On Riot’s Arcane and It’s Cost

Arguments justifying Arcane on the grounds that “Riot can afford it” are already lost. This framing positions Arcane as a cost center. Marketing heads are commonly called “Heads of Growth” because marketing isn’t supposed to be a cost center; instead, it ought to be a profit center.

It’s a beautiful show (I loved it! Thank you for your subsidy!), and Riot can and should spend $250M on IP narcissism (they’re also a private company), but that’s different from justifying it within a cost-benefit framework. It’s a common misconception that this framework requires easily observable evidence to be useful. Instead, it asks for higher rigor and a direct answer to “How could Arcane deliver over $250M of ROI relative to the best use of investment?” The higher the investment, the more intense the scrutiny level. Another way to “grow the brand” would be to perhaps dump $250M in developer subsidies to use the Riot IP, similar to Riot Forge. The cost-benefit framework doesn’t necessarily rule out Arcane’s viability—it could suggest more investment!

Maximizing the framework isn’t easy, but it leads to optimal decision-making and long-run firm growth. Remember, Riot laid off over 500 employees earlier this year. It’s feasible a more optimized use of capital could have avoided these layoffs. Any spending has real trade-offs, and we owe it to ourselves to consider their cost and benefits.