According to the game's director, the $500 League of Legends Ahri skin wasn't meant for the average fan, but instead 'players who are willing to spend $200 a month on their hobbies'

pcgamer.com:

Riot recently came under fire as League of Legends fans pushed back against its introduction of a cosmetic that cost up to $500. The skin was made to celebrate renowned League player Faker for being the first person inducted into Riot's new Hall of Legends, but lots of players were upset that the price barred so many from celebrating the momentous occasion. 

Since then, we talked to the game director, Pu Liu during a Q&A at Summer Games Fest, where the issue of sky-high cosmetics prices became the topic of discussion, and from the sound of things, the company doesn't want to make a habit of it. 

«I think there are people who are very upset about [the Ahri skin],» Liu says. «And I also think it's kind of justified because when you have a 14-year-old product that starts doing new things that are expensive, when [players] are used to everything living under a certain price point, all of a sudden, it can be kind of jarring.» But that still doesn't explain why it was so expensive. After the controversy League of Legends released a video addressing the complaints where a couple of devs explained the price tag was to cover the costs of esports and celebrate iconic pro players.  

The pricing for the majority of League's bundles and skins isn't outrageous. The Champions Bundle costs 3,410 in-game currency, which is $35/£35, while the Digital Collector's Pack is 2,520 ($20/£20). While it's not cheap, it does sit around the same ballpark price that many games charge for cosmetics like Overwatch and Valorant. This doesn't mean that cosmetics that go for upwards of $20 should be free from scrutiny, but these prices also aren't very surprising. 

Riot has also made it clear that the skins it sells are purely cosmetic, "[League] is competitively orientated, we only sell cosmetics, we don't want anything that even infringes upon pay to win or pay for power," Liu says. But sometimes a cosmetic skin can inadvertently provide a marginal improvement. There's been Frostfire Annie, who