What you're touching on here is that what is probably happening is that the playerbase is shifting. Now I'll try to answer, but forgive me if I ramble a little.

The people who are leaving League are probably the casual free players who don't spend a dime on the game and have no investment in it other than the time they've played it.

This leads to a higher value-per-player where you can have a constant/growing revenue and a shrinking playerbase.

The key thing that people don't recognise is that this is not necessarily an indicator of either instability or decay of a game.

It's just an indicator that if Riot wants to regain the size of the playerbase/viewer population, some innovation is needed to get back those casual players. Or that innovation is needed to turn more players from casual to invested.

If we're talking about the 'success' of a game though - it's still a business. As long as the revenue is there, the corporate investment and the development resources will be too.

For a free-to-play game it's quite different than it would be for WoW for instance. For WoW, the relationship between players and revenue is more linear as there is an individual revenue associated to every single person. For League, that's not the case. Many players are pure cost on the business as they require server time but do not pay anything back.

And as to the arguments about how the revenue is skewed by sponsorships and the like - the key point to remember is that in that scenario what matters is the perceived value of the company and of the game.

If the game is truly dying off then as a natural follow-on the sponsors will perceive the game as having less value to them as they get their product out to less people. Thus the sponsor will lower their investment size which in turn should lead to lower revenue.

If revenue is still moving up or stable, then the following must be true: 1) League's paying playerbase isn't leaving or is growing. 2) Sponsors are perceiving League as a stable or growing investment opportunity. 3) Shift in playerbase or sponsorship/outside revenue is being balanced by the a growth in the other one. 4) Riot is magic.

TL;DR: Game death happens when revenue declines. And for a free-to-play game that is NOT dependent on player population, but instead on population of paying players and the perceived value to investors.