Cloud9 have revealed that they currently lose millions of dollars every year running a CS:GO team.
In an interview with DBLTAP, Cloud9 president Dan Fiden revealed just how much it costs to maintain a team in CS:GO.
He states that not only do Cloud9 lose over $1 million per year on their CS division, but that he believes this to be the case for any organization operating a top-tier team in the game.
“Let’s be clear, Cloud9 loses between $1M and $2M every year on our CS operation, and I would challenge any top 20 team in CS to prove to me that they’re not losing a similar amount.”
Meanwhile, he revealed that “Cloud9 makes more money from Rainbow Six than we do from CS right now,” despite Rainbow Six being a smaller esports title.
The reason for such a large loss is apparently the disparity between the costs of running a team, including player salaries, support staff, and housing, and the amount that the organization can actually earn from participating in CS leagues and tournaments. Meanwhile, even drawing sponsorships for Counter-Strike can be tough due to the nature of the game.
“We received roughly $70K from ESL last year, and that’s the biggest league revenue distribution we've received for CS. We spend more than $70K on CS in a single month. On sponsorships, we have, and continue to receive, requests from our partners to be excluded from CS because the content is edgy.”
Fiden also explained that the quality of CS:GO as an esport is why Cloud9 is willing to put so much money into the game.
“We love CS and believe in CS, which is why we’re not being risk averse about CS. We’re putting millions of our own dollars — Jack’s money, my money, our investors’ money — into doing the harder thing, which is trying to make it work.”
Of the biggest esports games, CS:GO has historically had the least oversight from the developers. Titles like League of Legends, Overwatch, and Call of Duty have all now moved to franchised leagues operated by their respective owners, while Valve are still only involved in the bi-annual Majors in Counter-Strike.
While the hands-off approach and open circuit has been praised by many viewers, one of the major benefits of franchising is the security and financial benefits it offers to the league and the teams involved.
Though CS:GO isn’t going to have developer-controlled franchising any time soon, the coming year will see a move in that direction from major tournament organizers. The new iteration of ESL Pro League, the new BLAST Premier circuit, and the new ‘B Site League’ by FACEIT will all reportedly push for greater commitment from teams in return for guaranteed spots and revenue shares. Cloud9 have reportedly committed to the B Site League.