Elo, as a system, gets recalculated after every single game result. This is why you can notice the Elo change reflected after every single game. This is as intended.
What you seem to be complaining about, though, is that after a series of wins brings your elo up high, invariably drops you back down. Guess what? this is exactly as intended. Elo isn't supposed to be a one-direction "score" where almost anyone can eventually work their way up to the top. Rather, it's meant as a measure of how good the player ACTUALLY is. Almost no one is going to be an ace on a par with the likes of Scarra, Dyrus, Froggen, Hotshot, XJ9, or any of the other famous tourney players.
Elo (combined with the matchmaker that uses it) exists as a system to help the game filter out who's REALLY good, and who just plays a lot and gets lucky over time. The basic principles:
- The matchmaker tries to set you up with players (BOTH opponents and allies) that're close to your Elo, if not the same.
- The matchmaker tries to make sure both teams are balanced, and also make sure that any given player has equal odds of being the "high card," the "low card," or just "part of the middle."
- Winning a game wins you elo, while losing loses it.
So what was happening was, those victories against LESS skilled opposing teams started bumping your elo... But then you wound up in territory you didn't belong in: you wound up going on a losing streak because you wound up facing opponents who, generally, were more skilled than you. This brought you back down, eventually reaching a spot where it was YOU that were the more skilled one, hence bringing you up.
Because ANY result from an elo-matched game (barring draws, which LoL does not have) are going to change your elo after EVERY game, this sort of constant fluctuation is going to happen. It's only, after numerous games, that a pattern emerges: you see the player constantly bounces between a relatively narrow range.
As it happens, at the end of Season II Riot let people be lucky, and simply allowed their final rank to be the HIGHEST they ever achieved at any one point, when a more accurate measure of their skill would've been the AVERAGE of what they held in the last few games.
And no, Riot's profits aren't going to take a hit from what happens. You must realize that elo is a zero-sum game; the net spread will ALWAYS have below-average players to balance the above-average. It'd be broken if they let those lucky streaks boost your elo, but NOT let your slumps decrease it; that;d result in it not really ever going any direction but "up," making elo useless for determining player skill. Besides, such a stat already exists that measures just the games you did well in: "Games won."
Riot's focus is NOT on simply people having fun for always winning. Rather, their focus is on making a viable competitive game. Making it balanced, and fair, is critical. That's what draws people in. Like with a LOT of things in LoL, as an e-sport we can make analogies to real-world sports, such as football; some teams do better, and some teams do worse. It wouldn't be as exciting to watch if even ANY of the losses got thrown out. It'd just make the roster of teams that made the playoffs look more irrelevant, since as long as any team got a "hot streak" in the season they'd basically be included, due to the list getting so crowded.
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