BRANDON BECK, 28 and MARC MERRILL, 29, co-founders, Riot Games, Culver City
Business: Publisher of online gaming software
Employees: 70, including Beck and Merrill
Financials: Company has received $15 million in venture capital
Fact: The company’s first online game, “League of Legends,” has averaged 500 million minutes of playing time each month since launching in October 2009.
Brandon Beck and Marc Merrill have been video gaming buddies since they met at USC a decade ago and both knew they wanted to go into the gaming business. They took separate career paths after graduation, but in 2006 – when they saw that the traditional business model of prepackaged games was breaking down – they decided to seize the opportunity.
“We think of this time as the end of the Blockbuster model for video games and the beginning of the Netflix model,” Beck said.
Running a video game company fits perfectly with their personal interests and histories.
“We both were passionate gamers since we were kids,” Beck said.
Their goal was to publish downloadable low-price games and make money by selling accessories, such as yellow skin or special weapons for a game character.
They didn’t want to bring the concept to industry giants such as Santa Monica-based Activision Blizzard Inc. or Redwood City-based Electronic Arts Inc. and become employees, so they launched Culver City business Riot Games.
“We felt we could make more of an impact going out on our own,” Merrill said.
But developing a quality online game wasn’t easy. Not only did they have to develop the actual game software, but they also had to come up with a service platform that would facilitate the online downloads of the game and the customized add-ons. They also had to develop chat rooms.
Raising the money to do all this was also a challenge. After starting with some seed money from their families and friends, Beck and Merrill persuaded angel investors to put in $1.5 million to get the company started. Then, in 2008, just before the financial markets collapsed, they secured $7 million in venture capital financing, chiefly from Benchmark Capital of Menlo Park and FirstMark Capital of New York.
In a second round of venture capital financing to bring the company’s first game, “League of Legends,” to market, Beck and Merrill last year secured an $8 million investment, with the largest investor being Tencent, a Shenzen, China online media company Tencent.
“League of Legends” – a fantasy role-playing game – came out six months ago. Beck and Merrill are preparing to announce what they say will be better-than-expected financial results.
What’s the worst part of being your own boss? Having to fire people. “We’re pretty candid and direct about it,” Merrill said. “But we don’t like it.”
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