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Lord of Worms
09-05-2009, 11:42
Well, I guess the title says it all... Anyway, on the boards I heard a few off-hand comments that GW is in a bad way financially. :wtf: How? Does this mean the board of directors is trying to get them to squeeze a greater profit and is dissatisfied with how much money we dump on their stuff, or are they actually losing money? With the prices going up the way they had and stores popping up everywhere I doubt they could possibly be losing money. Unless they're paying their sculptors half a mil each a year, it's almost impossible. At least that's how it appears to we mortals. Anyway, anyone care to share on that

Griefbringer
09-05-2009, 12:03
If you would like to see something resembling facts about the GW financial situation (instead of the usual Interweb rumours), I would recommend checking the "Investor relations" section of GW website. There you can find their annual and semi-annual financial reports for several years.

Chaos and Evil
09-05-2009, 12:42
Why is GW not doing well financially:


- Overhead costs. (The high street stores cost a huge ammount in rent and staff paychecks, and make a loss for the company every year).

- The last few years have seen a lack of popularity for the Lord of the Rings game system, leaving GW with a decent ammount of semi-dead stock on the shelves.

- High prices have driven away some customers.

- Lack of diversity in gaming systems (All three core games are battle games, and customers naturally tend to pick a favourite and stick with it, instead of trying out other games) hurts crossover potential (If GW re-release Space Hulk & Hero Quest this will be mitigated).

- An ambitious store-opening scheme is costing money.

- They racked up quite a debt in loans at the start of the LoTR bubble bursting, instead of realigning expectations.



Alone, each is not a problem, but together they are causing difficulties.

ToXin
09-05-2009, 12:44
Understand a simple profit & loss account, contributions and recoveries for manufacturing...

there's a lot more to a big business than popping up shops, paying sculptors and raising prices.

Cane
09-05-2009, 12:48
On top of what Chaos has said, GW has been grabbing fewer and fewer overall sales over the past few years. Reinholt talked about it in one of his posts and if you do a search you can find it.

Lord of Worms
09-05-2009, 12:49
So what you're saying is that back in the mid 90s when it was run by a bunch of amateurs sitting around playing with toys it was successful. Now, that the big, bad businessmen who went to school for this and get payed astronomical sums screwed it up?

Chaos and Evil
09-05-2009, 12:56
So what you're saying is that back in the mid 90s when it was run by a bunch of amateurs sitting around playing with toys it was successful. Now, that the big, bad businessmen who went to school for this and get payed astronomical sums screwed it up?

One of the problems is that GW over-expanded during the height of LoTR's popularity, and when that waned they found that LoTR had been concealing a contraction in their core business, leaving them with high overheads.

Company revenue is down to ~70% of what it was at the height of the LoTR boom.

They made redundant a huge swathe of staff (Both in the Studio and on the shop floors), closed reigonal HQs, and started closing the more problematic GW retail stores.


On the other hand some of the boom time funds were well spent, for example GW now has some advanced in-house plastic machining technology, meaning they can produce new plastic models for cheaper R&D costs, faster than ever before.

Lord of Worms
09-05-2009, 13:03
On the other hand some of the boom time funds were well spent, for example GW now has some advanced in-house plastic machining technology, meaning they can produce new plastic models for cheaper R&D costs, faster than ever before.
I heard about that. You can actually see all the extra bitz they can cram on the sprues now.
Does anybody think that there will be a LoTR bubble 2.0 now that they're making "The Hobbit" movie?

Chaos and Evil
09-05-2009, 13:06
Does anybody think that there will be a LoTR bubble 2.0 now that they're making "The Hobbit" movie?

If GW get the license again yes.

I'd expect GW to get some better terms on the license this time around too, as the LoTR experience has shown that the period of high sales lasts only so long.

Lord of Worms
09-05-2009, 13:09
The implication that I'm getting (not just from this thread, but elsewhere) is that they payed a flat fee for this licence to whoever owns it, and overestimated on how much it would earn them.

Chaos and Evil
09-05-2009, 13:30
I've no idea if they paid a flat fee or not, sorry if I implied that.

Lord of Worms
09-05-2009, 13:33
All I heard was that it wasn't as successful as they thought it would be, and sunk too much into it. I figured that's why they kept coming out with supplement after supplement with 12 different Aragorn models trying to milk all they could.

Templar Ben
09-05-2009, 13:36
They underestimated how much they would make early and overestimated how long it would last.

The sudden influx of cash hid declining sales in 40K and Fantasy. As Tom Kirby said GW became "fat and lazy" and paid a nice dividend.

Then the movies ended and the LotR cash was cut off at the levels that they were seeing before. GW had presumed that the LotR players would jump over and start playing 40K and Fantasy. Generally that didn't happen in part because of the way the LotR game and LotR gamers were treated by staff and also due to the elegant gameplay in LotR compared to the other core games.

Lord of Worms
09-05-2009, 13:43
How was it treated by the staff?

Reinholt
09-05-2009, 13:44
So what you're saying is that back in the mid 90s when it was run by a bunch of amateurs sitting around playing with toys it was successful. Now, that the big, bad businessmen who went to school for this and get payed astronomical sums screwed it up?

I would argue GW has never been a well-run company.

The trick is that it is much easier to run a niche, small-market, low-overhead, growing company with little in the way of competition, which is what GW was early on. When companies are still small, it is easier to control things well, and you need a lower level of skill to make it work.

After all, if I ask you to add 2 + 2 in less than a few seconds, it's easy to come up with 4. Now add 1 + 3 + 5 + 4 + 7 + 8 + 21 + 9 + 10 + 1 + 5 + 3 + 19 in the same amount of time.

Scale is a confounding problem for humans in general; I think the problem is that GW's size outstripped GW's management skill, and the problem has not corrected itself.

For a similar problem, let me ask you:

Is it easier to run GW, or GM?

But to get back to the original query:


Anyway, on the boards I heard a few off-hand comments that GW is in a bad way financially. How? Does this mean the board of directors is trying to get them to squeeze a greater profit and is dissatisfied with how much money we dump on their stuff, or are they actually losing money?

There are two answers here, essentially:

In a literal sense, they lost money in 2007. The reasons behind this are many, but include high overhead costs, inefficient SG&A from headquarters, poor product quality control, extremely poor marketing, inadequate financial and business planning for the LotR line in particular, and a shrinking customer base due to repeated successive price raises.

In a less literal sense, for the amount of capital they require and the amount of risk they take on, GW produces a very sub-par return from an investment basis. Thus, as an investment, it looks absolutely terrible, and continues to look absolutely terrible. To really solve that problem, they need to iron out some of the issues above, as even if they swing back to a profit this year (and I expect they will), it wouldn't be enough of a profit to cause investors to buy into the stock when there are better options out there.

Lord of Worms
09-05-2009, 13:53
Does this mean then that "investor confidence" has a direct part to play in GW's product quality?:eek:

Templar Ben
09-05-2009, 14:04
How was it treated by the staff?

In many stores staff greatly disliked the game. They tried to steer people away from the games and in some cases would berate the people that played those games.

LotR brought in a lot of new people that were new to the stores. They would go in and buy the models and then leave.

Managers also didn't like them because the armies were smaller so you didn't get nearly the volume from one customer that you would for the other games. They didn't understand how someone could like the work of Tolkien but not want to play with chainswords in space.

I myself saw LotR games disrupted by staff.

Lord of Worms
09-05-2009, 14:13
This was a general phenomenon? Not just localized in your particular shop?:wtf::eek:

Thoth62
09-05-2009, 14:29
How was it treated by the staff?

Think ugly stepchild and you wouldn't be far off. For the reasons mentioned above, LotR, to me at least, always felt like it never really fit in with their mainstream product. In general it felt second rate, and as a result it was treated as such by the staff and the gamers who didn't play it.

That being said, we have a decent LotR community here with a few regulars at most of the tournaments. Is it the same as during the LotR bubble? Not a chance. But it isn't a complete waste of time for the store.

Templar Ben
09-05-2009, 14:36
This was a general phenomenon? Not just localized in your particular shop?

According to posters on here in various parts of the US, Canada and the UK it was not just a particular store.

Lord of Worms
09-05-2009, 14:41
This is yet another indication of poor oversight between the store-managers and their superiors. I've ranted about this particular issue enough...:mad:

Bloodknight
09-05-2009, 14:50
What do you expect? GW pay peanuts, and thus get monkeys.
Most redshirts used to work there for the discount. And the managers probably didn't like LotR that much because the minis are cheaper and people don't need that many.

The system is pretty elegant, but it's not a battle game.

Lord of Worms
09-05-2009, 14:55
Oh yeah, it's a great cult.

"We'll pay you minimum wage, but if you love the hobby enough it'll be fine. We'll also give you a "discount" so you can spend your pittance in our store. Make it a90% discount, it don't matter 'couse we get it all back anyway.":confused:

Mannimarco
09-05-2009, 15:07
unfortunately theres not a massive plethora of jobs out there, i work in a mimum wage job i hate, surrounded by people i hate and dealing with customers i hate, i could however do i job where im paid minimum wage working at somthing i like, surrounded by people i like and dealing with customers i like and have somthing in common with

chunk
09-05-2009, 15:10
I wouldn't say that all staff were keen to bash LotR. I failed a job interview with GW because I said it was hard to enjoy a game played only by kids (in relation to the games played at my local GW) and held no interest for me.

I'd say its going to take alot of plastic kits to make up for the costs of those new machines, but in the long run they are possibly the best investment they could make. With the rising costs of all metals and selling old metal minis at new plastic prices still represent a massive saving to me. They're far from perfect, and I think the worst thing they do is to chop and change their marketing strategies and alienate long term customers.

Belakor
09-05-2009, 15:17
Looking at the latest two financial reports, they are not as bad as people here want you to believe.

Losing sales is not a GW phenomena.

Galdur Hrafnsson
09-05-2009, 15:20
unfortunately theres not a massive plethora of jobs out there, i work in a mimum wage job i hate, surrounded by people i hate and dealing with customers i hate, i could however do i job where im paid minimum wage working at somthing i like, surrounded by people i like and dealing with customers i like and have somthing in common with

That's what I thought when I applied for the GW job. I quickly discovered that I loathed the bulk of the customers (especially the children with a sense of entitlement; i.e. all of them), I was forced to smile all the time even if I couldn't stand the person I was talking to, I was verbally abused on several occasions and could do little about it, and frankly... if you're surrounded by miniatures all day and spend all your time painting them, when you get home that's often the last thing you want to do. Yet we were expected to have a gameable army for all 3 core games. When I left I had one painted 40k army, one painted warhammer unit, a painted gimli, and unpainted models that probably equalled over a grand if I'd bought them full price.

The only things that made the job at all fun were my co-workers and my housemates, two of which were also hobbyists. Staff games nights were great fun. Vets nights were also fun, if I didn't have to work them.

Lord of Worms
09-05-2009, 15:21
unfortunately theres not a massive plethora of jobs out there, i work in a mimum wage job i hate, surrounded by people i hate and dealing with customers i hate, i could however do i job where im paid minimum wage working at somthing i like, surrounded by people i like and dealing with customers i like and have somthing in common with

That's true, but babysitting on top of that?:eek:

Reinholt
09-05-2009, 16:34
Does this mean then that "investor confidence" has a direct part to play in GW's product quality?:eek:

More so, you have it reversed. Product quality leads to investor confidence, and a lack of product quality leads to a lack of investor confidence.

The willingness to invest in GW could be seen as a referendum on the quality of GW as a company, which could be seen as a referendum primarily on the health of the hobby and the quality of GW's products within it.

So, in short, it's something useful to look at, because what stock prices and their movements tell you is this:

"Are people willing to give me their money to invest at this price?"

You may argue there are good or bad reasons for the opinions they have, but that is what it ultimately shows. For GW, the answer lately has been "No", which leads to some interesting questions as to why that is the case.

Wolf Scout Ewan
09-05-2009, 16:55
Maybe its just my area but while LotR was at its height elsewhere the the two local GW's were empty. The staff made it clear that because the PTB were concentrating on LotR the other two games systems player's felt neglected.

Because of neglecting WFB and 40k, players did other things.

I really dont know where the LotR stuff was selling cos it wasnt at my locals!

Fenlear
09-05-2009, 17:46
- High prices have driven away some customers.


High prices have driven away a LOT of customers. There were lots of price rises around when lord of the rings came out too and it caused a LOT of 40k and fantasy players to leave (self included). GW ignored the drastic loses in the 2 main systems because the LotR cash cow was coming in. Now the cash cow is over and they just keep raising the prices losing even more customers. At this point I don’t even see anyone around with new fantasy armies because no one can afford them, particularly the hordish armies. Everyone I see playing has armies bought from a while ago, practically nothing new or they are using 3rd party miniatures. They now have a lot of competition, mostly created from their price rises.

As far as staff being against LotR I’ve seen it myself. It generally comes from the employees that play fantasy and in all honesty I agree with them as I too am a fantasy player. Managers may not have liked the sales difference but I don’t thing that’s where most of the employees were coming from. From what I gathered it had to do with the fact that Warhammer and LotR are 2 different IPs to the same thing: fantasy war gamming. It was bothersome to see all these new great ideas going into a new system, rather then improving the system we already had and bought into. Case and point being the LotR turn system. I think most people would agree (unless they are completely anti LotR) that LotR has a much better turn system then what we see in Warhammer. Had LotR never happened we might had seen this better turn system implemented into 7th edition rather then having 2 systems where one gets all the latest ideas and the other becomes dated and broken. This doesn’t really affect 40k at all, as all the sci-fi war gamming ideas are still going into a single system. If GW bought the license to alien vs. predator or some other sci-fi IP, you would start to see 40K suffer in the same way that Warhammer has.

Lastly I don’t think the Hobbit is going to make nearly as much as a bubble as the first time around. When the first movie came the wow factor was uncanny. I myself thought it was the greatest movie ever made. After that wow factor worn off I look back at the movies and still think they’re pretty good, but now notices how whole chapters have been taken out (replaced with long drawn out scenes that don’t really add to the plot) and how they abused the CGI a little too much. When they announced that the hobbit would be made into 2 movies rather then 1 I know a lot of fan boys lost it. After all the hobbit was the shortest of the books that Tolkien wrote, being about 1/3 the length of Return of the Ring. If Return of the King was to be a single movie I fail to see how a book 1/3 the length can be made into 2 movies unless they are just going to pull stuff out of their ass just to milk ticket sales, and Jackson is not even directing. With the wow factor gone and most the fan boys pissed off I don’t see how the new movies will create anywhere near the same bubble.

warhammergrimace
09-05-2009, 17:56
The LOTR system has been bashed by store staff for a long time and I personally think this hasn't help with sales. I've been to quite a few stores around the country and staff are all the same. I've even been told by staff don't bother taking up LOTR as its *****, you play LOTR, really, man that's sad.

When staff in stores are slating the game, then obviously the sales will be down.

Ultimate Life Form
09-05-2009, 18:01
If Return of the King was to be a single movie I fail to see how a book 1/3 the length can be made into 2 movies unless they are just going to pull stuff out of their ass just to milk ticket sales, and Jackson is not even directing.

You don´t need much of a plot to make movies. In fact, I´ve seen several movies that seemed to get around without any plot whatsoever, leaving a gaping hole in my head after 2 hrs.:D

Chaos and Evil
09-05-2009, 18:01
LoTR didn't deliver what people expected.

They expected a battle game, and they got a small scale skirmish game... which they then tried to play as a battle game (Meaning games took many hours to play).

WoTR is now here as a true battle game, but it was released too late for many, and it's too simplistic and random for many older gamers' taste too.

starlight
09-05-2009, 18:07
*sigh*

The Hobbit *isn't* being made into two movies. The Hobbit is being made into one movie, and they are making a second movie to bridge the period between The Hobbit and The Lord of the Rings.

Yes, the huge sales from LotR masked declining sales from WFB and 40K, and now that LotR sales have dropped off, GW (who foolishly expected LotR sales to continue unchecked) is in a pickle. :(

Yes, many people in GW were frustrated with the amount of resources being devoted to LotR (instead of WFB), but what most refuse to recognise is that if LotR hadn't happened those resources wouldn't have existed in the first place! No LotR = no new plastic moulding technology, which has greatly benefited both 40K and WFB.

Yes, many staff undermined LotR, but many staff also undermine 40K or WFB if they don't like or understand the differences between the systems.

Would the WFB rules have changed to resemble what LotR used (ie turn system, etc)? Seriously? I don't think so. GW has a long track record of refusing to change until they are forced to do so (not unusual in companies), so why they would voluntarily change after six editions hasn't been demonstrated.

Most people at GW still haven't grasped that their main competitors aren't other gaming companies, but other uses of time and money. If GW continues to create and maintain high barriers to admission (high costs, poorly written rules, etc), they will see their customer base continue to decline, as demonstrated by falling sales volumes in their core lines (WFB/40K) since 2002!

Ultimate Life Form
09-05-2009, 18:14
as demonstrated by falling sales volumes in their core lines (WFB/40K) since 2002!

Well, anyone can claim what he wants here on the web and what you do believe is up to you.:(

With so many (sometimes contradictionary) numbers thrown around all the time, I would like to get my own opininon. So is there some source or anything where GW officialy publish the sales numbers? There was a link to a financial report some time in the past, but I couldn´t quite work my way through this financial gibberish.:(

Fenlear
09-05-2009, 18:19
Well I have to argue that trying to make a movie to “bridge the gap” is blasphemy. Taking someone’s masterpiece and mutilating it just because you think you can milk an extra movie out of it is horrible, and I’m fairly surprised that Tolkien estates would even allow it (not like they're not already rich).

boogle
09-05-2009, 18:29
What i find so funny is their refusal to believe that anything other than other mini companies offer competition to them, whereas 10-12 years ago Pokemon got blamed for the drop in sales

yabbadabba
09-05-2009, 18:42
Well, anyone can claim what he wants here on the web and what you do believe is up to you.:(

With so many (sometimes contradictionary) numbers thrown around all the time, I would like to get my own opininon. So is there some source or anything where GW officialy publish the sales numbers? There was a link to a financial report some time in the past, but I couldn´t quite work my way through this financial gibberish.:(

Go and work for GW. Get to a reasonable level. It's amazing what you can learn that does not get anywhere near the stores, especially at HQ.

re: LotR. Don't credit GW managers with too much requirements to examine their sales. A sales is a sale and LotR was easy money for alot of the stores. GW store managers are not required to run P+L's. A lot of store staff didn't get into LotR initially because they didn't understand the appeal of the game, they didn't like the film link and the amount of "non-wargamers" they had to deal with and, tbh, the retail higher management presented the opportunity all wrong. That second point is really revealing - GW staff just aren't used to shppers. They are used to people being actively interested in what they are buying and who have time to spend talking.

Oh, and GW shop staff were explicitly told not to ignore their 40K and WFB customers as they would be essential post LotR bubble.

For me, talking to a lot of GWUK ex-retail staff, GW failed to make the most of LotR and got there messages to the front line wrong. If Kirby recognised this, it's not surprising that the infection spread over the whole company, especially at the strategic level.

Hlokk
09-05-2009, 18:43
Most people at GW still haven't grasped that their main competitors aren't other gaming companies, but other uses of time and money. If GW continues to create and maintain high barriers to admission (high costs, poorly written rules, etc), they will see their customer base continue to decline, as demonstrated by falling sales volumes in their core lines (WFB/40K) since 2002!
The barriers to admission are quite horrific at the moment in terms of GW. On a pure cost basis, the start up costs of an army if bought new are enough to have made enough of my friends back out of starting the hobby. What doesnt help though, is that there is no real direct product based competition in terms of market penetration or wide spread availability on the highstreet. If there were, GW would be forced to compete, whereas now it just behaves like a bunch of chimps throwing crap at each other (or us).

I think your right in pointing out the biggest competitor being other uses for time and money. GW is pricing itself to compete with computer games, DVDs and so on, maybe not intentionally, but its at a point where their on a much more vicious playing field, and things will not end well.

I didn't mind a tenner and a bit of change for a few nice models once or twice a week, as its not that much, really. But when they want £20 for the same thing, I have to reprioritise. I have a daughter to raise and other, frankly, more important uses for my money.

I personally would recommend people take up golf. I got a set of second hand golf clubs from a car boot for a tenner. Job done.

starlight
09-05-2009, 18:51
Well, anyone can claim what he wants here on the web and what you do believe is up to you.:(

With so many (sometimes contradictionary) numbers thrown around all the time, I would like to get my own opininon. So is there some source or anything where GW officialy publish the sales numbers? There was a link to a financial report some time in the past, but I couldn´t quite work my way through this financial gibberish.:(

I'm not *claiming* anything, and I don't *believe* anything, I *know* it, having followed their financial reports for many years... As a publicly traded company, GW is required to publish annual reports, which are available free for the asking. They make for sad and worrying reading. :(


Well I have to argue that trying to make a movie to “bridge the gap” is blasphemy. Taking someone’s masterpiece and mutilating it just because you think you can milk an extra movie out of it is horrible, and I’m fairly surprised that Tolkien estates would even allow it (not like they're not already rich).

Apparently the new director (Del Toro) feels there is enough material in The Hobbit to justify two movies ending right before The Fellowship of the Ring.


What i find so funny is their refusal to believe that anything other than other mini companies offer competition to them, whereas 10-12 years ago Pokemon got blamed for the drop in sales

GW has *always* blamed external influences for their problems, only recently accepting that *some* (but not all) of the issues were internal.

boogle
09-05-2009, 18:57
And yet, having spoken and indeed am good friends with a guy who was with the company for many years and worked both in store and regional management at one time or another, stated that those who wielded the real power don't believe that there is any real competition to their products.

It makes me think that the majority of GW higher up don't know their **** from their elbow and can't remember the lies they have told

starlight
09-05-2009, 19:00
And if you don't believe that, read a few years of their Annual Reports to get Tom Kirby's rantings on that very subject... :(

Fenlear
09-05-2009, 19:00
The new director is corporate scum then. The Hobbit was the most simplistic of the books, very little material. If your only aim was to make more money you could argue that a 100 page script could be 6 movies. I’ll stop arguing the movies though; this has gotten off the main subject.

I still hold with I don’t think the new movies will make a big sales boost for GW like the first time around.

Reinholt
09-05-2009, 19:03
Well, anyone can claim what he wants here on the web and what you do believe is up to you.:(

With so many (sometimes contradictionary) numbers thrown around all the time, I would like to get my own opininon. So is there some source or anything where GW officialy publish the sales numbers? There was a link to a financial report some time in the past, but I couldn´t quite work my way through this financial gibberish.:(

That financial gibberish, however, is the sales numbers. You have to learn how to read them to figure out what is going on.

;)

I've posted on it before. The fact that GW had a decline in sales revenue over the past several years, and the fact that they are experiencing major drops in sales volume is just that: fact.


I think your right in pointing out the biggest competitor being other uses for time and money. GW is pricing itself to compete with computer games, DVDs and so on, maybe not intentionally, but its at a point where their on a much more vicious playing field, and things will not end well.

This is the key. GW's products are discretionary entertainment. Thus, like it or not, they compete with all other discretionary entertainment. There are plenty of options for how to spend my time. Higher prices from GW will encourage people to do those other things.

Damien 1427
09-05-2009, 19:12
The new director is corporate scum then.

...Del Toro is anything but. Take a look at what he's done, and how he did it. He's a strange man, a very strange man, but he's not a Hollywood toolbag who cares more about the bottom line than making great films.

To be honest though, I do wonder why the current management haven't been fed to the dogs. Either they're playing a very long and shrewd game, or they're so divorced from reality the company may as well take business decisions from a D1000 Chart.

Ultimate Life Form
09-05-2009, 19:15
That financial gibberish, however, is the sales numbers. You have to learn how to read them to figure out what is going on.


Since I cannot even read financial gibberish too well in my own language, surely you do not expect me to be able to read it in a foreign language? I´m not some kind of bank chairman like you appear to be, you mind.:o

boogle
09-05-2009, 19:15
of which:
1-500 - Raise Prices
501-1000 - sack frontline staff

IJW
09-05-2009, 20:09
The new director is corporate scum then.
The director of films like Chronos and Pan's Labyrinth is corporate scum? Try doing some basic research next time... :rolleyes:

freddythebig
09-05-2009, 20:13
With regard to the cost of getting into GW games and what they consider to be their competition, I have recently bought a box each of Valiant Miniatures US, British and German figures for use in 20mm WWII skirmish games.
These boxes cost less than £10 each.
Each box contains over 60 figures and gives me a useable force.
I have various rules, the cheapest were free to download and the most expensive £25 for a Hardcover book similar to the GW rules.
As I only have a limited amount of leisure time available to me, the time spent painting and gaming with these figures will obviously be at the expense of time spent with GW products, therefore they are competing for my time and I have spent money on them that I will not now spend on GW.

Damien 1427
09-05-2009, 20:32
of which:
1-500 - Raise Prices
501-1000 - sack frontline staff

Nah, closer to...

001-100 - Raise Prices D6%
101-250 - Cut number of troops in the box by D6xD6%
251- Mutation - Anal Elbows, the unit gains arses on their elbows.
252-500 - Sack frontline staff
501-550 - Trebles all round!
551-800 - Increase bonuses by D6xD6 thousand pounds sterling.
801-1000 - Retreat to the Ivory Tower and spend the next D6 financial quarters quietly ignoring all critcism.

boogle
09-05-2009, 21:04
Nah, closer to...

001-100 - Raise Prices D6%
101-250 - Cut number of troops in the box by D6xD6%
251- Mutation - Anal Elbows, the unit gains arses on their elbows.
252-500 - Sack frontline staff
501-550 - Trebles all round!
551-800 - Increase bonuses by D6xD6 thousand pounds sterling.
801-1000 - Retreat to the Ivory Tower and spend the next D6 financial quarters quietly ignoring all critcism.

Brilliant, just brilliant

Quetzl
09-05-2009, 21:25
Be funny if GW did collapse... What would we do with ourselves? No more rumour thread ranting, no heated conversations about dice rolling!

In the distant future, there is only boredom.

Damien 1427
09-05-2009, 21:31
I'm certain life would go on. At worst, we'd move onto other things, but I imagine as long as we have ample free time and unhealthy obsessions with toy soldiers and statistics, the game would move onwards, ever onwards.
I tend to fiddle with the rules, anyway. So I'd be fine.

As I was making use of the lavatory, I did have a thought... Surely, the problems are clear to us on the ground. As much as we lambast GW's management, surely they know what's going on. So, assuming they're not utterly self-absorbed, they must know what's gone wrong, and thus, the solution isn't that simple.

Hlokk
09-05-2009, 21:31
The original question:
How is it possible that GW is losing money?

The real answer:
because its run by idiots.

Simple.

Cane
09-05-2009, 21:54
Yea, even the GW higher-ups admit the company got fat and lazy.

One thing that hurts GW's profits is opening up stores that, from their results, turn in poor sales compared to the cost to run it. They've expanded beyond walk-in demand especially since you can get the same exact product at a much cheaper cost online rather than an official GW location. This is one of the great things that Southwest Airlines did in the USA - before they opened up new travel routes or purchased new aircraft they made sure such operations would rake in positive financial statements...sounds simple enough yet most major airline companies went the GW route and are paying for it or are already out of business.

boogle
09-05-2009, 21:56
I heard on good authority they have a few more 1 man stores planned for later on this year in the UK

Damien 1427
09-05-2009, 22:03
Yea, even the GW higher-ups admit the company got fat and lazy.

So am I, but I took the step to cut back on the takeaways and get some damned exercise. GW seem to be urinating in a bottle and inhaling quarter pounders, if we're running with that example.

It's one thing to admit you've a problem. It's quite another to actually do something about it.

Dr. Who
09-05-2009, 22:07
Sorry, briefly off topic, but:


*sigh*

The Hobbit *isn't* being made into two movies. The Hobbit is being made into one movie, and they are making a second movie to bridge the period between The Hobbit and The Lord of the Rings.


Apparently the new director (Del Toro) feels there is enough material in The Hobbit to justify two movies ending right before The Fellowship of the Ring.


Actually this is no longer true apparantly. According to this (http://www.darkhorizons.com/news/13871/-the-hobbit-spread-over-two-films/) story from the Dark Horizons movie news site the premise has been changed. Siting an article in Empire Magazine, the premise is now to do the Hobbit in two films with added bits and bobs about Gandalf and the White Counsel and his trip to Dol Guldur (and his battle with The Necromancer I presume).

Back on topic: No, I don't agree with GW's way of doing business either but I'll refrain from ranting here. Suffice to say, I think GW is going about it all wrong in so many areas.

- Dr.

GraveGuard
09-05-2009, 22:37
The thing is though GW never really knew what they were doing business wise. The differance was though before that was because is wasn't run by people who knew what they were doing. It was run by gamers. The problem now is its run by business people who don't know what they're doing either. Give it back to the Gamers and it might stand a chance. After all that was what drew people into it in the first place.

I could never stomach all this "we have to compete with films and games" crap. Wargames/Wargaming is a niche within a niche, Hell even GW have admitted that as they don't advertise. If Wargaming and GW were mainstream things you could get anyone into you would be marketing it like anything else, but they arn't because they know it won't appeal to everyone yet this still keep trying to push the idea that it is.

Velsharoon
09-05-2009, 23:00
See thing is they are in competition, i have a limited income (dont we all) and whereas before I would spend all my hobby funds on GW I have in the last 2 weeks purchased:

urbanwar platformer set
warlord warhounds
prince august warzone miniatures
gw flagellants

before I would never have considered other companies but now I have taken the "risk"

I am going to finish off my Orcs and Goblins and probably my demon hunters if I can find the money, my necromunda and mordheim are completed and mostly from ebay anyway andthen I shall ignore GW as I doubt they will be offering "VFM" and I shall be looking into historical s and other scifi/fantasy wargames

darkace77450
09-05-2009, 23:11
Nah, closer to...

001-100 - Raise Prices D6%
101-250 - Cut number of troops in the box by D6xD6%
251- Mutation - Anal Elbows, the unit gains arses on their elbows.
252-500 - Sack frontline staff
501-550 - Trebles all round!
551-800 - Increase bonuses by D6xD6 thousand pounds sterling.
801-1000 - Retreat to the Ivory Tower and spend the next D6 financial quarters quietly ignoring all critcism.

You left out the "release yet more space marines and chaos stuff.


I'm certain life would go on. At worst, we'd move onto other things, but I imagine as long as we have ample free time and unhealthy obsessions with toy soldiers and statistics, the game would move onwards, ever onwards.
I tend to fiddle with the rules, anyway. So I'd be fine.

As I was making use of the lavatory, I did have a thought... Surely, the problems are clear to us on the ground. As much as we lambast GW's management, surely they know what's going on. So, assuming they're not utterly self-absorbed, they must know what's gone wrong, and thus, the solution isn't that simple.

If they are smart enough to realize that there is a problem they would surely be smart enough to realize that raising prices to ridiculous levels isn't the answer.

W0lf
09-05-2009, 23:33
Its ok people, GW will just raise prices and all will be fine :wtf:

lol.

silashand
09-05-2009, 23:38
Apparently the new director (Del Toro) feels there is enough material in The Hobbit to justify two movies ending right before The Fellowship of the Ring.

Actually, I believe there is as well. If nothing else, the Fall of the Necromancer if done well would be an exceptional story. It's not one of the more detailed elements of Tolkien's mythos, but it is there and has significant potential.

Cheers, Gary

starlight
10-05-2009, 01:38
Sorry, briefly off topic, but:

*quoted bits*

Actually this is no longer true apparantly. According to this (http://www.darkhorizons.com/news/13871/-the-hobbit-spread-over-two-films/) story from the Dark Horizons movie news site the premise has been changed. Siting an article in Empire Magazine, the premise is now to do the Hobbit in two films with added bits and bobs about Gandalf and the White Counsel and his trip to Dol Guldur (and his battle with The Necromancer I presume).

That would be the second bit. :p The first bit was the original plan, which has been superseded... Since New Line only has (so far) the rights to The Hobbit and The Lord of the Rings books, they are limited to what's in them for the next movie(s), for good or ill.

Anyways, it's still a long ways off, so much can change...

Duke Georgal
10-05-2009, 01:55
What do you expect? GW pay peanuts, and thus get monkeys.

Most redshirts used to work there for the discount.

I looked into applying for a job at GW once, years ago, and was disgusted by their pay scale. It was actually an insult.

I got more stuff for less work as an outrider than I would have been able to get with a discount as an actual GW employee.

madprophet
10-05-2009, 02:00
Considering the global nature of the current recession, for GW to be at 70% of their peak isn't all that bad. GM, for example, is down 50% in sales from LAST YEAR. Yes, LoTR didn't produce as expected but GW isn't losing money on it, they just aren't making as much as they'd like.

Yes, 40k and Fantasy sales are down, but then all discretionary/hobby sales are down. Across the board, all retail sales are in the dumps.

As for GW's prices, they aren't totally insane compared to other niche/hobby products. Truth is 'Kriegspieling' was always a rich man's hobby. Avalon Hill, when there was an Avalon Hill, invented the hex and counter historical wargame and opened the hobby to the masses. D&D popularized miniatures gaming largely by reducing the army size to 1 (with 10 figures or less doing for the opposition in any case).

Along comes GW with WFB, and all of a sudden you have to raise armies of a hundred figures in 25mm no less (even historical wargamers rarely went bigger than 15mm) - of course the thing is expensive! Now you want to have multiple armies? Fine but you're gonna pay.

Now, if you are careful you can keep costs down. I bought 2 AoBR sets at 25% off at my local game shop (they had sent coupons in the mail) but you could find similar deals online (thewarstore.com sells GW for 20% off MSRP every day). Adding a few bits from my bit box and some scratch-built killa-kans and a scratch-built DeffDred (avg. cost $2.00 per model from bitz bought at Home Depot) I had 1850 points of Orks for the staggering sum of about $70.00.

Taking the Marines, adding the squad from the last boxed set, adding a few bitz from my bitz box I got 1500 points of Marines for the same $70.00.

starlight
10-05-2009, 02:42
Considering that GW's sales were sliding years before the recent recession, your point is sadly off the mark. Compound that with the fact that they didn't even notice the last recession (as was the case most hobby outfits) and you have a sorry picture... :(

The problem is that LotR produced *better* than expected, unfortunately GW allowed themselves to believe that the gravy train would continue without end without any effort on their part... :rolleyes:

ryntyrr
10-05-2009, 02:58
Games Workshop enjoyed the good times when the "circus" came to visit. Sadly they got the wrong signals. So GW expanded rapidly, had a few more stores, factories, HQs, staff. But they never understood the nature of a "circus". It comes in to town generates a buzz and then packs up and leaves. Not reading the correct signals, their new and expanded worldwide business has considerably retracted.

They had developed their plans on the basis of continual growth and did not see it coming. The terms "Bubble" & "Boom", were not correctly understood, in terms that bubbles eventually burst and the Boom is inherently the problem as it is not based on sound economics so therefore you always end with the "bust" which is the correction.

Right now in the past couple of years GWs status is being corrected by the market. Their job should be to surrive through the correction and hopefully now base their economics on sound business, which is slow linear growth and and adjustable variable costs. That is dependant on the skills & knowledge of the board and it's senior management.

Only problem they might have is the mercy they are with their big shareholders and their self interests.

spaint2k
10-05-2009, 03:42
*sigh*

The Hobbit *isn't* being made into two movies. The Hobbit is being made into one movie, and they are making a second movie to bridge the period between The Hobbit and The Lord of the Rings.

Oh, that sounds really exciting. 60+ years of the continuing non-adventures of Bilbo Baggins in Bag End.

Steve

starlight
10-05-2009, 04:21
And has been shown to have been replaced with the *new* version... :p

Lord Dan
10-05-2009, 04:31
The problem is that LotR produced *better* than expected, unfortunately GW allowed themselves to believe that the gravy train would continue without end without any effort on their part... :rolleyes:

I think you got it exactly right, Starlight. Unfortunately this mindset might be what is internally justifying their more extreme price hikes (LoTR plastic box sets, greatswords, paint pots...). If people are willing to pay a certain amount for X amount of effort, then surely they're willing to pay more for X+1 effort. It should be noted that the concept of "+1 effort" is mostly a self-serving delusion on the part of GW. More abundant bitz, shinier packaging, and new products are general expectations; not massive increase-demanding improvements.

starlight
10-05-2009, 05:03
Very true. GW seems to have confused normal customer expectations with something they can charge more for... :(

The irony is that I *would* pay more (more than before, not more than now:p) for X+1 effort...but I have yet to see it...:(

Templar Ben
10-05-2009, 13:17
I do think that trying to give a value added service like "you buy it, we build it" is a step in the right direction.

Billpete002
10-05-2009, 14:45
now if only they offered membership cards where you could get discounts online or at their stores...

I seriously don't see how their online shop or main stores can compete with online stores that sell almost all their items for 20-30% off. The only times I consider buying from GW is direct only.

They also have a terrible mess with pricing exchange rates (GBP to Euro for one example) - I am sure Canadians and Australians can comment on this as well..

It's a pity though, the only reason I like their shops and the main reason I go there is to game - nothing more. If they offered deals and such hell I would go back - the only time they ever offered deals is the 40k Apocalypse boxes and frankly they should of just made it "buy X you get Y free" or Z discount. It would have made people buy what they want in bulk with the same discount boosting the revenue of GW.

starlight
10-05-2009, 14:47
They used to offer loyalty cards, but discontinued them after no impact on sales was seen.

Templar Ben
10-05-2009, 15:01
Does anyone feel guilty buying online and then playing in a GW store? Just curious.

Instead of loyalty cards I would prefer the first move be to include a feedback card in every boxed set. Then they are getting an idea of what people think of the product from the people that are purchasing their product.

In a perfect world that information would be going to a third party research firm that is going to gather the data by region so that GW has a better understanding of how New England is different than the South is different from the Pacific Northwest which is different then the Ontario area. It would not be just North America as I doubt the Italian market is just like the Bavarian market which is not like the Berlin market which is different than the UK. GW doesn't seem to understand that.

Mucho
10-05-2009, 15:33
One more problem for GW, is the fact that they already lost so much time to make a fundamental buisness change. They stuck their head in the ground for so long, that it only becomes harder and harder to try new ways of approaching their customers.

For exemple: They still haven't made a clear and obvious distinction between gamers and hobby'res. Whille the last might collect full army's, this isn't their main goal. They want before anything else cool models and are as such willing to pay a higher price for a better but smaller product.

Gamers however, want wholle army's and will only invest in models if they can justify a complete army to their liking. I think mainly here the current prices are way over the top, and the gamers are, in my opinion, driven away to alternative gaming like Xbox, computer, sports,...

The problem with this fenomena is the lack of easy solution. Lowering the prices a little bit will not bring massas off players back from their current alternatives!

Templar Ben
10-05-2009, 15:55
Gamers would buy things like Possessed if the unit was worth the cost. There are simply too many cases of awesome models with terrible rules that keeps most gamers from picking them up.

Nu Fenix
10-05-2009, 16:15
I heard on good authority they have a few more 1 man stores planned for later on this year in the UK

I know that one of the full timers from my local GW is going to Squad Leader training at GWHQ on Monday, and is expected to be sent to a one man store after his training is completed.

Personally I think one man stores are a bad idea, but we shall see.

Jedi152
10-05-2009, 16:25
I still don't get how one man stores work. Does he have to usher everyone out and lock up every time he needs a pee?

Duke Georgal
10-05-2009, 16:26
Gamers would buy things like Possessed if the unit was worth the cost. There are simply too many cases of awesome models with terrible rules that keeps most gamers from picking them up.

And this is why the new Greatswords and Steam Tanks are so overpriced. They have good rules, so gamers will buy them.

Fantastic models, like the Possessed, get left on the shelves because the rules do not justify the $$$ price tag.

Mucho
10-05-2009, 17:02
And this is why the new Greatswords and Steam Tanks are so overpriced. They have good rules, so gamers will buy them.

Fantastic models, like the Possessed, get left on the shelves because the rules do not justify the $$$ price tag.

Well, even gamers aren't completly incesitive towards etisthic's of the models. ;)

But for good measure, why would a chaos Gamer buy the new Possessed if he already has one or two units?

Only if the Gamer starts a new army, he will be interested in buying the new models. But since the costs off a completely new army are way too high, he won't buy anything. Samething for the goldswords and STank, only here even collectioners and hobbyists are shocked by the new price.

bravey
10-05-2009, 17:17
So what you lot are saying is that I can basically just plan on GW going under, just as I finished my 2,000 point orc army I have been working on for a WHOLE YEAR?

Lord Dan
10-05-2009, 17:29
I doubt they'll go under anytime soon, as people are going to keep buying their models. I do foresee them losing a noticeable amount of money in the next quarter as many people ease up on the number of models they actually buy. This loss will do one of two things:

1) GW will realize that they are pricing people out of buying. I doubt they'll subsequently lower their prices (as that would admit they made a mistake) but it may slow their increases in the future.

2) GW justifies another price increase due to the loss.

We can only pray for the former.

Killgore
10-05-2009, 17:43
2) GW justifies another price increase due to the loss.



GW will always rise prices every year

thats been their plan since at least 2003 when i read a trade information pack on the way home from a gamesday that my then FLGS owner got from a sales rep.

personaly i dont know how this can be sustainable in the future, but we'v somehow managed for the last 6 years and probaly will do for the next 6.

Nu Fenix
10-05-2009, 17:55
I still don't get how one man stores work. Does he have to usher everyone out and lock up every time he needs a pee?

Depending on the store and if there isn't someone he knows well to keep an eye out for a second, then yes. Thats what I had to do back in the day, as even with myself, another full timer, a manager and key timers, we often had one man shifts all day, and so would have to close the shop to do things like that.

How they plan to accept the store being closed for lunch, as legally you are allowed to leave your place of work for your lunch break is beyond me. They would probably complain if you went out for some food for 30 mins.

I took the phone off to make it seem like the phone was in use if someone ever tried to call, instead of it just ringing without being picked up when I would go out for food, take the previous days takings to the bank, etc.

thinkerman
10-05-2009, 18:07
-**** poor management from store level to the very top

-Lack of vision and especially foresight (Lotr boom and doom)

-Forgetting its roots, past, beginnings and veterans

-Pressure sales tactics forcing new and existing customers away in droves

-Constant unjustified price rises (raw material costs are down)

-Reduced quality of goods (falling apart codex’s and army books)

-Belief that they are the only tabletop gaming company/hobby (it’s a huge market out there)

-Treat there staff like dirt, give them stupid targets, under pay and do not value them!

The above are but a few examples of why GW is a failing company, the only way they see to address a problem is increase the price. The upper management smacks of having there fingers in there ears.

Its going to get to a point where by all stores turn into 1 man stores, reproduce codex's ever 6 months, up the cost of the minis and products through the roof and where you'll have to pay to game in store!

starlight
10-05-2009, 18:07
personaly i dont know how this can be sustainable in the future, but we'v somehow managed for the last 6 years and probaly will do for the next 6.

a) It's already not sustainable, they've already proven that by borrowing heavily, cutting the dividend, increasing prices, and cutting staff.

b) They *haven't* managed (in the sense of making the situation better), they've simply burned existing cash and borrowed to fund operations (a *very* bad sign for a company).

c) They don't have enough reserve cash to survive another six years without serious changes.

:(

IJW
10-05-2009, 18:28
I thought GW had reduced their borrowings over the last couple of years?

Mucho
10-05-2009, 18:28
So what you lot are saying is that I can basically just plan on GW going under, just as I finished my 2,000 point orc army I have been working on for a WHOLE YEAR?

No, we don't think GW will go under fast. We just think GW can do a wholle lot better than it does now!

But to let that happen there will need a lot off changes in how GW runs itselfs.

yabbadabba
10-05-2009, 18:33
How they plan to accept the store being closed for lunch, as legally you are allowed to leave your place of work for your lunch break is beyond me. They would probably complain if you went out for some food for 30 mins.

Shutting the store for breaks won't be a problem. Thousands of small businesses in the UK have been doing it for decades.


-**** poor management from store level to the very top
-Lack of vision and especially foresight (Lotr boom and doom)

-Forgetting its roots, past, beginnings and veterans

-Pressure sales tactics forcing new and existing customers away in droves

-Constant unjustified price rises (raw material costs are down)

-Reduced quality of goods (falling apart codex’s and army books)

-Belief that they are the only tabletop gaming company/hobby (it’s a huge market out there)
-Treat there staff like dirt, give them stupid targets, under pay and do not value them!

This sounds so much like a whinge instead of a reasoned and well thought criticism.

The items in blue are just gut reaction and poorly worded. Poor management only goes in one direction. If your top management is poor, the decisions, actions and staffing at the lower levels will reflect that. If the top management know what they are on about, that then gets reflected through the business. Although every business has knobs working for them, as a whole, I have found GW staff to be keen on customer service and enthusiastic about what they do, and extremely hard workers if a little misdirected.
(As for pressure sales - duh! They are in retail, sales is what they do. And as I have mentioned plenty of times before, GW staff are a lot more easy to work with the a lot of salespeople I have worked with over the years. Pressure sales, don't make me laugh.)
They work in retail which, outside of low level manual work like cleaning, is recognised as one of the lowest paid and valued businesses around. At least GW don't have crappy teenagers who quite obviously don't want to be there serving you and look like a hand grenade has exploded in their face.
Finally for the blues, they don't don't think they are the only TTWG business out there, and a huge majority of their staff remember exactly where they have come from. The fact that the business has chosen to move on is a part of the business world. As an aside, a lot of GW design staff are involved with other TTWG companies and markets - not what you would expect from a business who chooses to see themselves as the only one eh?

Poor quality books is a recent phenomenon. And these things always take time to sort. BTW thats what customer service is there for mate. Don't abuse you stuff and use the service you might be surprised.

And finally, constant unjustified price rises. So I take it you can supply us with the discussions you had with the CFO and the finance committee on how GW are going to move forward financially for the next 5 years? No didn't think so. Price rises might be unpalatable and I don't enjoy them either, but as we don't have access to GW's full financial details, unjustfiable is just emotional claptrap. Try looking at the cost control mate, not the price rises.

Thinkerman you might have had some good constructive points there, shame it came across as emotionally ridden ranting.

Nu Fenix
10-05-2009, 18:37
Yabba - Oh I know many small businesses do it, as I left to run a small gaming shop, and did it myself. But I didn't have different levels of managers complaining I would step out to my legally entitled break ;)

Also, that blue is really hard to read. Any chance of picking a different colour?

yabbadabba
10-05-2009, 19:03
Yabba - Oh I know many small businesses do it, as I left to run a small gaming shop, and did it myself. But I didn't have different levels of managers complaining I would step out to my legally entitled break ;)
Also, that blue is really hard to read. Any chance of picking a different colour?
I don't think it will be too much of a worry, although I can empathise with your concerns.

Hows this? :D

Nu Fenix
10-05-2009, 19:04
Much better, and suits your avatar more ;)

ryntyrr
10-05-2009, 19:52
So what you lot are saying is that I can basically just plan on GW going under, just as I finished my 2,000 point orc army I have been working on for a WHOLE YEAR?

Well I hope no one should hope that would happen. Looking at the positives GW have brick & mortar venues to showboat Table Top wargaming minis. Unfortunately there is no other chain of stores that delivers a good choice of other gaming products like PP and others. It is left to the stalwart champions of the independant gaming stores owners. Which in the UK are far and few.

If GW does go under. I really hope there will be enough business acumen from the TTG industry to pick up their customers. My own point of view is that I hope GW does not go under. They are good for the TTG market & industry. They do bring in new people into the hobby & overall they are not too shabby. Although you won't see me buying their goods untill they change their tact, which sadly I think it is a little too late to do so.

I hope to be proved wrong in the future but there is a point of no return. I think they have well passed that point.

thinkerman
10-05-2009, 20:24
shame it came across as emotionally ridden ranting.

Maybe i have let my passion's and emotions get the better of me but having been through a very intimate relationship with workshop on many levels, from store to high management at head office i can only go on my own personal experiences and feelings.

bravey
10-05-2009, 21:59
They could make everyone happy again by LOWERING PRICES. They arent too far gone yet! Really, they would make soo much more money if they started charging, say, $30/$25 USD for a box of 19 orcs, instead of $35, because people would be buying MORE stuff because they could afford it.

You know, we should start a group on warseer: Whiney Warhammer Nerds United (WWNU). We could hold demonstrations! We should form our own bigade of crack troopers to hold high up GW owners! Where do they sell balaclavas?;)

Lord Dan
10-05-2009, 22:07
I'm pretty good with a bowstaff.

Devil Tree
11-05-2009, 02:45
GW seems to have a lot of problems with their management but I think the constant price increases are what will really hurt them in the long run. It’s gotten to the point were it hits GW on 2 fronts.

Newcomers can be scared away at the price tag or simply can’t afford a new army.

Some oldtimers may leave the hobby. Others simply won’t buy the new stuff, just buy the bare minimum to stay in the game.

As it stands, it’s a bad enough problem already, if it’s not addressed however, it will only get worse as time goes on. It creates a vicious cycle were GW tries to squeeze more and more money out of a shrinking customer base. It’s unfortunate but I think this is the strategy that GW adopted (wittingly or not) as evidenced by the new Goldswords.:(

Ultimate Life Form
11-05-2009, 10:58
I think we have to differentiate anyway. Let´s face it, everythings becoming more expensive all the time, at least where I live. A price rise is not out of the normal, in fact, I would be surprised if they´d keep their prices on the same level for decades, and I could accept it... to a degree.

But we´re talking about price increases from 30%-66% here if the sources are to be believed.:eek:

I don´t think there is anything in the world that could justify such a move. That screams either one or all of the following things:

A) We give a damn about you

B) We´re desperatly trying to save our rotten company

C) Our bosses want a little extra on their x-mas gratification

ChrisMurray
11-05-2009, 11:17
Didn't I read that GW has just posted a profit??!! So they must be doing something right.

Also I find people who don't expect price rises to be unaware of what goes on in business in general. Almost every company has an anual price rise.

Reinholt
11-05-2009, 11:53
Didn't I read that GW has just posted a profit??!! So they must be doing something right.

Also I find people who don't expect price rises to be unaware of what goes on in business in general. Almost every company has an anual price rise.

This is patently false.

In fact, in industries with free and fair competition, prices of goods produced often go down over time (people become more efficient and pass on the savings, because if they don't, their competitor does and thus steals all of their market share), which is why people are constantly trying to innovate and differentiate to keep their prices high!

As to GW, I suspect they will post a narrow profit this year (barring a major misstep), but their consumer base will continue to shrink if they can't fix some of their fundamental problems with how they approach business and their products.

Templar Ben
11-05-2009, 12:19
Not to mention the effects of anything post April won't show until next year's half year report.

Llew
11-05-2009, 12:41
Didn't I read that GW has just posted a profit??!! So they must be doing something right.

Also I find people who don't expect price rises to be unaware of what goes on in business in general. Almost every company has an anual price rise.

If your profit keeps shrinking and shrinking, it's a sign that you're doing something wrong. Or at least worse than you did before.

Not every company has price increases. I work for a painting contractor. We have continually lowered our prices for the past several years through discounting, etc., while increasing the payout to our employees through an incentive system. The incentive increased their productivity, making us able to make good profits while reducing our prices to the end customer.

In other words, we've attempted to increase volume, reduce our margin slightly but make up for it by getting our crews to work more efficiently.

This is one of the basic strategies of good business.

starlight
11-05-2009, 14:15
Didn't I read that GW has just posted a profit??!! So they must be doing something right.

GW's fiscal year isn't over, so they can't have posted an annual profit yet.

They posted *profits* during the LotR *boom*, yet sales volumes of the WFB and 40K lines were dropping the entire time, and they continue to fall. They also posted *profits* and paid out dividends until recently, however they were borrowing to do so... Not a healthy way to run a business.



Also I find people who don't expect price rises to be unaware of what goes on in business in general. Almost every company has an anual price rise.

As has been noted, this line of thinking is contrary to how many (and most successful) businesses are run. Generally companies look for efficiencies over time to lower costs in order to:

1) lower prices
2) maintain prices while increasing profits
3) fund further innovation

Very few companies offer the exact same product year after year and increase prices on these products. Most successful companies who raise prices justify these increases by listening to their customers and adding the innovations the customers have proven they are willing to pay for.

Lord Dan
11-05-2009, 17:22
Almost every company has an anual price rise.

No. They don't. Consider price rises for a particular company and the following:

1) Are they MORE than once a year?
2) Do they stay the same once raw material cost (the justification for most rises) goes back down?
3) Do they exceed 33% at times?
4) Is there no hope in sight?

One thing that just occurred to me is that GW is going "all out" for this June price hike. I seem to recall that their strategy for price rises was to "spread out" the rises so that all the games weren't hit at once. For instance, the army books and codices back in September went from 20 to 22 USD. Since they already had a recent rise, using GW's spread out theory they shouldn't be getting a rise with this batch of increases. Sure enough, however, the army books and codices are now 25 USD.

Am I missing something?

Devil Tree
11-05-2009, 18:00
Didn't I read that GW has just posted a profit??!! So they must be doing something right.

Also I find people who don't expect price rises to be unaware of what goes on in business in general. Almost every company has an anual price rise.

It’s a long term problem that can’t be covered by a single annual or quarterly report. I’m also sure GW will post a profit before the June price increase too, as people scramble to get their minis at the “old” price. But afterwards who in the hell is willing to buy things like the $40 Goldswords. They aren’t gaining many new customers and are slowly pricing out the old ones. In effect they’re eating their seed grain.

It’s also worth noting that while other gaming company’s miniatures are expensive, they tend to be more skirmish oriented, meaning you can make due with a lot less of them.

Captain Shrike
11-05-2009, 18:33
Well, I guess the title says it all... Anyway, on the boards I heard a few off-hand comments that GW is in a bad way financially. :wtf: How? Does this mean the board of directors is trying to get them to squeeze a greater profit and is dissatisfied with how much money we dump on their stuff, or are they actually losing money? With the prices going up the way they had and stores popping up everywhere I doubt they could possibly be losing money. Unless they're paying their sculptors half a mil each a year, it's almost impossible. At least that's how it appears to we mortals. Anyway, anyone care to share on that

http://investor.games-workshop.com/downloads/GW_year_end_08.pdf
Really?

Vulvol
11-05-2009, 18:34
Very few companies offer the exact same product year after year and increase prices on these products. Most successful companies who raise prices justify these increases by listening to their customers and adding the innovations the customers have proven they are willing to pay for.

Surely the ubiquitous supermarkets do this with thousands of product lines, and if we're judging success on generating billions of pounds of profit each year, I reckon they'd be right up there. It would be interesting to see how certain well known products have changed in price over time compared to those made by GW. I wonder how much a core game would retail at if it had gone up by the same percentage as a can of Coke in the last 10 years?

Llew
11-05-2009, 18:42
Supermarkets operate at insanely low margins. In the US, at least, the competition is so stiff that there's not a lot of room for large price hikes on products. In fact, on foods considered "necessities", the US consumer is known to be so prickly about it that when shipping costs increased dramatically, food producers snuck the price increases in. Instead of increasing the per-package costs they made the packages slightly smaller instead.

Food costs are tied very tightly into the cost of producing and transporting the food item. Only products that successfully market themselves as "elite" can make large margins, and that is developed by actually being noticably better or through expensive and well-planned marketing campaigns.

Belakor
11-05-2009, 19:01
http://investor.games-workshop.com/downloads/GW_year_end_08.pdf
Really?

Indeed!

90% of the "experts" (and I type that in the worst mockery fashion ever) here, are dead beat wrong.

If they will be at the end of the year with these new insane hikes, remains to be seen however.

Reinholt
11-05-2009, 19:06
Surely the ubiquitous supermarkets do this with thousands of product lines, and if we're judging success on generating billions of pounds of profit each year, I reckon they'd be right up there. It would be interesting to see how certain well known products have changed in price over time compared to those made by GW. I wonder how much a core game would retail at if it had gone up by the same percentage as a can of Coke in the last 10 years?

Coca Cola, 2 Liter Bottle, 1995: $.099

Coca Cola, 2 Liter Bottle, 2005: $1.09

Core games would cost significantly less if they only rose at the price of Coca Cola.

Llew
11-05-2009, 19:31
Indeed!

90% of the "experts" (and I type that in the worst mockery fashion ever) here, are dead beat wrong.

If they will be at the end of the year with these new insane hikes, remains to be seen however.

Am I to understand that you consider less than a 3% margin for a vertically-integrated manufacturer/retail chain to be a good rate of return?

Or am I missing something?

starlight
11-05-2009, 19:45
Indeed!

90% of the "experts" (and I type that in the worst mockery fashion ever) here, are dead beat wrong.

If they will be at the end of the year with these new insane hikes, remains to be seen however.

I'm not seeing the sense in this Post...care to explain it better...?:confused:

Do you mean the experts at GW, financial commentators, or members of Warseer...? And how are they wrong...especially given the conflicting information usually bandied about...ie *who* is wrong?

The last part I simply don't get at all...:confused: If GW is losing money come year end? They already are, so I'm not sure how things will change when they keep doing the same things that have put them in the position they're in to begin with...

In the first half of 2008/2009, they've shown modest gains on the backs of currency fluctuations, Christmas and the most anticipated release in a decade (Orks). Hopefully they can continue, but the fine print is still worrying...and the second half of the fiscal year lacks the heavy-hitting December and any major releases. Perhaps they're banking on the pending price increase to drive sales at the last minute, and be forgotten/overcome by the time Christmas rolls around...


Am I to understand that you consider less than a 3% margin for a vertically-integrated manufacturer/retail chain to be a good rate of return?

Or am I missing something?

You might be, because the grocery industry operates on approximately 2-3% margins and extremely high turnovers. :) Although they aren't vertically integrated.

GW is currently declaring about 71% gross margin.

warhammergrimace
11-05-2009, 19:47
The upper management smacks of having there fingers in there ears.

What you really mean is that the upper management have their collective thumb up their arses and brains in neutral, LOL..

Ultimate Life Form
11-05-2009, 19:58
I'm not seeing the sense in this Post...care to explain it better...?:confused:


So I´m relieved I´m not the only one puzzled by this post. Made me feel stupid.

Yeah, but thanks for that link anyway. I was actually able to make some sense out of it!:D

Wasn´t so bad to read, don´t know what that other abomination was that had given me the creeps back then.

However, the preamble or what it was called by that Kirby guy (think: pink little ball, I can´t help it:rolleyes:) left me seriously confused. I suppose the man is either an idealist or a drug addict?:confused:

starlight
11-05-2009, 20:02
He's a salesman, selling GW to investors.

Templar Ben
11-05-2009, 20:03
To be fair he is the Head Cheerleader in the little Cheerocarcy so it is his job to say everything is wonderful. You just get used to it. It is spin just like politicians do when jobless reports come out e.g. "yes we lost 300,000 jobs last month but we were projected to lose 500,000 so in effect we saved 200,000 jobs by our strong leadership".

Havarel
11-05-2009, 20:32
However, the preamble or what it was called by that Kirby guy (think: pink little ball, I can´t help it:rolleyes:) left me seriously confused. I suppose the man is either an idealist or a drug addict?:confused:

I think a little of both. That preamble was far funnier and more...odd than I'd have expected. I also love how they empahised that GW will return to growth and an emphasis on customer satisfaction. Thats definately a sign of delusion if they think their going to achieve this by raising prices...

Llew
11-05-2009, 20:37
I'm pretty sure it's not a Cheerocracy, but a Cheertatorship. ;)

Ultimate Life Form
11-05-2009, 20:37
I also love how they empahised that GW will return to growth and an emphasis on customer satisfaction. Thats definately a sign of delusion if they think their going to achieve this by raising prices...

That´s the part that made me actually stop reading and groan with disbelief. As far as I´m concerned, I´m less than satisfied to say the least!:mad:

Someone fetch a Noddy...

Templar Ben
11-05-2009, 20:40
I'm pretty sure it's not a Cheerocracy, but a Cheertatorship. ;)

Glad someone got the reference. :D

nedsta
12-05-2009, 01:11
i've just died a little inside cos i said quite loudly to myself 'i know that film' then realised i shouldn't be admitting that about a cheerleading film,

Lord Dan
12-05-2009, 01:24
i've just died a little inside cos i said quite loudly to myself 'i know that film' then realised i shouldn't be admitting that about a cheerleading film,

Incidentally we wouldn't have known you loudly said something you believed embarrassing if you hadn't typed it out and posted it here. :p

starlight
12-05-2009, 01:24
Acknowledging your wide-ranging knowledge and experience is very masculine... ;)

nedsta
12-05-2009, 01:31
:( ahh the internet diminishing my 'manliness' since 1994

Reinholt
12-05-2009, 01:33
This discussion has suddenly gone full cheertard.

:p

Templar Ben
12-05-2009, 01:34
:( ahh the internet diminishing my 'manliness' since 1994

Just stop comparing yourself to those guys you see in the internet movies. :o

Back on topic, it is not nefarious to say everything is fine in the chairman's preamble. It is actually expected to put the best spin on things or you can get in trouble.

starlight
12-05-2009, 02:00
Indeed, as long as people understand that and see through it... :)

carlisimo
12-05-2009, 06:05
Another issue is their production costs. They're still making their stuff in England instead of China.

That's not a bad thing, but it's expensive. They're also using higher quality plastics than some companies would. Speaking of which, they're using more plastic than before because pewter costs went up a lot when China's economy started taking off. This came at a time when their old business plan was blowing up in their faces.

Fortunately, LoTR was meant to be all-plastic so GW had been spending a lot of money researching how to make plastics more affordable. That was crucial. But it doesn't exactly mean cheap figures, either.

zedeyejoe
12-05-2009, 07:26
With the prices going up the way they had and stores popping up everywhere I doubt they could possibly be losing money.

But despite that, total volume of sales have declined. Costs have also remained fairly static (it does not cost a lot to actually make the GW stuff).

Profit = sales - costs

if your costs are bigger than sales, then you make a loss. Now my point would be that managers are supposed to stop such a situation. Which is why I have a poor opinion of GW management.

yabbadabba
12-05-2009, 09:02
(it does not cost a lot to actually make the GW stuff).

Disagree. Show us some facts mate. I know you are not just basing that assumption on raw material cost.

zedeyejoe
12-05-2009, 11:06
Certainly here you go:

http://investor.games-workshop.com/latest_results/Results2008/full_year/consolidatedincomestatement.aspx

Revenue £110m
Cost of Sales £33m

yabbadabba
12-05-2009, 11:18
OK, not even being familiar with this, it says that cost of sales was £31m and operating expenses were £80m. Which biut says it doesn't cost much to make the stuff?

Osbad
12-05-2009, 11:25
Certainly here you go:

http://investor.games-workshop.com/latest_results/Results2008/full_year/consolidatedincomestatement.aspx

Revenue £110m
Cost of Sales £33m

If you follow note 4, the analysis of Operational Expenses you see:

Selling costs £44m
Administrative expenses £28m
Design and development costs £3m

That £44m selling costs is a MASSIVE number in context of their turnover and other costs. And that is, I suspect, largely the cost of their shops!

If they closed their shops they could reduce their turnover by up to 40% and still make the same profits as they did last year.

Personally I believe if they lost the albatross around their necks that is their store chain, they'd benefit more from the increases sales from price decreases they could then afford.

Even dumping half their stores and ploughing the savings into price decreases would pay dividends in the long term in the form of improved customer relations...

But then I'm the kind of person that believes if you reward the customer with a good deal you will benefit in increased turnover...

Clearly I have no place in GW!

Something else that this tells us is that while GW's >£100m turnover is impressive an makes them appear a large fish in the small pond of games companies, up to £44m of that turnover is spent on their store infrastructure, something that none of their competitors indulge in. In other words we should be looking at a turnover of likely just under £70m as the figure GW would be boasting of once we deduct the cost of running all those stores. If we were able to net off the cost of running their stores from their turnover then we would have a figure to compare to other companies such as Privateer Press. If, of course, we were able to find out PP's turnover figure! :D

Osbad
12-05-2009, 11:28
OK, not even being familiar with this, it says that cost of sales was £31m and operating expenses were £80m. Which biut says it doesn't cost much to make the stuff?

The "cost of sales" bit. Literally the cost to the company of the items sold.

That is the cost of raw materials, plus manufacturing costs, plus stock useage in the year.

Its a standard accounting term.

It cost them only £31m to buy the raw materials and turn them into toy soldiers, and £44m to sell them on to us... go figure... :D

Most of the cost you bay for the box goes on the packaging, and on running the store you buy them from... Utter madness!

IJW
12-05-2009, 11:45
Most of the cost you bay for the box goes on the packaging, and on running the store you buy them from... Utter madness!
And what's the difference between that and most other retail purchases? ;)

isaac
12-05-2009, 11:55
Why don't they franchise the GW stores?

yabbadabba
12-05-2009, 11:58
Personally I believe if they lost the albatross around their necks that is their store chain, they'd benefit more from the increases sales from price decreases they could then afford.
Even dumping half their stores and ploughing the savings into price decreases would pay dividends in the long term in the form of improved customer relations...

Yet how much of their turnover is made, and driven, by their stores? Dumping a load of those stores would massively reduce that cost, but is it being offset by store sales. We know GW is closing unprofitable stores and trying to make other stores more profitable my reducing staffing. Long term, with no focussed recruitment how much of GW will have to be culled to finally balance the books? How much does GW's stores contribute to the trade stores when their new recruits discover they can get more for less?

And would the shareholders allow it? Yes the company gets profiable, but the turnover plummets.

Let me put it this way, at the moment GW is keeping its head above the water. With its current structure and cost control and reduction programmes. There is no guarantee that if GW dropped it's retail chain and plowed that saving into reducing prices, that Vets would come flooding back and make up for the lack of GW store sales. Why take the gamble?

As I have said in a previous post, if you want lower prices, you better hope for someone to buy GW outright.

Llew
12-05-2009, 12:31
For a company that prides itself on customer service, looking for cost savings by reducing staffing is a bad idea. It's especially bad when you offer a "you buy, we build" promotion.

And again, I think you have to let go of the English model everywhere else in the world. I had never set foot in a GW store -- in fact, hadn't even seen one -- when I bought my first GW game. I can say the same of my entire gaming group. And this was way before the internet became the huge phenomenon it is now.

If you design good games and make great miniatures and offer them at reasonable prices you can sell plenty. There was a time when GW over here meant fun games with cool miniatures. The miniatures are still pretty good, but no longer leaps and bounds ahead of the competition. (Go back and compare Citadel to Ral Partha, Grenadier and Superior then, then compare GW to Privateer Press and Reaper. GW has an advantage, but not nearly as great as it did, and individual sculpts from the others may be as good or better than GW.)

GW needs to focus on the product, not on the manner of distribution. Good products sell.

Osbad
12-05-2009, 12:59
And would the shareholders allow it? Yes the company gets profiable, but the turnover plummets.

If it increased profits, then the shareholders couldn't care less.

I'm not suggesting anything overnight. I just happen to believe the figures indicate that GW might make more profit if they abandoned the subsidy of their stores and instead focussed on building up internet and independent routes to market giving value for money and quality priority over dumping money on an expensive distribution network. Let the independent retailers sell stuff at the local going rate and focus their attention on making their product kickass quality and value so they recover sales from the competition.

I think it was Andy Chambers that famously said "a state of the art distribution network is no substitute for a quality game". Or something like that.

Given their volume sales are actually contracting rather than increasing (borne out by the fact that turnover has decreased in real terms since 2004, and 40k and WFB sales have decreased in real terms since 2001) this would indicate that their favoured marketing technique (i.e. stores) is failing them badly.

Now, I expect none of this to actually happen. I actually expect GW to continue driving their company into a black hole of ever more-expensive product. I'm just a bemused by-stander as every year GW execute more of the geese that lay their golden eggs in the name of self-delusional dogma.

Reinholt
12-05-2009, 13:01
For a company that prides itself on customer service, looking for cost savings by reducing staffing is a bad idea. It's especially bad when you offer a "you buy, we build" promotion.

And again, I think you have to let go of the English model everywhere else in the world. I had never set foot in a GW store -- in fact, hadn't even seen one -- when I bought my first GW game. I can say the same of my entire gaming group. And this was way before the internet became the huge phenomenon it is now.

If you design good games and make great miniatures and offer them at reasonable prices you can sell plenty. There was a time when GW over here meant fun games with cool miniatures. The miniatures are still pretty good, but no longer leaps and bounds ahead of the competition. (Go back and compare Citadel to Ral Partha, Grenadier and Superior then, then compare GW to Privateer Press and Reaper. GW has an advantage, but not nearly as great as it did, and individual sculpts from the others may be as good or better than GW.)

GW needs to focus on the product, not on the manner of distribution. Good products sell.

To a point, I agree with this.

The problem is that GW does very little to no marketing or advertising, so cutting their retail chain essentially reduces visibility to zero, which is not exactly how you want to attract new people to a product.

If you make a good product and nobody knows about it, do you really have a product?

I agree you must make a good product; there is no strategy that works otherwise. However, I think the retail chain has some benefits.

With regard to:


If they closed their shops they could reduce their turnover by up to 40% and still make the same profits as they did last year.

Perhaps they could make the same profit, but their revenue would drop dramatically and their player base would also drop dramatically. Look at the other model manufacturers; none of them have the reach GW does, and part of that is the retail chain. It is an expense, but you are getting something out of it.

I would argue, instead, they need to do two things:

1 - Align their pricing strategy to maximize, not minimize, the value of the retail chain.

2 - Plan a better expansion strategy worldwide (especially for the United States, where they have failed miserably (and repeatedly) at figuring out where to locate retail stores), while not expanding into markets they already saturate (the UK).

Ithaka
12-05-2009, 13:15
Out of interest, how much would it cost to buy out GW, or buy a majority stake in the company?

Reinholt
12-05-2009, 13:25
Out of interest, how much would it cost to buy out GW, or buy a majority stake in the company?

That depends on a couple of factors:

1 - How you want to structure the buyout (are we talking about an all equity buyout, are we talking about leveraged financing similar to what people use in hostile acquisitions, are we talking about a large diversified entity that can provide in-house capital, etc).

2 - If you have to pay a premium to get your hands on a controlling share of the stock.

3 - What amount of stock you'd require to seize control of the company.

A quick look:

http://www.bloomberg.com/apps/quote?ticker=GAW%3ALN

There's the ticker price for the stock. The market capitalization (total value of equity) hovers between 60-70 million pounds of late. My suspicion is that you'd need to buy 51%, and that likewise, you are going to have the price go up some as you try to buy, though not a huge amount, as that's a pretty small company.

Half that number plus a small margin would be 40 million pounds to achieve absolute control. That's chicken scratch in finance terms; the question would be if there is a buyer who wants to do it.

zedeyejoe
12-05-2009, 13:27
It varies but at todays prices around £51m - which is very doable.

Once you go for more than 15% you have to inform the Stock Exchange that you are doing so. In effect you could not go out and buy control of GW you would have to find a seller who was willing to do business with you.

I tried to buy GW once but the people with the money were not convinced that you could make money from toy soldiers. So Kirby and co went off and proved them wrong, big time. We could have made a fortune!

Ithaka
12-05-2009, 14:24
Well my idylistic dream would be for a group of players to take control of the company and start running it for gamers; I was just curious as I have no experience with economics. Would it be unrealistic to hope a large enough group could be organised, or would that simply me naive?
Also, what would happen to the IP, miniature moulds and so forth if GW were to go bankrupt?

Brother Loki
12-05-2009, 14:30
They are assets, and would be sold off as such by the receivers.

starlight
12-05-2009, 14:49
...and given that approximately 60% of the stock is held by institutional investors who likely proxy their shares to someone like Kirby, it's a long expensive road to take over GW (not in global finance terms, but in general).

Templar Ben
12-05-2009, 15:07
Well my idylistic dream would be for a group of players to take control of the company and start running it for gamers; I was just curious as I have no experience with economics. Would it be unrealistic to hope a large enough group could be organised, or would that simply me naive?
Also, what would happen to the IP, miniature moulds and so forth if GW were to go bankrupt?

The issue is that people that can buy and run it would have lower risk investments to make their money. An angel investor could go to a start up and have much more potential than taking over that huge retail chain.


If GW went under then you would have an auction and GW's IP would be bought be a company that thought they could make money off of it.

Ravenous
12-05-2009, 15:34
And yet, having spoken and indeed am good friends with a guy who was with the company for many years and worked both in store and regional management at one time or another, stated that those who wielded the real power don't believe that there is any real competition to their products.

It makes me think that the majority of GW higher up don't know their **** from their elbow and can't remember the lies they have told

Its true, GW tells itself (i.e everyone it works for) that they control 95% of the worlds miniature sales, and in my experience managers and regional managers go right on the defensive about the "lesser" games.

I just wish GW had major competition, then they would have to really get their hands dirty.

starlight
12-05-2009, 15:47
The problem is that GW *DOES* have major competition...unless you have some other explanation for their declining sales volumes over the last six years...? Where has all that money gone? Customers (or former customers) are still spending that money, just not with GW.

Where is it going...? To GW's competition...

Lord Dan
12-05-2009, 16:52
Where has all that money gone?

GW is siphoning money from our accounts.

starlight
12-05-2009, 17:28
I meant the money that GW *isn't* getting... :p Where has *that* money gone?

Random Integer
12-05-2009, 17:59
From an outsiders perspective the problem with the retail chain is that there seems to be no method to the madness behind their choice of locations. The last time I checked there are 4 GW stores reachable from my doorstep in less than an hour (Glasgow, Falkirk, Livingston and Edinbrugh) which just seems insane. You don't need that many stores to serve this region and going by anecdotal evidence the story is the same elsewhere. Massive oversaturation in one location followed by little to no presence in another.

Maybe Im misjudging the situation but I feel like they easily could cut the number of UK stores by a third and still maintain exactly the same level of turnover.

Bloodknight
12-05-2009, 18:02
I meant the money that GW *isn't* getting... Where has *that* money gone?

Better food and Battletech in my case.

starlight
12-05-2009, 18:14
Better food and Battletech in my case.

Exactly...which is what GW doesn't see as it's competition... *all* luxury/discretionary spending, not just other model manufacturers.

Templar Ben
12-05-2009, 18:47
From an outsiders perspective the problem with the retail chain is that there seems to be no method to the madness behind their choice of locations. The last time I checked there are 4 GW stores reachable from my doorstep in less than an hour (Glasgow, Falkirk, Livingston and Edinbrugh) which just seems insane. You don't need that many stores to serve this region and going by anecdotal evidence the story is the same elsewhere. Massive oversaturation in one location followed by little to no presence in another.

Maybe Im misjudging the situation but I feel like they easily could the number of UK stores by a third and still maintain exactly the same level of turnover.

They have something similar in the US with H&R Block offices. It is not uncommon to be able to see one H&R Block from another H&R Block. (For those elsewhere, Block is a tax company.) The reason they do it is it keep Jackson Hewitt and Liberty Tax out. Individual offices are barely able to break even but it allows them to stay the largest tax company in America.

Random Integer
12-05-2009, 18:54
They have something similar in the US with H&R Block offices. It is not uncommon to be able to see one H&R Block from another H&R Block. (For those elsewhere, Block is a tax company.) The reason they do it is it keep Jackson Hewitt and Liberty Tax out. Individual offices are barely able to break even but it allows them to stay the largest tax company in America.

For GW to adopt that approach in this day and age seems both incredibly expensive and Quixotic. They can flood an area with as many stores as they wish but a 10 second google search will provide a list of competitors as long as your arm.

Templar Ben
12-05-2009, 19:04
It worked in the past and it does help keep other products out of "their" territory.

Emperor's Grace
12-05-2009, 19:41
I looked into applying for a job at GW once, years ago, and was disgusted by their pay scale. It was actually an insult.

Not really just a GW issue though...

In college, I made more washing dishes than WalMart offered me to be the manager of their toy department.


Instead of loyalty cards I would prefer the first move be to include a feedback card in every boxed set. Then they are getting an idea of what people think of the product from the people that are purchasing their product.

IIRC, I've said it before: They used to have these, I remember filling them out...


It is not uncommon to be able to see one H&R Block from another H&R Block.

I'm suprised that you didn't use Starbucks as the example. South Park had it right when they showed people fleeing a Starbucks that was being destroyed ... by running into the Starbucks across the street. :D

Xarius
12-05-2009, 19:45
Be funny if GW did collapse... What would we do with ourselves? No more rumour thread ranting, no heated conversations about dice rolling!

In the distant future, there is only boredom.

and airsoft!, thank god one of my local staffers got me into it (we had a cool manager who didnt mind then one who was in the team anyway, now we've got one who's banned us from talking about it and in fact anything non gw that doesnt include him

starlight
12-05-2009, 19:55
IIRC, I've said it before: They used to have these, I remember filling them out...

And when you sent them in, they went into one of two bins:

a) Hey! We're doing a great job! Let's keep doing what we're doing! :D

b) Well this guy obviously doesn't understand the challenges of running a vertically-integrated, multi-national niche business based on luxury hobby goods, so we can safely discount his opinion, especially because it disagrees with the way we're doing things. :)

Emperor's Grace
12-05-2009, 20:16
And when you sent them in, they went into one of two bins:

a) Hey! We're doing a great job! Let's keep doing what we're doing! :D

b) Well this guy obviously doesn't understand the challenges of running a vertically-integrated, multi-national niche business based on luxury hobby goods, so we can safely discount his opinion, especially because it disagrees with the way we're doing things. :)

Actually, it was in the late 90's/early 00's so it may have been a lot more of A) :)

Templar Ben
12-05-2009, 20:43
Well I would prefer if they didn't use data from 10 years ago to run the company. ;)

That is minimal cost and gives them a great way to get information on the customers.

starlight
12-05-2009, 21:15
Holding onto staff long enough to get some form of institutional knowledge base would be a good step as well...

Why does GW think that new gamers are more important that vets? A big part of it is that very few of their staff stick around long enough to develop relationships with vets.

On top of that most vets aren't the *in every week buying a blister with their allowance* group. They're more likely to have home gaming areas, shop less frequently (but game *more* frequently :eek: ) and make less frequent, but larger purchases... At least according to my research.

Da Black Gobbo
12-05-2009, 21:55
Games workshop is not loosing money, from what i understand and looking their financial reports you can clearly see that last year they made 61 millions (of pounds!) i don't know if this are net profits or is just what they sold, but hell!!! i don't think they are loosing money.

loveless
12-05-2009, 22:02
Loss of money shouldn't concern them. Loss of customers should.

Assuming buy rates remain the same, it doesn't take much to increase profits if you raise prices by 20% after losing 10% of your customers. That 10%, however, is giving their money to competitors, making them all the stronger and more desirable.

(Note: Numbers are made up, obviously)

starlight
12-05-2009, 22:13
Games workshop is not loosing money, from what i understand and looking their financial reports you can clearly see that last year they made 61 millions (of pounds!) i don't know if this are net profits or is just what they sold, but hell!!! i don't think they are loosing money.

a) You may not think that, but sadly...you would be wrong...

b) You need to check your numbers... For starters, last year they made 110.3M Quid...and *still* they lost money after all the bills and taxes were paid. :(

c) all of this information is available on the Investors section of the GW site...

Lord of Worms
13-05-2009, 04:26
Most people at GW still haven't grasped that their main competitors aren't other gaming companies, but other uses of time and money. If GW continues to create and maintain high barriers to admission (high costs, poorly written rules, etc), they will see their customer base continue to decline, as demonstrated by falling sales volumes in their core lines (WFB/40K) since 2002!

That's a really good point. Instead of "hooking" people to only think about hobbying and gaming, ever; It might be better to make it more approachable as a passing interest that's sustainable over a number of years instead of just pre high-school.

starlight
13-05-2009, 04:33
Sadly, GW considers it Heresy... :(

...at least they did...:(

GW is all about the quick bucks from the kids because they think it's less work and less money on their part...which flies in the face of successful business practices the world over...:(

Hellebore
13-05-2009, 04:41
That's alright. At least when they go under we can all post a rather large and hearty TOLD YOU SO! :p

Sometimes I WISH people would just blow the planet up so I could turn around and smirkingly say I told you so. It would almost be worth it. People don't learn any other way.

Hellebore

Templar Ben
13-05-2009, 11:11
People don't learn any other way.

That is the problem with people. A person can be smart but people are dumb.

Lord Dan
13-05-2009, 16:56
That's alright. At least when they go under we can all post a rather large and hearty TOLD YOU SO! :p

Then 5 minutes later when the adrenaline has died down we all think: "****, now what?"

Lord of Worms
13-05-2009, 16:59
Then 5 minutes later when the adrenaline has died down we all think: "****, now what?"

We keep playing with the dudes we already have:cool:

Condottiere
13-05-2009, 16:59
I don't believe it's possible to retcon a blown up planet. :)

Lord of Worms
13-05-2009, 17:08
I think he meant GW going under, not the world exploding.

Condottiere
13-05-2009, 17:16
Not impossible, if they have liquidity issues and the banks are tightening credit. However, it seems unlike Intel or AMD, who like to present their coming products over a period of upto four years, I have very little idea what GW's new miniatures will be over the next two years, so that I could consider buying them or not when they would be released, in the context of an overall purchase plan and my allocated discretionary budget.

Ravenous
13-05-2009, 23:44
The problem is that GW *DOES* have major competition...unless you have some other explanation for their declining sales volumes over the last six years...? Where has all that money gone? Customers (or former customers) are still spending that money, just not with GW.

Where is it going...? To GW's competition...

I meant competition ala coke vs pepsi sort of deal, this is more like Mircosoft vs Linux.

zedeyejoe
14-05-2009, 06:48
The problem is that GW *DOES* have major competition...unless you have some other explanation for their declining sales volumes over the last six years...? Where has all that money gone? Customers (or former customers) are still spending that money, just not with GW.

Where is it going...? To GW's competition...

Well me, I just stopped spending on GW stuff. Did not spend it anywhere else.

For me the turn off was the new 40K and WHFB rules. Just not worth the bother of driving to the club to play them and as for painting models, that would be a total no no.

Plastic Rat
14-05-2009, 08:32
As somebody who stopped spending money on GW back when the Dark Angels codex was released (shh... a few blisters of Epic don't count) I can say that money went towards computer games, MMO subscriptions, PC peripherals and more recently, sporting goods, and even a bit of saving.

I quit because of their blasé handling of the Dark Angels codex debacle, their generally abysmal and inconsistent rules and the fact that I could have more fun playing an MMO for a fraction of what I was spending on GW.

The recent news of a price hike makes me even less interested in involving myself again.

I can't ever say another miniatures gaming company has ever competed with my GW money. When I was buying GW stuff, I bought what I wanted and that was that.

As a married (between 25 and 35) year old male with no kids and a good job, I'd say I have a fairly sweet amount of disposable income, of which GW is now seeing none.

Find a fair few more like me, and it should provide one answer as to why they're losing money.

Templar Ben
14-05-2009, 13:02
Well me, I just stopped spending on GW stuff. Did not spend it anywhere else.

For me the turn off was the new 40K and WHFB rules. Just not worth the bother of driving to the club to play them and as for painting models, that would be a total no no.

So you have been saving?


I meant competition ala coke vs pepsi sort of deal, this is more like Mircosoft vs Linux.

That is a rough crowd, Coke and Pepsi.

starlight
14-05-2009, 13:57
I can't ever say another miniatures gaming company has ever competed with my GW money. When I was buying GW stuff, I bought what I wanted and that was that.

As a married (between 25 and 35) year old male with no kids and a good job, I'd say I have a fairly sweet amount of disposable income, of which GW is now seeing none.

Find a fair few more like me, and it should provide one answer as to why they're losing money.

I'm in a comparable position. At the end of the month I'm dropping $3000 on camera gear (one lens and some accessories), July it'll be $4000ish on a new camera. This is from disposable income. I used to drop upwards of $1000/yr on GW product (and have the dozen plus armies to prove it)...and occasionally I still do, but these days it's all been going to second hand product. :( for GW...

Fenrir
14-05-2009, 14:18
I'm in a similar boat. I splashed £425 on a meal for my wife and myself a few months back, and am out tonight with the expectation of a £200+ food bill. When it comes to GW products though, I just can't justify the cost as I think they are overpriced.

Chaos and Evil
14-05-2009, 15:07
As somebody who stopped spending money on GW back when the Dark Angels codex was released (shh... a few blisters of Epic don't count)...

I won't tell anyone if you don't. :rolleyes:

zedeyejoe
14-05-2009, 16:49
So you have been saving?

Actually using the money on the stock market instead. Who knows I might even make money.

MarineMorton
15-05-2009, 11:28
I'm in a similar boat. I splashed £425 on a meal for my wife and myself a few months back, and am out tonight with the expectation of a £200+ food bill. When it comes to GW products though, I just can't justify the cost as I think they are overpriced.

You spent £425 on a meal for 2! But GW prices are over priced:confused:

I feel hard done by when I spend £40 on a meal at least a drop pod can be used for years I get hungry again couple hours later!

Mireadur
15-05-2009, 12:13
I'm in a similar boat. I splashed £425 on a meal for my wife and myself a few months back, and am out tonight with the expectation of a £200+ food bill. When it comes to GW products though, I just can't justify the cost as I think they are overpriced.

Thats definitely excessive, someone who spends 400 pounds happily on a meal shouldnt find GW prices all that aberrant (although considering the ****** food you get over there at Albion i guess 400 is what you have to pay for a decent one :p).

Joking apart, ive been told quality food restaurants are extraordinarily expensive in England compared to Spain so i guess i would also pay those amounts from time to time to enjoy something superb (if i lived there that is).

firestorm40k
15-05-2009, 12:34
As somebody who stopped spending money on GW back when the Dark Angels codex was released (shh... a few blisters of Epic don't count)


I won't tell anyone if you don't. :rolleyes:
Ha! :D The exact same time the current Dark Angels stuff was released by GW, I spent about £400 in one month on EPIC stuff... love to see what THAT did to their sales figures that month! ;)

Anyway, back on topic, it'll be interesting to see how GW will weather the current financial situation (I mean globally, not just their own mess); at the club I play FoW & Warmachine are increasingly popular over 40k (fantasy doesn't seem to get a look in, though at the other local club it is hooooje to the extent they ALL attend the WFB GT together!) - though there's burgeoning interest in LotR again thanks to War of the Ring.

I think with GW's current emphasis that all armies have to be bigger will = more sales (e.g. look at the points drop for stuff like basic Guardsmen squad and Chimera in the new Guard 'dex) could backfire, especially if the current price rise inhibits new-comers from being able to do this.

So, will this lead to interested parties trying out a smaller scale game like Warmachine, Hordes, or even Urban War, where you can play a decent skirmish with just half a dozen miniatures? Or will people just carry on with the hobby they love?

I don't know, but the one opinion I do have is that GW must stop using price increases as a counter to falling sales and decreased revenues.

Iverald
15-05-2009, 12:55
Gents, have you seen this?


Sorry to spill more gall (sp? right idiom?). An indie stockist told me what they are thinking. They think that they got rid of competition and no-one can possibly rival them.
Also, they've made a tremendous rise in profit from last Financial Year, so why would they even bother to get the prices right?
:mad:
http://www.rttnews.com/ArticleView.aspx?Id=834977&Category=Breaking%20News
Already posted this in 40k forum.
I nearly wanted some Empire minis.

That is a 633% RISE in profit. Ok, it's pre-tax, but it is still smashing. GW is not doing as bad as we think it is.

Azhrarn
15-05-2009, 12:56
The current pricing isn't exactly pushing me away, just limiting my purchases to the new books and the occasional mini/box. But the main issue is that there's no real competition to GW in this area. Warmachine/Hordes are available if you know where to look (handful of stores in the country, closest local one is ~60-70 miles away) but that's about it.
Sales will most likely drop, so I'm mainly hoping the 2 LGSs I visit will hold out.

More online discount purchasing by our gaming club I suppose, rather than supporting the LGS since it's getting rather expensive over here, especially with the pound down in the dumps as it is, FW stuff is generally cheaper than metal minis now


Gents, have you seen this?
That is a 633% RISE in profit. Ok, it's pre-tax, but it is still smashing. GW is not doing as bad as we think it is.

A 633% increase in profit, probably means they got a big boost to their margins, since I doubt shipped volume will have changed by that much. In other words, despite their "price gouging" they are still shipping a sizeable chunk of units and making a killing because of it.
Or something else is allowing them to save a tonne of cash, pushing their profits way up.

blongbling
15-05-2009, 12:56
just to put the record srtaight on one of the things mentioned here, GW does think it has competition, they look at anything that causes kids not to spend their money with GW is the competition. They dont consider anyone else in the toy soldier industry as competition but McDonalds, DVD's etc.....all competition. Ironic that now one of the biggest barriers to people buying their products will be their own pricing policy.

Osbad
15-05-2009, 13:27
Gents, have you seen this?



That is a 633% RISE in profit. Ok, it's pre-tax, but it is still smashing. GW is not doing as bad as we think it is.

A 633% increase over virtually nothing is still virtually nothing to get excited about....

Particularly when the CAUSE of that profit rise is mainly exchange rate fluctuations based on the rate of £ Sterling falling vs the US$, not increased sales...

Bloodknight
15-05-2009, 13:34
Exactly. When a guy in Afghanistan opens a carpet shop and sells 2 carpets, he just tripled their legal GDP, which is still close to nothing, if you get what I mean (I hope I didn't offend anybody, but this is a visually working example).

Llew
15-05-2009, 13:34
I'm not as impressed by the profit statement there as I am by increasing the revenues by 7 million and change. It looks like they had a good Christmas push for overall sales.

Imagine how profitable they could be without the dead weight of all those stores! ;)

DarkstarSabre
15-05-2009, 15:11
You know, having read through this entire thread and the different lines of thought...

Is it bad that the first words to enter my head were...

'They're taking the profits to Isengard!'

MarineMorton
15-05-2009, 15:49
Imagine how profitable they could be without the dead weight of all those stores! ;)


Thats like going think how much more profit tesco could make if they got rid of all those dead weight stores and parking space:angel:

Llew
15-05-2009, 16:25
Thats like going think how much more profit tesco could make if they got rid of all those dead weight stores and parking space:angel:

Only in the UK.

I have purchased many, many thousands of dollars of products from GW, yet never spent a single dollar in a GW store. I have spent less than $200 on the GW website. (I don't include purchases on Ebay in the above figures, as I only go there for used stuff.) In general I pay full retail because I want to support my FLGS.

There are innumerable manufacturers who sell a lot of product without needing their own storefront. Manufacturers are generally not great at retailing.

I would go so far as to say that the retail stores are giving GW a false-positive result on sales. They probably could be just as dominant, maybe even more so, if they focused on a really good support system for retailers that carried their product, went to trade shows, reduced prices, etc. And a large amount of that sort of thing could be done if they weren't saddled with stores.

They make really nice minis. They have attractive game systems which range of beloved-but-flawed to elegant to advanced. They offer some products for hobbyists that are outstanding, in addition to the ones that are overpriced. (For example, Foundation Paints, Washes are good -- spray primer is ridiculously overpriced.) A lot of companies could make a highly profitable business with really large volumes off that sort of product line and never own a single store.

Azhrarn
15-05-2009, 16:26
Thats like going think how much more profit tesco could make if they got rid of all those dead weight stores and parking space:angel:

Well in a way he is right, GW's own stores make a consistent year-over-year loss, it's the independent stockists that make them the money by buying their stuff to sell on without the burden of pay checks to staff and rent for the shop.

razormasticator
15-05-2009, 16:54
I actually thought GW did some good stuff last year with the apoc releases. You had numerous options to bolster your army at an affordable price. Its looking like pLanet strike may be the same way.

Reinholt
15-05-2009, 17:16
Only in the UK.

I have purchased many, many thousands of dollars of products from GW, yet never spent a single dollar in a GW store. I have spent less than $200 on the GW website. (I don't include purchases on Ebay in the above figures, as I only go there for used stuff.) In general I pay full retail because I want to support my FLGS.

There are innumerable manufacturers who sell a lot of product without needing their own storefront. Manufacturers are generally not great at retailing.

I would go so far as to say that the retail stores are giving GW a false-positive result on sales. They probably could be just as dominant, maybe even more so, if they focused on a really good support system for retailers that carried their product, went to trade shows, reduced prices, etc. And a large amount of that sort of thing could be done if they weren't saddled with stores.

They make really nice minis. They have attractive game systems which range of beloved-but-flawed to elegant to advanced. They offer some products for hobbyists that are outstanding, in addition to the ones that are overpriced. (For example, Foundation Paints, Washes are good -- spray primer is ridiculously overpriced.) A lot of companies could make a highly profitable business with really large volumes off that sort of product line and never own a single store.

Llew,

I will say I think your view is influenced by where you live; having lived all over the US (I've lived in something stupid like 9 different states already), and seen a variety of places, I will say this:

- GW should focus on the independent store or internet retailing model in places where there are not large cities in the United States. KY might entirely fall into this category, depending on what you decide to define as large.

- Conversely, the UK model of having decent store coverage is going to be important in the larger cities (for several reasons, not the least of which is that having your own gaming space in Manhattan or downtown SF is pretty expensive, and getting everyone to the same place in LA is trickier than one would think). I think GW has done an extremely poor job of this with regard to the American market (in fact, if there is one market where they have dropped the ball in just an absolutely egregious fashion to the point that it's probably cumulatively cost them over 100 million pounds, it's the US), but that doesn't mean it couldn't be done well. It just means it hasn't been done well.

So my view is this:

- The retail chain cannot be viewed as an albatross for them, as without it, they also don't have any marketing. Now, one could argue that taking all the expense from the retail chain and plowing it back into marketing would produce the same result, but to that I would say that it certainly would not have done so ten to twenty years ago when they were building out the chain, and that even so, the track record of online distributors in tabletop gaming and the like has not been strong.

- Conversely, there is a strange trend going on right now with regard to the world of gaming, which is this - it's cheaper to buy online, but the online guys don't provide a tabletop setting or playing space, which reduces the exposure of the hobby and causes less people to play, shrinking the market. Thus, offering low prices but reducing the customer base might be part of the effect of online discounters. This is, to me, problematic.


So the trick becomes how you address this problem; there are a number of methods, and I think it can be done well, it's just a question of what path you want to take. But I think the retail stores, in the end, are necessary in at least some places, as without them, you might just not have a very large hobby community at all in densely populated places where there are other, cheaper social options otherwise.

Llew
15-05-2009, 18:23
Well, for sake of scale, I live in the largest city in KY. This is not large at all by world standards, but there are at least 3 decent sized stores with gaming space that support a metro population of about 950,000. You can drive just about from any point to any point in the metro area in about 30 minutes, and people do so willingly all the time.

There used to be a far larger number and variety of gaming stores when I began gaming. I can remember being a teenager just starting to play D&D and on Saturday, or FLGS had 25+ regulars in the store all day. (We were probably disruptive --although not intentionally -- but we did spend all of our available income there.)

When I've stopped into GW stores while travelling (Atlanta, somewhere in Maryland a while back) they were nice retail spaces, laid out spaciously with a lot of stuff on the racks. (Although to be honest, my FLGS had a wider variety of GW stock, though some of this would be very old.) There were maybe two small gaming tables and no customers in the store. I haven't been in one for I suppose 8 to 10 years.

The FLGS that I go to up in Columbus, OH is much better than my FLGS here, and overwhelms the GW stores I saw.

There may be markets where the UK strategy works. Off hand, I would expect NYC to be one, but I'm less sure it's viable for L.A.

The point is, they *had* marketing. They *had* ways to get people into the games. They had gateway drugs, they had (and have) good quality, eye-catching products, and they used to be only marginally more costly than similar products.

If you really believe that the retail stores (as they exist) are truly necessary, how many single-brand retails stores do you know of that are successful? For god's sake...even Disney had to close most of their retail stores, and there are few companies with better brand recognition.

Effective retailers survive and thrive by having a breadth of offerings or they develop their brand into such a powerful marketing tool that no one could imagine going elsewhere. The problem is that, with plastic toys (which won't have the cachet of high-end chocolate or some other luxury) you can't make a persuasive argument why your stuff costs so much more.

GW would be best off cutting loose the retail chain, developing a relationship as the "featured" product and then let the games stores sell a variety of games. But that's a really dramatic revision of their current plans, and would take a much more in-depth discussion than I have time for at the moment.

Duke Georgal
16-05-2009, 01:22
Well, for sake of scale, I live in the largest city in KY.

B I G S N I P

take a much more in-depth discussion than I have time for at the moment.


That was the most well written post I have ever seen on this subject.

Thank you for writing it.

Reinholt
16-05-2009, 02:17
When I've stopped into GW stores while travelling (Atlanta, somewhere in Maryland a while back) they were nice retail spaces, laid out spaciously with a lot of stuff on the racks. (Although to be honest, my FLGS had a wider variety of GW stock, though some of this would be very old.) There were maybe two small gaming tables and no customers in the store. I haven't been in one for I suppose 8 to 10 years.

I agree this is a flaw with regard to their retail strategy in the US; they do not leverage the value of the gaming space enough.

Again, I don't think that's a knock on the retail chain in general, but rather the way it is currently run. I mean, if Toyota started making a car with a wheel on the roof or something equally pointless and obviously idiotic, that doesn't mean Toyota making cars is a bad idea. It just means that car is a bad idea.


There may be markets where the UK strategy works. Off hand, I would expect NYC to be one, but I'm less sure it's viable for L.A.

Oddly enough, I believe GW is doing the best in the LA and Seattle markets in the US - their execution in NYC has been very poor thanks to store placements in the past I could only charitably describe as excretable.


The point is, they *had* marketing. They *had* ways to get people into the games. They had gateway drugs, they had (and have) good quality, eye-catching products, and they used to be only marginally more costly than similar products.

GW has never really had marketing. They have had gateway games (and, quite frankly, one of their biggest mistakes in terms of expanding the player base was getting rid of games like Mordheim, Space Hulk, and the like that people could start playing quickly - if you look at the downward trend in GW sales, it coincides with some of these games vanishing. It also coincides with other things, but it's worth a thought or two), they have had quality products (and while their models remain good, I feel the game quality outside of the new WotR has been slipping for a while compared to the competition), but they have never had marketing.

GW doesn't advertise effectively. They certainly don't brand effectively (I would wager only a tiny sliver of people I know are aware of what Warhammer is, but almost all of them know what something like WoW is, at least in passing). It's been a serious weakness of the company for a long time.

With that said, I agree with you that they had some great stuff they screwed up.


If you really believe that the retail stores (as they exist) are truly necessary, how many single-brand retails stores do you know of that are successful? For god's sake...even Disney had to close most of their retail stores, and there are few companies with better brand recognition.

There are many, many single brand retail stores that are very effective; go walk through a mall (though GW should stop opening mall locations, but that's another story). Most specialty retailers are single brand, or brands distributed through a single brand name. To name a few off the top of my head - Orvis, Franklin Covey, Apple, Prada, and Patagonia. This is not to say a diversified distribution model doesn't work either (it clearly does - Wal Mart, Walgreens, Sports Authority, and Best Buy attest to that), and is often better for scale and volume, but if you are a small differentiated producer, you can do fine with your own stores.


Effective retailers survive and thrive by having a breadth of offerings or they develop their brand into such a powerful marketing tool that no one could imagine going elsewhere. The problem is that, with plastic toys (which won't have the cachet of high-end chocolate or some other luxury) you can't make a persuasive argument why your stuff costs so much more.

You mean like the iPod, as that is fundamentally what it is?

I think it can be done, and has been done. Differentiating a product is possible across all kinds of products, and GW certainly could do it. The fact that you regard the company purely as generic plastic toys merely tells you they haven't, whereas if someone referred to GW as a cutting edge model-based strategic simulation platform, you'd know they were on to something.

Granted, part of the way to drive that is often the perception of product quality (and the easiest way to get that is, shockingly, through product quality), so until GW cleans up their rules, gameplay, and cohesive presentation of products beyond just models, it won't happen.

But it could.


GW would be best off cutting loose the retail chain, developing a relationship as the "featured" product and then let the games stores sell a variety of games. But that's a really dramatic revision of their current plans, and would take a much more in-depth discussion than I have time for at the moment.

I disagree. I think if GW wants to go that route, they should actually just sell the company. That kind of production, if you want to maintain revenue or profits at anywhere near the average level of the past 10 years, requires a certain level of distribution platform that GW simply would not have without the retail stores; for every great independent store, there are 10 crappy ones, which partially explains why brick and mortar stores are dying out. And because people are far more likely to start GW games if their friends are already playing, you can't count on online retailing to make that happen, as that doesn't provide any sort of support for actually gaming in the form of tables, players, etc that you can find at a brick and mortar. They need that.

They'd need to sell themselves to someone else to get it, or at the very least, get a vastly larger distribution channel than they would have independently.

starlight
16-05-2009, 02:41
GW's biggest issue is that the people making the decisions are completely divorced from their market. The bigwigs only see GW through the eyes of UK Retail and that's killing GW. :(

Edonil
16-05-2009, 05:26
You know, having read through this entire thread and the different lines of thought...

Is it bad that the first words to enter my head were...

'They're taking the profits to Isengard!'

Thank you my friend, I needed that laugh...I nearly fell out of my chair...

I haven't weighed in on this topic yet, but, honestly, I'd be surprised if GW is really losing money. The fact of the matter is that, for each product sold, they make a good amount of profit. What we're seeing right now is a policy promoted by the idea that they need to make more profit...which is going to cost them revenue. I've been in this hobby for a fair amount of time, 7 or 8 years, and have seen prices go up, but haven't always understood why. After hearing about how they're doing business in the UK, it's starting to make more sense...that really won't work in America, frankly. A good independent retailer will generate more loyalty and have a wider range of customers than a GW store. I've been in one GW store, and was thoroughly unimpressed.

However, the indie stores I've been to have always impressed me- good community, good service, and they cater to more than just 40k and fantasy. If GW would work with these kinds of stores, instead of fighting them, I think they'd be better off. One thing that renewed hope in overall GW strategy that I remember them starting last year was a prize support project- every three months or so, GW would help with the prizes for the tournaments that month, so long as a certain amount of GW stuff from the three major ranges was kept in stock. Not a huge amount, certainly, but enough that those tournaments are always packed, and usually a lot of fun.

I'm not saying GW needs to sell all of its stores, but, they really need to look into how they can partner with their main sellers, the independent retailers, to improve their impact in the US...and a price hike isn't it.

Condottiere
16-05-2009, 08:03
I blame that Youtube music clip - nothing that ever goes to Isengard will ever be taken seriously again.

Lord Dan
17-05-2009, 01:29
I blame that Youtube music clip - nothing that ever goes to Isengard will ever be taken seriously again.

I have to say I had trouble taking it seriously to begin with. The music certainly didn't help, though..

Spleendokta
17-05-2009, 06:26
I cant see how GW is loosing money here in Chicago. Seems like every 2 months they are opening a new shop! We have I think 15 stores around Chicago now plus the biggest bunker in north america? Hrm... some cities dont even have a GW mall shop.

Brandir
17-05-2009, 09:36
Well in a way he is right, GW's own stores make a consistent year-over-year loss ..........

Er, no.

Overall the GW shops make a profit. Some individual shops do make a loss. GW is extremely ruthless towards these shops, either closing them down, re-negotiating lease terms with landlords or replacing management/staff.

I understand that a number of UK shopping centre based shops were going to be closed, having been leased during boom times on high rents. However, many landlords are desperate to keep shops filled so GW are renewing leases at very favourable terms - in many cases returning individual shops to profitability.

Emperor's Grace
18-05-2009, 03:00
There may be markets where the UK strategy works. Off hand, I would expect NYC to be one, but I'm less sure it's viable for L.A.


Oddly enough, I believe GW is doing the best in the LA and Seattle markets in the US - their execution in NYC has been very poor thanks to store placements in the past I could only charitably describe as excretable.

Seconded. NYC used to boast 3 GW's, IIRC? Now it's just the 8th st/NYU one left as of my last business trip. (I lived in NYC 1998-2001 but now only go back on occasion) That one is tiny. Literally almost the size of my office. IIRC, two 4x4 demo tables, a painting table in the back, and a register on a small counter at front. Slottawall all around with blisters and boxes. If folks were at the tables, you couldn't comfortably pass to browse the racks - that's how little space there was. I stayed once (when it was empty and BFG had just come out) for a BFG demo, other then that I just got my stuff and went.

There are a few good indie FLGS to shop in NYC but the ones I found were always cramped/crowded with little room to play.

ICEMANQ
18-05-2009, 07:32
The stores are a good/bad situation I guess.

To deliberately go off topic, does anyone know if there was advertising for the miniatures in Warhammer: online? Or did the box come with flyers? Discounts for starter boxes (epic idea..)? PM me if you know :)

Azhrarn
18-05-2009, 10:09
The stores are a good/bad situation I guess.

To deliberately go off topic, does anyone know if there was advertising for the miniatures in Warhammer: online? Or did the box come with flyers? Discounts for starter boxes (epic idea..)? PM me if you know :)

none of the above I believe, GW only licensed the game out and approved content, they had nothing to do with the rest of it which was done by EA.
And I doubt EA would include GW flyers and such, Dawn of War by Relic (which was even more suited to that sort of thing) didn't get any either.

ICEMANQ
18-05-2009, 10:20
none of the above I believe, GW only licensed the game out and approved content, they had nothing to do with the rest of it which was done by EA.
And I doubt EA would include GW flyers and such, Dawn of War by Relic (which was even more suited to that sort of thing) didn't get any either.

Fair enough. Surely though, when GW agreed to let them use the IP they could have included stipulations about advertising? I imagine EA would go along with it, considering the success of Dawn Of War(It would be worth having the advertising in it due to the interest a Warhammer MMO would generate).

Then again I have no idea how the IP/gaming law world works!

Azhrarn
18-05-2009, 12:19
Fair enough. Surely though, when GW agreed to let them use the IP they could have included stipulations about advertising? I imagine EA would go along with it, considering the success of Dawn Of War(It would be worth having the advertising in it due to the interest a Warhammer MMO would generate).

Then again I have no idea how the IP/gaming law world works!

Neither do I, and I suppose GW could have included advertising stuff easily enough or specified that advertising should be included, but they didn't.
Not sure why though.
The only thing I recall that included anything from GW aside from the logo on the box was the special edition box of the MMO, which included a miniature.

exsulis
18-05-2009, 22:24
Part of what burned GW in the LotR department is the "No Crossover" policy they were saddled with. hell, the whole range is a different scale, and they look funky together.

The other problem you tend to notice is the fact that there is a high turn over rate among LotR players where-as Fantasy/40K players tend to stay a bit longer.

Unforgiven666
18-05-2009, 22:31
GW's biggest mistake was fiddling with LOTR..
Sure it was a good idea back when the movies were coming out...

Edonil
18-05-2009, 22:32
GW's biggest mistake was fiddling with LOTR..
Sure it was a good idea back when the movies were coming out...

Considering War of the Ring, I think it's a mistake they'll be able to correct in grand style...

starlight
18-05-2009, 23:16
Part of what burned GW in the LotR department is the "No Crossover" policy they were saddled with. hell, the whole range is a different scale, and they look funky together.

The other problem you tend to notice is the fact that there is a high turn over rate among LotR players where-as Fantasy/40K players tend to stay a bit longer.

I really wish people would stop perpetuating this falsehood...:(

a) Nobody forced GW to sign the agreement.
b) GW's biggest reason for wanting the license was to prevent anyone else from getting a foothold.
c) Based on conversations I had at GWCanHQ back in the day, the idea that it was *New Line* (the usual culprits) who insisted on the No Crossover rule is...suspect at best...:eek:


As far as longevity by system...LotR hasn't been around long enough to have a record you can really compare to WFB/40K... :eyebrows: However I've found the biggest reason people (the ones I've known) people leave LotR is lack of opponents, whereas with WFB/40K it tends to be dissatisfaction with either the game system itself, or with GW as a whole.

Guess which one is easier to fix...:angel:

Iverald
18-05-2009, 23:51
I really wish people would stop perpetuating this falsehood...:(

a) Nobody forced GW to sign the agreement.
b) GW's biggest reason for wanting the license was to prevent anyone else from getting a foothold.
c) Based on conversations I had at GWCanHQ back in the day, the idea that it was *New Line* (the usual culprits) who insisted on the No Crossover rule is...suspect at best...:eek:


As far as longevity by system...LotR hasn't been around long enough to have a record you can really compare to WFB/40K... :eyebrows: However I've found the biggest reason people (the ones I've known) people leave LotR is lack of opponents, whereas with WFB/40K it tends to be dissatisfaction with either the game system itself, or with GW as a whole.

Guess which one is easier to fix...:angel:

We have fixed the problem in Poland. :D

Templar Ben
19-05-2009, 00:30
I am sorry if this was covered as I am standing in line and posting via my phone. I disagree with the belief that GW needs a retail chain and then a comparison to high end items such as Coach bags or Sephoria. GW does not market themselves to people that buy items just to show that they can. Also consider that Coach has much smaller runs than the generic handbag. GW is geared for volume and by moving to be the top line exclusive mini (as ForgeWorld agruably is) then they are moving against their interest. Even Apple stores are low volume compared to PC. They know they won't control that market so they are doing what they can with their smaller size.

ryntyrr
19-05-2009, 01:36
I think GW missed a trick here. Their issue I wuld suggest is their price point. If they were selling in volumne of pre 2007 figures and the consumer had those incredible credit lines that were given to them back then economics would suggest to increase prices as the general consumer as long as they had a good credit rating could have more credit therefor a producs Value was variable, people would still slash out £300-£1k on their credit via (loans, credit cards, borrow more on the house).

Now with the credit considerably slashed the consumer does not have this eluded "infinite cash". Spend now worry about paying for it later. GW should lower it's price points and reduce it's distribution costs. They have a few fixed costs which are white elephants built and created with the expectation of continous growth. By their expectation they should have been now worth at least 1/2 a Billion now back when the days of making money was good.

The arguement about the need for the retail chain is slipping. If the Indies now with the new guidelines can take that role and we will see in 5-10 years. It is possible to see GW to be extremly profitable with no retail chain.

A wait and see policy for now. I would suggest that allot of positives won;t come to any fruitation purely due to the economic circumstances.

MarineMorton
19-05-2009, 11:15
For all of you who think that GW should just get rid of their shops please follow this link

http://investor.games-workshop.com/latest_results/Results2008/full_year/businessreview.aspx

As you can see if we close them down GW lose 49% of thier sales not exactly the best way of keeping the company going:)

Templar Ben
19-05-2009, 12:00
That is presuming sales are not replaced by other sources. Each store should have a profitability target that is at least the profitability of the Indy stores. That is the 40% extra should cover rent, wages, utilities etc. GW can give them some time to get to those levels but it does matter if 50% of sales generates 70% of costs.

Some stores may make sense but I don't see that being true for the majority of stores.

Osbad
19-05-2009, 14:38
Agreed TB. GW's selling costs were £44M in 2007/08. Which represents 40% of turnover Of course not all of that is the cost of running the store network - some of it goes on distribution and and the website and area reps, but I suspect the largest chunk of it is. Cutting costs representing up to 40% of your revenue to lose 49% of that revenue (49% x £110M = £50M) does not appear to make sense at first, but it is pretty easy to imagine circumstances where it would! Cutting stores that are not as profitable as indie stores and focussing on supporting indie sellers in those areas instead makes more sense for instance, as TB suggets.

£54M sales for £44M of costs is an awful lot of effort for very low level of return (and of course is actually a loss after cost of sales and interest etc is factored in.) Could they generate more than that £54M if they spent £44M in another way? It begs the question!

There MUST be ways of generating £54M in turnover that cost a lot less than £44M

Thinking about it radically. What if they axed all the shops and distribution network, saving (say, for the sake of argument £30M). That would leave them their website and indie retailers to act as their retail arms.

a) Would all that £50M in sales disappear, or would a large part of it transfer to indies/the internet?

b) If they took some of that saving (the amount that turnover didn't reduce by and slashed their prices by (say) 30%, wouldn't their turnover rise?

Of course, none of us have sufficient access to concrete data to say for sure, but it isn't as simple as saying "we took £50M through the tills of GW stores last year so if we close them we will be £50M worse off". It is quite possible that if they closed the stores, and revised their business model they could actually make MORE profit, and sell MORE volume.

The issue is really that GW have an internal conflict in their business model. They have a cost structure that works best at very high volumes (high fixed costs, low variable costs), yet they are marketing their product as if it was a luxury - which forces volumes down and prices up - not taking advantage of their competitive advantage which is their access to mass-production facilities.

If they marketed their product as a mass-market item to compete with other manufacturers then there at least would be some internal consistancy in their policy.

Alternatively they could just cast their models in gold, and achieve internal consistency that way instead...

Of course you then have the argument: "The stores are generating word of mouth marketing". But my guess is that is so much bull poo. Look at the volume of n00b churnage. If stores don't recover their costs and make an actual profit then they are failing, as if they don't generate repeat sales throught their own doors (as falling turnover in real terms indicates they do not), there is minimal liklihood of them generating repeat sales through any other portal!

MarineMorton
19-05-2009, 15:48
Well GW agrees with you as reading through the report they are closing shops that make no profit or moving stores to areas with lower rent(US) in Europe where indy sales are down they have repalced the sales team!

As indy shops are an important to the business as they themselves can see just from the numbers what would be interesting to see is what % of these indy shops are real shops or internet I would be willing to bet £1 that the numbers are quite different between say the US and the UK. Different markets different plans but it would seem GW might be starting to think this but until sometime later in the year we will not known.

doombanner
19-05-2009, 16:06
In a literal sense, they lost money in 2007. The reasons behind this are many, but include high overhead costs, inefficient SG&A from headquarters, poor product quality control, extremely poor marketing, inadequate financial and business planning for the LotR line in particular, and a shrinking customer base due to repeated successive price raises.

This is a great post, and I agree completely with GW not being well-run, and providing very little value for investors when compared to other companies.

But can I get some addt'l info on what you mean by yopur reasons; "extremely poor marketing" etc.

~Doom Banner

starlight
19-05-2009, 16:38
Ask any ten random non-geek/gamer people you know if they've heard of:

Dungeons and Dragons
Doom
World of Warcraft
Facebook
Star Trek
Lord of the Rings
Warhammer
Mythbusters
Ghost in the Shell
Final Fantasy
Pokemon
Spiderman
Batman
Wolverine

Now how many had heard of almost every one *except* Warhammer...? :eyebrows:

Reinholt
19-05-2009, 17:54
This is a great post, and I agree completely with GW not being well-run, and providing very little value for investors when compared to other companies.

But can I get some addt'l info on what you mean by yopur reasons; "extremely poor marketing" etc.

~Doom Banner

Sure thing.

To touch on the ones not covered by the numbers alone:


poor product quality control

We should not be seeing things like typos and inconsistent rules in rulebooks (this indicates a lack of a copy / technical writer reviewing work, or any content controls), we should not be seeing wide disparities in plastic coloration and quality from batch to batch (this indicates problems either upstream with a supplier or poor input controls), we should not be seeing model designs that are often shipped broken (several of the LotR pikes have this problem, for example), we should not be seeing the number of incorrectly packed orders we see from direct and/or Forge World, and so on.

Poor quality control from top to bottom.


extremely poor marketing

In the US in particular, GW is an unknown. Most gamers who would be interested in them are either mostly or completely unaware of their existence or, if they are, unaware of the details and the games that GW produces. I can say "Warhammer" to friends who have been playing strategy / computer / roleplaying games for a decade and have them go "Yeah, it's a weapon, and?"; they are often totally unaware of GW.

When your market penetration is so low that your target market doesn't even know who you are, you have poor marketing. One of GW's great failings is that, in the US, they are essentially a nobody compared to a lot of other companies producing comics, roleplaying games, or video games. The slice of the market they control is tiny.

You can measure this tiny market share through sales volumes and revenue as well - Blizzard makes more in subscriber fees for WoW from many single US states in one month than GW makes in the US for the entire year from all operations combined.


inadequate financial and business planning for the LotR line in particular

LotR was a classic short lifecycle product:

High initial popularity, then a drop off over time. This provides a lot of cash flow up front, but reinvestment in the projects could be foolish, as you get diminishing returns unless you release something new.

The fact that GW used the cash from the LotR bubble to expand the company by increasing fixed costs (which must be paid regardless of sales volumes) is incredibly foolish. If people weren't buying that much WFB and 40K before, what makes you think they would magically start doing it after?

In those situations, you either stash the cash to pay for future projects to try to expand your market, keep it as a buffer against downturns, or return it to investors.

What you definitely do NOT do is increase your costs so that when the cash flows decline, you can't meet your bills.

That is exactly what they did, however.

I believe the other things are shown directly through the numbers or other posts I have made. Hope that helped.

:)

MarineMorton
19-05-2009, 18:09
Sure thing.

The fact that GW used the cash from the LotR bubble to expand the company by increasing fixed costs (which must be paid regardless of sales volumes) is incredibly foolish. If people weren't buying that much WFB and 40K before, what makes you think they would magically start doing it after?

In those situations, you either stash the cash to pay for future projects to try to expand your market, keep it as a buffer against downturns, or return it to investors.

What you definitely do NOT do is increase your costs so that when the cash flows decline, you can't meet your bills.

That is exactly what they did, however.

:)


GW used the Lotr cash to invest in new plastics technolgy right? Are you suggesting this was a bad move, better plastics equal better quailty ect more sales! certainly I hope your not saying they should of just given all that cash to the shareholders! or worse just put it into a bank account!

Tagis
19-05-2009, 18:28
They used the money to invest in high volume plastic production and then switched to a price structure that results in low volume sales. They effectively wasted one of the major benefits of the technology they had invested in. I think it would be better to say GW spent money on plastics technology. Compared to the stuff coming out for the likes of Gundam by Bandai where the models are different colour plastics which colour match the model all on the same sprue GWs stuff looks dated.

Llew
19-05-2009, 18:29
Investing into plastics technology is a great move, especially if you're planning on increasing your volume of sales.

The higher initial costs on developing a plastic mold only really make sense if you plan on selling tons of the miniatures. (There's a break-even point based on the cost of making molds for metal and their replacement molds vs. the plastic molds. I'm sure that is one thing -- quite possibly *the* one thing -- that GW has run the numbers on and figured out how many plastics they'd have to sell to outstrip metal minis.)

Once you have the mold, materials are relatively cheap and it's almost like printing money. The more you sell, the less that mold effectively cost to make. So generally when you switch to plastic, the driving issue is that you're planning on selling volume. Volume companies usually go for large volume and lower margins.

GW apparently believes they can go for large volume and higher margins. I think they're wrong, but they don't buy it yet.

The plus side is, with that fancy molding equipment in place they can always switch their strategy and recover from it. So while they're not making the best use of it yet, it was still a good investment in my opinion.

starlight
19-05-2009, 18:32
The problem was that GW banked on the LotR cash influx continuing, and bought equipment/etc with that in mind. In addition they paid out huge bonuses to the top people for a plan that eventually proved to be massively flawed. The whole time they were wading in cash, WFB/40K sales volumes were falling... :(

The plastics tech is good, but it should have been approached from a sound business perspective, instead of that of a bunch of giddy suits thinking they'd found the golden goose...:(

Lord of Worms
19-05-2009, 19:51
The new bigger sprues, do mean more bits. Which sort of mitigates the need to have a bitz ordering service ( I still don't like them killing it though). But I agree, make stuff cheaper, and the people will come. Especially the kids. I can easily see parents looking at a box "saying $50 for a tank?" and then going to train shop and getting little Jimmy a WWII tank for $20.

Brandir
19-05-2009, 22:10
Tom banged on about the LOTR bubble for years - look at the annual reports.

GW taking the LOTR licence was a superb move that enabled GW to invest oodles of cash in the new plastic technologies. It also prevented WotC from securing the rights and launching a minis line of their own to complete with GW.

The problems have occurred for many many reasons. One could be the failure to realise that LOTR gamers were interested in LOTR and not WHFB/WH40K. Staff from the 5 or 6 shops I visited and four Conflict events didn't help with their poor attitude to LOTR.

And, as Tom said in an annual report, GW became lazy - LOTR was easy money. I can't emphasis how successful it was and how gloriously profitable it was for GW during that period 2001 - 2004.

GW knew the LOTR money would end but managed to convince themselves those players would transfer to WHFB/WH40K.

Why didn't they?

Perhaps because the core rule engine of WHFB/WH40K is not as elegant as the core LOTR rule engine?

Perhaps this is an issue of expectations. I doubt that City investors, who we now know as the fools who broke the banks with their incompetence, didn't realised that fundamentally GW is a hobby with hobbyists and not a retail operation with customers.

But, apart from 2007, GW has been a profitable company every year. After the 2007 loss GW reshaped the company and were back in profit in 2008.

Not bad considering the recession!

I expect the next annual report, due Jul 09, will show a rise in profits.

So, basically GW is not losing money!

starlight
19-05-2009, 22:49
You may want to check your numbers, since several of those years you claim they were profitable...they weren't. :( Borrowing to pay dividends is not a sign of profitability. :( The last few years they were spending more than they were taking in.

Brandir
19-05-2009, 23:11
Borrowing money is a normal part of business - what distinguished GW from 'mainstream' companies during their early years was the lack of borrowing.

They started to borrow in 2006 - last year the total was some £10 million if I remember correctly. That is what, less than 10% of turnover? Nothing for a plc in these troubled times. Very few companies in the UK have cash reserves and the vast majority have borrowings, although perhaps that is why many of our businesses are failing at the moment ....... ;)

Having too much in the bank was an invitation to takeovers from either rivals or asset strippers, particularly during the height of this behaviour 2006 - 2007. Oh yes, just before the crash :eek:

Disclaimer - I am a GW shareholder, although the few I have left remain in my portfolio for sentimental reasons :)

IJW
19-05-2009, 23:21
Ask any ten random non-geek/gamer people you know if they've heard of:

Warhammer
Ghost in the Shell

Now how many had heard of almost every one *except* Warhammer...? :eyebrows:
I'm a big fan of GitS & almost anything by Masamune Shirow, but more widely known outside geek circles than Warhammer? Definitely not the case in the UK...

Rest of the list is spot on, though.

ryntyrr
20-05-2009, 00:25
For all of you who think that GW should just get rid of their shops please follow this link

http://investor.games-workshop.com/latest_results/Results2008/full_year/businessreview.aspx

As you can see if we close them down GW lose 49% of thier sales not exactly the best way of keeping the company going:)

As others have explained above it doesn't really work like that in RL for many reasons although the above may seem to be correct on paper. I think it is a question of time and that of a slow transition. To keep the most profitable stores which will always have a place and a slow transition period where most stores will be phased out. This would be a good move for GW from a profit point of view. The only issue/worry I have, is GW right now or in the near/far future fit for purpose. Only time will tell

Reinholt
20-05-2009, 04:48
To Clarify:

1 - By increasing their fixed costs, I am also referring to the expansion of the retail chain beyond the scale that their customer base would allow for. The resultant cuts that had to follow reveal this. GW out-grew their natural customer base in some places with the LotR bubble sales driving much of the spending.

2 - The plastic technology is neither a good thing nor a bad thing. It's just a thing. However, the internally inconsistent business strategy that accompanies it is a bad thing. You cannot produce your product with large upfront capital costs but low variable costs and have a retail chain demanding high volume, low margin, then price your products for high margin, low volume while simultaneously marketing like a premium product.

It just makes no damned sense. Almost no companies that do not hold a patent on some kind of very important technology can get away with this strategy. GW certainly does not fit the mold.

3 - GW's borrowing concerns me greatly, and is a sign the company is not as healthy as some may think. Why? Because they are borrowing while paying a large dividend, in many cases. I would be less worried if they were borrowing while sales volumes were growing and they were expanding their markets, but they are borrowing on shrinking sales volume and declining project returns.

This could bite them in the ass, hard, in the future. If they need cash, they should have cut their dividend first, THEN borrowed if it came to that, not the other way around, given their cost of capital and size.

zedeyejoe
20-05-2009, 07:02
From a purely business point of view, the glory days of GW were when they were making 20% profits after taxes. Then the organisation started to grow, more shops, more admin staff. Truth is they have gotten sloppy and did not do much about it when sales fell.

The borrowing to pay dividends was a big no no,could not be maintained and thank god was not.

I was wrong, I did not think that watching the LoTR films would inspire people to play wargames. They did, unfortuanly the rules were written to make things easy for non-wargamers and as such had no long term appeal (sorry to all those who think LoTR is a great set of rules). I have great hope in the new WoTR rules.

Losing the 'game in a box' games that could be sold in supermarkets was also a mistake.

Enfid
20-05-2009, 11:10
I've read every single reply to this thread, and I'm a bit stunned at the moment, plus I have no real knowledge in accounting, so I'll refrain from saying anything. However.....

The staffs at my closest GW store are acting rather....peculiar. They seem much more hyper than usual, and despite the candy shop about 10 meters from the store and the vitamin store directly across from it, I doubt it's just sugar rush. They seem to be yelling and screaming at the drop of a hat. I noticed a lot of people (shoppers in the department store) just came into the store just to see what the commotion was about. At first it didn't bother me, but after a while I found that they were 'crying for attention' to a ridiculous level. They ARE GW staff, but I'm quite sure they weren't like this a few months ago.

Maybe it's just something else altogether, but is this one of their new marketing strategy? To get the attention of everyone passing by to get new gamers, and make the game look 'exciting' (despite the games filling the niche of 'interesting' rather than 'exciting')? If it is, then it's an epic fail, because they look like idiots, which makes the game look like a game for hyperactive idiots, and it also drove one gamer away because he couldn't stand the shouting.

Maybe I'm just being paranoid.......but anyone else who go to GW stores notice this? Or is it just these two hyperactive idiots?

Chaos and Evil
20-05-2009, 11:21
Maybe I'm just being paranoid.......but anyone else who go to GW stores notice this? Or is it just these two hyperactive idiots?

GW staff are often hyperactive sillies... GW actively encourages a modicum of such enthusiastic behaviour.

Captain Micha
20-05-2009, 14:15
GW Stores is probably 99 percent of the reason.

The other 1 percent is poor handling of their 40k armies.

darkace77450
20-05-2009, 16:14
3 - GW's borrowing concerns me greatly, and is a sign the company is not as healthy as some may think. Why? Because they are borrowing while paying a large dividend, in many cases. I would be less worried if they were borrowing while sales volumes were growing and they were expanding their markets, but they are borrowing on shrinking sales volume and declining project returns.

This could bite them in the ass, hard, in the future. If they need cash, they should have cut their dividend first, THEN borrowed if it came to that, not the other way around, given their cost of capital and size.

Remember, most of the CEO's salary comes from paying those dividends; so whether he should have done it or not didn't matter...he wanted to get paid. Which is the short answer to the question posed...GW is losing money because of very poor management (and I'm not talking about the managers at your local shop either).

Reinholt
20-05-2009, 18:15
Remember, most of the CEO's salary comes from paying those dividends; so whether he should have done it or not didn't matter...he wanted to get paid. Which is the short answer to the question posed...GW is losing money because of very poor management (and I'm not talking about the managers at your local shop either).

Actually, most of the CEO's salary for GW is actually just that - salary! It's unusual for a corporation, and there would be dividends for his stock holdings, but they are not large. I can't find Wells among the top stockholders for GW.

Tom Kirby, on the other hand... you might more accurately point your finger for this claim at the Chairman of the Board.

starlight
20-05-2009, 18:27
Given how new Mr. Wells is, yes most of the responsibility lies with Mr. Kirby...and his ownership/salary is substantial.

Crazy Harborc
21-05-2009, 00:36
IF...I do mean "if" GW continues to cut back on it's USA company stores and returns to selling to/through indies and letting the indies promote, build, grow the market of GW's goodies......It sounds like a great way to lower the operating expenses.

IMHO, that should lessen the "need" for GW, UK to hike prices in the UK, Europe, etc to make up for USA company store's higher rents and other operating expenses.
I seem to remember that the USA division had a higher profit window BEFORE the crazy, massive increases in company stores in the USA.

But then some people "might see that" as admiting the good old days were better $$$$$$ wise for GW.

Naaawwww that couldn't work...makes too much business sense.:rolleyes:

Reinholt
21-05-2009, 03:41
IF...I do mean "if" GW continues to cut back on it's USA company stores and returns to selling to/through indies and letting the indies promote, build, grow the market of GW's goodies......It sounds like a great way to lower the operating expenses.

IMHO, that should lessen the "need" for GW, UK to hike prices in the UK, Europe, etc to make up for USA company store's higher rents and other operating expenses.
I seem to remember that the USA division had a higher profit window BEFORE the crazy, massive increases in company stores in the USA.

But then some people "might see that" as admiting the good old days were better $$$$$$ wise for GW.

Naaawwww that couldn't work...makes too much business sense.:rolleyes:

Part of the problem here is that we only have two scenarios to judge from in the US:

1 - GW with no retail stores.

2 - GW with retail stores in poor locations and with poor overall company management of the US retail chain.

Unsurprisingly, option 1 is more profitable. However, what would option 3 (GW with well run and properly located retail stores in the US) look like? Your guess is as good as mine.

Lord Martel
21-05-2009, 04:20
"Taking someone’s masterpiece and mutilating it just because you think you can milk an extra movie out of it is horrible."

Ever see the Starship Trooper movies? Heinline must be spinning in his grave.

As far as GW goes, when your main source of advertisement is word of mouth you need lots of customers. While prices and game qualities are at the forefront of the discontent I have always found the companies inconsiderate attitude toward its loyal supporters to be its main problem.

Some gamers have always held lukewarm attitude about GW games. Their opinions don’t hurt the company much. However, formally loyal and supportive customers that feel belittled, take advantage of, and overall betrayed create the kind of word of mouth that can kill a company.