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
Walmart’s EV chargers are coming to California with discounts for members
Walmart is rapidly expanding its network of electric vehicle chargers designed for customers to use while they shop.
The network could help fill gaps in EV infrastructure in states with greater need for chargers. Walmart, which has more than 5,000 locations in the U.S. and hundreds in California, says more than 90% of Americans live within 10 miles of one of its stores.
The chargers also offer an incentive for customers to choose Walmart — Walmart Plus members will receive a 10% discount off an average price of $0.46 per kilowatt-hour of energy at the company’s chargers.
Walmart chargers are already available at more than 75 locations in 17 states, with Texas boasting the most charging stations, followed by Florida and Arizona.
Matthew Nelson, Walmart’s director of energy policy, said last week on LinkedIn that the network will soon reach 29 states, including California.
“We are delivering on the promise of affordable, reliable and convenient charging,” Nelson said in his post.
According to Walmart’s website, six charging stations are coming to California soon, though the company did not offer a specific timeline.
The chargers will be installed at stores in Antelope, Brea, Fresno, Stockton, Suisun City and Vallejo.
Most charging sites in California will include eight to 16 fast-charging stalls, said Walmart spokesperson Kelsey Bohl.
The company first announced plans in April 2023 to install its own EV chargers at Walmart and Sam’s Club stores, with a goal of installing thousands of chargers by 2030. Partnering with ABB E-Mobility and Alpitronic, it added 25 new charging sites this past May and six more in June.
“Walmart is building a leading retail-integrated EV fast-charging network, focused on delivering an affordable, reliable and convenient charging experience where customers already shop,” Bohl said in an emailed statement. “Customers can charge while they shop, access stations through the Walmart app they already use, and benefit from affordable pricing.”
The charging stations already available include 612 individual charging stalls using 400-kilowatt chargers. Each stall has a dual charging cord with both Combined Charging System and North American Charging Standard connectors. The standard connectors, designed by Tesla, are smaller and lighter than the combined systems.
The primary way to pay for the chargers is through the Walmart app, but the company is also experimenting with built-in credit card readers to allow those without the app to use the stations.
Customers can check charger availability on the Walmart app. The company said the chargers will be available 24 hours a day.
Business
Waymo reports teen riders for bad behavior and delivers them to the police
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
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