The economy of Counter-Strike and why it’s too valuable to lose

      Counter-strike: Global Offensive, or CS:GO, is the latest in a series of wildly successful first person shooter games marketed and created by Valve. Released on August 12th, 2012, nearly eight years after the release of Counter-Strike: Source. The game featured improved graphics, new maps and gameplay, different weapons, and more balanced physics. However, this new game wasn’t all Valve thought it would be. The pro eSports teams were lacking, with small prize pools and just LAN tournaments, and the overall popularity was somewhat mediocre.

      That all changed on August 14th, 2013, with the Arms Deal Update. This update added over 100 new weapon skins to the game, and allowed them to be bought, sold, traded, and unboxed through cases, all through the game itself and the Steam Market. In addition, the CS: GO community workshop was implemented just a few months later, allowing players to enter in their own skins and maps, which could possibly be featured in the new updates and operations.

The economy continues to grow

Armsdealpromo
A promo for the 2013 Arms Deal Update
      As with any chance-based commodity, certain skins became uncommon to find and reached prices nearly exceeding the monetary limit on the Steam market, which currently sits at $450. With the introduction of ultra rare knives along with the regular weapon skins, prices skyrocketed and the 10% tax on skins bought and sold throughout the market quickly became one of Valve’s best revenue stream. New operations, knife and weapon skins, and cases were added to the game over time. The number of professional teams grew, and Valve was able to sponsor and hold its first major tournament, Dreamhack 2013. Major tournament prize pools sat at $250,000, and grew to $1,000,000 by 2016. Player numbers exploded and skins continued to be bought, sold, and traded all around the world.

      Now, in 2016, hundreds of thousands of skins exist, and are likely worth hundreds of thousands, probably even several million dollars in total. Insanely rare knife or weapon patterns, i.e. one-in-the-world skins, have hit record prices of over $20,000, and some have even been offered to buy for up to $50,000. Pro player and collector inventories have been valued at hundreds of thousands of dollars. With an average of more than 10,000,000 players per month, CS: GO is one of the best moneymakers on Steam today.

An ultra rare Karambit Ruby Doppler, fetching prices of around 700-800 keys or almost $2,000 USD

      As always, people are thinking about sequels and more sequels to games, and with arrivals of newer games such as GTA V and Battlefield 1, people wonder when we will see the next Counter-Strike game. The answer: not for a long time, likely nowhere under half a decade. People have invested an unrealistic amount of money all over the world in skins and knives. As a player who only owns less than $45 worth of skins, I can’t say I would be devastated if there was a new game. However, I certainly can’t speak for the rest of the world either.

So what would happen to Valve and to us?

If Valve was to release a new competitive FPS like CS: GO, they would lose a lot of money. The first reason here is that creating a new game to top CS: GO would cost a lot of money in advertising and development. While this is true for any game, it’s a bit more complicated than that. It’s possible there wouldn’t be a new skin system in the new CS game. Valve generate millions of dollars just from skin micro-transactions. Even if Valve implements a new skin system in the new game, it would take much longer to convert CS: GO dollars into money for the new game. There is so much money invested in skins that a new Counter-Strike could cause a several million dollar drops in the net worth of all the skins in CS: GO.

As you can see here, inventories can reach hundreds of thousands of dollars, especially when stocked full of extremely expensive knives
      As the game would slowly lose players, they would likely sell off skins in huge quantities. Even though this would still represent income for Valve, the reduced buying and selling of skins would cause them to lose money. Once they lose money, major tournaments can no longer be sponsored to a large degree by Valve. This could cause many pro players to move on. People who have spent exorbitant amounts of money on skins would suddenly be draining money at a fairly substantial rate.
      The main point here is that CS: GO makes large quantities of money over time. If people moved to the new game, there would be a massive spike in skins on the market, and then the micro-transaction economy would continue to move at slower and slower rates. In addition, there is no guarantee that new game would be a success, in which case Valve would lose money for sure.
      There are a few other possibilities here. Valve could wait for 6-8 years before releasing a new game. This would be done in order to let CS: GO die down a bit, as it is still going strong. Another possibility is a new, campaign-based game like Counter-Strike: Nexon or Counter-Strike: Condition Zero. In conclusion, the chance of consistent updates, new content, and new operations being added to CS: GO over time is high, as this hand is too good to play with no money on the table. It looks like your skins will stay valuable for the time being.
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