Millions of people from all over the world play Counter Strike Global Offensive. This turned the first-person shooter into one of the most popular video game at the eSports, on par with League of Legends and Dota 2. Valve made a lot of money from selling and marketing the game, but recently found another source of revenue. Weapon skins trading grew into a huge industry, estimated at more than $2.3 billion.
The company came under fire from the Federal Trade Commission and private individuals who sued them. Valve was accused of encouraging and profiting from an industry that encourages underage gambling. After the initial revelations, they took a defensive stance and declined any involvement, without going beyond statements. Weapon skins trading quickly grew into a gambling operation, with millions of transactions performed every week.
An Avalanche of Counter Strike Global Offensive Lawsuits Hits Valve
Initial complaints went unnoticed, but things took a turn for the worse when Counter Strike Global Offensive players filed lawsuits. Many claim that they were allowed to buy skins and gamble as minors, in the absence of any obstacles. The Steam Marketplace was the place where these transactions were made and the company that produced the first-person shooter cash in heavenly. Apparently, 10% of all these transactions went to Valve, which explains their reluctance to act fast.
The vast majority of those who play Counter Strike Global Offensive at casual level are minors. Even many of the professionals are yet to turn 18 years old. Not surprisingly, the vast majority of those who found the prospect of buying and selling skins attractive were also minors. The plaintiffs in some of these losses stated that they bought skins both as minors and adults. Lawyers picked up on the scent and try to elevate the lawsuit to a class action, which could bring Valve on the verge of collapse.
Valve Cracks down on a $1 Billion Industry
A lot is at stake at the moment and Valve decided to take firmer action in the wake of mounting lawsuits. While they don’t deny the fact that they make money as a result of weapon skins trading, they deny any knowledge of underage gambling. Now the company is ready to go a step further and crack down on the lucrative business. It all starts with them sending notices to those websites that facilitate or operate these transactions. They will be notified to cease-and-desist their activities immediately.
It is only fair to assume that the industry will try to fight back, but without Valve’s support they will have a hard time. The company takes this threat seriously and is willing to go to great lengths to prevent the scandal from escalating. It has all the instruments needed at its disposal, since it is the one that owns both CS and Steam.
At the time of writing, there are still websites that make a steady income from trading weapon skins. It is not yet clear whether Valve keeps taking 10% of these transactions and what happens with the money. On the bright side, the company is in the clear as it did its part and took a firm stance. The vast majority of players are indifferent to this situation, but the community is polarized. Many feel like their rights are being infringed, as they can no longer spend their own money on skins.
Shockwaves throughout the ESports Industry
The consequences of this radical decision from Valve go beyond the community of Counter Strike Global Offensive players. These are obviously the ones affected directly, but there are other things at play and the entire eSports industry is reeling. For a brief period of time, it looked like video games and betting could go hand-in-hand for the benefit of both. There are plenty of bookmakers such as William Hill, Betfair and Pinnacle Sports who allow their members to bet on video games.
The fact that Counter Strike Global Offensive skins will no longer be available for sale won’t end this practice. However, many of the tournaments that were hosted by various companies might disappear in the absence of financing. It is hardly a surprise that many websites dwelling on skins selling were big supporters of CS GO tournaments. Many will be driven out of business, while others will find new ways to monetize their products, outside tournaments.
The unintended consequence of this scandal involving Valve is that Twitch has also prohibited skin gambling. The channel used by millions of people every day came out with a statement, clarifying matters for its mambers. It is now strictly prohibited to promote any type of skin gambling for Counter Strike Global Offensive on Twitch. This is yet another serious and potentially lethal blow to the skin gambling industry and it can bring it to a screeching halt.
Fears of Federal Trade Commission Fallout
Valve representatives eventually realized that things have gotten out of hand, but their actions could be too little too late. The industry has generated a lot of money for a lot of people and there are plenty who are afraid of losing this cash. There is no shortage of lawyers willing to take up cases and people ready to go to court. Everyone has suddenly realized that there is money to be made by suing Valve and the skin gambling websites.
The Federal Trade Commission is also expected to take a close look to determine whether there were any violations. As long as the industry stayed relatively small, nobody paid attention, but when it crossed the psychological threshold of $1 billion, things changed for the worse. Many of those who lost their weapon skins also contemplate the possibility of asking for a refund.
Counter Strike Global Offensive schemes were the ones that sold like hot cookies, but they were not the only ones. Dota 2 is one of the most popular MOBA games out there, with millions of active players. Several websites made a business of selling skins for this game, so the ramifications go beyond CS:GO.