diff --git a/src/engine/runtime.js b/src/engine/runtime.js
index 56e1a572a..43dc2873e 100644
--- a/src/engine/runtime.js
+++ b/src/engine/runtime.js
@@ -71,6 +71,47 @@ const ArgumentTypeMap = (() => {
     return map;
 })();
 
+/**
+ * A pair of functions used to manage the cloud variable limit,
+ * to be used when adding (or attempting to add) or removing a cloud variable.
+ * @typedef {object} CloudDataManager
+ * @property {function} canAddNewCloudVariable A function to call to check that
+ * a cloud variable can be added.
+ * @property {function} removeExistingCloudVariable A function to call when
+ * removing an existing cloud variable.
+ */
+
+/**
+ * Creates and manages cloud variable limit in a project,
+ * and returns two functions to be used to add a new
+ * cloud variable (while checking that it can be added)
+ * and remove an existing cloud variable.
+ * These are to be called whenever attempting to create or delete
+ * a cloud variable.
+ * @return {CloudDataManager} The functions to be used when adding or removing a
+ * cloud variable.
+ */
+const cloudDataManager = () => {
+    let cloudVariableLimit = 8;
+
+    const canAddNewCloudVariable = () => {
+        if (cloudVariableLimit > 0) {
+            cloudVariableLimit--;
+            return true;
+        }
+        return false;
+    };
+
+    const removeExistingCloudVariable = () => {
+        cloudVariableLimit++;
+    };
+
+    return {
+        canAddNewCloudVariable,
+        removeExistingCloudVariable
+    };
+};
+
 /**
  * Predefined "Converted block info" for a separator between blocks in a block category
  * @type {ConvertedBlockInfo}
@@ -283,6 +324,30 @@ class Runtime extends EventEmitter {
          * @type {Profiler}
          */
         this.profiler = null;
+
+        /**
+         * Whether this runtime uses/interacts with cloud data.
+         * @type {boolean}
+         */
+        this.hasCloudData = false;
+
+        const newCloudDataManager = cloudDataManager();
+
+        /**
+         * A function which checks whether a new cloud variable can be added
+         * to the runtime.
+         * @type {function}
+         * @return {boolean} Whether or not a new cloud variable can be added
+         * to the runtime.
+         */
+        this.canAddNewCloudVariable = newCloudDataManager.canAddNewCloudVariable;
+
+        /**
+         * A function which updates the runtime's cloud variable limit
+         * when removing a cloud variable.
+         * @type {function}
+         */
+        this.removeExistingCloudVariable = newCloudDataManager.removeExistingCloudVariable;
     }
 
     /**
@@ -1394,6 +1459,13 @@ class Runtime extends EventEmitter {
         this._monitorState = OrderedMap({});
         // @todo clear out extensions? turboMode? etc.
         this.ioDevices.cloud.clear();
+
+        // Reset runtime cloud data info
+        this.hasCloudData = false;
+        const newCloudDataManager = cloudDataManager();
+        this.canAddNewCloudVariable = newCloudDataManager.canAddNewCloudVariable;
+        this.removeExistingCloudVariable = newCloudDataManager.removeExistingCloudVariable;
+
     }
 
     /**
diff --git a/src/serialization/sb2.js b/src/serialization/sb2.js
index 5021c14df..0562f3405 100644
--- a/src/serialization/sb2.js
+++ b/src/serialization/sb2.js
@@ -470,12 +470,21 @@ const parseScratchObject = function (object, runtime, extensions, topLevel, zip)
     if (object.hasOwnProperty('variables')) {
         for (let j = 0; j < object.variables.length; j++) {
             const variable = object.variables[j];
+            // A variable is a cloud variable if:
+            // - the project says it's a cloud variable, and
+            // - it's a stage variable, and
+            // - the runtime can support another cloud variable
+            const isCloud = variable.isPersistent && topLevel &&
+                // It's important that this part of the check goes last
+                // because it will update the cloud variable limit counter.
+                runtime.canAddNewCloudVariable();
             const newVariable = new Variable(
                 getVariableId(variable.name, Variable.SCALAR_TYPE),
                 variable.name,
                 Variable.SCALAR_TYPE,
-                variable.isPersistent
+                isCloud
             );
+            if (isCloud && !runtime.hasCloudData) runtime.hasCloudData = true;
             newVariable.value = variable.value;
             target.variables[newVariable.id] = newVariable;
         }
diff --git a/src/serialization/sb3.js b/src/serialization/sb3.js
index 7012aa949..8d11d565a 100644
--- a/src/serialization/sb3.js
+++ b/src/serialization/sb3.js
@@ -393,7 +393,7 @@ const serializeVariables = function (variables) {
         // otherwise should be a scalar type
         obj.variables[varId] = [v.name, v.value];
         // only scalar vars have the potential to be cloud vars
-        if (v.isPersistent) obj.variables[varId].push(true);
+        if (v.isCloud) obj.variables[varId].push(true);
     }
     return obj;
 };
@@ -900,12 +900,21 @@ const parseScratchObject = function (object, runtime, extensions, zip) {
     if (object.hasOwnProperty('variables')) {
         for (const varId in object.variables) {
             const variable = object.variables[varId];
+            // A variable is a cloud variable if:
+            // - the project says it's a cloud variable, and
+            // - it's a stage variable, and
+            // - the runtime can support another cloud variable
+            const isCloud = (variable.length === 3) && variable[2] && object.isStage &&
+                // It's important that this part of the check goes last
+                // because it will update the cloud variable limit counter.
+                runtime.canAddNewCloudVariable();
             const newVariable = new Variable(
                 varId, // var id is the index of the variable desc array in the variables obj
                 variable[0], // name of the variable
                 Variable.SCALAR_TYPE, // type of the variable
-                (variable.length === 3) ? variable[2] : false // isPersistent/isCloud
+                isCloud
             );
+            if (isCloud && !runtime.hasCloudData) runtime.hasCloudData = true;
             newVariable.value = variable[1];
             target.variables[newVariable.id] = newVariable;
         }