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Marked_by_chaos
06-12-2007, 22:22
It strikes me that one of the big problems for GW is their limited potential for growth. They could do better and be more efficient but they are never going to rival a major entertainment company for example and they are right to state that they are a niche company (to an extent).

One of the big factors in their demise has been the huge operating costs in relation to their turnover.

They appear to have spent a fortune (a large proportion of their windfall from LOTR) on new technologies and infrastructure that have seemingly had limited impact on their turnover. They have simply spent more to gain more (with the amount of cost/profit seemingly correlating).

Furthermore their strategy of high rent location flagship stores appears to be little more than a yoke around their neck. They may increase awareness but does this increase revenue to the amount that they lose in loss making stores.

I could go on but what do you think? How can you conceive growth for GW as a business?

Thommy H
06-12-2007, 23:11
new technologies and infrastructure that have seemingly had limited impact on their turnover

I'm not a business expert, but surely these things take time? New technology and infrastructure is a long-term investment for any company - as you say in your post (except with the opposite sentiment for some reason) "spend more to gain more": in other words, the old business maxim "you have to spend money to make money".

These investments have only been made in the last couple of years, so why would you expect results now? The current downturn in fortunes is not (I believe) down to a massive increase in overheads, but to a decline in turnover thanks to the LotR bubble bursting and alienation of veteran hobbyists. If anything, newer technology (such as the improvement in plastic manufacture and sculpting techniques) is intended to reverse that trend by providing superior products. Whether that turns out to be the case or not is another question, of course.

What I'm saying is; don't write off GW's recent investments because they haven't reversed their fortunes immediately. That's not what an 'investment' is.

Llew
07-12-2007, 03:55
I suspect the technologies they invested in aren't really that revolutionary. I'm sure it's new to them to design models via CAD then create the molds, but I don't see immediately how it translates to more sales. And it appears that some of the Asian companies are using superior casting processes for plastic miniatures. (That could just be GW not yet getting the full abilities out of their system though.)

GW needs to do a number of things to increase their position, and most of them run counter to what they want to do.

1) Loosen up on the IP. Let some other companies make a little money with it while GW makes a fair return on products they don't have to build/produce/market directly.

2) Use the rules systems as a way to try to attract customers. When they started, printed rule books and such were a valuable sales item. With the rise of the internet and cheap printing technologies, these are less valuable. They'd disagree with me, but I'd say they could sell a lot more miniatures if they gave away the rules. This, however, depends upon...

3) Modernize the rules sets and get rid of badly-written rules. I believe they can do some really creative, fun stuff if they don't feel they have to keep every legacy idea in the 2 Warhammer lines.

4) Take advantage of outside playtesting and make the rules a living process. Let the designers make the main games, then float them so people find the holes and gaps so they can be fixed.

5) Bring back entry-level games. All the games that were abandoned because they didn't lead enough people into the "real" games actually led a sizeable portion of current players into them. And a good entry game can be cheap enough to pick up some dollars from people who you'll never see again, and who won't buy an army now.

6) Create new avenues of entry for players. Pre-paints on basic sets. Snap together kits. Todd McFarlane-style models.

7) Create games (probably licensed to bigger players) that can be sold in mass-market shops. If you can get something Wal-Mart can sell, maybe you get new customers. There's a vast world of kids who will never be exposed to GW games. Each of those is a lost sale. Who cares about kids? Well, do you think it was adults who wanted millions of Pokemon cards?

8) Realize that the store model that they rely on in England is close to useless in America. Some flagship stores are great. But you need to expose your products to people who don't already know what they are. Support the independent game shops and make it attractive to them to want to sell your games.

9) Use the few stores you have to sell a wider variety of product lines. Sell your computer games and stock some Specialist Games stuff.

Those are just a few off the top of my head. They have reasons for all of their decisions. I'm just saying that, from here, it looks like their reasoning was short-sighted and missed out on valuable opportunities.

I'm hoping they get aggressive and think not "how can we do more of what we're doing now", but rather "how can we do new things and get customers we never dreamed we could access."

snurl
07-12-2007, 04:51
The flagship stores in the malls do work, they attract customers who otherwise wouldn't know about GW, and they attract shoppers for which the price point for entry level is not a big problem.

Related item; A few years back when Allied hobbies moved from the Park City mall to the Golden Triangle shopping center, in order to get cheaper rent, their business took a nosedive. An ex employee told me that the foot traffic at the mall made all the difference.

Reinholt
07-12-2007, 05:15
I'm going to restrict myself to the three key bullet points I'd throw into a presentation for executive level clients.

In order of importance:

1 - Lower production costs.

2 - Lower entry cost into GW products.

3 - Leverage IP as a marketing tool.

The explanations:

1 - Currently, part of what is killing GW is their **** poor margins. These need to come down, and more so, it would be easy to do so. To wit:

- They should move their production to areas where the cost of living is lower, so that they do not have to pay the wages they currently make (I'm not saying China, but how about Oklahoma or something similar in the US instead of freaking Maryland for HQ?). Land is also cheaper, and most likely, other fixed costs could be reduced by doing this.

- Downsize management.

- Find more efficient ways to package and ship products (this is least likely to produce major savings, unless GW is doing something foolish).

- Streamline ordering and inventory systems.

2 - To grow a business, entry costs need to be at a point where new people can be attracted to product. A current starting cost of over 100 dollars / pounds is flat-out unacceptable. (To wit with the previous point, whoever let this happen can be the first manager downsized)

- Make an entry level kit for each game that includes all of the very basic items needed - glue, paint, a few models that can snap together to alleviate the need for further tools, dice, a small plastic ruler, and a short rulebook. Maybe make one for a few armies in each game. Make them cheap. Under 50 dollars or pounds, but closer to 30 is ideal. Sell them at a loss if you have to, though ideally you can do this at cost if the previous measures are employed in point 1. These need to be configured such that if two friends each buy one, they are good to go at a small level with these games almost immediately. (Battle for Macragge is getting close - try putting only one army in so each friend gets one, as people who have an investment are more likely to give it a real shot, and make sure to have paints and tools in even a very basic way in there)

- Make some entry level games; less complicated rules, probably single-box games with a few models each. Use these as gateways to the more expansive strategy games.

3 - One of the big problems with GW is that the IP is the strength of the company, but it's trapped in a niche market and does little to differentiate themselves from any other super-geek hobby. Leveraging that IP would be wise; Dawn of War was a small step in this direction. Warhammer Online is a much bigger (and better) one. Continue down this path. Likewise, GW should try to get some novels written by someone who can actually write (I'm not talking William freaking Gibson here, though that certainly wouldn't hurt) for what is essentially free publicity, should produce much higher quality comics to run through comic stores (and online!), throw promotional videos onto youtube as viral marketing, and the like. Basically, infuse themselves throughout culture in such a way that it's not a super-niche product, and it is perceived as at least being fun, even if people don't play.

And, if they are smart, every single one of these tie-ins will have some kind of promotional link to the model games. Maybe x dollars/pounds off a starter set. Maybe free supplies. Something that makes people want to go look at additional stuff.

Those, right off the top of my head, would be the three big things I'd hit. There are many, many smaller things, but if they cannot get costs under control, lower the barriers to entry, and market effectively, the rest is essentially for naught.

There are also US specific vs. UK specific issues, as the same strategy will not work in both places, but I believe all of the points above are relevant for any market GW wants to approach.

Enjoy.

twisted_mentat
07-12-2007, 06:32
4) Take advantage of outside playtesting and make the rules a living process. Let the designers make the main games, then float them so people find the holes and gaps so they can be fixed.


I agree with this one. GW Canada has some really hard working Grey Knights, and they would be excellent people to get some outside feedback and play testing. Though how do you people from blabbing their mouths on here?

"hey i just got my hands on the new dark eldar codex which is a work in progress but the rules have this this and this!" Which will happen. Even with NDAs, people still blab. The problem then becomes other people will hear about this and think thats how the army is going to go, and get pissy. Think about all the games that are leaked in an early beta and its really hurt it.



5) Bring back entry-level games. All the games that were abandoned because they didn't lead enough people into the "real" games actually led a sizeable portion of current players into them. And a good entry game can be cheap enough to pick up some dollars from people who you'll never see again, and who won't buy an army now.


I'm not sure what you mean by "entry level" games. Do you mean stuff like Space Hulk, Blood Bowl and Warhammer/Hero Quest? Those aren't nessacely easier than the core games, and aren't exactly a great way to bring people further into the hobby. If anything they need to make more stuf flike battle for skull pass; lots of cool stuff, easy to understand introduction to the rules, then the full rules in a economy package. BFSP costs pretty much the same as My Copy of Space Hulk or Bloodbowl cost, and you get pretty much a whole starter dwarf and goblin army.

Or are you talking about combat cards?



6) Create new avenues of entry for players. Pre-paints on basic sets. Snap together kits. Todd McFarlane-style models.


Worst Idea ever. There already way too many "GW is too dumbed down" comments all over the place, and this would be my line. GW at its core is collect, model (which includes paint, assembly and conversion), and play. Having this kind of stuff eliminates a section of the hobby, and would only bring in even younger kids.



8) Realize that the store model that they rely on in England is close to useless in America. Some flagship stores are great. But you need to expose your products to people who don't already know what they are. Support the independent game shops and make it attractive to them to want to sell your games.


I know in Canada they push really hard for independent retailers, but i don't understand why the US is so controlling.



9) Use the few stores you have to sell a wider variety of product lines. Sell your computer games and stock some Specialist Games stuff.


GW stores on the whole aren't large, and they have to have at least one of every 40, fantasy and LOTR box. While it would be nice to be able to walk in and buy a Blood bowl team, what if it means that they don't have space to put beastmen or necron warriors on the shelves?

Thommy H
07-12-2007, 11:24
3 - One of the big problems with GW is that the IP is the strength of the company, but it's trapped in a niche market and does little to differentiate themselves from any other super-geek hobby. Leveraging that IP would be wise; Dawn of War was a small step in this direction. Warhammer Online is a much bigger (and better) one. Continue down this path. Likewise, GW should try to get some novels written by someone who can actually write (I'm not talking William freaking Gibson here, though that certainly wouldn't hurt) for what is essentially free publicity, should produce much higher quality comics to run through comic stores (and online!), throw promotional videos onto youtube as viral marketing, and the like. Basically, infuse themselves throughout culture in such a way that it's not a super-niche product, and it is perceived as at least being fun, even if people don't play.

And, if they are smart, every single one of these tie-ins will have some kind of promotional link to the model games. Maybe x dollars/pounds off a starter set. Maybe free supplies. Something that makes people want to go look at additional stuff.


I disagree with most of what's in this thread so far - GW knows what brought them to the dance and they aren't going to change basic stuff like a business model based on specialist stores - but the above is something I totally agree with. GW have shown active resistance in the past to actually marketing their product: I'm sure there's a Gav interview out there somewhere where he says something like "advertising isn't the way we do things, and that's how it's always going to be", which seems completely insane for an international company to me. Given the strength of their IP and their imagery and the production values we know they can achieve in their products is there really a good reason there aren't advertisements for GW products in appropriate genre publications, the internet or even TV?

I think it's really, really weird that such a big company, which is part of a pretty widespread industry and hobby, is virtually unknown outside of the circle of people who play it. My fiancť was in Cardiff recently and I'd asked her to pop into the GW there and pick up some paintbrushes for me, but she didn't know where it was and asked her cousin (who lives there) where the Games Workshop was. She didn't even know what she was talking about, and this is someone who's in her early 20s, and therefore grew up in GW's late 90s heyday, presumably surrounded by hobbyists at school or whatever. But there's no knowledge of GW unless you play it or have a close friend/family member who does. I mean, I know there's a certain amount of shame and embarrassment associated with the hobby in general, but if it wasn't so ridiculously niche then I think that'd be less noticeable. I have friends who remember Heroquest and thought it was cool because it had TV advertisements and was therefore a toy kids wanted. What are GW trying to prove by stubbornly refusing to even attempt to repeat that success?

Just compare GW to Dungeons & Dragons, Magic: the Gathering or World of Warcraft. All three of these brands are in the same genre, have about the same level of stigma attached to them, but if you mention them to someone who doesn't play, they all have a pretty good idea of what they actually are. Can you say the same for Warhammer?

TheLionReturns
07-12-2007, 11:43
To answer the original post, I personally think that the investment in new technology was a good way to spend the extra revenue from LotR. Whilst this may not translate directly into sales it is important to consider the long term impact. GW is a niche company but it needs to stay the top of this niche tree. There are plenty of small scale rivals out there, and by improving the quality of its plastic products it help stay ahead of these rivals. I don't foresee these rivals potentially overtaking GW, but they have the ability to eat away at GW's sales. The new tech IMO helps guard against this.

I have long been opposed to the number of stores. Quite frankly they are empty most of the time and give a bad image of the hobby when they are full. They can not carry sufficient stock and are a huge cost. I've long advocated a move to more online sales (with free postage above a reasonable level), and moving the other functions of the stores to other areas. Provide more support for schools programs and games clubs to help teach hobby skills for example.

Also remaking some entry games such as Space Crusade and Heroquest would help draw in new players. Computer games shouldn't be overlooked as a way to advertise either, whilst the release of more fiction from black library also helps.

Personally I don't think GW are too far from getting it right. The stores however, are a millstone they are going to have to address at some point. Its just the way retail is going.

We must also remember that like all companies GW are also subject to the whims of the market. The fact is that their raw materials costs have also been increasing in recent years, and this is bound to have a major effect. Similarly social changes like the shortening of attention spans of kids since I was younger and the growing obsession with computers and consoles will also have an impact.

The biggest thing for me, even more important that the stores, is the image of GW. The hobby has a bad reputation, being a domain for geeks (in the insulating sense of the word) and screaming kids. There are so many positives to the hobby it is difficult to list them all. It makes you think providing mental stimulation. In fact I put some of my own academic success down to the games I played in my youth and the creative thinking they helped instill in me. But there are far more positive aspects than this. Its a social hobby, provides a creative/artistic outlet, promotes fair play. The list could go on and on and I'm sure we all have our own examples. Quite simply GW should be easy to promote in a positive light.

Current image problems are partly a result of the behaviour of a minority of hobbyists, but also a result of the way GW goes about its business. GW tries to dumb down and appeal to the lowest common denominator. Writing in WD is done in a childish way aimed at appealing to kids with a focus on exaggerating everything. My memories of childhood though consisted of me wanting to be an adult. I can't help think that many younger hobbyists find the approach patronising.

Templar Ben
07-12-2007, 11:55
I'm going to restrict myself to the three key bullet points I'd throw into a presentation for executive level clients.

In order of importance:

1 - Lower production costs.

<snip>

The explanations:

1 - Currently, part of what is killing GW is their **** poor margins. These need to come down, and more so, it would be easy to do so. To wit:

- They should move their production to areas where the cost of living is lower, so that they do not have to pay the wages they currently make (I'm not saying China, but how about Oklahoma or something similar in the US instead of freaking Maryland for HQ?). Land is also cheaper, and most likely, other fixed costs could be reduced by doing this.

- Downsize management.

- Find more efficient ways to package and ship products (this is least likely to produce major savings, unless GW is doing something foolish).

- Streamline ordering and inventory systems.


Just so you know, production is in Memphis. That gives them a lost cost production force and puts them in the distribution capital of the world. The facility is about 5 miles from the airport which is the busiest cargo airport in the world. There are also 200 truck terminals in Memphis because an overnight drive from Memphis will put cargo in the hands of 75% of the US population.

As to headquarters, I don't know how must staff is in Maryland but I am sure it would be cheeper to have it in Memphis. That doesn't mean they should move because I don't know what tax incentives they are receiving to stay where they are. Memphis is home to some big players (FedEx, International Paper, and AutoZone - Service Master was just bought out) so I don't know what they can get being such a small fish.

Does anyone have good answers on how large the presence is in the US HQ and some idea on the costs there?

Marked_by_chaos
07-12-2007, 13:07
[QUOTE=Thommy H;2159899]I'm not a business expert, but surely these things take time? New technology and infrastructure is a long-term investment for any company - as you say in your post (except with the opposite sentiment for some reason) "spend more to gain more": in other words, the old business maxim "you have to spend money to make money".

I don't mean that new technologies do not have benefits but LOTR aside they are probably selling less units than before the investment but at greater cost.

GW have always relied on a committed customer base (who they may be neglecting - but i'm not getting into that here). The point I want to make is that these players bought just as many of the old one pose type fantasy models of yester year as they are of the current plastics that have cost them much more to produce.

Essentially they are not getting many more new customers and they are not selling many more products to the existing customers. Instead they are using more costly technologies and passing the cost on to their customers (a fact that results in much of the disatisfaction on here)

Llew
07-12-2007, 14:28
"hey i just got my hands on the new dark eldar codex which is a work in progress but the rules have this this and this!" Which will happen. Even with NDAs, people still blab. The problem then becomes other people will hear about this and think thats how the army is going to go, and get pissy. Think about all the games that are leaked in an early beta and its really hurt it.

If the rules actually work, people are a lot more forgiving. And I don't propose just a select core of outside playtesters. There are thousands and thousands of people willing and excited to pour over the rules and try to help make them better.

Plus, if people complain, you can explain *why* changes are coming and what the goal is. GW still makes changes, and wild rumors circulate, frequently causing a mini-firestorm of righteous anger until the book is finally released. Then people complain about the final product when there's no possible way that they can hope to influence the designers; any mistake has already been made and won't be addressed for 5-7 years.

The modern world allows a company to communicate with customers and take advantage of that if they choose to. I don't think GW likes communication at all.

Of course, if GW thinks the rules are some secret, super-special item, then they can't do this. But if they give away the rules and realize that everytime you put a free rulebook (PDF, of course) in someone's hands they have the chance to sell them a load of miniatures, and it costs GW virtually nothing.

The people who are going to pirate rulebooks are already doing it.



I'm not sure what you mean by "entry level" games. Do you mean stuff like Space Hulk, Blood Bowl and Warhammer/Hero Quest? Those aren't nessacely easier than the core games, and aren't exactly a great way to bring people further into the hobby. If anything they need to make more stuf flike battle for skull pass; lots of cool stuff, easy to understand introduction to the rules, then the full rules in a economy package. BFSP costs pretty much the same as My Copy of Space Hulk or Bloodbowl cost, and you get pretty much a whole starter dwarf and goblin army.

Or are you talking about combat cards?

Not combat cards, but the first stuff. Things that are relegated to Specialist Games now. Or games like Battlemasters.

The difference between those and BfSP is that you get everything you need to make out a decent table, and they set up and tear down a lot more quickly than a game of Warhammer.

Remember -- money isn't the only cost associated with GW games. Time is a big cost and that needs to be addressed.


Worst Idea ever. There already way too many "GW is too dumbed down" comments all over the place, and this would be my line. GW at its core is collect, model (which includes paint, assembly and conversion), and play. Having this kind of stuff eliminates a section of the hobby, and would only bring in even younger kids.


If they want to grow, they need to bring in younger kids. The problem they have is they sell to nerds who think they are somehow special because they can spend countless hours assembling a kit. They're not. Most of those nerds probably got involved in gaming at a young age, but they somehow forget that they were once the annoying kid at the game store.

But I think your goal is to *make* customers like those nerds. To do that, you need to take a shot at anyone who might be remotely interested in the games. If you get 100 kids to try GW games on a low, simple scale, then maybe 1 becomes a customer over the long haul. That's 1 more than you'll get if they never hear of you.

I'm an old guy and I can think of nothing that would be more exciting than getting a handful of kids as excited about wargames as I am.

Reinholt
07-12-2007, 22:46
Just so you know, production is in Memphis. That gives them a lost cost production force and puts them in the distribution capital of the world. The facility is about 5 miles from the airport which is the busiest cargo airport in the world. There are also 200 truck terminals in Memphis because an overnight drive from Memphis will put cargo in the hands of 75% of the US population.

As to headquarters, I don't know how must staff is in Maryland but I am sure it would be cheeper to have it in Memphis. That doesn't mean they should move because I don't know what tax incentives they are receiving to stay where they are. Memphis is home to some big players (FedEx, International Paper, and AutoZone - Service Master was just bought out) so I don't know what they can get being such a small fish.

Does anyone have good answers on how large the presence is in the US HQ and some idea on the costs there?

Thanks for the update - the last time I did major research on GW's production structure was right when they acquired the LOTR license. I was considering them as an undervalued play in the market due to the potential from the IP at the time.

When I recall looking at them then, I believe production was in Maryland, which I thought was a very poor idea. Moving to Memphis, while perhaps not as good as some other options, is at least a decent one. I believe my other points all still stand on #1, and the rest I think stand for themselves.

Likewise, thanks to Thommy for providing some context around the IP thing as well. I do enough business recommendation work at work that I don't really feel like building an entire case on my free time.

:p

selfconstrukt
08-12-2007, 01:26
Does anyone have good answers on how large the presence is in the US HQ and some idea on the costs there?

I worked in Memphis when it was set up, and before that in Baltimore, and yes, GW did do a cost analysis for manufacturing in Memphis and found it was a lot cheaper than in the UK, but for some reason they pulled a lot of it back to the UK like the metal casting department.

What they make in Memphis now is a select range of plastic kits, and supplement items like paint sets, bagged bases, movement trays etc.

Casting metal in Memphis was far cheaper than in the UK, mainly due to the low cost of metal the US got and the changes and procedures made by the old supervisor and a few other staff members.

In Memphis we were constantly able to shave off anywhere from $.05 to $.25 per finished box set, which was a large improvement over what the Uk was doing.

Several times we tried to work with the UK counterparts to make improvements, but they were unwilling to change, citing "Thats not the proper way to do it" and telling us to stop, which we didn't. Many of those improvements the UK said they tried, but couldn't get them to work so they gave up, but we got them to work just fine.

There can be endless speculation as to why this happened, but IMHO most of the problem is the managers are more concerned with getting their own objectives completed (so they get their bonus) than anything else.

And yes, you can get your bonus at GW even if your department is not achieving its goals, because it is very easy to hide your mistakes in Memphis, and they usually did it by playing the "blame game".

Etienne de Beaugard
08-12-2007, 01:31
If the 'Battle for ...' series was augmented with simple $25 expansion packs for the various other warhammer races, each pack containing a new mini-army, paints and brushes, and a little book on how to use the army for Skull Pass/Macaggre adventures, GW would have a product line that they could market to the large toy retailers like TRU, WalMart and Target. GW could also put out new 'Battle for...' sets to the mass market.

If GW was able to get a few good contracts with TRU, Wal-Mart, etc. the volume of product would allow them to price the intro-games at more consumer friendly prices. Strategic adds would lead a certain percentage of the mass-market to the more advanced 'core' games. The part of the market that did not 'advance' would still bring GW a handsom profit and shelf-space in big-box stores would bring GW much needed publicity.

starlight
08-12-2007, 02:30
Several times we tried to work with the UK counterparts to make improvements, but they were unwilling to change, citing "Thats not the proper way to do it" and telling us to stop, which we didn't. Many of those improvements the UK said they tried, but couldn't get them to work so they gave up, but we got them to work just fine.

There can be endless speculation as to why this happened, but IMHO most of the problem is the managers are more concerned with getting their own objectives completed (so they get their bonus) than anything else.

And yes, you can get your bonus at GW even if your department is not achieving its goals, because it is very easy to hide your mistakes in Memphis, and they usually did it by playing the "blame game".

On one hand I'm glad to see that GW Can wasn't alone in that, but on the other hand...:cries:

The short version of why just about *anything* was done (or not done) in GW Can was *to protect the next bonus*:(.

Looking hard for *actual* solutions was never encouraged, simply because people were afraid that they might have to act on what they found...and what if you find that your boss is the problem...:(

Edmund
08-12-2007, 13:43
Dear Folks

What is the objective of Games Workshop? Simple question you might think eh? Make money, isn't it obvious? Well yes and no. It is true that their objective is to make money but what I would like to propose is that the actual method isn't quite straight forward,

See I happen to think that GW's strategy is brilliant, production to point of sales with no middleman. That, in my opinion, is the key to the shop front because obviously there is no middleman in GW owned stores. Sure the staff are monkeys (don't care if you work in one and I am offending you so don't bother groaning at me) and its wall to wall pimples and excessively loud death metal. So what if they only stock a limited range of each army/ etc. The fact is it is maximum profit because there is no middleman.

However, by far the most successful way to make a profit is to have a monopoly. I am old enough to remember Metal Magic, Grenadier and a host of other European figure companies. What happened to them, in a nutshell they got vaporised. Now I know the collapse of TSR contributed a lot to that but the truth is GW was saturating the markets of Europe well before AD&D became irrelevant. I am firmly convinced that GW has as its "objective" the monopolising of the figurine world. Increasing price rises and a growing focus on Warhammer 40K (a skeleton is a skeleton but only GW make Space Marines) tends to support my opinion.

GW had stores in the Eastern block not that many years after the wall came down. They have launched a number of invasions in the States. The overall objective is to ensure they are the primary player in figurine production with the aim of being the only producer. Still don't believe me? Have a look at the warhammer rules for the historical battles (i.e. ancient Greeks, Romans, etc). I suspect that production of figures for those isn't as far away as people might think.

All right, so what has my rant got to do with the question of "Fundamental problem with GW business position?" Well the problem with a monopoly is it tends to kill the goose by dictating to the market. Go into the stores, the "monkies" will tell you anything to make a sale - and I mean anything - I am aware of the same blokes saying the exact opposite thing in order to make that sale, dependant on what they perceive as the interest of the customer (mail order isnít any different). Read a White Dwarf battle report - I can't remember one that stuck to the standard rules, set up, points etc for oh so long (I am informed that the last new army to loose a battle report in a WD was Dark Eldar!!!). All the time GW are attempting to tell you what are the must have items - that has become the focus - meanwhile army playability suffers, rules are confusing blah blah blah (Skavern still havenít been fixed!!!). In focusing on the sale they undervalue the system they are trying to sell - quality will always count and in gaming that means 1) clarity and balance re rules, 2) quality and look of figures (Those chunky single piece plastic goblins and dwarves are shocking).

Now I remember when TSR went nuts in the late 80ís. Junked its founder and produced a million and one products which, while they were only ad ons to the actual game, effectively meant that if you were to play a definitive 2nd Edition AD&D game you had to have them ALL! Needless to say the market balked. By the early nineties things were bad but hey, they just kept on churning out the junk because management knew it all and the focus had become the dollar, not providing a decent product. So, how many have played an Armageddon game lately with a Forge World Titan? What about a 3, 000 aside Warhammer pitched battle? I think you can see where I am going.

What is wrong is that GW does dominate the market and are dictating to consumers. Problem is that consumers can always vote with their money. My problem is that I actually do like playing Warhammer and I donít want GW to go under because of arrogance.

Edmund

efarrer
08-12-2007, 15:01
Dear Folks

What is the objective of Games Workshop? Simple question you might think eh? Make money, isn't it obvious? Well yes and no. It is true that their objective is to make money but what I would like to propose is that the actual method isn't quite straight forward,


Osbad, on another thread did an interesting graph. GW has managed to not make more actual money since the 1990,s despite a larger turnover. Meaning they make less value since then after you account for inflation then they did in the late 1990's.




See I happen to think that GW's strategy is brilliant, production to point of sales with no middleman. That, in my opinion, is the key to the shop front because obviously there is no middleman in GW owned stores. Sure the staff are monkeys (don't care if you work in one and I am offending you so don't bother groaning at me) and its wall to wall pimples and excessively loud death metal. So what if they only stock a limited range of each army/ etc. The fact is it is maximum profit because there is no middleman.


Actualy very few companies follow this model because the middlemen and final retailers all save money for the company in the long run. How you ask? They remove risk. Once the product is sold at 50% value it vceases to be the parent companies risk. It doesn't sit as dead inventory on the shelves waiting to be bought. There are no costs associated with the product after it hits the middleman. No costs to run said store of pimple faced deathmetal fans. All round the specialty shop is a risky market, and if GW canada is any example, the company tries to cut costs by choosing the worst locations in the malls.






However, by far the most successful way to make a profit is to have a monopoly. I am old enough to remember Metal Magic, Grenadier and a host of other European figure companies. What happened to them, in a nutshell they got vaporised. Now I know the collapse of TSR contributed a lot to that but the truth is GW was saturating the markets of Europe well before AD&D became irrelevant. I am firmly convinced that GW has as its "objective" the monopolising of the figurine world. Increasing price rises and a growing focus on Warhammer 40K (a skeleton is a skeleton but only GW make Space Marines) tends to support my opinion.


[QUOTE=Edmund;2164318]
GW had stores in the Eastern block not that many years after the wall came down. They have launched a number of invasions in the States. The overall objective is to ensure they are the primary player in figurine production with the aim of being the only producer. Still don't believe me? Have a look at the warhammer rules for the historical battles (i.e. ancient Greeks, Romans, etc). I suspect that production of figures for those isn't as far away as people might think.


I really doubt that. Why? You can't make a generic Napoleonic figure to which your individual IP can be assigned. Historical players know that, even if you don't. That means one 28mm, or 10mm, or 6mm historical figure is of the same value as another of the same size, and quality vs price becomes the issue.



All right, so what has my rant got to do with the question of "Fundamental problem with GW business position?" Well the problem with a monopoly is it tends to kill the goose by dictating to the market. Go into the stores, the "monkies" will tell you anything to make a sale - and I mean anything - I am aware of the same blokes saying the exact opposite thing in order to make that sale, dependant on what they perceive as the interest of the customer (mail order isn’t any different). Read a White Dwarf battle report - I can't remember one that stuck to the standard rules, set up, points etc for oh so long (I am informed that the last new army to loose a battle report in a WD was Dark Eldar!!!). All the time GW are attempting to tell you what are the must have items - that has become the focus - meanwhile army playability suffers, rules are confusing blah blah blah (Skavern still haven’t been fixed!!!). In focusing on the sale they undervalue the system they are trying to sell - quality will always count and in gaming that means 1) clarity and balance re rules, 2) quality and look of figures (Those chunky single piece plastic goblins and dwarves are shocking).


You may not like them, and they may not be the same quality as a similar metal or multipart kits, but that box is a sign of hope. 500 points for two armies for 80 canadian dollars.







Now I remember when TSR went nuts in the late 80’s. Junked its founder and produced a million and one products which, while they were only ad ons to the actual game, effectively meant that if you were to play a definitive 2nd Edition AD&D game you had to have them ALL! Needless to say the market balked. By the early nineties things were bad but hey, they just kept on churning out the junk because management knew it all and the focus had become the dollar, not providing a decent product. So, how many have played an Armageddon game lately with a Forge World Titan? What about a 3, 000 aside Warhammer pitched battle? I think you can see where I am going.

What is wrong is that GW does dominate the market and are dictating to consumers. Problem is that consumers can always vote with their money. My problem is that I actually do like playing Warhammer and I don’t want GW to go under because of arrogance.

Edmund

Gaebriel
08-12-2007, 15:54
...
I really doubt that. Why? You can't make a generic Napoleonic figure to which your individual IP can be assigned. Historical players know that, even if you don't. That means one 28mm, or 10mm, or 6mm historical figure is of the same value as another of the same size, and quality vs price becomes the issue.
...

Agreed - if GW were to venture into historicals miniature-wise they would lose their greatest strength - their monopol. They had to stand against established competition on the basis of their greatest weakness - price. While GW does sure produce quality models (even in realistic scale - see LotR), most historical players aim for a acceptable-sculpt-for-lowest-price-ratio.

That's not to say GW couldn't make a pound or two, as they would essentially draw some of their established (I'll say indoctrinated, for lack of a better word) customers into historical gaming, but that could also draw away that budget from their established product.

efarrer
08-12-2007, 16:45
Agreed - if GW were to venture into historicals miniature-wise they would lose their greatest strength - their monopol. They had to stand against established competition on the basis of their greatest weakness - price. While GW does sure produce quality models (even in realistic scale - see LotR), most historical players aim for a acceptable-sculpt-for-lowest-price-ratio.

That's not to say GW couldn't make a pound or two, as they would essentially draw some of their established (I'll say indoctrinated, for lack of a better word) customers into historical gaming, but that could also draw away that budget from their established product.

The other problem with that is that without choosing and prmotoing an irregular scale, the company would be in a situation where they could actually commit to a course of action that would introduce existing cutomers to the competition. In particular in stores where the owner has an established reason to dislike the company (many US and Canadian retailers I hear have had some minor issues with GW sales people in the past).

As well this could see them competing directly with thier two best sculpters.

Reinholt
08-12-2007, 17:08
Agreed that historical gaming is not a solution.

What GW needs to focus on is 'getting their house in order'. Re-focus on delivering quality product, at sound prices, to their customers. Strengthen their core brands. Market more effectively to their target demographics to organically grow their customer base. Cut costs.

Now is not the time for diworseification, to borrow some Peter Lynch speak. They need to improve the heart of their business first.

Rikens
08-12-2007, 18:06
Uh, is there ever a time for divorsefication?

efarrer
08-12-2007, 20:23
Agreed that historical gaming is not a solution.

What GW needs to focus on is 'getting their house in order'. Re-focus on delivering quality product, at sound prices, to their customers. Strengthen their core brands. Market more effectively to their target demographics to organically grow their customer base. Cut costs.

Now is not the time for diworseification, to borrow some Peter Lynch speak. They need to improve the heart of their business first.

Honestly have to disagree with you on at least one point. It's always a good time for calculated diversifaction.

Let me use farming as an example

Farmer Brown knows

Wheat nets 1000 per section
He needs 3000 income to survive
He has four sections
Barley will net between 500-2000 per section, on a normal year, but on some years it will gross nothing, equalling a -1000 net.

Therefore if he wants to survive on a year to year basis in order of most conservative to least

Plant four wheat (steady growth, lowest risk)
plant three wheat and one barley (moderate growth, still low risk).
plant 2 wheat two barley (possibilty of substantial growth, moderate risk)
plant 1 wheat three barley (possibilty of high growth, substantial risk)
Plant no wheat four barley (highest possible growth, unreasonable risk)

Investors do not favour the first as an option. It has almost no actual growth relative to thier investment (though it will work for a conservative farmer).

Options two and three are the investor's preference. Some risk for a greater level of return.

Option 4 is the banks nightmare

Option 5 is the route to bankruptcy, Tooo much risk of getting nothing.

A company such as gamesworkshop cannot jsut stick with it's exsting IP and develop that as it's sole source of income. It has to continually try to expand, even if only in little ways into areas it has not previously explored.

Now this is why I tend to be in favour of expanding liscences. LotR has proven that it works . The company posted fantastic income during that period, which it chose not to keep as pure profit, but raher to invest into capital improvements.

This means the actual profit for the company was much lower during those periods. If Osbad's graphs are right, the company has very little to show for these capital investments as they do not appear to have garnered an increase in long term profits. That would make me as an investor ask, "Why did we not simply outsource the plastic production?"

The real problem is that Gw as a company is incrediably slow at adapting to change. It would prefer (and many of it's long term customers would prefer case a if they were farming)

THe problem with that approach is

to use a manufacturing example this time

you have 10 plants producing 10 widgets each
the population wants 100 widgets per year
so far so good
but...
a company begins retooling used widgets at a rate of 10 per year
now you are only selling 90 widgets a year, so to reach your old target of 100 widgets worth of sales you can, increase the price, pursue new customers, or see if one widget factory can be retooled to gadgets. To continue to use GW as an example you choose a price increase, which is an easy fix.
but...
Now the retooling company figures with the price increase it can retool a bit more and moves it up to 20 widgets it reools per year.

This becomes a loop if you keep raising prices. So really it become you can either pursue new customers (advertising) or add products and takesome of the risks mentioned above.

Gaebriel
09-12-2007, 00:23
How quickly does GW need to act? Do they have the time to downsize to a sustainable level, or cut costs until they earn a higher profit - both things that wouldn't necessarily need a higher turnover, just a largely unchanging one? Do they have the time to consolidate and to expand from a somewhat stabler basis? - Like, now they are barely making a profit, but if they could enlarge that to a couple of million they had some money to work with.

Or do they need rising turnover for investors not to abandon them? Where do investors look at, turnover, or profit, or both? What is GW's risk at the moment?

What about the cost cutting programme that is said to net 7m a year -. would that be a literal 7m given unchanged turnover?

Llew
09-12-2007, 01:33
I think GW has several (3-5) years to effect a turnaround. It doesn't need to be immediate but they need to show that they are addressing concerns quickly. If Apocalypse is the sum-total of their gameplan for a turnaround, they're done for. Personally, I don't think monetary resources are where the solution lies for them. I think they could do some things that would cost almost no money in order to buy time for a turnaround and even help that turnaround be more successful.

Even if they're not willing to be bold, just making a concerted effort to actually engage their fans, listen to them and respond could be huge. So even without a pile of sound financial business changes, they could make a huge impact on their survivability just by engaging their customers. They need to dedicate to it though and really make it a priority.

I've seen Gav Thorpe post on here from time to time. He wades in briefly, responds, gets called on something that's a little sketchy (like a vague or illogical argument, or what seems a deliberate misreading of another poster's point), then gets buried under a wave of negativism. Then he bolts. I'd love to see him really support his points and really dig in and respond to the customers. (Or if not him, SOMEONE from GW.)

Right now, GW looks at customer feedback and uses the negative posts as an excuse to ignore it. Instead, they need to approach the negative posts as an opportunity to clearly state their case. I don't think they have it in their makeup though to do so. They'd need to 1) stop believing in their own infallibility and 2) stop being so insular and secretive.

Fix the culture and you buy a lot more time to fix the other problems.

Crazy Harborc
09-12-2007, 02:05
Seldom has GW responded to criticism with explainations. IMHO, the upper level types at GW are affraid that critics and those customers who found out about the responding to questions and complaints, to critics, would see it as a sign of weakness.:confused: NEVER mind that we might think...hey they DO care about what we think.

Reinholt
09-12-2007, 03:35
Efarrer,

I said I was against diworseification, not diversification.

This is usually means a company doing one of the following:

1) Greatly overvaluing an acquisition or new line of business
2) Buying something they don't have any experience running
3) Making a play for synergy where there is no synergy

You will notice I previously advocated expanding GWs IP and using it as a marketing tool. What tends to happen in these situations, however, is that companies begin to do foolish things that will not benefit their core business.

That is why I'm advocating against things like moving into historical gaming; GW has no major experience competing in that market segment, and the GW business model of exclusive IP leading to pricing power won't work there. It's a classic combination of a #2 and #3 play from above.

That is diworseification. Now, if they BUY a historical miniature company and pay too much for it, they could pull off the rare trio of 1, 2, and 3!

Edit - Having said that, now is not the time for GW to diversify. Their core business of WFB and WH40k are in bad shape. Diversification now means they are giving up on those lines completely - they would be saying they don't think they can fix those. If that's true, they should sell themselves off, not diversify. Right now they need to fix their core business, THEN figure out how to hedge in the future to minimize market downturns in that segment.

Templar Ben
09-12-2007, 16:13
Now this is why I tend to be in favour of expanding liscences. LotR has proven that it works . The company posted fantastic income during that period, which it chose not to keep as pure profit, but raher to invest into capital improvements.

This means the actual profit for the company was much lower during those periods. If Osbad's graphs are right, the company has very little to show for these capital investments as they do not appear to have garnered an increase in long term profits. That would make me as an investor ask, "Why did we not simply outsource the plastic production?"

The costs of the investment wouldn't go against profits. Those are capitalized and depreciated. There were lots of other things going on in those years causing them to not see those profits.


What about the cost cutting programme that is said to net 7m a year -. would that be a literal 7m given unchanged turnover?

They didn't release the details of the assumptions they made when figuring the savings.

efarrer
09-12-2007, 16:17
Efarrer,


Edit - Having said that, now is not the time for GW to diversify. Their core business of WFB and WH40k are in bad shape. Diversification now means they are giving up on those lines completely - they would be saying they don't think they can fix those. If that's true, they should sell themselves off, not diversify. Right now they need to fix their core business, THEN figure out how to hedge in the future to minimize market downturns in that segment.

My concern and the reason I argue that it may be time for diversifaction (by adding product lines) is that I am beginning to believe that the compnany has reached a point of saturation. I am simply not convinced they can sell much more of thier current product to thier current customers, and a change in game direction may not reduce that problem, but exacerbate it.

As much as people here make fun of the people who storm about saying "I'm getting out of the game if X or y rumour is true", some if not all of those people actually do. Whe they quit, many sell thier armies. And others buy those armies, stopping GW from gaining the full benifit of the "new" codex release, which they used to see, when the person was restricted to selling to those who he knew. The frequency of these sales can be seen easily on ebay. GW stuff is worth less then 25% of it's purchase value, while it used to be worth 60% or more. That is not a good sign for the company.

Adding a new product line (or a specialist revolving door) might be thier best bet, but they need to do something else...because concentrating on thier core lines ain't working.

Reinholt
09-12-2007, 20:32
My concern and the reason I argue that it may be time for diversifaction (by adding product lines) is that I am beginning to believe that the compnany has reached a point of saturation.

I disagree here; in the UK? Yes, maybe. In the US? Not even close. They have literally captured such a small fraction of the US market that there might be single servers in WoW with more people than there are WHFB gamers in the US.


Adding a new product line (or a specialist revolving door) might be thier best bet, but they need to do something else...because concentrating on thier core lines ain't working.

If the belief is that their focus on core products is not working, I think that is a good argument for GW to start looking to sell the company. Saying they cannot succeed on their current strengths basically means their business model and execution have failed.

Likewise, diversifying into other things they can't effectively manage either (because they are failing with their core lines, which should be their major expertise) isn't going to solve their problems. The problem is that GW has poor marketing, poor quality control, and poor management. There is no business where that is a recipe for success they can diversify into, because there is no business where that is a recipe for success period.

Kelkyen
09-12-2007, 21:18
I'm not going to get into everything posted before, just some things I noticed when I dealt with GW when I used to own a store, and some of their current problems.

Years ago they brought a guy from Australia to the US to train him, I think to become one of the future big bosses. He was in the US for 5+ years, then was recently fired/quit. How many Land Raiders did they have to sell for that? Assuming he had a business degree, why was he here in the US past 6 months?

GW's stores are often dead until after school is out or a weekend. Why are 3 staff there? One to run the register, one to intro game, and one to...suck the profits of any sale away? Do you need 5 guys to run a hobby shop on a Saturday afternoon?

When I opened my game store, GW's closest store was 30 minutes away. A couple years later, a second was opened 20 minutes away. My last year, and a contributing factor for me going out of business, was they opened a third store 5 minutes away. My sales of GW product dropped 50% that last summer. How was the extra rental location, 3-5 employees, and inventory overhead helping them?

Gouging is also a problem.

While not so common these days, why do GW's games require 3 models for such and such unit, and they come in blisters of 2? Or 10 models for this and that and they sell them in boxes of 8?

New army book/codex comes out, and someones army has been fundamentally changed. The last groaning of Iron Warriors and Night Lords players springs to mind.

GW talks about how expensive their plastic kits cost to produce, but why is it they now cost more than the super high detailed historical models? I can get a diecast chassis Tiger tank with a turned aluminum barrel cheaper than a Land Raider.

Enough from me, off to play 40k.

efarrer
09-12-2007, 22:01
I'm not going to get into everything posted before, just some things I noticed when I dealt with GW when I used to own a store, and some of their current problems.

Years ago they brought a guy from Australia to the US to train him, I think to become one of the future big bosses. He was in the US for 5+ years, then was recently fired/quit. How many Land Raiders did they have to sell for that? Assuming he had a business degree, why was he here in the US past 6 months?

GW's stores are often dead until after school is out or a weekend. Why are 3 staff there? One to run the register, one to intro game, and one to...suck the profits of any sale away? Do you need 5 guys to run a hobby shop on a Saturday afternoon?

When I opened my game store, GW's closest store was 30 minutes away. A couple years later, a second was opened 20 minutes away. My last year, and a contributing factor for me going out of business, was they opened a third store 5 minutes away. My sales of GW product dropped 50% that last summer. How was the extra rental location, 3-5 employees, and inventory overhead helping them?

Gouging is also a problem.

While not so common these days, why do GW's games require 3 models for such and such unit, and they come in blisters of 2? Or 10 models for this and that and they sell them in boxes of 8?

New army book/codex comes out, and someones army has been fundamentally changed. The last groaning of Iron Warriors and Night Lords players springs to mind.

Enough from me, off to play 40k.

Welcome to the problem of the independent retailor with GW product. You advertise their prodcut and build excitement, then they kill your store. If they retract and your still in operation then they offer you the glorious oppurtunity to carry their whole line again.

The unit gouging always has po'd me. It's not needed.

The policy in Canada is to have at least two staff to close as I understand it, and since the company prefers malls that means almost all of those stores must be open for 10-12 hours, forcing an overstaffing situation.

THe new codex sitaution is one that has long left me scratching my head. It's not bad in fantasy, the new book looks a lot like the old one for thehighelves, but in 40K they aren't even keeping the style of play consistent between versions of the codex. Balance or no (and I'm not going to get into that), you cannot use an army between editions of 40K in the same way, and that frankly sucks the life right out of the experianced players. THe new Blood Angels are not the same as the 3rd edition BA and won't be the same as the 5th edition BA for style of play. Say what you want each time there is a radical revision to an army we hear people talk about the wonderful army they picked up from Ebay, and that's not a sale for GW.

Crazy Harborc
10-12-2007, 04:04
Kelkyen........I do understand how and why you feel as you do. My indie store closed before, long before GW opened a store in my area.

When GW opened a store here, a local chain suddenly had "problems". They had been one of the top indies (having several stores helped) in this area.
Now one of the chain's stores still carries GW. I knew the owner, he worked hard for several years building a GW playing market in this area.

Rumor (NOT mine) has it that the "problems" started just before GW moved into the area. At that time, there were over 13 local indie stores all of them had fair to very good local GW markets/playing groups building.

Now there's the local GW store left. One store was here, it's still listed in WD. That store is part of a nation-wide, franchised, chain of hobbyshops. Another store (w/the same franchised name) stocks GW. Four other stores are listed in the WD.....NONE of them were here then to help build that local market.

GW did not cause the massive turnover of local indies. I knew several of the owners (still do) of the various indies stocking large quanities of GW's products..they are gone. The local indie chain is still going strong, not because of high sales of GW's products, only one of their stores still stocks GW(none listed in WD). They stock lots of the other minies to be had and rules to use them with. Used to be mostly GW sold there....not anymore.

Great PR here......hey what!!:rolleyes:

Kelkyen
10-12-2007, 05:47
The biggest cause of indies closing is the stagnation of the hobby market. CCG's are all but worthless, and Magic is the only one that sells year to year. RPG's are on life support now due in part to MMO's, as playing WoW at home with voice comms is easier than playing D&D every couple weeks. Historical wargamers buy something once a decade, when it's on sale, in the 50% off bin, and because it has a scratch they want to knock another $10 off.

/off topic

Hehe, historical wargamers comment reminded me of something. Back in 2000 I think, I remember a guy asking me why I didn't carry Avalon Hill's bookshelf games. I told him they went out of business, as no one bought their games.

He says, "But I buy their games."

"When was the last time you bought one of their games, sir?" I asked.

"Uh, 1985."

"Thats why they went out of business, sir."

Classic example of a historical gamer if there ever was one.

/back on topic

In my case and many others, GW's practice of "helping" the hobby with a store down the street from an indie is the final straw. Everyone knows they do it, I just fail to see how capitalizing on someone else and driving them out helps them. Very few walk-in's get into the GW hobby, but many times ccg or rpg gamers do. GW stores don't draw those players into them. It's like GW's eating its own tail.

GW has a good thing. They make the best mini's and the games they make are gold. If someone else comes up with a winning combination that doesn't have the "evil company" mentality they might find their dominance of the industry lost. Of course, no one has done so for 20+ years, but time will tell.

twisted_mentat
10-12-2007, 07:25
Kelkyen, that story is awesome, and is why my 'retried' uncle makes more money selling old avalon hill games on ebay than he did working. a complete one can sell upwards of a few hundred bux, and you can often find them really cheap at yardsales and games stores.

I had one sitting under my bed for years i bought as a kid, and he turned around and sold it for $500, for which is gave me 200 of as a finders fee.

I really do think that giving someone whos starting the game a big boost would help. BFSP is a perfect example of this. You get two good starting forces. maybe $150-200 more and you've got yourself a decent sized dwarf or orc army.

If 5th ed 40k is comming, i really hope they do the same thing, giving a new player a starting force of marines and who ever they put in it. Tact squad, commander, maybe scouts or another foot unit, and maybe a dread or a landspeeder...

People don't mind paying X $ for something if they feel they're getting value for their money. I mean, look at the Ps3. Its the most powerful console out there, but hardly anyone is buying them because they don't feel like its worth that money. Though people bought Ps2s for nearly the same price but in significant numbers, because they saw value in it.

Though admittedly, its the perception of value rather than the actual value that nets buyers. the new ork box actually does save you something like $15, but people feel because it has 5 less orks in it, you're not getting as good a value. forgetting it basically comes with the components that you got in 2 blisters that cost $16 and $18 (canadian).

Though i don't know where people are getting the '5 years and gw is gone!' throught from. I'd love to borrow your time machine and get some lotto numbers, or buy a computer from 5 years in the future that kicks ass today.

lanrak
13-12-2007, 18:17
Hi all.
I belive that GWs biggest problem is alot of customers percive their products as 'poor value for money'.

And while this perceptions persists , GW will struggle along.

Yes, a particular boxed set of minatures MAY be quite good Value for money.
But if a £1 tape measure is bieng sold in the same store for £5, it may colour customers perceptions somewhat negatively.

Also BFSP boxed set , give comparativley good value for money.
100 minis + rule book and dice and measuring sticks and templates for £40!!(About 20p per plastic mini?.)

Then next time the 'newb' with BFSP or BFM pops in for more models,GW want to charge £40 for 40 minis?(£1 per plastic mini.)

Most commonly used phrase of parents in GW stores.
'HOW MUCH!'

Also poor support for actual 'core games' and gameplay issues is not helping the customers perceptions AT ALL.

Apocalypse
13-12-2007, 19:24
I think it is ironic as well that all of GWs customers hate them.... I mean, we pay the bills don't we? How can you alienate your source of income so thouroughly?

Crazy Harborc
14-12-2007, 01:48
Well....as one grandchild said. "Grandpa THAT is TOO MUCH money" Pretty smart for a ten year old.;)

ExquisiteEvil
14-12-2007, 06:17
Well....as one grandchild said. "Grandpa THAT is TOO MUCH money" Pretty smart for a ten year old.;)

The amount of times Ive seen similar situ's in my local are scary. It happens more so over the ast 2-3months with the Canadian dollar situation and such - but its always been a factor.

This time last year I remember a kid in with his poor unknowing mum. He started putting the components to a lizardman army on the counter - slann mage, couple of boxes of temple guard, stegadon, saurus, skinks, armybook, etc etc.

Must ahve only had maybe 6-7 items - mums smiling away happily as he's getting enthralled in the display cabinets, the staff merrily ringing through the product...

"ok, thats just $329 please..."

-mum literally does a double take and starts to look horrified-

"excuse me" she replies

-staff looks nervous-p

"its $329 with the tax"

-mum starts to put credit card away, turns to the kid and says-

"how about if santa got you those video games you wanted instead"

suffice to say, the kid agreed and that was a sale LOST to GW.

there is no way in making up those sales.

Surely its better practice to sell 3-4 times as much stuff at half the price?

I mean if that total sale would have come to the 150-200 mark(eg same amount as a few video games) that would have been money in the till.

But for some reason GW is insistent on driving away business with what is simply its own greed.

BrainFireBob
14-12-2007, 07:50
Personally, I figure upper management is looking at Europe and Britain, where, as I understand it, there isn't much non-GW option.

In the US there is, though, which is part of the problem.

ankara halla
14-12-2007, 10:04
Well, I don't know about Britan or much of the rest of Europe, but over here there's plenty of option.

Gaebriel
14-12-2007, 10:39
...
But for some reason GW is insistent on driving away business with what is simply its own greed.I guess GW would put it like "that wasn't our target customer" ;)


Personally, I figure upper management is looking at Europe and Britain, where, as I understand it, there isn't much non-GW option. ...
Well, I don't know about Britan or much of the rest of Europe, but over here there's plenty of option.
I have to agree - while the rift between GW and non-GW wargamers is there it's also floating. It's easier to find playing partners for GW's main systems, of course, but especially Battletech, Confrontation, Flames of War and Mechwarrior are quite popular (may vary from region to region). I guess what could give the impression is that GW's saturation (stores and established playerbase) is much higher.

Psycho_Laughs
14-12-2007, 11:20
The problem is that GW has poor marketing, poor quality control, and poor management. There is no business where that is a recipe for success they can diversify into, because there is no business where that is a recipe for success period.

quoted for truth, hilarity, and a little bit of sadness.
having worked as a redshirt in canada, sometimes i felt ashamed selling certain items.
i became quite vocal about some of the things i thought the company could do to improve its sales, nothing too crazy.
for example, the upper management constantly hounded us about white dwarf sales. so i suggested they improve the content. i worked there and can count on one hand how many white dwarfs i actually sold to some one who was not a complete novice to the hobby. we used to get them free and i still gave mine away to the regulars i liked.

unfortunately for me, speaking up is a big no no. especially when general sales in canada are down. if you are a vocal employee it must mean you hate the company and therefore you are part of the problem... shortly after the company gives you the "so long...
"by the way we have no real reason to fire you, but we'll mark it as gross insubordination so we don't have to pay you 2 weeks severance, even though you were probably the most popular staffer with the regulars."
another commonly held belief by management is that is sales are down it's not their falt, it's the falt of the retail staff for failing to use dishonest cheap retail tactics to sell overpriced junk. *bitterness*

and that is why i got rid of about 50% of all my gw collection, with the only reason it's not more being that i can't sell it for what i got it for on ebay, even with a 60% discount. might as well keep it.

a ray of hope i have is on other companies, such as PP. they seem to be doing the exact opposite from games workshop in relations to customer feed back. their product is so hot they have trouble keeping up with demand.

one main gripe i have though... it's not all the managements falt you know? the customer is to blame as well. it's the customer that gives them the money to be badly managed. if you complain to them but buy the product anyway, isn't that message a little mixed? "hey, stop screwing around, now here is some money"?
a real boycot of their products might be the kick in the pants they need.

gorgon
14-12-2007, 14:22
I could go on but what do you think? How can you conceive growth for GW as a business?

I'm 100% with you. If you look at their position in their market, I can't see how they're going to grow enough to keep their shareholders happy. I understand their retail chain is an attempt to generate organic growth, but good luck with that.

I want them to be successful and for the hobby to be around and healthy for a long time, mind you. I'm just not sure how they're going to get there without some real changes.

Reinholt
14-12-2007, 16:15
for example, the upper management constantly hounded us about white dwarf sales. so i suggested they improve the content.

unfortunately for me, speaking up is a big no no.

if you are a vocal employee it must mean you hate the company and therefore you are part of the problem...

another commonly held belief by management is that is sales are down it's not their falt,

This kind of story is repeated over and over when discussing companies with poor management. If a nickel dropped out of the sky every time I heard those kinds of things, I wouldn't be typing this post because I would be dead at the bottom of a huge pile of nickels. Sales are a multi-faceted operation, and not even the best sales team in the world is going to save you from some mistakes. This is not to suggest GW has the best sales team in the world (they don't), but that until a truly long-term and unified view is taken of operations, there will be no turnaround at GW.

My view, from my experience working with the management of various companies, is that GW is factionalized, incentives are not aligned, blame for failure and credit for success are not accurately assigned, and that the expertise necessary to run a business operation (as opposed to just making cool stuff) is not present. In short, poor management.

Also, management is always in charge, and has the final say. Thus, problems with operations are always their fault - if you had the power to change it and did not, you take the blame.


the customer is to blame as well. it's the customer that gives them the money to be badly managed. if you complain to them but buy the product anyway, isn't that message a little mixed?

This I disagree with; customers buy products on the basis of relative value. However, my question is this - given the declining sales volume GW is seeing, and the fact that they need things like Apocalypse to spur bulk sales currently, don't you think the customers are speaking?


I'm 100% with you. If you look at their position in their market, I can't see how they're going to grow enough to keep their shareholders happy.

License out the IP.

Develop strategies that allow for growth in markets other than the UK (hint: the UK strategy will not work in the US - look at successful US distribution models instead).

Relentlessly cut costs, including management level expenses.

That is how.

Crazy Harborc
15-12-2007, 01:39
Selling/licensing the IP.....Will a company/somebody be willing to buy GW IP?

A customer boycott......How to organize one is a big problem. IMHO, a world wide one is the only way GW's suits might notice. It would need to start in the UK. If it went counter clock wise around the world, the suits just might notice.

Anyway, getting GW's management to admit responsibilty for customer backlash/reduced sales volume and reduced cash flow...not too likely to happen.;)

Templar Ben
15-12-2007, 03:12
I had an interesting situation. A mom was asking what came in the GW box (BfSP) and she seemed to like the idea. Then they started saying what else he could buy to "round out" his army. Well she decided she would think about it. Later I saw her with her son at Toys R Us. There were looking at this.

The basic set comes with knights and orks. It also has little walls to use as terrain for cover and 2 warmachines for each army. They models are not painted and they are a solid color except for the general who is dry brushed a metallic. There are also expansions to give you more soldiers or more warmachines and there is an additional tower to use as an objective.

Cost of the set $35. Cost of the expansions $10 each.

Guess which one she bought.

That is what I see as GWs problem. Parents know their kid is more than likely going to drop it after about 6 months so why invest more than 50 bucks.

Etienne de Beaugard
15-12-2007, 03:50
@Templar Ben - Your experience does not surprise me. Funny thing is, if the clerks hadn't tried to up-sell the game, they would have made a new sale. GW could compete in the larger toy market, using packages like BfSP. They just need to drop the price point a little bit and get some advertising out in the mass media.

selfconstrukt
15-12-2007, 03:58
Wow! I remember that. My little brother had Crossbows and Catapults when he was a kid.

Man those pieces of plastic are loud when you use them on a hardwood floor!

Zink
15-12-2007, 06:47
I still have a bunch of the wall and tower pieces from Crossbow and Catapults. Back then it was barbarians versus vikings. My 4 year old started playing with the catapults and they broke due to the age of the plastic. We've been looking at these and thinking of buying.

I'm losing interest in 40k and warhammer rules but I still like a lot of the figures. I bought BFSP and was satisfied with it. The models aren't the greatest but for that price... GW needs advertising and more accessible games. Like a lot of people have already stated they need something to hook new players that doesn't cost an arm and a leg. Most people will never want to assemble and paint hundreds of dollars worth of figures just to play. But give them heroquest, spacehulk and that sort of thing and they may spend a few dollars and play sometimes. Out of those a few are bound to get interested in the bigger games.

Vic
15-12-2007, 07:27
@ Zink:
GW still has to get over the idea that they are a "premium" product that demands a premium price. Until they do, they will continue to get in their way of success. Unless of course they really want to keep the high price point and dont really care to sell to the "masses". Good luck to them as the current crop of buyers starts to dry up and no one really rushes in to purchase the stuff.

starlight
15-12-2007, 07:54
Sadly GW has mistaken their premium division (Forgeworld) for their entire operation.:(

Until they understand that if they want to *be* like Mercedes (as they have compared themselves to), they need to start acting like who they want to be. Mercedes is actively involved in working with their customers to improve their product. Mercedes has entry level products to entice new customers, as well as a diverse array of products to appeal to a wide variety of customers. Mercedes advertises to keep awareness high.

No matter how many times GW says it, they are nothing like Mercedes...:(

scratchbuilt
15-12-2007, 10:50
I think GW's biggest mistake is assuming that they are a model selling company. Models actually have a small margin because of the cost of making them. In comparison, rules and painting offer two much better oppurtunities. Look at mtg, pictures and paper is much cheaper. Also models are a huge investment, in money, time, and social integration - the pay off might not match up.

If GW did the painting and assembly for a fee, and where willing to store them in the store: They could charge for these services - with a large premium on high quality painting.
(This isn't an insult to those willing to paint for a fee - I'm just talking business)

Pacific
18-12-2007, 23:28
quoted for truth, hilarity, and a little bit of sadness.
having worked as a redshirt in canada, sometimes i felt ashamed selling certain items.
i became quite vocal about some of the things i thought the company could do to improve its sales, nothing too crazy.
for example, the upper management constantly hounded us about white dwarf sales. so i suggested they improve the content. i worked there and can count on one hand how many white dwarfs i actually sold to some one who was not a complete novice to the hobby. we used to get them free and i still gave mine away to the regulars i liked.

unfortunately for me, speaking up is a big no no. especially when general sales in canada are down. if you are a vocal employee it must mean you hate the company and therefore you are part of the problem... shortly after the company gives you the "so long...
"by the way we have no real reason to fire you, but we'll mark it as gross insubordination so we don't have to pay you 2 weeks severance, even though you were probably the most popular staffer with the regulars."
another commonly held belief by management is that is sales are down it's not their falt, it's the falt of the retail staff for failing to use dishonest cheap retail tactics to sell overpriced junk. *bitterness*

and that is why i got rid of about 50% of all my gw collection, with the only reason it's not more being that i can't sell it for what i got it for on ebay, even with a 60% discount. might as well keep it.

a ray of hope i have is on other companies, such as PP. they seem to be doing the exact opposite from games workshop in relations to customer feed back. their product is so hot they have trouble keeping up with demand.

one main gripe i have though... it's not all the managements falt you know? the customer is to blame as well. it's the customer that gives them the money to be badly managed. if you complain to them but buy the product anyway, isn't that message a little mixed? "hey, stop screwing around, now here is some money"?
a real boycot of their products might be the kick in the pants they need.

I felt two emotions when reading this post. The first was a vague feeling of comfort to know that someone experienced the same things when working for GW. The second was fear, as its more than slightly sinister that I work on the other side of the Atlantic Ocean to you yet seem to have been subject to what exactly the same kind of ordeal!

A big part of the problem, and this is one I am not sure many non-staff of ex-staff would be aware of, is that during the time I worked for the company the middle-management were replaced by (and I hope this isnt too harsh a term) 'spineless yes-men'. Essentially people who do nothing but fawn over the greatness and infallibility of GW, and blame the staff working under them for poor sales rather than any underlying problems with the business plan.

Perhaps more disturbing is that this 'rot', this utter lack of ability to look at the situation as it is, extends far further up the hierarchy. The store I worked in was once paid visit by one of the writers for White Dwarf, during the period that LoTR was starting to nose dive. I was looking forward to this visit with some excitement. "Ah", I thought, "now I might get some informative and honest answers".

Oh what a dissapointment. When pressed on the matter of poor sales for LoTR (and its lack of ability to hold players introduced to the hobby), I was faced with utter denial, and informed that the god-touched games system known as LoTR was selling as well as ever. "But!", I cried in dispair, "I work 40 hours a week in the store! I chat to a friends in other stores! Where do these sales figures come from? Why have your eyes rolled up into your head, and why are you chanting??"

Ok, this is a slight exaggeration, but Im sure you understand the jist.

How can any well-informed decisions be made, if the picture of the business as presented to the policy makers is so inaccurate? It makes me think of Comical Ali talking about the defeat of the US army as the tanks roll into Baghdad. And that cant be a good thing.

ExquisiteEvil
19-12-2007, 00:50
I felt two emotions when reading this post. The first was a vague feeling of comfort to know that someone experienced the same things when working for GW. The second was fear, as its more than slightly sinister that I work on the other side of the Atlantic Ocean to you yet seem to have been subject to what exactly the same kind of ordeal!

A big part of the problem, and this is one I am not sure many non-staff of ex-staff would be aware of, is that during the time I worked for the company the middle-management were replaced by (and I hope this isnt too harsh a term) 'spineless yes-men'. Essentially people who do nothing but fawn over the greatness and infallibility of GW, and blame the staff working under them for poor sales rather than any underlying problems with the business plan.

Perhaps more disturbing is that this 'rot', this utter lack of ability to look at the situation as it is, extends far further up the hierarchy. The store I worked in was once paid visit by one of the writers for White Dwarf, during the period that LoTR was starting to nose dive. I was looking forward to this visit with some excitement. "Ah", I thought, "now I might get some informative and honest answers".

Oh what a dissapointment. When pressed on the matter of poor sales for LoTR (and its lack of ability to hold players introduced to the hobby), I was faced with utter denial, and informed that the god-touched games system known as LoTR was selling as well as ever. "But!", I cried in dispair, "I work 40 hours a week in the store! I chat to a friends in other stores! Where do these sales figures come from? Why have your eyes rolled up into your head, and why are you chanting??"

Ok, this is a slight exaggeration, but Im sure you understand the jist.

How can any well-informed decisions be made, if the picture of the business as presented to the policy makers is so inaccurate? It makes me think of Comical Ali talking about the defeat of the US army as the tanks roll into Baghdad. And that cant be a good thing.

It funny how I hear this very same phenomena from staff members(ex AND current!) all over the world!(My work has meant me living in a few different countries).

It seems the sycophantic 'Fan bois' are the ones in charge at GW. Those very same people who like to visit forums and try sell the idea that GW is the holy grail of wargames, whilst being totally oblivious to the facts that the shareprice is plummeting and customers dwindling! The 'yes men' who would believe the sky green and the grass blue if thats what Kirby told them.

Ive even heard that it goes as far as people who ask sensible questions and make suggestions that could improve the company, being branded 'traitors' and 'heretics' by their managers!:eek:

How can a company grow when this is how suggestions of change is answered?

This combined with those same fanbois utter contempt for the people who pay their wages - the customer - is what is slowly killing GW inside out.

The customers cry out for better rules - GW say we should make them ourselves.

We ask for clear FAQs - GW say we dont need them.

We tell them their price is too high - GW laugh and tell us we're 'in the wrong hobby'

Well GW - there is an old adage that says the customer is ALWAYS right - and it is proven to be true time and time again by business' that fail due to NOT listening to their customers.