Counter-Strike's player economy is in a multi-billion dollar freefall
222 comments
·October 24, 2025Bengalilol
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gquere
They did this to take a bigger cut of the market because most trades happened off-platform. This new update ensures that they will sell more of their new items through their shop (contract cases) because it's going to be the only way to get the red items to fuses into "valuable" knives. They're rotten to the core.
Bengalilol
Any market maker, such as Valve, is free to establish the rules of its own "reality".
I understand your analysis, and I certainly failed to mention that point, but making the overall value less attractive to speculators is not evidence of being "rotten to the core".
gquere
They're running an online casino directed at children and have made specific adaptations to bypass legal regulations in several countries.
Xss3
They warned the gambling sites plenty of times. They tried legal action several times. Those sites were against valves ToS.
abejfehr
It seems to me that they (Valve) are complicit. Don't they provide the API that those sites use?
I don't think they tried very hard to shut them down, they could be doing a lot more.
Edit: based on what I recall from this Coffeezilla video (https://youtu.be/13eiDhuvM6Y?si=GJ_kXOJyXFTogy40&t=476)
jackgavigan
> That's also a lesson on how a closed economy (and open ones too, to some extent) can collapse based on a single actor controlling the rules. That's fair to learn.
A timely lesson!
daanbread
This doesn't explain though "why now?". All of these reasons would make sense, but they've been in legal disputes before in the 13 years since the game came out. And why would they suddenly care about players' frustration? The skins economy isn't wildly different now than previously.
leshokunin
I play CS. This is good. The gambling economy and the creator economy of people pumping their marketplaces and gambling sites is really toxic. It extracts money from kids, all for a nice skin. Making them more affordable is going to make this more fair and sensible.
uvaursi
Remember back in the day when we just downloaded skin packs from some random Geocities website with obnoxious red text on black background and after going through the install.txt written in broken English/Italian, lo and behold your AK47 now had a proper arctic camo skin and it was so much cooler?
What was wrong with that? Doesn’t gaben have enough money for his super yachts and sword collections?
bilekas
> Doesn’t gaben have enough money for his super yachts and sword collections?
Steam is still a business, but of all the gaming industry, Gaben is one of the highlights, steam try hard to be extremely pro consumer. Refunds with no questions asked if you've played less than 2 hours of the game, requiring publisher and developers to explicitly state the AI generated content thats in the game to name just 2.
Aerolfos
> Refunds with no questions asked if you've played less than 2 hours of the game,
Weaker than standard physical store consumer protections (no playtime restriction on returns, obviously), and (much) weaker than GOGs refund: 1 month after purchase, no playtime restriction.
I believe they explicitly called out the equivalent for physical stores and european consumer protection in general when they announced the policy and lack of restrictions. Which is an indirect call out at Steam, which hasn't cared in the slightest and continues to have a worse policy.
endgame
The first one was because the Australian Competition and Consumer Commission (ACCC) took them to court, but yes, they're both very good features.
justacrow
Making billions of dollars by getting kids addicted to gambling for ones and zeroes as a third
jayd16
Its about showing off to other players. You can still do local game mods just fine but that's not what people are after.
ehnto
Which is an easy technical problem to solve, but the liability of abuse when sharing user content with other users is not palatable.
It is also not impressive to others, not a status symbol, and that's actually the purpose of skins in the modern day. No one grinds 1000hrs of warframe for a skin just because they think it looks cool, they think it makes THEM look cool. They want people to be impressed that they had $2000 to spend on a knife, not that the knife skin was neat. The skin is an auxiliary component to the task.
bravetraveler
> You can still do local game mods just fine
'sv_pure' exists and says no for the official servers, sorry
Community servers are a thing, so is a worse experience. The well-maintained community days passed. We wanted curation and we got it: matchmaking and even our customization/spending.
formerly_proven
So-called skin changers (which modify what skins you yourself see in-game) are actually considered bannable cheats.
null
nottorp
It really depends on playing the games for fun or to replace social interaction.
Most lootbox gambling apps are targeted towards the latter use.
renewiltord
This provides a continuous revenue stream that allows maintenance and improvement of the game without affecting gameplay. It's entirely cosmetic. Don't participate in it if you don't want to. I played with stock skins majority of the time till a friend gifted me an AWP Redline after staying at my place. It was cool but to someone who just wants to enjoy the game it hardly matters. Besides you can go to various private servers and play with whatever skins.
lolitsobvious
No he doesn’t. He’s greedy. Saw the freak on the train the other day the fact that he would stalk a random guy who’s been criticising him just shows how weird the man truly is. This wasn’t in the US btw.
GeoAtreides
>It extracts money from kids
Not it, Valve. Valve designed and implemented the system. Gabe Newell, founder and own of Valve, is one of the people responsible for introducing gambling to children. Children who grow up and develop a gambling addiction.
Just because they made some good things doesn't mean we can't call them out on literally their biggest, ongoing, evil.
leshokunin
Yes, let’s blame the f2p game dev when there are literally streamers pumping fake platforms, doing fake wins, marketing gambling sites at kids. Valve did that
crossroadsguy
A few months ago, I realised CS:2 is more than 60GB and still barely worked on my M1 Pro Mac. I tried with these three: Whisky, Sikarigur, and even CrossOver trial. A friend suggested I should try some kind of partitioning and install Windows on that. I definitely will never try that.
CS:1.6 (which is what I still would want to play) is history unless I clasp my nose with my toes and then hang upside down from a ceiling fan and request someone to switch it on and then pray it works and keeps working. It doesn't; it crashes with flamboyance. There are some browser options, but that's another story altogether, and that too if I can find enough players there, let alone with good pings.
I finally realised that the only computer game I ever loved playing and played really a lot— albeit with gaps worth years in between after college— is just gone for me, and there's no coming back.
I guess now I am too old for all this, and maybe that's the point. Possibly someone who is on the older side will not buy these skins and whatnot; the company's focus is rightly not on us at all.
(PS. I always felt distracted with those skins; even in those younger and much younger days)
pryce
Most of the scarcity in artificial economies like CS is (just as with trading card games) manufactured and vulnerable. Seeing what happens with a rug-pull in a billion dollar artificial economy like this is a valuable lesson for anyone watching.
If/when the huge Satoshi bitcoin stash gets traded in, we'll see similar outcomes there too.
pprotas
What makes this (or cypto) economy ‘artificial’, and why is our real-world economy not artificial?
Plenty of market manipulation and rug pulls happening on the regular stock market as well
rkomorn
They wrote the scarcity is artificial.
I'd say that's true: if you have one skin, there's virtually zero production cost to making more copies of said skin.
It's not that different for many things in the real world, I suppose (eg: if you sell way above cost, then your cost is also arguably zero), but I'd say it's magnified in the digital world (or even with NFTs).
breppp
Probably the biggest possible investment for quantum computing today is all the abandoned bitcoins wallets ripe for taking
jen729w
I weep for humanity if that's the best use we can think of for quantum computing.
yard2010
Honest question why would anyone harvest Bitcoin after this? Wouldn't it lose all its value since everyone has everyone key now?
highwaylights
Why would that only apply to abandoned wallets?
In a scenario where you have a powerful enough quantum computer and are able to break the encryption you can access any wallet (I.e. the system would be done, and the value would be zero).
rkomorn
If you can get abandoned wallets, can't you just get any and all wallets?
Edit: minus some race conditions of people changing passwords/moving/emptying wallets.
cornholio
The purpose of the update is certainly not to reduce the cost of these items, but to better position Valve to earn this revenue steam, as opposed to third party scalpers. Looks like it's working.
leshokunin
They crashed the premium market and resell value. Prices down. It’s a side effect, but the direct effect to the user.
cornholio
They don't care about the resell value since they don't earn a commission on those sales.
The point is that, for as long as items can be transferred in game, they are always convertible to cash in the real world. Inserting artificial friction inside the game to increase scarcity, such as limiting convertibility of items, will drive those trades away from the game economy and into the third party ecosystem where the dollar rules supreme as the super-convertible means of exchange. So you have an induced scarcity that in effect drives third party profits.
By increasing in-game convertibility, the trades are directed to other in game assets that are a just a proxy for loot boxes, i.e money in Valve's accounts. So prices crashing in the third party market signal that players have a cheaper and more direct route to acquire them - give the money to Valve - which also generates the supply of new rare items as those loot boxes are opened.
It's a smart economic move.
Buy that doesn't mean the prices will stay low, since they can always control the overall scarcity, or add new, rarer and more exclusive items. The total amount of money they extract from "kids" is ultimately linked to their ability and willingness to pay.
galaxy_gas
I am fine with this . Every third party in this ecosystem is literal scum
gquere
I doubt it's going to change anything, this manipulated market will adapt and continue to extract money from kids. The cynic in me could even say that this change was pushed by Valve to take a bigger cut of the skin market (most trades are supervised by 3d parties). Coffeezilla investigated one of the many casino sites, there's a lot more to it.
nubinetwork
I wish I knew what happened in the past few years, because steam was supposed to ban csgo gambling and trading sites, but you can see their names plastered all over twitch every day.
frenzcan
The whole skin economy around CS has gotten way out of hand. It’s less about the game and more about speculation and gambling at this point.
bob1029
This is good news. It seems some parts of the gaming industry are starting to recover.
I contend that games like Team Fortress 2 were also ruined by the F2P loot box crap. It's not that they took anything away, but it attracted a certain kind of customer that is very unappealing to the prior base. The "hats" made me walk away from TF2. No one on average seemed serious about the core gameplay anymore. Taking away that up front cost to play cheapened the experience for the existing paying customers. It's like going from shopping at Whole Foods to Walmart.
Robinhood is your go-to application if you want to gamble legally and efficiently without (as much) fear of a single actor ruining your day.
adrr
Gambling mechanics for anyone under 18 should be banned. Children can't buy lottery tickets or hit tables in Vegas. Its crazy they can buy loot boxes that real life value.
TheRoque
FYI, this is already the case in some countries. In Belgium or Netherland, it's straight up banned, and in France we get an adapted case opening that looks less random (X-Ray: you see what's in the box before opening it, but you have to open it to X-Ray the next one)
gruez
>and in France we get an adapted case opening that looks less random (X-Ray: you see what's in the box before opening it, but you have to open it to X-Ray the next one)
That still feels like gambling, but rather than gambling on what the current case contains you're gambling on the second one might contain.
TheBicPen
And in France specifically, the first case you open is guaranteed to not be a good item. So it's essentially the same system but with an additional $2,50 entry fee
gquere
It doesn't "feel" like gambling, it's straight 100% the exact same thing but it's designed in a way that bypasses the legal words.
tdeck
This sounds like that betting game in the Stormlight Archives books that's meant to circumvent the religious prohibition on predicting the future.
atraac
So we're against checking IDs cause privacy but we also want to limit kids from accessing certain parts of the internet because gambling/porn? Have a cake and eat a cake?
mosselman
How about no gambling at all? That would work for me.
Xss3
This. It's predatory in every implementation.
DonHopkins
The cake is a lie.
mrheosuper
But children can buy a cereal box that has some "rare" card.
Retric
Being virtual or not doesn’t matter here, ban it all.
Xss3
That should be banned too. Why are you defending it with a 'but'?
matwood
When I was a kid it was baseball cards.
smt88
Close to 0% of children do their own grocery shopping and buy their own boxes of cereal
jimmydorry
And close to 0% of children have credit cards to buy these virtual lootboxes. These mechanisms prey on getting children to beg their parents to spend money.
mrheosuper
And 0% of children having credit card to buy lootbox (My country requires you to be over 18 to have one)
shlant
can't tell if this is sarcasm
beeflet
they can buy pokemon cards. To be honest, I don't think CS:GO or TF2 or the like are pro-gambling. You learn pretty quickly as a kid that the best way to get good items is through trading, not gambling.
lurk2
> You learn pretty quickly as a kid that the best way to get good items is through trading, not gambling.
Not if your dad is the one buying you the cards.
gquere
Look at the "meta-"game mechanics: you play a few games, you get a guaranteed case drop. This circa $3 case could contain anything, a $0.2 skin or a rare $2500 knife. When you open it a casino-like wheel goes over all the items and selects one randomly. There are hundreds of YT/twitch channels that open cases all day long and their target audience is children. It's gambling, and it's gambling for children.
voidUpdate
I'm honestly really not a fan of the collectable trading card type of games (MtG, Pokemon TCG, yu-gi-oh etc). You have to pay to have a chance of getting a good card, which makes the whole thing pay to win. It should be perfectly acceptable to print off the cards at home ("proxies") so you can actually make a set that works for you, without having to pay more for having specific cards that you want to complete your ideal deck.
I personally often go to the huge bins of "shit tier" cards that my local game stores have, because I like to have some pretty cards (I often use them as bookmarks), but I don't play the game itself, so the actual mechanical value of the cards is meaningless to me
EDIT: I feel the same way about things like Warhammer. I don't know about other games, but in Warhammer at least there is a limit on how powerful an overall army can be, so sure it may not look as visually good, but just having tokens that say "squad of soldiers" or "mega death tank of doom" should be perfectly acceptable too
sjw987
> It should be perfectly acceptable to print off the cards at home ("proxies") so you can actually make a set that works for you
Unless you play Pokemon TCG or MTG competitively at a national/international level, proxy cards are mostly accepted in the community.
More and more people recognise Nintendo and Wizards of the Coast (Hasbro) have money in their eyes in the card games. Pokemon cards are becoming more full-art because that's what sells for crazy markups on third party websites, and MTG are doing crossovers with whoever will sign them a license. They're both playing a risk by moving from old time players (many of whom are now leaving the hobbies) for the sake of some nostalgic "investors".
I just wish I had a local shop with a shitbin. The shops around me just sell packs (when not out of stock) and they're all marked up beyond MSRP. I just want to play the game. I don't care about art, holographic patterns and the like.
On the other hand, whenever people open packs just looking for collectable cards, they flood the market with job lots of regular cards at dirt cheap prices. I managed to get a joblot of 2500+ Pokemon TCG cards for around £20 (lots of duplicates, all regular).
vincnetas
Where do the items used in trading come from? I guess Gambling.
episteme
With the second best way being gambling. Doesn't really change anything.
dandanua
Gambling mechanics is everywhere nowadays, especially in mobile games. It's almost like an industry standard. I think the only solution is to ban all in-game purchases completely.
alberth
Would you consider old school coin operated arcades as something that should be banned?
Just curious.
vharuck
I would like to see a ban on allowing children to play machines like the Wizard of Oz ones, where you drop the coin on a shelf in the hopes it'll push off other coins or cards you need to collect. It sounds like a skill game, and I liked them when I first saw them. But then I saw how people play them with vacant faces, like slot machines. They're casino games, not arcade.
ad_hockey
They're an institution in the UK. They're in the arcades at every seaside town, and every kid plays them. Now that I have kids I actually think they're brilliant; for £2 each they taught mine everything they need to know about gambling.
- You sometimes win a bit along the way, but eventually you lose everything.
- The jackpot prizes are only there to lure you in, and you never win them. Towards the middle of the shelf are things like £20 notes. We noticed that one of them was getting quite near the edge, and might actually become winnable, but then the following morning its position had been reset to the back of the shelf.
- It's still fun as long as you're just playing with money you don't mind losing, and not expecting to come out ahead.
They even learned something about company scrip, from the tickets that come out of the machines and the ridiculous exchange rate between tickets and the actual rewards at the prize shop.
I asked my son on the way home if he'd put all his Christmas money and savings into the machine if I let him, and the answer was hell no - maybe a pound, but he didn't want to lose all of his money. Valuable lessons all round.
zharknado
Not OP, but I would ban the tickets/prizes mechanism.
Depending on how old is “old school” for you, every game in an arcade might be fine.
If we’re talking 90’s Chuck E. Cheese, maybe half the games would be potentially interesting to play without a token payout. The others round to “roll the dice,” where there is no payoff other than a gambler’s variable reward.
I think this also covers whether skill is involved. Like for me, beating my buddy at basketball shots is mildly rewarding, but smashing a button at the right time is not very interesting even if it requires a lot of skill.
Ekaros
Pinball and video games I think are something that can be allowed. Even if the model is slightly predatory in this age. At least you only win game time.
Other types of partly fake skill games surely should be banned from kids. Like crane games where there is some hidden variable. And well anything in same category.
trinix912
It's not about banning paying to play games, it's about banning the gambling mechanics done through microtransactions.
null
neilv
> Prior to the most recent update, some Knives, like a Doppler Ruby Butterfly Knife, could fetch around $20,000 on third-party storefronts like CSFloat.
How many whales are buying an in-game cosmetic for $20K for their own use?
How much of this is day-trading? How much is investing? How much is fabricated by trading platforms? How much is money laundering? How much is a criminal payments channel?
Jhsto
I asked friends who play why would Valve do this. Answers were divided to:
1. Valve wants to avoid regulatory scrutiny over loot boxes
2. Valve wants to limit prices; the Steam marketplace only allows items up to 2500 usd to be traded. By averaging out the item prices (knives drop, covert-class increases) they are able to indirectly limit the usefulness and harmful side effects (money laundering, decentralized liquidity) of 3rd party trading sites
neilwilson
So high prices induce new supply in a market to relieve shortages and the “economy is in free fall”?
Sounds like it is working as it should. Those with oversight fixing supply in response to price signals when the private system is unable to.
Wouldn’t it be nice if those in charge of the economy in the real world made the same sort of intervention.
Gigachad
The supply of digital knife skins is infinite and free. The only reason they hold any value at all is because a company artificially restricts them.
Doesn’t really tie in to actual markets involving physical item.
Frieren
> Doesn’t really tie in to actual markets involving physical item.
- A designer brand has admitted to destroying its own products. Coach confirmed that it purposely ripped up bags that were returned to its stores, even if the bags were still in good condition. https://www.bbc.co.uk/newsround/58846711
Monopolies and cartels are also well known for creating fake scarcity. Fake scarcity is bad for the economy and for consumers, only a few profit from fake scarcity at the cost of everybody else.
yard2010
Isn't it the same with USD to some extent?
weird-eye-issue
You literally just described fiat currency. Just change company to central bank or government.
neilwilson
Not like, say, houses then.
Or shares in Nvidia.
bloppe
Not really, but it's actually kinda like currency. Imagine if a government suddenly devalued all $500 bills into $100 bills, but every other denomination remained the same.
CrossVR
So a knife-themed cryptocurrency then?
nutjob2
You're forgetting the other side of the equation, demand. The reason they have value is the level of demand versus supply. The item has to have some real world value, even if that's just being able to show off.
They're are plenty of things in very short supply, bit no one wants them.
mkagenius
Interesting that a whole economy is based on fake supply constraint. Or is making butterfly knife really hard?
It seems like NFT before NFT.
raihansaputra
yeah CS skins is one of the biggest markets of digital-only-aesthetic-items before NFT came around (and now probably still bigger than NFTs). The main thing with NFTs was that there's no "central database", CS skins solely lives in Valve's database.
making a butterfly knife for Valve isn't hard (in the past Steam Customer Service duplicated items lost in scams). It's hard for the players because they have to "gamble" for it through paying keys to open cases.
TZubiri
It's hard as in "it's hard to trick or manipulate the centralized database".
Similarly making USD in a bank account isn't technically hard, but it's fucking hard to get a bank to tweak some numbers in your favour.
est
it's not a fake supply
CSGO knifes actually currency run by shadow banks providing RMB <-> USD convertion.
Google for "挂刀"
EZ-E
Can you explain the shadow banking / conversion angle? All I found was that selling knives was used to get a discount on steam balance thanks to price arbitrage.
> "Selling Knives" (挂刀) refers to the technique of buying in-game items from 3rd-party (Chinese) trading sites like NetEase BUFF, C5, IGXE, and UUYP, and then selling them on the Steam Market to obtain a discounted Steam Wallet balance by capitalizing on price differences.
I'm surprised the price difference did not disappear if people make that trade.
Source https://github.com/EricZhu-42/SteamTradingSiteTracker/wiki
omcnoe
China notoriously has intense capital controls. It's difficult for ordinary Chinese citizens to take capital out of the country. CS2 items can be bought and sold in both USD and RMB, and can be transferred between Chinese and international accounts. It's not about Steam wallet balances.
est
Both US and CN have a massive player base, they all need to buy games in their own currency
You can buy games with Steam Wallet
You can also buy/sell in-game items with Steam Wallet
Now only if someone invents a commodity with a stable price. Hmm what could that be?
stickfigure
This should be a top level comment, it is the "ah hah" that suddenly makes everything clear.
Incipient
Artificial scarcity has existed for ages. Watches, playing cards, cars, etc.
Selling 10 of something for $1000 instead of 1000 of something for $10 is not new.
Also builds brand value.
eru
See the discussion around the supposedly lost Van Gogh painting, eg at https://news.artnet.com/art-world/van-gogh-lmi-group-2602847
Nothing about the painting itself would have changed, but its market value depends very much on whether Van Gogh painted it.
pols45
All this froth on the ocean surface is only possible in an economy where household net worth has been inflated to 150 Trillion.
omnimus
Yeah the measly peasants should have never gotten their hands on such luxuries as game knives skins.
colechristensen
A lot of real economies are based on fake constraints. Or the constraint is a closely held secret that's pretty arbitrary and not based on any grand amount of skill or effort.
TiredOfLife
It is NFT. But because it's Valve its actually good. Because of reasons.
zdc1
CS is wild. I used to play and have like 40+ cases from free post-match drops. Because those cases are no longer supplied, the prices have been creeping up and to the right for years now; from $0.40 to $20+. I don't even know why people still buy these, but I will basically never have to pay for a Steam game again.
imdsm
Could you explain more? I played CS 1.6 back in the day, and then we moved onto CSS, but what is it like these days?
adriatp
It seems more like a market strategy than an economic collapse. Afterall they control the skin market, and this will lead more players to buy very expensive skins (cheaper than the day before yesterday, but still quite pricey). Also, not all skins went down in price, the red ones from collections with gold skins even increased in value.
novoreorx
Took me sometime to understand why these items can be so expensive, The CS trading market makes NFTs look like child's play.
pnt12
That's hyperbolic. You had high profile celebrities advertising NFTs, and stuff valued at millions, that's a whole other scale.
Skins have their place when they're modestly priced, as they also have quite a modest impact. But the whole gambling, artificial restrictions and trading is quite suspicious indeed.
stodor89
Counter-Strike's pLaYeR eCoNoMy shouldn't have been a thing to begin with.
I bet this is an on-purpose move by Valve, and I view this as a sane action. [1]
Having a game where some players only play in order to win money is, for sure, a no go. If the game is fun, then players will keep on playing it. It may also keep some money thirsty (sometimes very toxic) people at the gates.
It is also smoothing players' frustration and shopping-spree habits in order to obtain a rare item. If you have the ability to trade N rare items for another rare item then you quite surely may obtain any cosmetic item you want for a much lower investment (less boxes to open). The 'grey market' will adapt to this new value.
That's also a lesson on how a closed economy (and open ones too, to some extent) can collapse based on a single actor controlling the rules. That's fair to learn.
[1] EDIT: and probably a preemptive protection for any future legal threat (as some countries tend to prohibit money gambling in games)