Copenhagen Flames is in flames, goes bankrupt

Right when Counter-Strike gives clear signs that it’s about to take off, Copenhagen Flames, one of the best-known Danish esports organizations, has announced that it filed for bankruptcy and laid off all personnel.

This is disturbing news for the esports industry and many wonder how many other organizations are in trouble. We know what happened to FaZe Clan after they listed the company on the stock exchange. But it seems that their failure was not an isolated incident.

Copenhagen Flames’ history and financial troubles

The CEO of Copenhagen Flames announced that the club failed to attract the necessary funding to continue its existence. It was seeking an investment of around 5 million DKK, which is the equivalent of $740.000. But nobody was willing to invest that much in a club that didn’t seem to be going anywhere.

Despite being a relatively old club, Copenhagen Flames achieved very little in their seven year history. At one point, they had players like Rasmus “HooXi” Nielsen, Rene “TeSeS” Madsen, and Ismail “refrezh” Ali, who went on to do great things with other organizations.

But Copenhagen Flames did not manage to make use of the talented individuals they had around and find a success formula.

This was a team that spent a lot of time on the border between tier 2 and tier 1 CS:GO, which is not an ideal place to be as an organization that highers highly skilled players and presumably offers them competitive salaries.

Seven years is a very long time in esports. In the last seven years, other organizations won multiple Majors and dozens of S-tier tournaments. Meanwhile, Copenhagen Flames did not win a single A-tier event, with the exception of European RMR B for PGL Major Antwerp 2022.

They won a lot of B-tier tournaments, but no investor will give you close to a million dollars for being successful in what is essentially CS:GO’s third division. All the glory goes to the top 24 teams. Being ranked 50^th+ in the world offers very few benefits in this game.

Unlike League of Legends, whose esports circuit is structured in a way that allows a lot of teams to be profitable simply by being part of a strong league, CS:GO only rewards top results. Anything less than that comes at the expense of the investors.

In some cases, even top results won’t cut it. It’s not enough to win an S-tier tournament if you can’t monetize that success properly.

Header: Copenhagen Flames