It has been determined that Riot Games Korea, the Korean subsidiary of Riot Games, a game company famous for 'League of Legends (LoL),' has sent most of its revenue to the U.S. headquarters under the guise of commissions and royalties. Recently, while Riot Games Korea's performance has been declining, the amount sent to headquarters is reportedly increasing.
According to the Financial Supervisory Service's electronic disclosure system on the 17th, Riot Games Korea recorded revenue of 443.2 billion won last year, a 1.0% decrease compared to 2023 (448 billion won). Last year's operating profit and net profit were 47.1 billion won and 64.6 billion won, respectively, reflecting decreases of 53.5% and 35.8% compared to the same period the previous year.
Examining specific sales items, revenue from games that include major intellectual properties (IP) such as League of Legends and Valorant reached 421.1 billion won, an increase of 2.1% compared to the same period last year (412.3 billion won). However, revenue from services such as broadcasting rights, sponsorships, and ticket sales, along with franchise revenue from the League of Legends Championship Korea (LCK) franchise fee, recorded a significant decrease of 44.2% compared to the same period last year (31.2 billion won), totaling 17.4 billion won, which has contributed to decreasing overall revenue.
Despite the decline in performance, the amount Riot Games Korea sends to its U.S. headquarters, Riot Games, is increasing. Riot Games Korea launches games developed by the U.S. headquarters in Korea and pays royalties in return. Last year's royalties amounted to 122 billion won, steadily increasing from 92.7 billion won in 2022 and 119.5 billion won in 2023.
Riot Games Korea pays commissions for IT services and other services received from the U.S. headquarters, and these commissions have also increased: ▲ 64.6 billion won in 2022 ▲ 72.3 billion won in 2023 ▲ 109.4 billion won in 2024.
Separately, Riot Games Korea also sent 98 billion won in dividends to the U.S. headquarters last year. Riot Games Korea explained that the dividends were based on the 2023 results and were paid in 2024. The company also distributed 111.6 billion won in dividends to the U.S. headquarters in 2022. Currently, the Riot Games headquarters is wholly owned by China's Tencent, making Riot Games Korea a subsidiary of Tencent.
The total amount that Riot Games Korea sent to its U.S. headquarters in royalties, commissions, and dividends amounts to 329 billion won, accounting for 74.2% of the total revenue. When including other expenses, the total amount Riot Games Korea sent to its U.S. headquarters last year exceeds 376 billion won. This is larger than the annual revenues of domestic mid-sized game companies such as NEOWIZ (367 billion won), Pearl Abyss (342.4 billion won), and WEBZEN (214.7 billion won) from the previous year.
Riot Games Korea's popular IP games continue to be popular in the country. According to GameTricks, a PC bang game statistics company, 'League of Legends' ranked first in daily share, while 'Valorant' was fifth.
A representative from Riot Games Korea noted, "Regarding royalties and other matters, we are transferring a portion of the Korean subsidiary's revenue according to contractual obligations with the headquarters," adding, "The dividends were implemented last year based on the 2023 results, which has increased the amount paid to the headquarters."