Since almost the beginning of its life, Cryptocurrency has been blasted as being “unreliable” and “untrustworthy” by many financial pundits. There were two sides to these statements. One side wholeheartedly believed them because of the “sense” they were making, and others felt they jumped the gun simply because it was a “new concept” that they hadn’t fully grasped yet. Fast forward to 2022, and the Crypto market has had numerous ups and downs and caused havoc in the financial sector. But what does that have to do with the gaming market? Well, people like Riot Games decided to make deals with people tied to them, and now it’s backfired big time.
What did they do? In the middle of last year, the heads of Riot got a deal made with FTX. Specifically, they made a sponsorship deal, and it was worth a lot of money. Riot would get paid almost $13 million a year over seven years if they agreed to let the Crypto Exchange site be their sponsor. All in all that sounds like a good deal. Right? But that’s where the problem comes in, many problems, actually.
The first is that FTX hasn’t lived up to its promises and has only paid half of the first payment to Riot Games. But that’s paltry compared to the other problem, which is that FTX is bankrupt, and the head of their company was arrested! Arrested for what? Fraud and money laundering. Those are some serious charges, and it got Riot to act once it happened.
They went to court and asked for the deal to be dissolved, so they never have to show FTX on their products again. So angry were they that they said:
“There is simply no way for FTX to cure the reputational harm already caused to Riot as a result of the highly public disrepute wrought by the debacle preceding FTX’s bankruptcy filing. FTX cannot turn back the clock and undo the damage inflicted on Riot in the wake of its collapse.”
What they’re referring to is that when FTX fell apart, a lot of people and places were “tarnished” due to the affiliation they had with them. There were multiple celebrities and even NBA teams that were attached to it. The CEO of FTX was also a known League of Legends player, and would allegedly play the game while doing meetings in his company. No wonder it crashed.
Is Riot the victim here? Not really, they should’ve known the risks of getting involved with something like this, but they’ll play the victim card if it helps them.
Source: Kotaku
