Esports org Copenhagen Flames files for bankruptcy
Danish esports organization Copenhagen Flames has announced that it has filed for bankruptcy and laid off all personnel.
In a statement posted on Copenhagen Flames’ website, CEO Steffen Thomsen explained that the decision was made after it failed to find funding to sustain operations for the club.
Only two weeks ago, Copenhagen Flames had announced that they were seeking an investment of 5 million DKK ($740,000 USD) to balance their books and launch a series of initiatives to ensure their profitability for 2024 and beyond.
“For the past six months we have worked tirelessly to avoid this outcome but unfortunately we have failed,” Thomsen said. “And for that I am deeply sorry. In the end it is my responsibility and I feel like absolute shit that it has come to this.”
Launched in 2016, Copenhagen Flames proudly described itself as the “Ajax of Esports” because of its ability to develop young CS:GO players and sell them for a profit. In 2021, their CS:GO team, made up of virtually unknown players on the global stage, qualified for PGL Major Stockholm. A few months later, it repeated that feat by qualifying for PGL Major Antwerp, where it even reached the playoff stage.
Shortly after the Major in Belgium, the team fell apart as the players joined teams like G2, Heroic and Fnatic. The organization quickly assembled a new lineup of Danish players but success was hard to come by, with the team unable to qualify for either IEM Rio or the BLAST Paris Major.
“It is no secret that esport clubs have been and are struggling financially and especially the past six-nine months have been absolutely horrendous for us in terms of securing partnerships of any kind, both in terms of extending already existing ones as well as gaining new ones,” Thomsen said.
“Marketing budgets are getting slashed by brands in a lot of businesses because of the global financial crisis and so our most important source of income has been reduced in a huge way and we have struggled to close out even smaller partnerships. Missing out on the past two Majors hurt us as well as we set a goal of going to at least one Major each year, to secure income but also for brand recognition, exposure, player sales and the gains in followers across all social media platforms.
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“And again, we know the risk of this approach, you can’t count on results in sports and we have always been looking to build a club that was independent of sporting income. But to get to that stage you need a solid foundation built from sporting success – at least to some extent.”
Esports winter takes another victim
Copenhagen Flames are the latest organization to cease operations during this period of economic turmoil with rising inflation and high interest rates. On April 17, Tricked, another Danish esports organization, filed bankruptcy after over a decade in the business. Two months earlier, it had closed down its professional esports division, citing the inability to “meet the ambitions in the current market.”
Thomsen said that, after dropping the Fortnite roster at the start of this year, Copenhagen Flames began looking for ways to keep the organization afloat. However, talks with potential investors broke down due to how “the esports scene has developed the past year”.
Copenhagen Flames have three teams, all competing in CS:GO. (In addition to a men’s roster, the organization fields a women’s team and an academy lineup). Danish AWPer Asger ‘Farlig’ Jensen, who played for the men’s squad, described this as a “sad day” for esports. He did not state what the future holds for his team, which is currently ranked 55th in the world.
Thomsen noted that the organization will look after the best interests of players and staff during the upcoming process. Shutting Copenhagen Flames down and letting go of everyone, he added, “feels extremely disappointing and heartbreaking.”
“I am immensely proud of what we achieved during these past 7 years without ever compromising our values, our mission or our conscience,” he said. “We never looked for shortcuts or the quick buck. We have treated everyone with respect, honesty and transparency.
“That is what Copenhagen Flames was. Something you can trust, something to aspire to, look up to or want to be part of. That was the vision in 2016 and despite this ending, I know in my heart that we became and were exactly that.”