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.
Business
How Google’s 32-million mosquito project could change California’s battle against dengue
Google took internet searches to the next level. Could it do the same for mosquito control?
The Silicon Valley-based tech giant is seeking to release up to 64 million sterilized male mosquitoes in California and Florida over two years, according to a notice in the Federal Register. It’s part of an ambitious effort to curb the diseases the insects spread.
Google says it can harness technology to optimize a concept that’s been around for decades, but hasn’t been successfully scaled with mosquitoes to rein in disease.
For example, the process often involves separating the insects by sex to isolate the males. Currently, that’s done manually and can be time consuming. Google says it’s “developing new technologies that combine sensors, algorithms and novel engineering to take advantage of unique aspects of mosquito biology to quickly and accurately sort males from females.”
The company also says it’s building software and monitoring tools to guide releases of sterile males, and its scientists and engineers are creating sensors, traps and software to decide which areas need to be treated and treated again.
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Called Debug, the project targets Aedes aegypti mosquitoes, which are native to Africa but have infiltrated nearly half of California’s counties since first being detected in the state in 2013. Not only do they drive residents nuts with itchy bites, but they can carry a number of potentially serious diseases, including dengue, Zika, chikungunya and yellow fever.
The plan is to infect males — which don’t bite — with a bacteria called Wolbachia, which effectively renders them sterile. They are then released to seek out wild females and mate. Females will lay eggs but these won’t hatch, which experts say drives down the population over time.
There are other methods to sterilize male mosquitoes. Vector control districts serving Los Angeles, Orange and San Bernardino counties have irradiated males and released them in recent years.
Early results are promising. Two neighborhoods treated by the Greater Los Angeles Vector Control District saw a more than 80% reduction in the female Aedes aegypti population in 2024 and 2025.
But as the Greater L.A. district seeks to expand its operations, cost poses a problem. Last year, business owners signaled they weren’t willing to shell out more every year to make it happen. District officials are still hoping to sway them.
If Google moves forward, it wouldn’t be the first time it has been involved in such an effort. In 2018, the company conducted a large-scale trial in Fresno County, releasing 14.4 million Wolbachia-infected males in three neighborhoods.
“At peak mosquito season, the number of female mosquitoes was 95.5% lower in release areas compared to non-release areas, with the most geographically isolated neighborhood reaching a 99% reduction,” a 2020 paper reported.
Google has applied for a permit from the Environmental Protection Agency to carry out the releases in California and Florida, for which the federal agency is currently seeking comments before deciding whether to grant approval.
The company aims to release up to 16 million Wolbachia-infected males in California, and the same in Florida, per year for two years, the Federal Register announcement said, for a total of 64 million.
Urgency to tamp down the invasive mosquito population in California has increased since 2023, when the state logged its first locally acquired dengue cases — meaning people were infected in their communities, not while traveling. The following year, the number of locally acquired cases ballooned to 18, with 14 of them in Los Angeles County.
A study published last week in “The Lancet Regional Health — Americas” found that approximately 18.2 million Californians — primarily in the Central Valley, L.A. and San Diego areas — live in regions where conditions are probably suitable for local dengue transmission.
“Under moderate scenarios of climate warming and urban expansion, an additional 4.1 million residents may be at risk by mid-century,” according to the study led by UC Berkeley’s Lisa Couper. Researchers note the current and future risk of transmission remains low except during summer in the Central Valley and Southern California.
“I’m pretty much in favor of whichever [sterile insect technique] approach gets us the disease prevention and nuisance control we need and at the lowest price,” Susanne Kluh, general manager of the Greater L.A. County Vector Control District, said in an email.
She said her district went with radiation because it was the only approved technique when they wanted to launch their pilot, and that it’s “also the only one where some company does not make a profit in the middle.” However, she wouldn’t rule out using Wolbachia if it turned out to be the most affordable option.
Business
In a first for the country, voters in Monterey Park ban data centers
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
Business
Rent-hike ban to protect fire victims ends despite gouging concerns
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
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