FaZe Clan, one of the prominent esports organizations, is grappling with substantial financial losses due to its involvement in the competitive VALORANT scene. Nordan "Rain" Shat, a member of FaZe Clan, recently shed light on the financial struggles faced by the organization, disclosing that they are losing a staggering $318,000 each month solely on their VALORANT team. This revelation has sparked concerns about the viability of VALORANT esports and raises questions about the allocation of resources within FaZe Clan.
FaZe Clan is losing over $300,000 a month running VALORANT teams
In a video released on May 24, Rain emphasized the financial strain FaZe Clan endures while managing its esports teams. According to Rain's breakdown, the VALORANT male team alone contributes to a monthly loss of $224,000, while the female team adds an additional $94,000 deficit. These figures indicate that FaZe Clan experiences an overall monthly loss of $756,000 across all esports endeavors, with the VALORANT division accounting for nearly half of the total expenditure.
Challenges Faced by VALORANT Teams
It comes as no surprise that esports organizations are yet to witness profitability in their VALORANT teams. Since its release in June 2020, VALORANT has been in a state of flux, gradually establishing its competitive stability. However, amidst the evolving landscape, player salaries have skyrocketed due to increased interest from top-tier esports organizations. While the financial loss incurred by FaZe Clan is significant, it underscores the organization's dedication to investing in emerging esports titles and the associated risks involved.
Profitable Endeavors and Other Losses
Rain's disclosure reveals that FaZe Clan's profitability is primarily observed in its PUBG Mobile and Call of Duty divisions. Notably, the partnership between FaZe Clan and Atlanta Esports Ventures contributes to the success of the Atlanta FaZe team. PUBG Mobile generates a monthly revenue of $87,000 with a lower monthly cost of $37,000 compared to other teams. Conversely, FaZe Clan experiences a monthly loss of around $70,000 each from its involvement in CS:GO, Halo Infinite, and PUBG.
Critical Voices and Unanswered Concerns
Rain's candid remarks also shed light on the internal dynamics within FaZe Clan, specifically questioning the financial decisions made by the organization. He highlights the substantial investment in esports and personalities like NICKMERCS while neglecting to adequately compensate other key contributors to FaZe Clan's identity, such as Rug, Alex, and Teeqo. These concerns, coupled with the recent layoffs within the organization, have fueled discontent and demands for transparency.
Also read: FaZe Rain Claims FaZe Clan Incurs Significant Losses on Esports
FaZe Clan finds itself grappling with significant financial losses as its VALORANT teams contribute heavily to the overall expenditure. The challenges faced by VALORANT esports and the soaring player salaries pose hurdles for profitability. As FaZe Clan navigates these financial struggles, there is a growing need for the organization to address the concerns raised by its members and ensure equitable treatment for all individuals who have played pivotal roles in shaping FaZe Clan's identity.