ENCE reports nearly €1 million in profits in 2022
While many organizations in the space consistently report losses and some have even had to close down, ENCE has just had a record-breaking year.
ENCE recorded its best-ever year financially in 2022. The company reported over €4 million in revenue for the year — a €1.4 million increase from its previous record in 2019 —, of which over €0.9 million came in net profit, a substantial improvement compared to previous years (€169,000 in 2021 and a €223,000 loss in 2020).
This comes as a rare success story at a time of the 'esports winter,' a term used to describe the industry's recent economic woes. Many large esports organizations report losses and some struggle to stay afloat amidst a lack of new investment — one of the most recent examples being Heroic, which is changing ownership after months of financial turmoil —, while others on the lower end have closed down entirely after going bankrupt, such as Tricked, Copenhagen Flames, and KOVA.
Much of ENCE's success came from its crown jewel, the CS:GO team, which it has put most of its efforts into in recent times, as Valve's first-person shooter is now the Finnish company's only big title after it parted ways with StarCraft and PUBG players earlier in 2023.
In the first half of 2022, the lineup around Marco "Snappi" Pfeiffer became one of the best teams in the world, placing runners-up at ESL Pro League Season 15, in the top four at PGL Major Antwerp, and securing another second-place finish at IEM Dallas. Though they were unable to replicate that success in the second half of the year following the loss of Lotan "Spinx" Giladi to Vitality, ENCE also qualified for the second Major, IEM Rio.
The organization's participation in both Majors of the year and the sticker money that came with it played a large part in ENCE recording its best year so far as a business. "Major stickers generated seven-figure revenue in 2022 based on us competing in both of the CS:GO Majors," ENCE CEO Mika Kuusisto tells HLTV.org.
Another key factor is ENCE's status as one of the 15 teams partnered with ESL as part of the Louvre Agreement, which grants the company a permanent spot in two ESL Pro League seasons a year, some spots in other ESL Pro Tour competitions, and a share of the revenue from both products.
Of course, the same is the case for other organizations, but unlike many others who are part of that partnership structure and consistently appear at Majors, ENCE does not rely on outside investment. It seems to use its funds more efficiently, especially by focusing on bringing up new talent rather than taking on expensive and more established players. Since 2022 the CS:GO team has been punching above its weight thanks to effective scouting.
"We have from the day one structured our business to be sustainable and not based on investors pockets — in fact, to date we have raised zero euros from investors and have been profitable excluding 2020 when the COVID hit us," the ENCE chief said to HLTV.
Moving forward, the company is positive it will be able to continue to thrive, but it might just have to wait at least until next year before it surpasses the record-breaking 2022.
"We remain positive about our long-term future but cannot break revenue record this year due to there being only one CS:GO Major in 2023. We will grow in the future, and for example partnerships/sponsorships have lots of room to grow. New game expansions are being evaluated continuously but there is a lack of interesting opportunities which would make financial sense to us at the moment."