League of Legends: The Emotional Economy Worth Billions

Hello everyone,

Imagine you’ve just unlocked a champion skin in League of Legends. It doesn’t make you faster, stronger, or better at the game, but it feels amazing. But why is that? Why do we spend money on things that have no objective value to us? Today, we’re discussing Riot Games' free-to-play (F2P) business model that tabs your human emotions to get you open your wallet. But it that necessarily a bad thing? Let's hear both sides.

🎦 Riot Games and F2P—Setting the Stage

It’s the year 2009. Riot Games just releases League of Legends. At first glance, it’s just another video game. But Riot does something bold: they make the game free to play. No upfront cost, no subscription fees—just download and play. Back then, the industry standard revolved around paying to own the game.

This wasn't entirely new. Other games had tried free-to-play before, but many relied on a "pay-to-win" system. This, however, left those who couldn’t (or wouldn’t) pay at an in-game disadvantage. Riot flipped this script. Instead of selling power, they sold style. Players could buy cosmetic skins to change the appearance of their characters, and paying players had no edge over those who played for free—at least at first sight.

Riot called this a "fair" free-to-play model. As the Riot Games put it, the game’s success depended on earning player trust and creating a level playing field. And it worked. By 2017, League of Legends had generated $2.1 billion in revenue, all while remaining free to play.

🎁 The Hybrid Gift Economy in League of Legends

So, what exactly makes Riot Games' approach so innovative? At its core is the idea of reciprocity—a give-and-take relationship between players and the developers. Riot Games positioned League of Legends as a gift to the gaming community. Players could enjoy the game without spending a dime, but many chose to buy skins and other cosmetics to support the developers. As one player explained in a Reddit discussion:

“I buy skins simply to support Riot. I play the game quite a bit and want to give back. Plus, the skins allow for a level of customization. It’s win-win [1].”

This sense of gratitude—a feeling of wanting to “pay back” for the free game. In sociology, gift economies are systems where people give and receive without expecting immediate payment. Riot Games tapped into this idea, creating what the author of the study calls a “hybrid gift economy.” The game felt like a gift, but it was also part of a larger commercial strategy.

By framing LoL as a gift, Riot Games encouraged players to spend money not out of obligation, but out of appreciation.

🫶 Make 'em Feel and Buy

Riot Games' model is not without its complexities. To fully understand it, we also need to explore a second concept called the “affective economy.” In simple terms, this refers to the way emotions and relationships are monetized. With regards to League of Legends, Riot Games doesn’t just sell skins; they sell the feeling of being part of a community, the joy of customizing your character, and the satisfaction of supporting a game you love. These feelings affect you in ways that increase the likelihood of giving back (spend money).

One Reddit user described it this way: “Skins make the game funner. Having them makes you feel empowered on the champion, like you have enough mastery over them that you are willing to get cosmetics [1].” Another user added,

"I don’t know exactly WHY I do it. I think it’s my way of paying Riot back whilst also trying my best to look as badass as possible... [1]"

These sentiments highlight the emotional connections players have with the game and its developers. In addition, players derive "value" from spending it, like being more unique (customized champions), make them feel stronger, and satisfying the urge to give back to Riot Games. The Reddit user comments are also functional reasons to justify spending money in-game.

💭 Some Additional Thoughts...

As the author pointed out, the model relies on what he calls “affective valorization”—the process of turning players’ emotions and social bonds into hard cash. Of course they do. They are a company that wants to make money, similar to Valve, Blizzard Entertainment, and EA. This is further underlined by the fact that some of Valve's employees are behavioral psychologists. Their job is to alter your behavior in ways that benefit the company, such as spending money, increase the amount of time you spend playing their game, satisfy your basic psychological needs, or improve enjoyment why playing.

On the other hand, may all of this be justified if the company uses to the money to improve the game, strengthen the esports ecosystem around it, and help you having a good time? I personally think there is a sweet spot—somewhere. However, note the study data are from before Riot Games introduced loot boxes to the game. But that's a story for a different time. As one player put it:

"I have been playing for a long time and have enough disposable income that I don’t mind giving £30 to Riot per month to help them improve the game. League is also pretty much the only game I play, so I spend less on league than I would do buying new game releases. Also skins are cool [1]."

In the end, everyone decides for themselves if they spend money on a video game. However, be aware of two things:

1. The ecosystem around League of Legends is created in a way to have you spend money eventually. So we aware that your "rational" you is at a disadvantage.
2. Buying skins in LoL is like buying a designer outfit for a virtual character—it doesn’t make you stronger, but hey, at least you look cool while losing!

Do you think Riot’s ‘fair’ F2P model is truly fair, or is it just smart business? Let me know what you think.

Thanks for reading, and I hope you all have a great week. Best,

Christian 🙂

References

[1] Jarrett, 2021