to 2.3 million barrels a day since 2019, he said.
“California’s had issues prior to the war,” David said. “Nothing new has been built over the past 30 years, and California has closed a lot of capacity.”
The result is higher prices for both gasoline and jet fuel in the state. Jet fuel at LAX costs close to $15 per gallon this week, compared with almost $10 at Denver International Airport and $11 at Newark International Airport.
Gasoline prices have also been hit hard by the global conflict. Average gas prices in California are close to $6 a gallon, around $2 higher than the national average.
The West Coast is a “fuel island” because it’s not connected by pipelines to the rest of the country, United Airlines chief executive Scott Kirby said in an interview last month. That means oil and refined products have to be brought in by ships.
“Fuel price is more susceptible to supply weakness on the West Coast than anywhere else in the country,” Kirby said.
Some airlines might not survive the turmoil if oil prices don’t level out soon, he said. Spirit Airlines, a budget carrier based in Florida, is reportedly facing imminent liquidation if it isn’t bailed out by the Trump administration.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
-
Pennsylvania1 minute agoCatchy chemistry: Pennsylvania musician sings songs about the periodic table of elements
-
Rhode Island7 minutes agoSix animals test positive for rabies in Providence County, health officials warn – What’s Up Newp
-
South-Carolina13 minutes agoStruggling South Carolina Farmers in Line for Assistance – FITSNews
-
South Dakota19 minutes agoDOC lacks population-specific programs, otherwise has ‘right things’ in place
-
Tennessee25 minutes agoTennessee basketball adds to frontcourt with Braedan Lue, Kennesaw State transfer
-
Texas31 minutes agoCarnival is Choosin’ Texas for its Newest Excel-Class Ship
-
Utah37 minutes agoGAME DAY: Golden Knights seek to retake advantage in first playoff trip to Utah
-
Vermont43 minutes agoCOMMENTARY: It’s time to invest in Vermont