Ludicrous $6 billion Counter Strike 2 skins market crashes, loses $3 billion overnight — game update destroys inventories, collapses market

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One small update has crashed the CS2 market.

Counter-Strike skins market crash cover
(Image credit: Getty Images (modified))

Valve pushed a "small" update to Counter-Strike 2 yesterday that mostly consisted of minor optimization tweaks, along with changes to how hard it is to acquire certain skins in-game. A lot of you will be familiar with how Counter-Strike's market works — it's player-to-player, meaning anyone with a rare item can sell it to another person for real money. These transactions often land in the hundreds of thousands range for the most desirable items, with an AK-47 skin even crossing the $1 million mark recently. Therefore, a sudden change dismantling the entire economy could not be foreseen.

[PSA] INTERNATIONAL LIST OF SUICIDE HOTLINES *LOVE YOURSELF, IT’S GOING TO BE OKAY* from r/csgomarketforum

For the average player, this is anything but a welcome change, especially if you're someone new to the game; it lowers the barrier of entry and even makes skin trading less intimidating for the inexperienced. The issue arises with the sharks at the top of the chain, who've invested millions of dollars in the market, treating it like any other exchange that carries commodities. They woke up to a significant chunk of cash wiped from their portfolios overnight, which, whatever you think about virtual items, is startling.

According to Price Empire, the skin market peaked at over $6.08 billion right before the update was announced, then fell to a low of $3.08 billion, erasing roughly $3 billion in real-world money. For finance and crypto bros, this might not be a big deal, and there's community dialogue suggesting mass hysteria has blown this ordeal out of proportion, much as it does in the stock market. That said, numerous notable figures in the space have publicly expressed their concerns and even exited the market.

There is no real way to tell whether the skins economy will fully recover from the crash. After all, these are virtual items that, unlike crypto that can be used to pay for things in reality, hold no real value outside of Counter-Strike. In fact, Valve has often been accused of failing to regulate the market, allowing rampant gambling to flourish, and of decade-long complaints about cosmetics becoming too expensive for casuals — so such a stringent change could be a sign of things to come.

The truth is that these items were never truly "yours" to begin with; Valve makes that pretty clear in the terms and conditions, which state that any content or service purchased from Steam is licensed to you, not owned. At the end of the day, we can all argue whether Counter-Strike cosmetics fall under that jurisdiction, but, on the surface, they're just in-game items that are ultimately controlled by Valve. Now, how much you trust the company to do the "right thing," well, we'll leave that up to you.

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Hassam Nasir
Hassam Nasir
Contributing Writer

Hassam Nasir is a die-hard hardware enthusiast with years of experience as a tech editor and writer, focusing on detailed CPU comparisons and general hardware news. When he’s not working, you’ll find him bending tubes for his ever-evolving custom water-loop gaming rig or benchmarking the latest CPUs and GPUs just for fun.

12 Comments Comment from the forums
  • Notton
    If you're going to "collect" stuff, collect physical items, like baseball and game cards.
    Even if it goes up in flames or gets drenched in flood waters, home insurance will still cover it... or at least they should cover it...
    Reply
  • coolitic
    The fallout was indeed hilarious.

    And the funniest part is that this change was likely (in-part) motivated by regulator-pressure to reduce the "gambli-ness" of CS knives, and, if so, it basically blows out the default-accusations of "corporate greed" from skin-copers, while also making Valve immune to law-suits.

    A funny bit that I read recently:
    Every 5 years or so someone in Valve's accounting department realizes they're one mistake away from accidentally becoming a bank so they do something really funny
    Reply
  • acadia11
    Notton said:
    If you're going to "collect" stuff, collect physical items, like baseball and game cards.
    Even if it goes up in flames or gets drenched in flood waters, home insurance will still cover it... or at least they should cover it...
    Digital assets are real. The fact our entire economy including fiat currency are only based in the perceived value of an item. And that perception is driven simply by someone else’s need to acquire it. These metaworlds will likely come in to conceptual rules applied in the physical world such as insurance some entrepreneur ing individual will offer such a thing. The only concern about metaworlds is it a bit more susceptible to the whims of the creating diety in a fairly explicit way, ie the corporation who decides to introduce an update that crashes a market for … whatever reason. These things happen in the physical world as well except you are simply less understanding of the machinations of the ruling parties and elites. Insert the land of the free today and the great pilfering a mist in a very real monetary way that either the masses don’t care about or don’t understand what’s actually happening as they are distracted with placations of social wars, real wars, illegal invasion propaganda … culture wars or whatever else keeps the average person distracted and unaware of theft the wizards are executing right in front of their eyes.

    So with that said the digital and physical are not different just the players and their roles may be different. But the game is the same.
    Reply
  • SSGBryan
    Found the crypto-bro.....
    Reply
  • thestryker
    coolitic said:
    And the funniest part is that this change was likely (in-part) motivated by regulator-pressure to reduce the "gambli-ness" of CS knives, and, if so, it basically blows out the default-accusations of "corporate greed" from skin-copers, while also making Valve immune to law-suits.
    First thing that popped into my head when I heard this news was "I wonder if this was a regulation dodge". It does make the market more fair, but it's been this way so long I doubt Valve would have done it just for fairness sake.
    Reply
  • Notton
    acadia11 said:
    Digital assets are real. The fact our entire economy including fiat currency are only based in the perceived value of an item. And that perception is driven simply by someone else’s need to acquire it. These metaworlds will likely come in to conceptual rules applied in the physical world such as insurance some entrepreneur ing individual will offer such a thing. The only concern about metaworlds is it a bit more susceptible to the whims of the creating diety in a fairly explicit way, ie the corporation who decides to introduce an update that crashes a market for … whatever reason. These things happen in the physical world as well except you are simply less understanding of the machinations of the ruling parties and elites. Insert the land of the free today and the great pilfering a mist in a very real monetary way that either the masses don’t care about or don’t understand what’s actually happening as they are distracted with placations of social wars, real wars, illegal invasion propaganda … culture wars or whatever else keeps the average person distracted and unaware of theft the wizards are executing right in front of their eyes.

    So with that said the digital and physical are not different just the players and their roles may be different. But the game is the same.
    I'm not saying you shouldn't collect digital items for fun.
    What I am saying is you shouldn't count on them as investments.
    Should something happen to them, there's no home insurance that would cover that and you pay out of pocket. (or you can back them up)

    Besides, if they are digital, you can duplicate them endlessly and have multiple backups. If you can make unlimited 1:1 copies, they hold no value due to oversupply.
    It is very similar to Ruby and Diamond prices crashing after they were successfully made in a lab.
    Reply
  • acadia11
    Notton said:
    I'm not saying you shouldn't collect digital items for fun.
    What I am saying is you shouldn't count on them as investments.
    Should something happen to them, there's no home insurance that would cover that and you pay out of pocket. (or you can back them up)

    Besides, if they are digital, you can duplicate them endlessly and have multiple backups. If you can make unlimited 1:1 copies, they hold no value due to oversupply.
    It is very similar to Ruby and Diamond prices crashing after they were successfully made in a lab.
    Think you missed the point of my post. All investments are risky, there is no such thing as a guarantee only the math of probabilities. But that wasn’t the point either which was it’s all the same game.
    Reply
  • OleMurpho
    To the author, Mr. Nasir, I would like to point out a grammatical error in your article.

    In the third paragraph you link to a reddit comment discussing how this is a positive change for new players with the statement, "For the average player, this is anything but a welcome change..."

    You should reword this to state,"For the average player, this is nothing but a welcome change...". If you state that this change is anything but a welcome change, you're stating that it is not a welcome change.
    You should say that it's nothing but a welcome change, so that it implies that this change can't be anything besides welcome; at least in the context of new players which your reddit comment references.
    Reply
  • Jabberwocky79
    ^^ That statement stumped me for a minute as well.
    Reply
  • winterfox
    Yea thank you for pointing this out. That error caused some real cognitive dissonance while I was wondering why new players would care.
    Reply