Why Riot Games is betting big on ‘Valorant’ with the VCT Team Capsules

On February 21st, Riot rolled out the Valorant Champions Tour (VCT) Team Capsules, a line of team-branded items available for purchase inside the popular first-person shooter game “Valorant.” Every team participating in Riot’s global “Valorant” ecosystem is allotted its own set of in-game items, with teams getting half of the proceeds from those items’ digital sales. Capsules will be sold for 2,350 “Valorant” Points, or roughly $25, a pop. The items will remain on sale until September 10, 2024.

“We’re expecting them to be very successful, to be well in the eight-digit revenues,” said Leo Faria, global head of “Valorant” at Riot Games. “The thing we don’t know yet — and this is why we’re kind of looking at this year as a big experiment — is how much fandom for teams drives monetization.”

In acknowledgment of that experimental nature, the program currently guarantees each team a minimum revenue share, though Riot representatives declined to share the specific figure. Last year, championship-winning teams were given the opportunity to put their logos on in-game “Valorant” items, gaining a revenue share of over $33 million from the deal. 

“We have gross sales, then we take all the hard costs that are related to producing the skins, and we have things like taxes and platform costs and transaction fees. So we detect that, and from there, we share 50 percent to teams,” Faria said. “We wanted to do it sustainably, and that’s why we cover those costs — but we also want teams to have all the upside. So, as the skins perform well, there’s no limit on how much we share.”

The VCT Team Capsules represent the first time Riot Games has opened up an in-game revenue share opportunity to every team participating in one of its esports. Amid an esports winter marked by reduced advertising spend and esports org contraction, this sort of revenue share has become increasingly necessary to keep teams afloat.

“I think these sorts of collaborations are one of the most important things we can do for the space, not only because the rev share is great and all, but I think it also shows a commitment from the developers to the esports scene,” said Matthew Eriks, an associate creative director at Team Liquid who worked on the project. “It’s healthy for the space to have that collaboration and not just feel, as it does sometimes, that the developers have complete ownership. Which, in reality, they do, but it’s nice to feel that the orgs get some say.”

As Riot refreshes its esports ecosystem to make it more enticing for participating teams, it makes sense that the publisher is leaning into “Valorant” in particular to make the requisite changes.

After all, “Valorant” is Riot’s fastest growing esport, and perhaps its most promising in the long term. “Valorant” viewership is steadily rising; brands like Mastercard are buying into the game; and esports teams are practically jumping to get involved. At the same time, viewership of Riot’s older esport, “League of Legends,” has declined thus far in 2024, with two North American teams exiting the game last year. At the Game Awards, “Valorant” has beaten out “League of Legends” for the title of Best Esports Game for the past two years.

Some observers also believe the “Valorant” ecosystem is more sustainable than other esports at Riot and beyond. The “League of Legends” ecosystem, for example, was built on the older franchise model, which required participating teams paying multimillion dollar franchise fees to buy in. The collapse of other franchised leagues such as Activision Blizzard’s Overwatch League — and team owners’ resulting lawsuits against the publisher — has demonstrated the flaws of this previously popular franchise model. 

In contrast, the more open ecosystems of esports such as “Valorant,” “Counter-Strike” and “Rainbow Six” are appearing increasingly attractive to teams and publishers alike. Esports teams such as Sentinels have taken note of Riot’s growing focus on “Valorant,” increasing their own investment in the game and its ecosystem accordingly.

“My team had identified ‘Valorant’ when it was in its infancy, even before the beta, as a game that feels like if Riot gets this it, it can be a great viewership game and a great esport,” said Sentinels CEO Rob Moore. “Riot, to their credit, has done the best job of really developing esports as something that’s integral to their business, and a high priority of their company.”

The VCT Team Capsules have already been a success for both Riot and the teams participating in its ecosystem — anecdotally, anyway.

Within a week of sales opening, several teams had already reached their yearly minimum guarantee, according to Faria. The Riot “Valorant” head declined to specify those guarantees, but teams’ minimum payment for in-game item sales in 2022 was reportedly $300,000, per Dot Esports.

As for Sentinels players, they’ve leapt into the task of selling the items with relish, engaging with fans on social media to encourage them to buy and flashing them ostentatiously during broadcasts.

“On that level, it’s been an absolute home run,” Moore said. “You couldn’t have had more ways that celebrities and fans of the game have all come together to have fun with this whole concept. So, from our standpoint as a partner, it feels like it’s going spectacularly well.”