March 17, 2019, marked a historical day for Bulgarian Counter-Strike scene, as Windigo, then ranked only #30 in the world, won the World Electronic Sports Games (WESG) $500,000 tournament, which was at the time the third-largest prize in Counter-Strike history.
Windigo's run through WESG 2019 was one for the books, as the Bulgarian squad not only topped their group, which featured ENCE, Movistar Riders and Fnatic, but later edged past MiBR (then ranked #5 in the world), swept G2 Esports (then ranked #17) and closed out the tournament with a 2-1 win over AGO in the grand finals. Their achievement, which marked the biggest and most prestigious title win for the Ukrainian esports organisation, however, also marked the day when everything started to fall apart.
Since winning WESG 2018, Windigo failed to produce any noteworthy results in the competitive CS:GO scene outside of runners-up finish at United Masters League Season 1, LOOT.BET/CS Season 2 and gold medal from Moche XL Esports 2019. What's more, Windigo ended up pulling the plug on their CS:GO project in October 2019, only seven months after their title-winning run at WESG. The announcement was shocking, though not because Windigo were doing well in the months that followed their run at WESG, but rather because of the announcement that it was cash-flow issues that ushered Windigo to close the doors.
As cited by Windigo management, the team had not received any payments from several event organisers, including WESG, which caused serious financial issues. Artur Yermolayev, Windigo's founder and co-owner stated that team needed only U$125,000 (%25 of their total prize from WESG) to keep their boat afloat, explaining that after winning WESG, the team demanded better conditions and higher salaries, which was too big of a burden for the organisation, who had practically no sponsors to finance the changes.
"The players got a big confidence boost after the tournament, they understood that they were performing at a different level," said Mr Yermolayev.
"In order to keep the squad, we had to increase their salaries. We were lacking cash flow, and the main reason for that was the [WESG] prize; it was the largest prize our organization had ever won. This would have been the cash flow that would have allowed us to stay in the game."
In a Reddit post, which announced Windigo's closure, Maksym Bednarskyi, who is the other cop-owner, stated that the unpaid prize money had forced the organisation's hand, while pointing out E2Tech (which ran Moche XL) and ESL as two other organisers who failed to fulfil their duties and pay Windigo their tournament winnings.
E2Tech were quick to respond and rejected Windigo's accusations, claiming that the payment has been made and returned by the bank due to "unknown reasons". Similarly, a representative of Alibaba (Chinese company behind WESG) claimed that the payment has been made, but sent back multiple times. Seemingly, both event organisers had run into the same issue; a bureaucratic problem caused by the fact that Windigo had bank accounts in different countries.
"These problems are pretty normal for the CIS region when the legal address of the organization is located in a different country, usually Hong Kong or Cyprus. In our case, it was Hong Kong," Mr. Yermolayev explained.
"The management was working out of Ukraine, the players were based in Bulgaria and bootcamped in Ukraine, and the funds were supposed to be sent from China."
In a bid to overcome this issue, Windigo created new bank accounts, but by then the esports organisation had already closed its doors, meaning that all expenses came out of the pocket of the old management. Despite fixing their issues with bank accounts, new obstacles continued to emerge. It all started with Hong Kong protests, which reportedly delayed WESG's payments, although the organiser never explained why. Later it was the COVID-19 outbreak, which brought every sector of the Chinese economy to a halt. Since China entered the coronavirus lockdown, the communication between the two parties got even worse, as stated by Windigo, who claimed that they were promised to receive the payment after February 24, but since the deadline expired, WESG have remained evasive when asked about the updates.
"We know that banks in China are open again and we understand that the company is functioning, even if some people are working remotely," Mr Yermolayev says.
Mr Yermolayev also questioned WESG’s continuous requests for information and documents, including player payment guarantee letters and team contracts even after other teams which were involved at WESG 2018 already received their prize money share.
"It's a standard business practice to send a confirmation of payment. This way, even if there is some sort of a delay, we can approach our bank and explain to them the situation, and they can try to resolve the issue."
After months of failed attempts to get compensated for their title-winning run, Mr Yermolayev stated that Windigo are considering to take legal action against WESG in a bid to finally received the long-overdue payment, which as stated by Yermolayev himself played a huge factor that led to the disbandment of their CS:GO team.
"We have an official contract, we have an official legal entity that WESG has obligations to. If we do not receive the money in the near future, we will be forced to seek legal assistance and go to court."
Yermolayev also claimed that all other tournament winnings (besides WESG) have been paid and assured that the players are patiently waiting to receive their share of the WESG prize and continue to trust WIndigo to handle the situation.
"Since the organisation has kept its words in terms of all financial obligations, we are still in touch all the time," said Yermolayev.
"There is no tension between me and the players because I am being as open as I can."
It remains to be seen how this situation will end, however, it's worth noting that this is not a sole incident of this nature, as there were several other esports event organisers accused of not paying the tournament winnings to teams in CS:GO, as well as other esports titles, namely Dota2, where we saw an incident in December 2019 involving Global Electronic Sports Championship, who reportedly failed to pay teams and players from two Dota2 Minor events, held in March and May 2018.