The 2XKO layoffs join mounting evidence that Riot Games doesn’t know what it’s doing

It appears that 2XKO’s freemium pricing model hasn’t worked out. Just under three weeks after the console 2XKO release date, Riot Games has announced a round of 2XKO layoffs. It’s not quite the 530 employees that Riot Games lost a couple of years ago, but roughly 80 employees from the 2XKO team are getting the boot. 

This is apparently because “momentum hasn’t reached the level needed to support a team of this size long term”. It’s hard to gauge the 2XKO player count, but this certainly suggests it hasn’t made enough of an impact to ensnare players in its den of monetisation.

✓ VideoGamer Summary

• Riot Games has announced 2XKO layoffs.
• The layoffs are likely due to the high costs of 2XKO’s development not paying off under the freemium model (at least, not yet).
• After the 2XKO layoffs it’s becoming clear that Riot Games is struggling to find a model that works, and its employees are paying for it.

Not quite a KO

Riot Games probably had every reason to believe 2XKO could be a hit. With other fighting games like Marvel Tokon slated for this year, it’s clear there must be some kind of market, and 2XKO got in there pretty sharpish. Well, not that sharpish. 2XKO started life in 2019 as Project L, and since then has racked up quite the cost.

Not just plenty of development time, but a high cost of starting the project. In 2016, Riot acquired Radiant Entertainment, including Tom Cannon, who would become Executive Producer for 2XKO. This was a whole new style of game for Riot, and a different kind of team needed to be brought on board.

According to an alleged former Riot Games employee, “budgets weren’t strict”, meaning there could be quite the cost expected to be recouped upon the 2XKO release date. If it were a paid-for release, it could have recouped that money in sales, but 2XKO is reliant on premium currencies to buy battle passes, cosmetics, and to fill out the slim 2XKO roster.

Even if the 2XKO player count were healthy, without a significant buy-in rate, 2XKO is going to be running at a heavy loss for a while. 

Eating its own tail

It feels like Riot Games is struggling to understand its own models. 2XKO isn’t just competing with other fighting games, but other ongoing live service games like its very own League of Legends or Valorant. This clearly already wasn’t working, as Riot Games hasn’t turned a profit since 2021.

Riot Games paints quite the picture of a company making promises it can’t keep. If 2XKO has struggled to get off the ground on launch, the 2XKO layoffs hardly inspire confidence that big things are on the horizon. 

While Riot Games has said that some will be able to find new jobs within Riot and it will provide severance to those who can’t, employees are being thrown out into turbulent waters. Layoffs seem to be the industry’s favorite word right now, as every company moves to downsize.

Certainly, none of this is the fault of the developers or artists who are no doubt being culled as part of this. Now that the game is shipped, Riot Games needs more 2XKO characters to keep the game’s microtransaction economy rolling. 

They built 2XKO, and now they’re forced out. Riot Games needs to have a hard look inward because each fumble it makes affects people’s lives.

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