Speaking at GDC Europe in Cologne, Ubisoft senior online game supervisor Teut Weidemann argued that Riot can easily double League Of Legends' revenues while driving away 60% of its current player base.
Using Riot 2013's financial results, Weidemann noted that the average League of Legends user spends just $1.32. "User acquisition with ARPU that low is hard," he said. "I haven't seen a League of Legends banner ad on the internet, and that's because they can't afford to."
Weidemann then used his knowledge of the industry along with some clues from his colleagues at Riot to calculate that only 1.2 million of LOL's 32 million players are paying customers. Each paying customer spends around $35, netting Riot $42 million per month but only due to the game's massive reach.
Weidemann confirmed from people working at Riot that LOL's conversion rate is indeed less than 5%.
"5% is pretty bad," he affirmed. "My conclusion was that League of Legends gives too much away for free and it doesn't sell power. Riot could sell exclusive premium champions - they could, but there would be a Riot in the customer-base... If they let me change League of Legends I could double its revenue, and they could afford to lose 60 per cent of the customer-base and still do twice as much money."
In the end, Weidemann advises developers not to adopt League Of Legends' monetization strategy. "With 70 million people, if 5 per cent pay, that's a whole lot of money," he said. "For Riot [raising conversion rate] is not a priority, but if you want to adopt its monetization system you should ask yourself if can you do that successfully."
"This is my key recommendation here: League of Legends is an exception. It should not be a role model for your monetization system... You shouldn't look at League of Legends if you want to learn about good monetization."
"Riot can afford it. You might not."