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View Full Version : 2014-2015 results out - sales down again. Company wants to be here 'forever'...



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Jim30
28-07-2015, 07:38
Link here http://investor.games-workshop.com/wp-content/uploads/2015/07/2014-15-Press-statement-final-website-final.pdf

Key headline figures on quick scan show that they are showing modest profit, but things like new warhammer world cost £2.4m. There was a decline in sales across board, but it seems licensing is keeping them going. Retail sales dropped 4.6%, trade sales by 6.3%

New forgeworld site toing live in summer 2015.

A 'review of product ranges' due - they are doing topdown review this year of their range this year. He is clear no price reduction, but they will be looking at pricing points, whatever this means.

This years report feels more like a 'this is what we do, come and buy me' approach by saying how they work and what they do in a way not seen for some years.

Lots of nuggets to study yet, but it seems more of the same, fewer sales, declining interest and hiding poor performance behind ingenious accounting and smoke and mirrors. The decline continues and accelerates.

Satan
28-07-2015, 08:44
...they're paying 1,1 million gbp for the new FW online store? I hope that includes internal costs...

MiyamatoMusashi
28-07-2015, 08:46
Prices up. Revenue down. Unit sales way down. Swingeing cuts, so profits up. Earnings per share up, to paper over the cracks.

You sure it's the new one, and they haven't copy-pasted from last year? Hmm... no mention of the word "otiose"... guess it must be legit.

Vazalaar
28-07-2015, 08:57
Hmm the flop of AoS will probably masked with the monstrous amount of royalities that W:TW will bring in when released.

shelfunit.
28-07-2015, 08:57
Wow. So in just two years they have shed £15.5m (13%) of their annual sales, not adjusted for inflation. Brutal.


Hmm the flop of AoS will probably masker with monstrous amount of royalities that W:TW will bring in when released.

Maybe, but DoW and their various other major computer releases have shown that the royalties will not do a vast amount to their bottom line, even when the game apparently sells millions.

Jim30
28-07-2015, 09:26
Interesting little snippet buried in the revenues section, there was a massive reduction (e.g. millions) in corporation tax paid this year compared to last year (last year £4.5m, this year £1.9m). Strip that out and the supposed profit increase is almost the same as last year.

My sense is that this is a smoke and mirrors report - a lot is lurking in the depths of the numbers that seems to indicate that the company is actually not doing very well at all.

toonboy78
28-07-2015, 09:31
52p per share dividend, very nice

Baragash
28-07-2015, 09:36
...they're paying 1,1 million gbp for the new FW online store? I hope that includes internal costs...

Yeah, in my experience using companies with a track record with London pricing premium, they're over-paying *shrugs*

There are two interesting non-financial statements in there. Obviously the FW thing, if that enables small orders to store below the free postage level, I think that is a good money spinner (and yeeeeeears overdue).

Secondly

Secondly, I will review our product range. We believe this is long overdue: it is time for a resetting of the ranges. Not tweaking here and there but a top down reassessment. I expect to update you further at the half year. We will aim to continue to deliver outstanding product and customer service, maintain our Group gross margin and continue to improve our Group stock turn. To be absolutely clear I will not be reducing the RRP of our products: they are premium priced for their premium quality. I will, however, be looking to offer a broader range of price points. This is exciting and is for the long term, so I'm not promising when you will see a change. We have already started the brainstorming in our monthly strategic product meetings. It is early days, but I can already foresee some busy times ahead.

So possibly we'll see lots of snap fit and other lower price point kits to address point of entry. However, to me, the first part implies that 40k is going to get a range rationalisation at some point in the next couple of years. I would interpret that as confirming the death of Sisters, and I'd be worried if I was into a low selling army (based on GW's behaviour I would flag Dark Eldar and Orks up and would wonder if there might be some reworking of the Chaos Gods like AoS, Slaanesh at risk in 40k, well there's already the Eldar fluff in place to sort that out).

Greyshadow
28-07-2015, 09:39
Not claiming things a rosey but at least Rountree seems a lot better a leader than that Kirby clown. The report seems to acknowledge that there is a problem - that is something. I hope they can improve things, we aren't off to a great start with Age of Sigmar.

vlad78
28-07-2015, 09:49
52p per share dividend, very nice

Indeed. Revenues are falling or stalling but profits increase thanks to the decrease of corporate taxation and some cost cutting.

GW policies of multiplying releases at most steemed the bloodloss but didn't increase the number of customers.

We'll see what the effect of AOS will be.

toonboy78
28-07-2015, 10:08
the first statement could have done with a proof read....

“Over the year we have seen modest sales growth, at constant currency"

sales at constant currency down from 123.5 to 123.1

Earl_UK
28-07-2015, 10:12
Gw has another problem outside of thier control being the customer base and its ever shrinking spare cash due to the economic climate. Many of my gaming friends actively seek out games with greater value for money and still maintain an enjoyable modelling and gaming hobby, there are more options than ever to do so now.

If I was in GW's position I would look at a cheaper gaming system but with far more options / armies to keep people entertained and offer those that want to spend (if they can) plenty of stuff to get, yet at the same time cater for a smaller budget and be an viable option.

They have become too focused on a high end product with a shrinking market.

vlad78
28-07-2015, 10:24
the first statement could have done with a proof read....

“Over the year we have seen modest sales growth, at constant currency"

sales at constant currency down from 123.5 to 123.1

He probably thought it would look bad to tell the whole truth. :D

williamsond
28-07-2015, 10:26
It's interesting to see they mention that they are going to have a pay freeze too, just to really stick it to the retail staff... theres some really great gems in there.

Samsonov
28-07-2015, 10:27
Imagine if sales still continue to fall next year, the same trend taking another, say, 5%. And AoS flops above and beyond this. It could be really brutal.

I do wonder, will we see a report covering AoS but not covering Horus Heresy? If AoS is a disaster but Heresy a success then I wonder if the numbers will conceal all this.

MiyamatoMusashi
28-07-2015, 10:28
the first statement could have done with a proof read....

“Over the year we have seen modest sales growth, at constant currency"

sales at constant currency down from 123.5 to 123.1

In fairness, you could at least quote the whole sentence.

"Over the year we have seen modest sales growth, at constant currency, in our core trade and mail order channels."

Let's not muddy the waters by misquoting, hmm?

Deadhorse
28-07-2015, 10:31
So here's a few conclusions:

Sales are falling, but we have no idea why and no concrete plans to do anything about it. Instead, we pretend sales aren't falling.
End times sold surprisingly well, so fantasy's last performance was stronger than normal. This suggests 40k sales tanked.
With the AoS gamble, the next financial report will be one of the most interesting in a while.

cracou2
28-07-2015, 11:24
Some parts are INCREDIBLY interesting, bit not where you expect them to be:

- The sudio, Warhammer World and Citabel are under the control of the Head of


"To do so the stores don't offer the full range of our products, they are merchandised to offer all customers new release product and the appropriate extended range

Concern 1: they do not explain how a single employee can run a store alone while doing intro games AND sell AND manage. And they wonder why they have problems to hire managers?


"To achieve this we centrally run automatic stock replenishment from Nottingham."

Concern 2: so they don't adapt to local conditions (??)

"We also have 94 multi man stores, which are constantly reviewed to ensure they remain profitable."

Concern 3: they misunderstand the concept. A store is designed to get more customers. Locally it may not generate a profit but it will increase the number of players in the area and on the long run it will generate a profit . Of course you need to close the really basd ones but they don't seem to grasp the conept.

"a stockist programme which is designed to sell the right amount of stock into every account in line with their store format and performance. This programme is reviewed annually. The intention is that we stock all of our stockist accounts with our best sellers."

Concern 4: we aim... but the stockist may not like that. Example: having tons of unsold and impossible to sell outdated WH.


"We strive to deliver excellent service, operating in 16 languages covering all time zones."

Concern 5: while having lost all knowledge about the local conditions (as they closed local HQ).

"I have a product and supply manager who is responsible for our factory, logistics and design studios (Citadel, Forge World and Black Library). He also manages our three main distribution hubs in Nottingham, Memphis and Sydney.

STOP!!! Here is the core: they do NOT have a marketing manager! The studio (creative team and so on) is NOT managed by the marketing but but by a SUPPLY manager who manages process and logistics.

Process and logistics are really complicated. It's a fact. You need somebody with an excellent training to be in control. At the same time he need to manage the studio, the creative team, the painyers, the design... It's a completely different job and it's also a complicated one. I do believe that he know show to produce a miniature (moulds, injection molding machine) and how to distribute it. He's probably really good at Sig Sigman and Lean Manufacturing. But it means that there is not a single first level manager in charge of the design or of the creative team. And we wonder why some rules are really lame? Maybe becaume nobody care: nobody appear to be really in charge of that.

KPI:

sales growth by chanel

--> so managers can compete with each otehr to get more than the other channel (basically the trade, retail and direct competing).
--> they look at value not numbers... Bad idea!

----------------------------------
Finance:

First: They distribute more money to shareholders than what they generate...
AND sales decline
AND cost of sales increases
AND they freeze salary!!!!

and they wonder why they have a problem to get good managers?

Basically the company has been loosing sales for years, they freeze salaries, they give more to shareholders (i.e. they don't invest more) and they expect their people to be happy? So the low level manager who doe NOT say anything about the strategy and so on is not going to get any money...

It's a joke!

The_Real_Chris
28-07-2015, 11:53
It does look like they don't expect to be here in a decade and are lookig at extracting maximum value from the operation for shareholders before they can no longer compete.

Still no mention of games in the 4 elements...

Fulgrim's Gimp
28-07-2015, 12:07
But at least Age of Sigmar was released to broad acclaim. Tee hee.

Ghal Maraz
28-07-2015, 12:38
So, 1.1M £ for FW new website? It seems Mrs. Kirby is getting another generous job offer by his concerned husband, perhaps?

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vlad78
28-07-2015, 12:39
But at least Age of Sigmar was released to broad acclaim. Tee hee.

Kirby could have written that.

The_Real_Chris
28-07-2015, 12:43
To help me stay focused on executing my key day to day duties I have arranged a consultancy agreement with Tom Kirby to support me with our Academy programme and our expansion in Asia.

Will his wife do the other website as well? :)


Product quality
This is an indicator of the effectiveness of our design studio and our continuous improvement in design to manufacture. We measure this by looking at sell through. If the product is great we sell a lot, if not we sell very few.

Genius. On the plus side they aren't a company who would distort sales figures with marketing or sales tactics :)


the customer is always right

Well unless that are asking about games :)


We expected a decline in non-core trade activities (-£2.2 million) and this comprised export, non-strategic accounts and magazine sales via newsstand

So they wiped out their white dwarf market finally.


The annual impact of this increase on our UK RRP price list is an average increase of 3%.

Is this the first time they have formalised it? Quite a bit ahead of inflation in the UK...


Explore new core trade opportunities in toy, craft, book and comic stores.

Wonder how they will do this? New products as part of their review? Jealous of x-wing appearing everywhere that can get the stock?

Ghal Maraz
28-07-2015, 12:57
They "expected". Yeah, I'm sure they expected it. It's always been a part of a firm to expect some decline. It's otiose to think otherwise.

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Deadhorse
28-07-2015, 13:16
To be honest, the idea of evaluating quality based only on the number of sold units is actually pretty bad if your product range is varied in any meaningful way. If a car manufacturer did this, at some point they would reach the conclusion that they should only be selling the cheaper sedan models, which are usually the most popular.

Thus, the car manufacturer would pretty much lose the customer segments interested in luxury cars, vans and all other kinds of cars.

This approach to evaluating quality will lead Games Workshop to the inevitable conclusion that the only viable miniature product is space marines. Which, given AoS, is pretty much what happened, isn't it?

Products which generate lower sales volumes can be profitable and desirable for a variety of reasons, including customer recruitment or retention.

The only think I can hope for is that they apply this philosophy to the nasty boil that is AoS.

Jim30
28-07-2015, 13:26
This line is very interesting!

"The first element - we make high quality miniatures. We understand that what we make is not for everyone, so to recruit and re-recruit customers we are absolutely focused on making our models the best in the world. In order to continue to do that forever and to deliver a decent return to our owners, we sell them for the price that we believe the investment in quality is worth."

Also this line appears to indicate the LOTR is dead, we're just waiting for the formal announcement in a few months.

The second element is that we make fantasy miniatures based in our imaginary worlds. This gives us complete control over the imagery and styles we use and complete ownership of the intellectual property.

And

"We design, manufacture, distribute and sell our fantasy miniatures and related products. These are fantasy miniatures from our own Warhammer 40,000 and Warhammer universes."

There is no mention at all of LOTR in this statement!

Also - fascinating to note a 3.5% drop in sales, yet prices went up by 3% on average - anyone care to work out how much of a decline this represents?

Deadhorse
28-07-2015, 13:47
Also - fascinating to note a 3.5% drop in sales, yet prices went up by 3% on average - anyone care to work out how much of a decline this represents?

I believe that's 96,5%/103% = 93.7%.

I.e. they've sold 6,3% fewer models than in the comparable period last year.

Gorsameth
28-07-2015, 14:03
...they're paying 1,1 million gbp for the new FW online store? I hope that includes internal costs...
The new (inferior) webstore cost 4 million and was build by the company of his wife.

tristessa
28-07-2015, 14:04
I suspect that a lot of doomsayers probably had their responses to this thread formulated in advance of the results. No big surprises there but profit and cash generation remain high and there's still a lot of investment going in to the business (nearly 10m in the Studio alone). Crazy amounts of money. Big commitment to returning to decent sales growth with a salary freeze. I think by this point (pretty much a decade of post-LOTR flux) we should have worked out that GW aren't going to follow the same patterns of other businesses - there is no death spiral. Profit and cash generation may dip but equally might buck the trend as they did during the recession. Investors are probably happy with their dividends.

I look forward the seeing a similar thread in 2025.

That said, I remain curious as to their ambitions for giving rules away for free and the impact that has over the next 12 months.

Herzlos
28-07-2015, 14:14
I suspect that a lot of doomsayers probably had their responses to this thread formulated in advance of the results. No big surprises there but profit and cash generation remain high and there's still a lot of investment going in to the business (nearly 10m in the Studio alone). Crazy amounts of money. Big commitment to returning to decent sales growth with a salary freeze. I think by this point (pretty much a decade of post-LOTR flux) we should have worked out that GW aren't going to follow the same patterns of other businesses - there is no death spiral. Profit and cash generation may dip but equally might buck the trend as they did during the recession. Investors are probably happy with their dividends.

I look forward the seeing a similar thread in 2025.

That said, I remain curious as to their ambitions for giving rules away for free and the impact that has over the next 12 months.

Less cash than the last 2 consecutive years though. That's almost starting to look like a trend.

They are still making money though, so will be around for a bit longer, plus it looks like the new CEO is making an effort to turn things round.

Satan
28-07-2015, 14:19
The new (inferior) webstore cost 4 million and was build by the company of his wife.

While I, in my humble capacity as a marketer working with some of the biggest companies in the country and a few world-renowned brands, do of course realize that an e-commerce platform is integral to most consumer businesses in 2015 (and I usually tell people how to go about ordering and building them) and therefore should be able to justify an increased cost vs most B2B equivalents, that is just silly expensive compared to so many of the projects I've worked on. Do they have the world's most advanced CRM hiding in the background of it? Richrelevance personalization? Advanced remarketing?

Well, they do have some analytics variables, so I guess there's a CRM connection hiding somewhere outside of analytics:

Custom Variable 1 Locale: en_GB
Custom Variable 2 Logged In Status: false
Custom Variable 3 Store Terminal: false
Custom Variable 4 Customer Role: normal
Custom Variable 5 Customer ID: 1299827440

Mozzamanx
28-07-2015, 14:21
I've absolutely no experience in the field, but last year people were claiming that they would've charged something like £250,000 for the job. So not only is it an order of magnitude higher, it also included delightful gems like the unfriendly faction navigation panes, putting the entire site offline for 30(?) hours during implementation, and deleting all of the old profiles and orders.

Deadhorse
28-07-2015, 14:22
@tristessa - several years ago, based on the policies and strategy pursued by GW, many people came to the conclusion that they're facing a slow decline... Until they are bought out or change significantly. And this is pretty much what has been happening. What is their track record since 2005? Their policies destroyed fantasy, epic and specialist games, they have been unable to keep LOTR alive nor launch the Hobbit successfully, they went from practically no competition to heavy competition. AoS hasn't been successful at retaining existing customers and, while it is too early to tell if it's an utter failure, it certainly isn't breaking any sales records.

They are currently down to one game, 40K, which, considering that prices have increased while sales volumes have decreased, is becoming less and less popular.

What you are seeing is the reverse of snowball effect. I understand they've managed to remain profitable by aggressive cost-cutting. But please, explain to me how GW has been doing great in the past decade, taking into account what happened to all their gameS. It seems to me that currently, GW is 40k, and 40k is shrinking.

If you have a different view, please explain what you see as the vehicles for their growth in the coming decade.

Agrimax
28-07-2015, 14:27
Hmm... no mention of the word "otiose"... guess it must be legit.

For some reason I can’t read that word without thinking someone typing ‘tortoise’ and had an absolute mare with autocorrect.

HelloKitty
28-07-2015, 14:31
I've worked consulting doing websites like GW's. You can get that site designed and implemented for $10,000, and that's considered gouging. Realistically a web developer that has database knowledge doing a one man show could get that done and bill at about $4000 - $5000 for less than a months work. I used to do sites like that in a week (only I worked for a consulting firm so I didn't see that much money, I made my salary which was considerably less)

Vazalaar
28-07-2015, 14:33
I suspect that a lot of doomsayers probably had their responses to this thread formulated in advance of the results. No big surprises there but profit and cash generation remain high and there's still a lot of investment going in to the business (nearly 10m in the Studio alone). Crazy amounts of money. Big commitment to returning to decent sales growth with a salary freeze. I think by this point (pretty much a decade of post-LOTR flux) we should have worked out that GW aren't going to follow the same patterns of other businesses - there is no death spiral. Profit and cash generation may dip but equally might buck the trend as they did during the recession. Investors are probably happy with their dividends.

I look forward the seeing a similar thread in 2025.

That said, I remain curious as to their ambitions for giving rules away for free and the impact that has over the next 12 months.

I don't think that much of the 10m for the studio was used for the AoS rules.. :mad:

The_Real_Chris
28-07-2015, 14:34
The CEO does seem blunt about customer recruitment. I guess it will be a good measure of whether or not their current setup can be a sucess. I think near universally here people believe you need good games to sell buckets of the same models, we shall discover if GW offerings are good enough to hook people and reverse the trend of recruitment not matching outflow. They might be. Remember the general population will always be less well informed than people absorbed in a field so would ahve different expectations.

Maybe people just have to step up their poaching campaigns:)

HelloKitty
28-07-2015, 14:42
I suspect that a lot of doomsayers probably had their responses to this thread formulated in advance of the results. No big surprises there but profit and cash generation remain high and there's still a lot of investment going in to the business (nearly 10m in the Studio alone). Crazy amounts of money. Big commitment to returning to decent sales growth with a salary freeze. I think by this point (pretty much a decade of post-LOTR flux) we should have worked out that GW aren't going to follow the same patterns of other businesses - there is no death spiral. Profit and cash generation may dip but equally might buck the trend as they did during the recession. Investors are probably happy with their dividends.

I look forward the seeing a similar thread in 2025.

That said, I remain curious as to their ambitions for giving rules away for free and the impact that has over the next 12 months.

Well this is the 11th annual anniversary of the first thread in 2004 that said games workshop would be dead any day with the next couple years, when these threads started becoming regular in forums, so 2025 will be interesting for sure.


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Reinholt
28-07-2015, 14:51
Well this is the 11th annual anniversary of the first thread in 2004 that said games workshop would be dead any day with the next couple years, when these threads started becoming regular in forums, so 2025 will be interesting for sure.

For all this gets repeated, I've never seen anyone with an informed opinion make this statement.

This report is more of the same; cut costs (taxes, this time), lose customers, lower unit sales, profit solid because of the cost cuts but revenue decaying slowly.

The real question is when the network effect that keeps their games popular begins to break down (WHFB already did, and now we have AoS, which is unlikely to reverse that trend) for 40k. I have been on the record, repeatedly, as saying GW is in zero short term danger but a large amount of long-term danger. This report does nothing to change my opinion.

To quote the Talking Heads: same as it ever was, same as it ever was.

Edit: A salary freeze is never the move of a healthy company. This will cause your best people to leave first.

Gorsameth
28-07-2015, 14:53
I suspect that a lot of doomsayers probably had their responses to this thread formulated in advance of the results. No big surprises there but profit and cash generation remain high and there's still a lot of investment going in to the business (nearly 10m in the Studio alone). Crazy amounts of money. Big commitment to returning to decent sales growth with a salary freeze. I think by this point (pretty much a decade of post-LOTR flux) we should have worked out that GW aren't going to follow the same patterns of other businesses - there is no death spiral. Profit and cash generation may dip but equally might buck the trend as they did during the recession. Investors are probably happy with their dividends.

How exactly does a salary freeze for an already **** paying retail job with to much commitment (one man stores) help get sales growth?
How does any salary freeze help sell stuff?

No GW will not be dead in 5 years but they are making less money year after year despite increasing prices faster then inflation and increasing their rate of product releases, they have shown no signs of turning this around. It is a bad state for a company to be in and while their profits are enough to let them keep this going for years to come it doesn't stop it from being worrying.

tristessa
28-07-2015, 14:55
@tristessa - several years ago, based on the policies and strategy pursued by GW, many people came to the conclusion that they're facing a slow decline...

Depends on what you measure as decline. Share price? Sales? Dividend?


Their policies destroyed fantasy, epic and specialist games

No - the lack of people buying those products killed those games.


They went from practically no competition to heavy competition.

True, but the largest competitor against GW still looks small. I think FFG's worth is a third of GW's... That said - when you're targeting the only game in town then it's easy to chip away at their business without causing that business too much concern.


AoS hasn't been successful at retaining existing customers and, while it is too early to tell if it's an utter failure, it certainly isn't breaking any sales records.


Time is going to tell on this - I suspect the free rules model is something we're going to see more of and I think in time it might be a success in recruiting more players...


They are currently down to one game, 40K, which, considering that prices have increased while sales volumes have decreased, is becoming less and less popular.


Your stats don't back this up actually - sales volumes have decreased but that's likely to be more on the WHFB side. I strongly suspect 40k remains as popular as it ever was.


What you are seeing is the reverse of snowball effect. I understand they've managed to remain profitable by aggressive cost-cutting. But please, explain to me how GW has been doing great in the past decade, taking into account what happened to all their gameS. It seems to me that currently, GW is 40k, and 40k is shrinking.

If you have a different view, please explain what you see as the vehicles for their growth in the coming decade.

Its no secret that I don't see GW as a sinking ship. I think they've got legs left. They remain cash rich and generally invest well at the edge of the curve and remain market leaders in bringing in new tech and making great models. They pay their investors a decent dividend and keep the city happy. They've recently started diversifying the business through licensing the worlds and that's a good way of reducing risk across the business. 40k is still doing well though has gone through a crazy run of releases. We know that plastic heresy kits are around the corner - those are literally a license to print money. On top of that we can be sure that FW and BL are still selling very well. I also think that the profit and cash generation can slow quite a bit before anything goes wrong - GW are making a lot of money and spending a lot of money on capital investment. When that stops we'll know that things are on the way down.
I guess I'm an optimist.

The_Real_Chris
28-07-2015, 14:58
The real question is when the network effect that keeps their games popular begins to break down (WHFB already did, and now we have AoS, which is unlikely to reverse that trend) for 40k.

And it was surprising in the ICv2 numbers just how quickly WFB had sales go down.

HelloKitty
28-07-2015, 14:58
For all this gets repeated, I've never seen anyone with an informed opinion make this statement.

This report is more of the same; cut costs (taxes, this time), lose customers, lower unit sales, profit solid because of the cost cuts but revenue decaying slowly.

The real question is when the network effect that keeps their games popular begins to break down (WHFB already did, and now we have AoS, which is unlikely to reverse that trend) for 40k. I have been on the record, repeatedly, as saying GW is in zero short term danger but a large amount of long-term danger. This report does nothing to change my opinion.

To quote the Talking Heads: same as it ever was, same as it ever was.

Edit: A salary freeze is never the move of a healthy company. This will cause your best people to leave first.

Informed opinion or not, its been a topic punchline for eleven years.


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Reinholt
28-07-2015, 15:03
Depends on what you measure as decline. Share price? Sales? Dividend?

I think people have been very clear that they mean market share and revenue. One can argue about if those are the correct things to measure, but don't start bringing up random things people did not mention to muddy the waters.


No - the lack of people buying those products killed those games.

The company not producing a product people would buy at a price they would buy it at killed those games. When products fail, you never blame the customer; if you did your job correctly, you either would not have made it in the first place OR people would be buying it. Producing something that fails is the company's fault, always. This is how capitalism works. Do not ever excuse poor execution by a firm. This is how you end up with things like a government bailing out GM or RBS and rewarding stupidity.


True, but the largest competitor against GW still looks small. I think FFG's worth is a third of GW's... That said - when you're targeting the only game in town then it's easy to chip away at their business without causing that business too much concern.

Source? Especially given that FFG is private and owned by Asmodee (which has other properties), I'm very curious as to where you got that estimate.


Its no secret that I don't see GW as a sinking ship. I think they've got legs left. They remain cash rich and generally invest well at the edge of the curve and remain market leaders in bringing in new tech and making great models. They pay their investors a decent dividend and keep the city happy. They've recently started diversifying the business through licensing the worlds and that's a good way of reducing risk across the business. 40k is still doing well though has gone through a crazy run of releases. We know that plastic heresy kits are around the corner - those are literally a license to print money. On top of that we can be sure that FW and BL are still selling very well. I also think that the profit and cash generation can slow quite a bit before anything goes wrong - GW are making a lot of money and spending a lot of money on capital investment. When that stops we'll know that things are on the way down.
I guess I'm an optimist.

If all of this is true, why do they have less customers now than 5 years ago? Why is their market share smaller? Why are their core cash generation options only working properly because they continue to cut costs at a furious rate?

Or, to ask the real question I have been pondering for a while now: what happens when they run out of costs to cut, which will happen (in my best guess) in roughly 5 years?

Reinholt
28-07-2015, 15:04
Informed opinion or not, its been a topic punchline for eleven years.

So has "GW will live forever ALWAYS"; I try to ignore the uninformed trolls on both sides.

HelloKitty
28-07-2015, 15:09
True enough.


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Deadhorse
28-07-2015, 15:19
No - the lack of people buying those products killed those games.


Yeah, that's kind of what we have been saying will happen... isn't it?

2005: GW, if you don't change your ways, people will stop buying your games!
2005-2015: People stop buying LOTR, Fantasy (and never begin to buy Hobbit), only 40k is left, GW revenue is down 20% before factoring inflation in, and adjusting for price increases suggests they're selling less than half the number of miniatures they were moving in 2005 (!).
2015: Is it really accurate to say: people have been predicting the fall of GW for a decade and look, nothing's happened?

Plenty has happened. I agree they do some things well, like plastic miniatures and paints. Unfortunately, they fail to look at their hobby as a comprehensive experience, they fail to look at the various segments of potential customers, their needs, financial capabilities and so on. They've done a good job of reducing costs in line with declining revenue, they've managed to focus on sculpt quality... and that's it.

The shortest way to describe the current state of the GW business is: still generating cash for shareholders from a declining customer base. And I think they can keep it up for many, many years, shrinking slowly 3-6% a year. Unless, of course, AoS flop coincides with a waning 40k and we see real blood in six months.

The_Real_Chris
28-07-2015, 15:23
Depends on what you measure as decline. Share price? Sales? Dividend?

I would say customer base and sales to those customers, now at a steadily increasing margin. I remember when pokemon came out and GW had a number of danger years. They found the small customer base somewhat vulnerable. The smaller that base gets the more vulnerable they are to market crazes taking them away, the less network recruitment they have, etc. Hence the CEO in the statement taking a very strong line on growing the customer base and changing price points, no doubt to get more people in and keep them for longer.


No - the lack of people buying those products killed those games.

It is traditional in business to blame the decline of a product that isn't facing some big market shift on the company, not the consumers. I get it that horse sellers were not at fault, the rise of the motorcar was. However GW failed to maintain and grow their games, in the process ceding markets they had created to rival companies. You can't say people have stopped buying games and blame it on them. The market segment is bigger than ever and indeed GW fed the growth of a competitor - FFG - with its licensing out. We could probably say GW branded stuff is selling more than ever, it is just GW is seeing less money from it. Wargames and boardgames aren’t less popular, GW failed to maintain its products. Do you honestly think they did a lessons identified activity from Epic 3rd ed and let it be robustly challenged to learn from it, or just got some anecdotal accepted wisdom?


True, but the largest competitor against GW still looks small. I think FFG's worth is a third of GW's... That said - when you're targeting the only game in town then it's easy to chip away at their business without causing that business too much concern.

GW faces companies targeting different aspects of its business rather than one competitor. That is a lot of more specialised pulls to fight off. And this presumably is FFG prior to the take over?


Time is going to tell on this - I suspect the free rules model is something we're going to see more of and I think in time it might be a success in recruiting more players...

GW is probably right not to try and compete on rules. It is risk, has an overhead and is too vulnerable to disruption. Is what they have got enough to keep customers until their peak spend has passed though? I know I am old fashioned but the type of gameplay in AoS is more of a mass market (I want to say crossbows and catapults…) affair, with limited utilisation (no competition without significant work and without a leader a fractured scene that damages it) but attached to a very expensive product.


Your stats don't back this up actually - sales volumes have decreased but that's likely to be more on the WHFB side. I strongly suspect 40k remains as popular as it ever was.

The ICv2 figures make me think otherwise. Flat sales in miniature wargames, but an awful lot of diversification going on. Unless FFG is posting x-wings to people free they are coming from somewhere and Fantasy sales seemed to drop off a cliff 2-3 years back, not now.


They've recently started diversifying the business through licensing the worlds and that's a good way of reducing risk across the business.

They have changed licensing. Rather than being precious they now it seems let anyone have a go, to the extent there is no automatic buy in due to poor quality control.


40k is still doing well though has gone through a crazy run of releases.

Which has lowered their return on investment as the sets sell less than they used to. Not much of a drop but enough to be noted in the report.

Herzlos
28-07-2015, 15:37
How exactly does a salary freeze for an already **** paying retail job with to much commitment (one man stores) help get sales growth?
How does any salary freeze help sell stuff?

Because you're luring them with the notion that if they sell enough, they'll get a pay rise, or even a bonus. Sure, you're just making the desperate sales tactics worse, but if you're not expecting to keep the staff for very long before you quit, why not go full double-glazing salesman with them?

Pacman
28-07-2015, 15:49
A salary freeze is never the move of a healthy company. This will cause your best people to leave first.

True. A lot of companies were freezing salaries during the recession, but now that the economy has picked up it can only be a sign of problems within the company.

Gorsameth
28-07-2015, 15:51
True. A lot of companies were freezing salaries during the recession, but now that the economy has picked up it can only be a sign of problems within the company.
How many greats do they have left tho?
I think most of those who where there during the glory years are already gone.

jtrowell
28-07-2015, 15:53
Am I the only one that find the salaries freeze insulting when combined with the fact that they still are in the black *and are still paying huge dividends*.

Isn't it like telling that this was a bad year and there are not enough money for raises while at the same time giving a huge raise to the CEO and upper management ?

williamsond
28-07-2015, 15:59
that was one of the big things for me, what could be a better idea than upsetting your already over worked and burnt out retail staff. I'm sure moral at the coal face is already brutally low in teh one man stores with unrealistic sales goals and a pay freeze will make staff feel un-appreciated and will lead to descent in the ranks.

75hastings69
28-07-2015, 16:01
Plenty has happened. I agree they do some things well, like plastic miniatures and paints. Unfortunately, they fail to look at their hobby as a comprehensive experience, they fail to look at the various segments of potential customers, their needs, financial capabilities and so on. They've done a good job of reducing costs in line with declining revenue, they've managed to focus on sculpt quality... and that's it.

This, totally this.

Have to disagree with the paints comment, because GW don't actually make the paint, they're made by another company and just branded as GW with their labels/names etc. AFAIR (or at least they used to be before the last re-pot/re-name).

Also I feel other companies are now sculpting better models than GW are by a long shot, but THAT is purely personal taste, I've not been bought over by the cartoony look of recent GW releases, although they still even in my opinion manage to knock them out of the park every now and then.

Ghal Maraz
28-07-2015, 16:05
No big surprises there but profit and cash generation remain high and there's still a lot of investment going in to the business (nearly 10m in the Studio alone).

The majority of them being spent on artwork, sculpting and model-making. I don't see new pattern of innovative growth here. Just more of the same. The Design Studio is the heart of the creative output, is its R&D part... And still is the least expensive-part of the financial investment of GW.



Big commitment to returning to decent sales growth with a salary freeze.

You say it as if it is a Good Thing. They should reduce dividends, not put the onus on the most fragile, decision-lacking part of the company. They paid 16.6 millions in dividends and 'invested' (a broad term which also incorporates, I guess, the salaries on Nottingham people) 9.7 millions in the Studio. I'm certain not an economist, but to me it doesn't sound the acting of a company which strives to grow.

MiyamatoMusashi
28-07-2015, 16:19
Am I the only one that find the salaries freeze insulting when combined with the fact that they still are in the black *and are still paying huge dividends*.

Ha, quite.

I also laughed at the suggestion that the CEO "asked" staff to accept a pay freeze. I wonder how many of them had the opportunity to say, "erm, no thanks..."? ;) I rather suspect they were told, not asked! At least he's promising to backdate it if all goes well, but why will it miraculously go well now, suddenly?

Still, it's a funny thing with GW staff. Generalisations are always suspect (so many exceptions) but in many cases, they're working for GW because they want to work for GW, not because they're expecting to get much of a livelihood out of it; if they were looking for high pay, they'd have looked somewhere else... GW were never renowned for paying particularly well. As for the more discerning ones whose already-low morale is dented still further by the shareholders getting a dividend... they're probably already marked as "bad managers" who must be replaced, contributing further to employee turnover, but that's OK because GW are always hiring managers and there will always be a queue of people who want to work for them, just as there will always be a queue of people ready to buy Sigmarines at £6 per model (then £7, then £8, and so it goes on... and up...).

cracou2
28-07-2015, 16:32
ok, salary freeze which is going to stop IF they increase sales...

BTW, sales have been going down for years... And most of the current staff joined shen if was already the case.

Dr. Who
28-07-2015, 16:38
Big commitment to returning to decent sales growth with a salary freeze.

Excuse me, but are you not a business owner yourself (a FLGS)? Or do I remember wrong? Either way, it is another cost-cutting measure, not a tool for actual sales growth. And not a "sympathetic" tool at that if the wage adjusted for inflation goes down. And you are not actually selling more units that way are you?

Would you - or do you - treat your employees (if you have any) like that?

- Dr.

Blutrache
28-07-2015, 16:39
Yeah well the pay freeze combined with the statement that a critical success factor in the near future is "finding the right employees" seems a bit contradictory. Unless the "right employees" aren't people who are above such trivial things as money...
/Cheers

shelfunit.
28-07-2015, 17:19
Big commitment to returning to decent sales growth with a salary freeze.

What possible way would a salary freeze mean commitment to sales growth? They say they recruit for attitude rather than ability, by freezing wages they lose the option to improve as people with ability will go and find somewhere their work is rewarded.


I look forward the seeing a similar thread in 2025.

If they still exist by that point they will be a sub £80m company on current trends.

Also interesting to note that since the half year report their sales are down roughly £0.5m, what was released between Christmas and the end of may that sold so poorly?

The_Real_Chris
28-07-2015, 17:26
Unless the "right employees" aren't people who are above such trivial things as money...
/Cheers

They are highly sought after int eh Uk and companies are always experimenting with lowering pay to try and find them.

Lexington
28-07-2015, 17:32
We know that plastic heresy kits are around the corner - those are literally a license to print money.
I wonder about this. Yes, the Heresy has done very well for ForgeWorld, but I'm not sure how much of an impact it'll have at the level of GW overall. Current HH collectors and gamers are almost certainly made up of a sub-section of existing 40K consumers, so while I can see HH stuff selling relatively well (at least compared to, say, AoS), I'm not sure it'll be the enormous success people think it will obviously be.

akai
28-07-2015, 17:39
What I found most interesting in their report -

4 Strategic Elements and Objectives to their Business -
1. Games Workshop make high quality miniatures and sell them for the price that they believe the investment in quality (best miniatures in the world) is worth.

2. Games Workshop make fantasy miniatures based on their imaginary worlds giving them complete ownership of the intellectual property. My note: Seems to be referring to Age of Sigmar replacing the generic, and in my opinion iconic, fantasy races with their own spin. Suggests all new miniatures from Games Workshop would focus on a new spin of the old iconic fantasy races (Elves, Dwarfs).

3. Games Workshop business at three fronts - Games Workshop stores (42% of profit) / Games Workshop Mail Order Store (21%) / Independent Accounts (37%).

4. Games Workshop focus on making profit.

Current Business Projects:
1. ERP Replacement - Business Management Software replacement
2. Forge World Mail Order Store combined with their Citadel Mail Order Store. My note: Hopefully this suggest an easier way to acquired FW miniatures at my local game store.
3. Mail Order Warehouse System Replacement

Plans for the Next Year:
1. Open more GW stores (one man run stores, with some "multi-man run stores). Games Workshop stores to be rebranded as "Warhammer" stores
2. Increase their Independent Retail Store Trade Outlets - focus on North America.
3. Explore new core trade opportunities in toy, craft, book, and comic stores. My note: I am interested to see if this entails making lower cost entry items into the Warhammer gaming hobby, such as HeroQuest, Space Crusade and Battle Masters. Or is this just trying to sell their current novels and items to these other stores...

Kisanis
28-07-2015, 18:13
All I can say is that im glad I turned down the offer to be a one man store redshirt.

They make immense margins, they pay out yearly dividends, and then they pay freeze the staff.

What. The. Eff.

It does sound like our new ceo is a Little more interested in rebuilding than kirby, but emphasis on the little part.

Im still a fan of warlord/mantic at this point. Better games, better service, less arrogance.

Sent from my Z30 using Tapatalk

Gonefishing
28-07-2015, 19:03
For me the most interesting part is the fact that there is (again) no mention of the Games, but they state:


Thirdly, we must grow the number of Customers we have. We have been underperforming here in recent years, mainly because of our focus on the value based initiatives of converting our loss making stores to profitable ones and restructuring our sales business to take of duplicate and unnecessary costs...

Speaking from personal experience I can state that the reason I, and many of my gaming friends, are not Games Workshop customers anymore is because the games they produce now are awful and the company has made it very clear they don't want gamers as customers. I really don't care how nice there models are, or what price they are - if the GAME does not exist to support the purchase I will not buy them.

All the focus of the report is on the quality of miniatures, but surely in the majority of cases what entices people to spend money on those miniatures and buy into the world/IP is there initial experience of the game? I have just spent £350, (and have another £150 pounds worth of purchases planned) with Hawk, because we tried Dropzone Commander and loved it as a game- this justifies my investment and makes the purchases worth while. 6 years ago I would not have even registered the existence of Dropzone, I would have been to busy playing 40K.

Personally I think the loss of GW customers, and the rise of their competitors coincides with their decision that the games that supports their product are the least important aspect of their business, not because of their: focus on the value based initiatives of converting our loss making stores to profitable ones and restructuring our sales business to take of duplicate and unnecessary costs. Until they address this I don't think they have a realistic chance of significantly growing their customer base, instead they are just disenfranchising a not insignificant portion of people that fit exactly into the "Niche Market" they are trying to sell too.

Whirlwind
28-07-2015, 19:23
It's definitely an interesting read. Definitely laced with lots of corporate spin. A lot can be read into their language which seems from my perspective to be positive defence of their practices.

A few things I noted - They definitely will not reduce RRP. Strange for this to be in the statement; it's as if 'others' are starting to question their business practices and they feel it is necessary to defend what they are doing. It hints that someone or groups are starting to question their pricing structure.

They have had a successful recruitment mechanism but now need a full time Recruitment head (this being one of their top priority). Implies to me that they have a high turn over of staff; and hence are struggling to keep employees and recruit new ones. Would also imply that morale is low. Skilled labour is becoming hard to find (for example CAD designers/shop managers/production managers) are all going to become more in demand (and probably paid more than GW) as the economy picks up.

They are freezing pay for staff. Considering profits are up this must irritate a lot of staff especially with prices increasing across the board for the essentials (and given as well that it appears that GW only paid 0.5% in tax when employees are paying 30% - stupid UK tax system). However it does not evidence a rosy outcome for GW at the moment and that they are feeling even greater pressures at the moment than is being shown in this report.

A complete overhaul of the miniatures range - not many items are selling well enough at the moment, they need to reduce the range so customers spending is focussed on fewer products (achieving greater profit per item). Also it appears that the retail arm has now been cut back as reasonably possible without closing stores; so now the manufacturing/design side is going to feel the squeeze.

So the same old then; a continuing decline for GW with no respite in site. Profits are still healthy though, but I wonder how far things needs to decline before they start seeing the cliff edge. Given the wording in the document I would interpret that they are at least seeing it on the horizon.

Edit - oh yeah, AoS has "broad acclaim" just where is this stated? On a poster in the CEO office? To me it appears deliberately misleading.

Finnigan2004
28-07-2015, 19:31
Interestingly, for me, the game was a necessary part, but the organized play was what made me buy GW. I bought their game books religiously, I bought their miniatures because they were good-- though there were plenty of other good ones around. When I wanted something like werewolves, I didn't buy from a competitor because at the time I played in GW stores and in tournaments that required GW models-- I bought orc and wolf bitz and made them. Their stores mostly went away in my area (one of four is left-- and not in a convenient place) and their tournaments totally went away. Now, I can buy Avatars of war minis or Perry minis (at a very minimum as nice as GW, and much of the time cheaper in Canada, or whatever else I want. I can play where ever I want with these models (except the one store that I usually can't go to in any case). Even more, now that these ridiculous rules are published, I will likely play with some other companies rules.

I am relatively sure that GW does not know what makes their products move-- models, rules, organized play, providing a place to game, setting,etc. (probably a combination of these). They are flying blind in the hope that people just want their minis, but they don't know this. They need to figure out what customers want and deliver.

Archaon
28-07-2015, 19:36
For me the most interesting part is the fact that there is (again) no mention of the Games, but they state:


Thirdly, we must grow the number of Customers we have. We have been underperforming here in recent years, mainly because of our focus on the value based initiatives of converting our loss making stores to profitable ones and restructuring our sales business to take of duplicate and unnecessary costs...

Speaking from personal experience I can state that the reason I, and many of my gaming friends, are not Games Workshop customers anymore is because the games they produce now are awful and the company has made it very clear they don't want gamers as customers. I really don't care how nice there models are, or what price they are - if the GAME does not exist to support the purchase I will not buy them.

All the focus of the report is on the quality of miniatures, but surely in the majority of cases what entices people to spend money on those miniatures and buy into the world/IP is there initial experience of the game? I have just spent £350, (and have another £150 pounds worth of purchases planned) with Hawk, because we tried Dropzone Commander and loved it as a game- this justifies my investment and makes the purchases worth while. 6 years ago I would not have even registered the existence of Dropzone, I would have been to busy playing 40K.

Personally I think the loss of GW customers, and the rise of their competitors coincides with their decision that the games that supports their product are the least important aspect of their business, not because of their: focus on the value based initiatives of converting our loss making stores to profitable ones and restructuring our sales business to take of duplicate and unnecessary costs. Until they address this I don't think they have a realistic chance of significantly growing their customer base, instead they are just disenfranchising a not insignificant portion of people that fit exactly into the "Niche Market" they are trying to sell too.

Bingo!

I have never met a true collector only in my 20+ years of Tabletop gaming (more than 15 of those exclusively with GW) which is apparently to core clientele GW wants. They fail to understand that they need a proper game that amazes the people and give them incentive to shell out for the premium priced products they sell. GW still makes good products and nice designs (especially the 40K vehicles, most of them are truly fantastic) but to claim they make the best miniatures in the world is hyperbole at the least (it may have been true when they were the sole providers of a mass market Fantasy Tabletop in the 90s).

So unless they start producing a game worth playing they will slowly sink their ship.. AoS is their attempt at modernizing WHFB but i know nobody in my area who wants to play it, the scene is more or less dead since AoS which doesn't bode well for GW.

Kisanis
28-07-2015, 20:08
Nottingham is turning into motorsport valley of wargaming.

GW has pushed its talent out and down the road, alienated customers into competing products, priced themselves to the edge of the market, fired everyone they can fire, and are now freezing the pay of staff so that they can keep dishing out those divdends.

The house is made of cards. This is completely u sustainable and I hope to god investors know that, or else they wake up one day to the company tanking.

Their mediocre IP and space marines can only take them so far.

They have no idea anymore of where they need to take the company. Without market research for the industry as a whole and consumer habits, you cannot accurately say anything. Its pure speculation.

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itcamefromthedeep
28-07-2015, 21:02
Salary freeze and dividend payment.

I... have difficulty expressing my feelings on this in a way that falls within forum posting guidelines.

---

Still no idea what the problems are. Par for the course, then.

Whirlwind
28-07-2015, 21:20
Salary freeze and dividend payment.

I... have difficulty expressing my feelings on this in a way that falls within forum posting guidelines.



Sign of the times I'm afraid especially in the UK. I'm sure the people at the top will get a healthy bonus though (I suppose they could split it between their staff but somehow I doubt it) and they wonder why they have a problem recruiting :rolleyes:

Gorsameth
28-07-2015, 21:23
Nottingham is turning into motorsport valley of wargaming.

GW has pushed its talent out and down the road, alienated customers into competing products, priced themselves to the edge of the market, fired everyone they can fire, and are now freezing the pay of staff so that they can keep dishing out those divdends.

The house is made of cards. This is completely u sustainable and I hope to god investors know that, or else they wake up one day to the company tanking.

Their mediocre IP and space marines can only take them so far.

They have no idea anymore of where they need to take the company. Without market research for the industry as a whole and consumer habits, you cannot accurately say anything. Its pure speculation.

Which is why dividends are being payed at all costs.
Stockholders don't give a **** about how well the company is doing long term (those that did already bailed long ago)
Heck at one point they borrowed money to pay dividends.

And yeah if you have a problem recruiting freezing salary seems like an extremely counter productive move.

MarcoSkoll
28-07-2015, 22:32
Their policies destroyed fantasy, epic and specialist gamesNo - the lack of people buying those products killed those games.
GW started noticeably trying to economise their business models in 2004, with stuff like Fanatic Online and a massive decline in the release of new SG models.

Given that The Return of the King film was released in 2003, and that LotR was at its peak a massive money spinner for GW, the significant sales decline of the 2004-2005 financial year (and with it, the main motivation to cut costs) will assuredly not have been the Specialist Games. Heck, as Jervis revealed in that old Blood Bowl seminar, Inquisitor was having a massive sales surge at the time.

SG sales declined after their support was cut, not before.

Herzlos
28-07-2015, 22:36
I wonder about this. Yes, the Heresy has done very well for ForgeWorld, but I'm not sure how much of an impact it'll have at the level of GW overall. Current HH collectors and gamers are almost certainly made up of a sub-section of existing 40K consumers, so while I can see HH stuff selling relatively well (at least compared to, say, AoS), I'm not sure it'll be the enormous success people think it will obviously be.

I can see it taking quite a big chunk out of FW's HH sales, since they'll be easier to work with and cheaper. Hopefully this will open up FW to work on something else for a change. In reality, I think it might mean FW downsizing a bit.


Bingo!

I have never met a true collector only in my 20+ years of Tabletop gaming (more than 15 of those exclusively with GW) which is apparently to core clientele GW wants. They fail to understand that they need a proper game that amazes the people and give them incentive to shell out for the premium priced products they sell. GW still makes good products and nice designs (especially the 40K vehicles, most of them are truly fantastic) but to claim they make the best miniatures in the world is hyperbole at the least (it may have been true when they were the sole providers of a mass market Fantasy Tabletop in the 90s).

So unless they start producing a game worth playing they will slowly sink their ship.. AoS is their attempt at modernizing WHFB but i know nobody in my area who wants to play it, the scene is more or less dead since AoS which doesn't bode well for GW.

I know several collectors (one of my gaming buddy has one of each 40K army, to a fairly large scale, in his basement, not being used), but they only collect because of the game. He dropped 40K years ago for Warmachine and hasn't bought anything from GW since.

Gorsameth
28-07-2015, 22:37
Specialists games were cut because GW believes money spend on them was money taken away from the core games.
By cutting them they would reduce costs (less model lines to maintain) while keeping income stable (money gets spend on fantasy/40k instead)

MusingWarboss
28-07-2015, 22:39
Also interesting to note that since the half year report their sales are down roughly £0.5m, what was released between Christmas and the end of may that sold so poorly?

Probably isn't the whole of that £0.5m but...

http://www.games-workshop.com/Assassinorum-Execution-Force

"This is available while stocks last - given the quality of the game, and that this is the only place to get the Imperial Assassin miniatures deployable in Warhammer 40,000, we don’t expect these stocks to last long at all! Order Assassinorum Execution Force now to avoid missing out."

Still available for sale online and in GW stores... how many copies did they make?

MarcoSkoll
28-07-2015, 22:56
Specialists games were cut because GW believes money spend on them was money taken away from the core games.
That much is quite possibly true, if short sighted (cannibalising your own sales is better than having that money go into someone else's pocket). Still, the customer still isn't the one to blame here.

Gorsameth
28-07-2015, 22:58
That much is quite possibly true, if short sighted (cannibalising your own sales is better than having that money go into someone else's pocket). Still, the customer still isn't the one to blame here.
Oh for sure. As Reinholt said, a company should make a product that customers want. Its never the customers fault that they didn't buy your product.

jet_palero
28-07-2015, 23:35
Specialists games were cut because GW believes money spend on them was money taken away from the core games.
By cutting them they would reduce costs (less model lines to maintain) while keeping income stable (money gets spend on fantasy/40k instead)

Which is a hilariously arrogant thought.

"I know you're a fan of space ship games, but I'm cancelling mine. I'm 100% confident despite the fact that you specifically wanted to play a spaceship game, you're going to buy 40k instead of just going to any of the dozen other spaceship games out there."

Hilariously arrogant and short sighted describe GW management style pretty well though./

Katastrophe
28-07-2015, 23:42
Which is a hilariously arrogant thought.

"I know you're a fan of space ship games, but I'm cancelling mine. I'm 100% confident despite the fact that you specifically wanted to play a spaceship game, you're going to buy 40k instead of just going to any of the dozen other spaceship games out there."

Hilariously arrogant and short sighted describe GW management style pretty well though./

But they added flyers to 40K so you can scratch that itch. You assume they care about you liking a game. You're not the customer any of this is aimed at. You want high quality expensive models, you buy GW. You want a game (of any type) you go elsewhere because that's not the hobby of GW. The hobby is buying, painting and collecting GW models. Gaming preference is secondary to those.

Commissar von Toussaint
28-07-2015, 23:49
I'd like to interject a thought for just a second, something that has been stirring in the back of my head.

Star Wars.

I mention this because as well all know, the Star Wars franchise is going to get a massive shot of adrenaline in a few months. Disney has reassembled the team that made the original trilogy and there is every reason to expect that these movies will be at least as well made as the Marvel films.

What that means is that the original Star Wars property is going to garner a surge of interest and if the films are any good, the legacy properties are also going to become a thing as well as people of a certain age (like me) get back into the glorious fandom of their youth (and push those awful prequels out of their minds for good).

I mention this because the last remaining leg GW has to stand on is 40k. In the 1990s, GW was more diversified and balanced and when the Pokemon/Magic storm engulfed the hobby industry, GW was able to survive in large part because they had a broader base upon which to fall back.

At this point the Fantasy die-hards are heading for the exists and the 40k devotees are pretty disgruntled (I mean we know sales are falling and the fastest way to get 100 replies in the 40k forum is to ask "what is broken with this game?").

Where am I going? So let us say that the advent of this new Star Wars also coincides with say a major marketing push into toys - call it X-wing on crack that feeds into the movies.

Can GW in its present form weather that kind of hit? Do they have the resources to sustain that level of competition?

A lot of GW customers dabble in other systems or at least thing about it. If they all go 'on a Star Wars holiday' for the big shopping season, what will happen to GW?

jet_palero
29-07-2015, 00:19
I'd like to interject a thought for just a second, something that has been stirring in the back of my head.

Star Wars.

I mention this because as well all know, the Star Wars franchise is going to get a massive shot of adrenaline in a few months. Disney has reassembled the team that made the original trilogy and there is every reason to expect that these movies will be at least as well made as the Marvel films.

What that means is that the original Star Wars property is going to garner a surge of interest and if the films are any good, the legacy properties are also going to become a thing as well as people of a certain age (like me) get back into the glorious fandom of their youth (and push those awful prequels out of their minds for good).

I mention this because the last remaining leg GW has to stand on is 40k. In the 1990s, GW was more diversified and balanced and when the Pokemon/Magic storm engulfed the hobby industry, GW was able to survive in large part because they had a broader base upon which to fall back.

At this point the Fantasy die-hards are heading for the exists and the 40k devotees are pretty disgruntled (I mean we know sales are falling and the fastest way to get 100 replies in the 40k forum is to ask "what is broken with this game?").

Where am I going? So let us say that the advent of this new Star Wars also coincides with say a major marketing push into toys - call it X-wing on crack that feeds into the movies.

Can GW in its present form weather that kind of hit? Do they have the resources to sustain that level of competition?

A lot of GW customers dabble in other systems or at least thing about it. If they all go 'on a Star Wars holiday' for the big shopping season, what will happen to GW?

Indeed, FFG must just be salivating right now at the thought of that movie release. I hope they get X-Wing back into Target and other major department stores. Armada seems a bit more niche, but X-wing has appealed to anyone I've demoed it to with even the slightest bit of starting interest. its fun, easy to learn, and relatively quick to play.

ewar
29-07-2015, 00:35
In July 2015 we relaunched Warhammer Fantasy to broad acclaim

citation needed there, Kevin old pal

EDIT

This is an interesting tidbit:


Secondly, I will review our product range. We believe this is long overdue: it is time for a resetting of the ranges. Not tweaking here and
there but a top down reassessment. I expect to update you further at the half year. We will aim to continue to deliver outstanding
product and customer service, maintain our Group gross margin and continue to improve our Group stock turn. To be absolutely clear I
will not be reducing the RRP of our products: they are premium priced for their premium quality. I will, however, be looking to offer a
broader range of price points. This is exciting and is for the long term, so I'm not promising when you will see a change. We have
already started the brainstorming in our monthly strategic product meetings. It is early days, but I can already foresee some busy times
ahead.

Brainstorming :)

It's not ********** rocket science, your entry point is TOO HIGH.

EDIT 2

As I'm going through it, might as well put a couple of interesting excerpts here as well:


Secondly, I will review our product range. We believe this is long overdue: it is time for a resetting of the ranges. Not tweaking here and
there but a top down reassessment. I expect to update you further at the half year.

Better snap those minis up while they're still around...


Thirdly, we must grow the number of customers we have. We have been underperforming here in recent years

I imagine the investor calls have been raising this recently. No idea how they plan to turn this around of course.

stonehorse
29-07-2015, 00:46
They are caught in a Death Spiral, which is evident by their actions. The only real way out of a Death Spiral is to innovate, which they think Age Of Sigmar will be.

However I think that the company managed to grow to the sheer staggering size it is due to the hotbed of talent and ideas it was back in the 80's, and 90's. The people who made GW so successful worked together to produce a company that was far greater than it's parts. Now that they have all but gone on to other things the company is now deflating. I don't think that the company will go under, they are after all still making a profit, an ever declining one.

I think it is safe to say that they will be around in 20-30 years, however I honestly think that the company has had its moment in the sun, it can only look back and be proud of how far it went with ultimately selling toy soldiers.

DonkeyMan
29-07-2015, 01:06
Well, GW still has some reserves and still hasn't lost the fight.
They still have time to turn around things actually. For their sake, I hope that will happen before they actually run out of things to cut costs from.

As I don't play as much as I used to and don't go as often to my FLGS as I did once I wonder?
Who would actually be GW's biggest competitor? FFG? Are they really a direct competitior as they produce mainly boardgames and not wargames.
Privateer Press then? Or Mantic? Maybe Corvus Belli? Or Wyrd?

Whenever I actually go the FLGS in my area Warmahordes seems to be most popular and most played game from what I can see.

The_Real_Chris
29-07-2015, 01:37
Speaking from personal experience I can state that the reason I, and many of my gaming friends, are not Games Workshop customers anymore is because the games they produce now are awful and the company has made it very clear they don't want gamers as customers.

They seem to have made a conscious decision to abandon gamers. Maybe we just weren't worth it.

The_Real_Chris
29-07-2015, 01:45
Who would actually be GW's biggest competitor? FFG? Are they really a direct competitior as they produce mainly boardgames...

GW has until now been the only company to reliably get miniature war games into high street shops until they stopped wanting to.

FFG now has a big rich parent company, an IP licence to kill for, plenty of experience in sourcing product learnt the hard way and a proven demand and sales tactic (personified with the board game pricing).

They will need a new trilogy setting for the minis and spaceships and a massive increase in production, which the parent company can underwrite. If GW isn't worried, they are idiots.

If you are 12 again and get the choice of a boardgame and skirmish game with a load of models from Star Wars in WHSmiths or a more expensive game giving you less but the space marines look kinda cool, which do you go for.

And prepaints - gamers (who hate painting like me) love good pre-paints and FFG nailed it with x-wing.

Commissar von Toussaint
29-07-2015, 02:16
I want to be clear what I am talking about so the GW cheerleaders have to work extra hard next year to misquote me. ;)

I am one of the doomsayers going back several years. I never expected GW to collapse overnight, but rather what I saw (and what others see) is GW becoming increasingly vulnerable to a serious shock, a "black swan event" if you will.

It seems to me that Star War VII could be just such an event. With the fantasy line in turmoil, GW is almost entirely dependent on 40k. There is no strategic depth from a market standpoint; they cannot rely on BFG, Mordheim, Necromunda, etc. to help them weather the storm. All of their eggs are in the sci-fi basket.

So what happens when the premier space fantasy movie of all time goes head to head with them during the crucial holiday season? To this point, Star Wars has been a non-factor since not only did the prequels suck, they lacked any miniatures tie-ins.

The last time there was a pop-phenomenon film with miniatures, GW had the license. Now the shoe is on the other foot.

Can GW weather this storm? Can it survive a lot of its core players taking a break and immersing themselves in the fun old happy place of Star Wars? How long until those players come back and will they buy at the same volume?

The problem I have long had with GW's strategic planning is that it assumes a flat, unchanging landscape. They annual payouts to shareholders is neat, but what reserves do they have in the event that revenue collapses for a quarter while the world obsesses over the cinematic return of Han Solo? :confused:

Probably GW will survive. After all, they've been around this long.

Then again, General Motors went bankrupt and A&P is about to go away entirely - and it was the biggest US corporation in the 1950s. K-Mart (formerly Kresge) was dominant in the 1970s and now it struggles to stay alive. Corporate survival is not a given. As soon as people think it is, they are doomed.

Skargit Crookfang
29-07-2015, 02:37
That much is quite possibly true, if short sighted (cannibalising your own sales is better than having that money go into someone else's pocket). Still, the customer still isn't the one to blame here.


This is what boggles my mind about the whole thing.

I've been a WHFB player since I was 10 years old (so...over 20 years of begrudging GW payments now?). I used to mow the neighbours' lawns, deliver papers, run the hockey rink canteen... you name it... to earn money to buy their plastic crack and rulebooks. That was 4th ed, btw.

Anyways, I had several friends over the years who liked the look, liked the idea, but needed that extra...push..

That's what specialist games are for.


GorkaMorka (my favourite) got 4 of my friends to start Mobs, that they later turned into full fledged 40k armies.
Mordheim (still play it) got another few to start warbands and...shock!... turned into armies, eventually.
Bloodbowl? Well... I had the hockey team playing that one... none of them turned to the main system, but a few of them bought teams- we used to play after games.

AoS is...sorry AoS lovers... a specialist game... and nothing more. It is the first little "taste", just like Mordheim...just like Necromunda and GorkaMorka...etc... the specialist skirmish games were there to get people hooked! They could play at a minimal cost, and build towards something bigger.

AoS is not a "main line"... it should have been the enticement to get into WHFB later on.


And for those saying that GW is "fine", and that they will be around in 2025, I have 2 points to make:

1- Only a few days before they went bankrupt, Lehman Brothers was rated AA.... a very high credit rating.

2- In the paraphrased words of an author far greater than I, responding to the question of how they went bankrupt:

"In two ways. First, gradually, and then, suddenly"

Kisanis
29-07-2015, 02:58
I live in waterloo ontario.

you know what this city is famous for? Research in Motion.

The big goliath that thought it knew what it was doing and how to do it. It was on top and didnt need to push hard. It could rest easy on its laurels.

GW is blackberry all over again.

And yes, I still have a blackberry, I legitimately like it the best. But I saw first hand how the attitude wreaks a company.

Sent from my Z30 using Tapatalk

Voss
29-07-2015, 03:36
For all this gets repeated, I've never seen anyone with an informed opinion make this statement.

This report is more of the same; cut costs (taxes, this time), lose customers, lower unit sales, profit solid because of the cost cuts but revenue decaying slowly.

Technical question here. I note on page 14, the total segment operating profit (before taxes) is being propped up almost entirely by 8.6 million in 'product and supply' (as opposed to 200,000 the previous year). Despite a nearly 4 million drop in trade and nearly a million more in central costs. Soo... what is this product and supply? They can't possible be talking about unsold inventory and counting it as a profit.... right? I'm honestly at a loss for any other definition of 'product' in a financial report other than, well... product: the article manufactured for sale.

What is this line entry that is effectively doubling their profit for the year? And keeping them from being at 66% of last year's profit. :eek:

Tzar Boris
29-07-2015, 03:37
It always confused the bejeezus outta me why GW never considered something that dipped their toe into "mass market" - if anything as a back up. It would make me incredibly wary as an investor for their not to be a back up plan, and only with a nominal IP amount being credited, it beggars belief.

IP is their business. Forget models, forget games. The IP is what drives them forward and keeps people coming back.

Look at your comic books figures - wasn't always niche - Batman was selling a comfortable 500,000 copies a year in the 60s, but that shrunk to under 200,000 (counting all various publications as opposed the single title comics of the 60s) by 2006. Single runs of Batman titles struggle to achieve over 100K. And that's the big hitter.

But they all did the sensible thing and owned their IP. They'd be gone overnight if they couldn't sell T-shirts, games, movies, pyjamas, wallpaper with their logos everywhere.

It's self-propagating marketing. Diversify, GW. Not just sneaking a cheeky tenner in your back pocket letting someone make a crappy iPhone game based on your IP. Own it, and market it soundly. Start small. Get a proper editorial team into White Dwarf and make it a hobby magazine again, and onto newsstands. The reason they borked Specialist Games was purely financial - it was allegedly pulling people away from the core money makers. However, it'd be interesting to see the figures of Blood Bowl sales at its height vs current 40K sales. I'll wager that having those alternate supported games would keep some gamers from lapsing or going to play one of the hundreds of other products out there from someone else.

Is Mantic really doing Dreadball just for fun, not profit? Infinity taking all the Necromunda cash? Even Osprey are lining their coffers with Frostgrave, a clear contender for "Mordheim replacement".

It's perhaps too late to pull back the veterans and all those LOTR recruits they found in the early/mid 00s, and we're down a Necromunda, Warmaster, Blood Bowl, a Mordheim, Battle of Five Armies, Space Hulk, Inquisitor, Gothic, Man-O-War, Dreadfleet, Warhammer Quest, and it looks like we're down LOTR/Hobbit and most of WFB. They've been and gone. At this rate of culling/obsolescence you'll only be able to buy a really nice Horus and a really nice Emperor model from your local "Space Marine" store in a couple of years. Without a groundswell in extra IP - extra facets to their existing worlds, and extra worlds - as opposed to simply reimagining and replacing the existing ones with a hope it will invigorate flagging sales - there is no way GW will be around in the next ten years, let alone "forever".

As a side - "Design Studio" employs 167 people. 167. Can you fathom that amount? Most of them are the "creatives" - some will be the tech liaisons for manufacture, some will be admin/management types, but there can't be THAT many ancillary positions. I'll be generous. 150. 150 people working passionately on this stuff. Adding skulls to all the things. I'm almost sure that's almost twice the size it should be (too many cooks) or they're just not being utilised. Seriously, 167? Compare GW output with some of those one or two man teams you see out there. Plus the resources. And not having to work around the IP. There's at least fifty folk in "Design" that just turn up and surf the internet all day. Expect a meeting with Human Resources on Thursday.

Voss
29-07-2015, 03:43
Not just sneaking a cheeky tenner in your back pocket letting someone make a crappy iPhone game based on your IP.
Yeah, how many games got released last year with a GW IP, now matter how cheap and shoddy the final product? And yet royalties are effectively a static 1 mil.
Oh... they actually answer this question in the document: 37


And the AoS was so exciting, you'll have to see the new statue to believe it.

Also found this, answering my own question again.

Product and supply. This includes the design and manufacture of the products and incorporates the production facility in the UK and the Group logistics and stock management costs.
Design and manufacture of products nets a profit... how? (other than obviously trade, mail order or retail [though the latter apparently only works for competent companies]) Aren't those costs?

Tzar Boris
29-07-2015, 04:10
Design and manufacture of products nets a profit... how? (other than obviously trade, mail order or retail [though the latter apparently only works for competent companies]) Aren't those costs?

Internal purchasing probably. Although they can put as many barriers to 3rd party sales as they like, they can't just give the product to their own stores/mail order, and certainly not for less than everyone else. Manufacture will probably have internal payment to Design for raw product to replicate. All payments in will have some degree of Design/Manufacture tariff.

Design - income will be marked as Design for a percentage of sales/licensing. They'll only ever get whatever agreed budget they can argue for though.

Manufacture - like any factory, they'll have to make sure they make themselves viable and accountable. Product cost of manufacture plus operating insurance, plus sales margin = something like final cost to trade/internal. It's all just on paper though. Shows they have separated their processes and could, if required, spin an arm off if it becomes unaffordable to keep in house. If the manufacture of their stuff doesn't make any money, then there's no point in them not outsourcing it to China, and means they can't feel nice about keeping Nottingham Industrial estates just as dystopian as they'd like. No offence to Nottingham, but an Industrial Estate is an Industrial Estate. A factory is a factory. But it'd cost them a pretty penny to relocate 167 Design staff plus the rest...

MarcoSkoll
29-07-2015, 04:28
This is what boggles my mind about the whole thing.
I'm not actually looking at it from a perspective of low cost of entry, although that is a valid point.

Former staff have said that it was all a bit of a zero-sum game - promoting Mordheim meant that Fantasy sales went down, more BFG sales meant fewer Space Marines sold, that sort of thing. (Not hugely surprising, as GW's nearly absent advertising would mean that a lot of the people that they were promoting Necromunda to were already GW players, with presumably finite budgets).

From that perspective, it might have seemed that these games were heavily eating core game sales.

Well, maybe, but it also meant they had a much broader range of genres they could appeal to. Now, if someone wants to play a skirmish game, they go off and find Malifaux or Infinity, which is money not going into GW's pockets and people not being kept within the GW brand.

shelfunit.
29-07-2015, 05:13
They seem to have made a conscious decision to abandon gamers. Maybe we just weren't worth it.

Anybody, and I mean anybody who, without absolute statisitical backing, believes gamers (as opposed to "collectors") are not keeping GW afloat needs to have a serious talk with a mental health professional.

DonkeyMan
29-07-2015, 05:38
I was just thinking about the competition and what I said earlier.
Good point about FFG taking away the potential new blood. Didn't think about that.
Another thing I didn't really think about.
GW doesn't need one big wargame competitior.Death by thousand cuts will work too.
PP, Mantic and the others are much smaller operations. They can coexist together much easier and each company be happy with their own slice of the GW customers cake.

One thing I"m certain off. 40K will survive. Even if the worst comes to the worst and GW goes bust. Someone will pick up 40K (including Horus Heresy).
But it might survive as something completely different than a wargame.

Mawduce
29-07-2015, 06:28
Anybody, and I mean anybody who, without absolute statisitical backing, believes gamers (as opposed to "collectors") are not keeping GW afloat needs to have a serious talk with a mental health professional.

Except if you follow the sales, they aren't doing much help either.

Archaon
29-07-2015, 06:33
Indeed, FFG must just be salivating right now at the thought of that movie release. I hope they get X-Wing back into Target and other major department stores. Armada seems a bit more niche, but X-wing has appealed to anyone I've demoed it to with even the slightest bit of starting interest. its fun, easy to learn, and relatively quick to play.

As an avid X-Wing player and Tournament Organizer in my area i fully expect FFG to have a major release for X-Wing ready once the first new movie hits, it would be stupidity on a monumental level if they did not. This weekend is GenCon and game manufacturers traditionally use such big gaming conventions to launch major news so i'm expecting something big.

X-Wing has spread like wildfire in my area and tabletop community and every new release wave is totally sold out within a week or so (was even far worse a year or so ago where people paid more than 200% more for a single well doing fighter in the then current meta, but these were tournament players mostly). This is also due to FFG's major supply problem they had since they launched the game a few years ago to massive success and demand and they just can't keep up with demand and are either unwilling or incapable of increasing production.

X-Wing is also much more affordable.. the starter box is(was) around 25 Euro (20 Dollars?) and gives you 3 Fighters (one X-Wing and 2 Tie Fighters) and those 3 are already more worth than the cost of the box if you bought them separately.. factor in the additional stuff like dice, cards and markers and you have a very good deal which is why many players buy 2 starter boxes. The fighters themselves are now somewhere around the 12 Euro mark (used to be around 10) which is still a good deal considering they are (well) prepainted and playable straight out of the box.

FFG has done everything right with this massive IP they scored in the same way GW is doing everything wrong with their IP and games like these and "proper" Tabletops like Warmachine, Flames of War (mostly Tabletop Veterans) and rising games like Infinity have done a lot of damage to GW by daring to stick around and poach players from GW by either providing a better rulesset or cheaper miniatures (or both). Often enough the miniatures are not that much cheaper than GW model by model but you need far less for a full game (usually 10-15 models is enough) so players are rightfully asking themselves why they should spend 300+ bucks for a rudimentary GW army (books and accessories not even included) while about 150 Dollars/Euros is more than enough to have a good sized force going in either game and even have some models left over for variability.

GW has never understood this or they didn't care about it, they consider themselves Premium and charge accordingly but you can only do this if your price is high enough to sustain your company or if you are the prestige project of a parent company that is willing to lose money but is counting on the wow effect to get more customers to buy their regular product.

Veterans have all but left GW which leaves kids and new customers where parents pick up the tab but kids are notoriously fickle in their interests and tabletop games need a sizeable investment and time besides building miniatures, i.e. you also need to devote time to the play area, painting and so on and in this day and age only a percentage of the players are willing to give it the time and effort so much of these new customers won't be around in a year or two so GW needs to recruit even more gamers, it's an endless cycle and apparently doesn't work that well for GW yet here is the CEO drawing the line and outright saying he will not lower prices and he will bring back gamers (without mentioning a single measure on how to actually do that).

I care enough to post such a lengthy rant about games and a company that i used to love (back in the 90s it was all pouring over the bitz catalogue figuring oout which parts you'd need for that next awesome conversion, playing quick games of Blood Bowl or BFG) and i have met many cool people in the store and tournaments and some became good friends. For me it's sad to see this company slowly dwindle, knowing why but seeing that the people in charge just don't care or are so incompetent to run this company into the ground.

I stuck around the hobby and have branched out to different games as did most Veterans (in fact i even had to put in the brakes and let some games pass because i just don't have the time to play them all) so GW's slow demise doesn't affect me because the hobby is well alive and doing great but still, it's sad to see it go down.

shelfunit.
29-07-2015, 06:56
Except if you follow the sales, they aren't doing much help either.

Take away gamers and I would put money on GW being gone within two months.

AlexHolker
29-07-2015, 07:31
If the CEO of Games Workshop says he wants GW to be here forever, he is a damn liar. You can tell he's a liar because anyone who has the slightest understanding of accounting knows that dividends > earnings is unsustainable. It means you are taking more money out of the company than profits are bringing in, which will inevitably cause the company to shrink. It means that you are writing the company off - that it's not just not worth investing money in, but it's not worth the money it already has, and that the best place for that money is somewhere else.

spaint2k
29-07-2015, 08:07
Sign of the times I'm afraid especially in the UK. I'm sure the people at the top will get a healthy bonus though (I suppose they could split it between their staff but somehow I doubt it) and they wonder why they have a problem recruiting :rolleyes:

I guess nobody here realizes that the dividend is basically a bonus from the excom to themselves. Kirby owns over two million shares, so this dividend equals a nice million-pound payout for him.

logan054
29-07-2015, 08:44
They have had a successful recruitment mechanism but now need a full time Recruitment head (this being one of their top priority). Implies to me that they have a high turn over of staff; and hence are struggling to keep employees and recruit new ones. Would also imply that morale is low. Skilled labour is becoming hard to find (for example CAD designers/shop managers/production managers) are all going to become more in demand (and probably paid more than GW) as the economy picks up.

They are freezing pay for staff. Considering profits are up this must irritate a lot of staff especially with prices increasing across the board for the essentials (and given as well that it appears that GW only paid 0.5% in tax when employees are paying 30% - stupid UK tax system). However it does not evidence a rosy outcome for GW at the moment and that they are feeling even greater pressures at the moment than is being shown in this report.

Unless they are well above the minimum wage I can't see how they can actually freeze wages. I was under the impression that they don't employ hobbyist's anymore? Who on earth who doesn't have a passion for the product is going to work for a company that freezes it's wages while making massive payouts to the shareholders who's only discount is of actual interest to people with a interest in the hobby. This whole 30% tax sounds very dubious, employees should only be paying 20% tax...


So the same old then; a continuing decline for GW with no respite in site. Profits are still healthy though, but I wonder how far things needs to decline before they start seeing the cliff edge. Given the wording in the document I would interpret that they are at least seeing it on the horizon.

I think as others have suggested, once we see the star wars films out GW really is going to feel the pinch. The people GW think buy it's games are probably going to looking for the latest star wars toys. Sadly, Space Marines just aren't as cool as jedi, Sith, stormtroopers, Boba Fett and Han Solo.


If the CEO of Games Workshop says he wants GW to be here forever, he is a damn liar. You can tell he's a liar because anyone who has the slightest understanding of accounting knows that dividends > earnings is unsustainable. It means you are taking more money out of the company than profits are bringing in, which will inevitably cause the company to shrink. It means that you are writing the company off - that it's not just not worth investing money in, but it's not worth the money it already has, and that the best place for that money is somewhere else.

I'm sure he honestly does want to company around as long as possible. It's probably a sign that GW is closer to the cliff edge than most people like to think. They are trying to milk it for all it's worth before **** hit's the fan. It's a real shame that a few peoples greed is destroying a company that provided me with a lot of joy as a child. I really don't understand why anyone would defend the actions of the company.

Herzlos
29-07-2015, 09:04
This whole 30% tax sounds very dubious, employees should only be paying 20% tax...

20% tax, 11% National Insurance (Social Security), for what I assume is the majority of their staff (Earning under £42k/year)

Poncho160
29-07-2015, 09:11
He mentions that GW will not be buying any other companies. Why even mention that?

I wonder if a board member of stock holder has asked if it would be a prudent move to buy up a company affiliated with GW, someone they buy supplies from perhaps would make most sense, or perhaps (unlikely) a competitor in the market.....

Samsonov
29-07-2015, 09:45
"I know you're a fan of space ship games, but I'm cancelling mine. I'm 100% confident despite the fact that you specifically wanted to play a spaceship game, you're going to buy 40k instead of just going to any of the dozen other spaceship games out there."
Signatured for truth. Ironically, not only will players head to other manufacturers for spaceships, once there they are sometimes suddenly exposed to other ranges of 28mm, so it can be a double loss. Just think how many people headed to Spartan Games for spaceships and ended up starting three or four new games, some of them 28mm.

logan054
29-07-2015, 09:55
20% tax, 11% National Insurance (Social Security), for what I assume is the majority of their staff (Earning under £42k/year)

That's what everyone in the country pays, but you don't pay that until you hit 10k a year, so it probably 30% of 10k a year max (if that on GW wages). My mistake for not taking into account NI, perhaps I just like to believe I pay less tax than I do :(

Baragash
29-07-2015, 10:12
Minimum wage is not an issue for GW, store staff starting wage is (quick and dirty calc) approx 40% above the current level.

toonboy78
29-07-2015, 10:22
That's what everyone in the country pays, but you don't pay that until you hit 10k a year, so it probably 30% of 10k a year max (if that on GW wages). My mistake for not taking into account NI, perhaps I just like to believe I pay less tax than I do :(

https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom#Income_tax

http://www.thesalarycalculator.co.uk/salary.php

this may help illustrate UK income taxes.

i am guessing (based on information from people who i know work in retail) that GW pays about £17k which is about a combined tax and NI rate of 15%

but i don't think freezing wages and paying dividend (unless they have a generous share option scheme) will help the morale of the staff

Blutrache
29-07-2015, 10:36
If the CEO of Games Workshop says he wants GW to be here forever, he is a damn liar. You can tell he's a liar because anyone who has the slightest understanding of accounting knows that dividends > earnings is unsustainable. It means you are taking more money out of the company than profits are bringing in, which will inevitably cause the company to shrink. It means that you are writing the company off - that it's not just not worth investing money in, but it's not worth the money it already has, and that the best place for that money is somewhere else.
Exactly this. In the analysis thread cited from their own report Kirby stated that the company is ex-growth. They have nothing more to give other than administrating their IP (of which they just shot a fair portion in the head with AoS) and increasing margin on goods sold. They've basically given up on growth. That's probably why doing a Sigmar wasn't too much of a problem. Alienating fantasy players didn't matter, as a smaller range of fantasy with improved margins would compensate.
/Cheers

logan054
29-07-2015, 10:41
https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom#Income_tax

http://www.thesalarycalculator.co.uk/salary.php

this may help illustrate UK income taxes.

i am guessing (based on information from people who i know work in retail) that GW pays about £17k which is about a combined tax and NI rate of 15%

but i don't think freezing wages and paying dividend (unless they have a generous share option scheme) will help the morale of the staff

Sorry, I was assuming they earn £20k a yeah just to be crystal clear, I was thinking that was tight for a managers role lol. Sorry I haven't read your links as I actually know how the tax system for country I live in works. earnings above £42 a year are irrelevant when talking about GW retail staff ;)

Kegslayer
29-07-2015, 10:52
Had a brief look through this threw and a look at what the report said. What I find interesting is the bit where they want to diversify and simplify as it were the products. So get rid of what's not selling and focus on what is. Ie AoS has replaced fantasy and the model ranges will be condensed over time into the four sub categories order, chaos, death and destruction. Now conspiracy theory time. What sells 40k? Space marines do. Plastic Horus heresy boxed set coming soon FW made gw a load of cash with heresy marines, ad mech are in heresy, eldar were round then too. What if gw doesn't do 40k. What if the Horus heresy is the replacement to 40k that AoS was to fantasy. Space marines sell, eldar sells. The other existing 40k armies can be incorporated into 30k. FW with their new site start only doing characters and titans. Its out there but its plausible and makes gw money

Blutrache
29-07-2015, 11:04
Signatured for truth. Ironically, not only will players head to other manufacturers for spaceships, once there they are sometimes suddenly exposed to other ranges of 28mm, so it can be a double loss. Just think how many people headed to Spartan Games for spaceships and ended up starting three or four new games, some of them 28mm.
Also exactly this. I have heard the mantra repeated "cannibalizing their own sales" through the years but I cannot understand how they think that would work with their segment of products. Basically the wider range of types you have available, the wider the range of taste you will cater to. And in an immersive universe as Warhammer there's a very good chance of cross-pollination. Otoh reducing the range will also reduce the potential number of customers likely to be interested. Every customer is unique in that they have different points of interest and different types of budget to realise that particular point of interest. That Epic 2nd ed or whatever didn't sell as well as expected at a certain point in time (I.e. GW overproducing) has nothing to do with "cannibalizing sales" as it didn't sell!! In fact I'm pretty sure this quasi-theory was bull*hit thrown-in to justify the purge of lowest margin sellers.

/Cheers

Commandojimbob
29-07-2015, 11:07
If the CEO of Games Workshop says he wants GW to be here forever, he is a damn liar. You can tell he's a liar because anyone who has the slightest understanding of accounting knows that dividends > earnings is unsustainable. It means you are taking more money out of the company than profits are bringing in, which will inevitably cause the company to shrink. It means that you are writing the company off - that it's not just not worth investing money in, but it's not worth the money it already has, and that the best place for that money is somewhere else.

Dividend payouts vary from year to year so I think you are over thinking one year of high payout - they still have a closing cash balance of £12.5m and so that is what a Plc should be doing with its cash reserves, distributing to the shareholders !

As for the pay freeze.... I am torn here. As someone who has instigated pay freezes, this is often due to missing expectations for the current reporting year and you don't foresee a recovery in the forthcoming financial year. You also consider the wider economic trends or perhaps you want to slow the increased fixed cost base that may have built up over prior years. To me, it is an indication that GW HQ believe that they will continue to see a decline and so they are looking at all areas to save money - pay freezes are usually low down the list of cost cutting due to the impact and message it has.

I would like to think they have benchmarked their staff also to make sure that by putting a pay freeze in place, they wont shed lots of staff - where I work there is a huge demand on Engineers, so any adverse working conditions in our business means we will lose Engineers, equally we know to recruit we have to pay much higher rates.

Unfortunately all of this is difficult to convey to the work force, but especially in GW's case because they have reported strong operating profits, large cash reserve in the bank and a huge dividend payment - this wont reconcile in the minds of the people who are getting a pay freeze and when the bulk of the workforce is in the UK, where the economy is performing well.

Sureshot05
29-07-2015, 11:18
I am not sure if this has been noticed as of yet, but the figures are considerably distorted in a new sense. They have deferred costs of over 1.6 million (compared to 0.4 in previous years) which would significantly affect the profit margin. I know all companies defer costs, but this rise was so stark I thought it was worth including in the discussion.

The_Real_Chris
29-07-2015, 11:19
Anybody, and I mean anybody who, without absolute statisitical backing, believes gamers (as opposed to "collectors") are not keeping GW afloat needs to have a serious talk with a mental health professional.

When do we book GW in?


Take away gamers and I would put money on GW being gone within two months.

Back to that wonderful quote about going bust gradually then suddenly :)


He mentions that GW will not be buying any other companies. Why even mention that?

Asmodee group (owned by Eurazeo?) buying companies including FFG (previously picked up Days of Wonder). Talked about off and on, became a must buy I suspect with the potential of the Star Wars products.

Commandojimbob
29-07-2015, 11:25
I am not sure if this has been noticed as of yet, but the figures are considerably distorted in a new sense. They have deferred costs of over 1.6 million (compared to 0.4 in previous years) which would significantly affect the profit margin. I know all companies defer costs, but this rise was so stark I thought it was worth including in the discussion.

Good spot ! Deferring of costs could well relate to development activities (more likely in the case of GW). In the UK / IFRS you can defer costs in this way - it could suggest many things, it could suggest another big launch, it could be new platforms in software, or it could be activities relating to more restructuring.

Blutrache
29-07-2015, 11:36
Or they could have expanded their warehouse or maybe ordered a brand new golden statue... ;)

Blutrache
29-07-2015, 11:41
He mentions that GW will not be buying any other companies. Why even mention that?

I wonder if a board member of stock holder has asked if it would be a prudent move to buy up a company affiliated with GW, someone they buy supplies from perhaps would make most sense, or perhaps (unlikely) a competitor in the market.....
If they admit to being ex-growth then organic growth is pretty much out if the picture. The only other way then is acquisition. I'd guess that's why he brought it up. They foresee no growth as such.
/Cheers

ewar
29-07-2015, 11:56
To be fair to them, keeping like for like revenue flat is actually significantly better than I was expecting. Yes, it includes the annual price rises (he says at 3% average) but that's still not bad. I'd love to know what End Times contributed to this, as it was obviously wildly more popular than they were expecting.

Almost like there are thousands of us WFB players out there waiting for them to release really awesome products as we have more models than we could possible play with ;)

Commandojimbob
29-07-2015, 12:06
If they admit to being ex-growth then organic growth is pretty much out if the picture. The only other way then is acquisition. I'd guess that's why he brought it up. They foresee no growth as such.
/Cheers

Who would GW actually acquire that fits in with what they wish to focus on ? For me the only acquisition targets would be focused on digital games development but that would cannibalise their royalties, add more operational risk and stray from their key strategy. It would be complimentary thought to where they seem to be heading but at the moment the no risk (well low risk), Royalty generating IP is preferable.

I dont really see where they can go growth wise and it is almost as if GW have recognised and accepted that they are contracting in the market due to greater competition and choice, so they are setting themselves up accordingly.

ewar
29-07-2015, 12:27
Who would GW actually acquire that fits in with what they wish to focus on ? For me the only acquisition targets would be focused on digital games development but that would cannibalise their royalties, add more operational risk and stray from their key strategy. It would be complimentary thought to where they seem to be heading but at the moment the no risk (well low risk), Royalty generating IP is preferable.

I dont really see where they can go growth wise and it is almost as if GW have recognised and accepted that they are contracting in the market due to greater competition and choice, so they are setting themselves up accordingly.

But imagine if they bought Privateer. They would have both the competitive and narrative sides of the market sewn up. I've wanted to play warmahordes for a while but the models are a complete turnoff.

Benefits of this:
- can slow their frantic release schedule on 40k/AoS, whilst giving their customers something new to consider
- use their model making skills and market leading plastic sculpting to release minis for Warmahordes
- use the space in their stores vacated by LOTR for PP stuff
- gain the rules making knowledge of PP

I think the synergies speak for themselves personally (though that isn't to say it would be without challenges).

Blutrache
29-07-2015, 12:36
Who would GW actually acquire that fits in with what they wish to focus on ? For me the only acquisition targets would be focused on digital games development but that would cannibalise their royalties, add more operational risk and stray from their key strategy. It would be complimentary thought to where they seem to be heading but at the moment the no risk (well low risk), Royalty generating IP is preferable.

I dont really see where they can go growth wise and it is almost as if GW have recognised and accepted that they are contracting in the market due to greater competition and choice, so they are setting themselves up accordingly.

Well that was my whole point actually :) GW has been saying just what you are saying, but in different words. They have no idea how (or desire) to grow. Thus increased margin on a shrinking volume is what will happen, as that is the only way to keep paying dividends. And the dividends is why Investors should buy GW stock, according to themselves.
Thus I find it funny when people think that AoS will herald lower prices and greater mass appeal, when nothing of this sort is even remotely in GW's scope. Sure the start up cost can be lower, but never the price of any single model, because what matters is better margins on each and every item sold.

If they had the ambition to grow they could easily branch out and exploit their IP, testing different types of games. And they have old products like BB, Epic, Space Hulk, Necromunda and Mordheim which could very well have systematic vitamin injections to test the waters. If they'd only allocate some of the %profit to this type of R&D. Again, in a shifting market R&D is critical, as that is what you will sell tomorrow, when todays Product won't do. But that is not what they want to do and they are clearly showing this both by their actions and by their own comments.

After working 18 years in different positions in big Corporations one of the things that still holds true is: If any actions or decisions seems weird, redo analysis and follow the money. Then you've got your answer.

/Cheers

Deadhorse
29-07-2015, 12:54
But imagine if they bought Privateer. They would have both the competitive and narrative sides of the market sewn up.

With GW's thinking, it is much more likely that two years after the purchase they'd decide that Warmahordes cannibalise 40k sales and scrap it.

I agree the potential is there - GW have the store network and miniature manufacturing capability, Warmahordes has good rules and player base. But TBH it would probably be cheaper for GW to publish a game with really good rules than to make a huge investment just to buy the rules ;)

Blutrache
29-07-2015, 13:03
With GW's thinking, it is much more likely that two years after the purchase they'd decide that Warmahordes cannibalise 40k sales and scrap it.

I agree the potential is there - GW have the store network and miniature manufacturing capability, Warmahordes has good rules and player base. But TBH it would probably be cheaper for GW to publish a game with really good rules than to make a huge investment just to buy the rules ;)

Eliminating competition has it's own intrinsic value though ;)

/Cheers

tristessa
29-07-2015, 13:04
I'm taking the long approach on this one. Having had a look at 2007 and 2008's reports (and compared those to the latest and found that GW is doing a lot better now than then) I imagine that in another eight years we'll have similar posts here about the death spiral. We'll see I guess.

GW's competitors can only expand so far before they hit their own ceiling. I'm sure that GW have indeed hit theirs for the time being, but they have the resources to kick on or diversify.

Kisanis
29-07-2015, 13:24
I'm taking the long approach on this one. Having had a look at 2007 and 2008's reports (and compared those to the latest and found that GW is doing a lot better now than then) I imagine that in another eight years we'll have similar posts here about the death spiral. We'll see I guess.

GW's competitors can only expand so far before they hit their own ceiling. I'm sure that GW have indeed hit theirs for the time being, but they have the resources to kick on or diversify.
How can you say theyre doing better now when they are at the end of the cost cutting line?
They have 1 man stores, and a wage freeze

They are literally running out of costs to cut to keep profits floating.

They have more competition now than ever before, and they shed one of their main lines due to the need to legal hammer the small mod business.
(AoS, and the new army names for it and 40k are purely from the IP laws that got settled from chapterhouse)

In 2007 there was no kings of war, no warlord games (which is full of key GW creatives), no avatars of war, barely any privateer press, and no Fantasy flight (in its current incarnation at least)

GW was essentially still the only major player in town.

In the last 7/8 years they have LET (emphasis here) compeition fill the gaos in the market that they created.

As others have said, GW created demand big enough for most of these companies to come into existence, then quickly ceeded market share to these startups because "not enough space marines"

Games workshop is slowly moving towards a khornemarines vs. Space marines world. Expect everything else to fall away.


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AlexHolker
29-07-2015, 13:45
Also exactly this. I have heard the mantra repeated "cannibalizing their own sales" through the years but I cannot understand how they think that would work with their segment of products.
How I would think it would work is the opposite of how GW thinks it would work. Making eight different plastic Space Marine Dreadnoughts, that will result in your products cannibalising each other's sales.


Dividend payouts vary from year to year so I think you are over thinking one year of high payout - they still have a closing cash balance of £12.5m and so that is what a Plc should be doing with its cash reserves, distributing to the shareholders !
It's not one year of high payout - they've done it a number of times, and every time they have, Games Workshop has been a smaller company at the end of the year than at the start of it. Games Workshop was in a perfect position to leverage their market dominance to stay dominant, but they instead seem to want to be nothing more than another "boutique" piece of crap.

tristessa
29-07-2015, 13:59
How can you say theyre doing better now when they are at the end of the cost cutting line?
They have 1 man stores, and a wage freeze

They're still making millions and a lot of the old retail guard aren't even standing in the UK.


They are literally running out of costs to cut to keep profits floating.


They're making millions in profit - how many millions is enough or not? If they didn't pay the dividend (not a requirement) how much more would just sit about doing nothing? They're leaner now than they were. Is that a bad thing in 2015? Don't think so.


They have more competition now than ever before, and they shed one of their main lines due to the need to legal hammer the small mod business.
(AoS, and the new army names for it and 40k are purely from the IP laws that got settled from chapterhouse)

They didn't shed AoS because of Chapterhouse - everyone in the know has talked about WHFB and its decline for a long time even before chapterhouse.



In 2007 there was no kings of war, no warlord games (which is full of key GW creatives), no avatars of war, barely any privateer press, and no Fantasy
flight (in its current incarnation at least)

FFG was still a reasonably big player in 2007 - they took the GW licensing stuff on from early 2008. They may be competitors for the over 21s but for the kids (the target market) GW are really the only game in town - literally with their high street shops over here in the UK


GW was essentially still the only major player in town.

In the last 7/8 years they have LET (emphasis here) compeition fill the gaos in the market that they created.

They have. Not a bad thing - not even for GW. Competitors will inevitably have to make them sharper! The fact is that its always hard to innovate as a market leader - nothing lasts forever. GW favour churn because it will generate some sort of change but they're more prone to making mistakes.


As others have said, GW created demand big enough for most of these companies to come into existence, then quickly ceeded market share to these startups because "not enough space marines"

Games workshop is slowly moving towards a khornemarines vs. Space marines world. Expect everything else to fall away.

Nice hyperbole. Not true from my perspective but each to their own.

Sephillion
29-07-2015, 14:14
How can you say theyre doing better now when they are at the end of the cost cutting line?


One word : denial.

MiyamatoMusashi
29-07-2015, 14:24
I'm taking the long approach on this one. Having had a look at 2007 and 2008's reports (and compared those to the latest and found that GW is doing a lot better now than then) I imagine that in another eight years we'll have similar posts here about the death spiral.

Yeah, probably. We'll also have similar posts about how they're doing fine and not in danger of going bankrupt any time soon; all while their profits, revenue, and customer base will have shrunk year on year while the competition gets larger and larger (not to mention that at some point they'll run out of costs to cut).

Ignore the posts at hyperbolic extremes. No, GW won't go bankrupt next year. If you want to argue about that, go and find someone who's actually saying that they will, and dispute it with them - because no-one here is saying so. (I daresay someone is, somewhere, but someone somewhere is probably saying anything).

What seems pretty undeniable is that GW are smaller than they were, smaller than they would have been if they hadn't made bad decisions, and smaller than they could be if they made good decisions - and that if they continue in the same vein, as they seem to intend to, they will be smaller still in future. (For "smaller", in each case read "smaller and less successful"). That's what people are saying. Dispute that if you like and if you can, not strawman imaginary posts about bankruptcy that no-one here is saying.

GW's own figures show that they are haemorrhaging customers (or, at least, it's certain that they are haemorrhaging unit sales, and a reasonable conclusion backed up by evidence elsewhere is that it's fewer customers, rather than - or in addition to - fewer unit sales per-customer). That's not a good thing. That's not evidence they've hit their ceiling or maximised their market. It's just them losing customers, reaping what they have sown. It won't make them bankrupt next year. But it's not good for the health of the company.

Herzlos
29-07-2015, 14:32
They're making millions in profit - how many millions is enough or not? If they didn't pay the dividend (not a requirement) how much more would just sit about doing nothing? They're leaner now than they were. Is that a bad thing in 2015? Don't think so.
At least as much as the previous year. Ditto for revenue.


FFG was still a reasonably big player in 2007 - they took the GW licensing stuff on from early 2008. They may be competitors for the over 21s but for the kids (the target market) GW are really the only game in town - literally with their high street shops over here in the UK
the X-Wing game definitely didn't exist in 2007.

Kisanis
29-07-2015, 14:46
They're still making millions and a lot of the old retail guard aren't even standing in the UK.



They're making millions in profit - how many millions is enough or not? If they didn't pay the dividend (not a requirement) how much more would just sit about doing nothing? They're leaner now than they were. Is that a bad thing in 2015? Don't think so.



They didn't shed AoS because of Chapterhouse - everyone in the know has talked about WHFB and its decline for a long time even before chapterhouse.




FFG was still a reasonably big player in 2007 - they took the GW licensing stuff on from early 2008. They may be competitors for the over 21s but for the kids (the target market) GW are really the only game in town - literally with their high street shops over here in the UK



They have. Not a bad thing - not even for GW. Competitors will inevitably have to make them sharper! The fact is that its always hard to innovate as a market leader - nothing lasts forever. GW favour churn because it will generate some sort of change but they're more prone to making mistakes.



Nice hyperbole. Not true from my perspective but each to their own.
Fair warning; we will likely agree to disagree here. So by no means take anything personally - this is just a debate about the standing of a company that makes a game thats been central to my life since I was 13 years old, its bound to touch a few nerves for everyone.

I cannot see how literally destroying the world which has been central to GW's games, only to replace it with a new world filled with sigmarines (read alternate reality space marines) and renaming all the fantasy races away from their fantasy generics to a new "copyrightable" term is not a result of their IP woes.

In the chapterhouse suit they got caught trying to claim they owned halberd.

Halberd.

Let that sink in for a minute. Go and find the chapterhouse thread from 2 years ago and read over what they were trying to claim rights on. The spots the space marine debacle.

Once you look at those you realize how IP copyright has driven the latest decisions.

Combine that with their lack of will to grow, and you sum up the picture.

If your company isn't growing, its shrinking.

Also, it is perfectly fine for companies at the top to innovate. How? By buying the ones at the bottom doing the innovating.

Which gw dont want to do.

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The_Real_Chris
29-07-2015, 14:59
Cannanananablising sales

No I understand their point. I didn't agree, but I got it. Andy H while he was running SG explained it to me from the point of view of someone in the company with the results of the soft relaunch of BFG in the states under the SG label supported by various pushes. Overall sales up, but 40k sales dipped. Overall return on investment was lower. The argument is even if the game is advertised widely on TV you would always be pulling people off your core fantasy or Sci Fi brand onto a side game and raising costs. As it is you drew people in witht he main brands and lost them to internal competition (the idea of the side games acting as recruitment pathways wasn't attractive to them). The idea that people go elsewhere to play didn't worry GW because they always had a high churn.

My counter arguement would always be the long term consequence of not maximising your brand presence and the network effect of gamers in bringin in and retaining customers over the long term. It is somewhat amusing that a company that retains, on the face of it, an inefficient retail network with the idea that it does recruitment wouldn't do game diversification for recruitment and retention. Which is the high cost strategy?


FFG was still a reasonably big player in 2007 - they took the GW licensing stuff on from early 2008. They may be competitors for the over 21s but for the kids (the target market) GW are really the only game in town - literally with their high street shops over here in the UK

FFG was good then. Made 'premium' boxed games (ah yes, the old coffin boxes, I love my Horus heresy, but how often will I actually play it...).

But you have to admit the game has changed (to quote Tron). FFG have set themselves up as a global games designer and now have an IP, after experimented with a few small properties previously (fascinating in retrospect to see how they built up), that is in demand and frankly is going to get bigger. They now have global distribution through Asmodee and the backing of the cash behind the group - one that has its sights on capturing more of the growing market segment. That is why I think the CEO addresed the take over issue.

Of course GW is extremely well based to take the surplus cash, take on debt and expand across the segment. They would need a different management and probably a big staff refresh though. Note for fans of their current 1 1/2 core games that might be bad for you because you wouldn't be the focus anymore. Still if things tank during Star Wars maybe an investment group will snap it up and use it to chase where Asmodee will have got to if it all goes to plan.

I really would love to understand what happened with LotR to make them so wary of this. Is there really a structural flaw in the company which means this is the limit of what they can handle?

ColShaw
29-07-2015, 15:03
A pretty central tenet in business, as in life and relationships, is "If you're not growing, you're dying." Simply standing still, content to be where you are, is untenable.

I think they'll gradually diminish their earnings until they post their first loss; this will probably take a few years, but maybe not very many. Then will come a precipitous decline in share price, as the dividends dry up. Then... the End Times. But that's just my opinion. I have no business degree; I'm just a guy who likes toy soldiers. When will it happen? No idea. But I'm increasingly sure it will.

Kisanis
29-07-2015, 15:25
Gw axing specialist games "because it was pulling people away from the core games" is a bit of bs.

Why? GW doesnt do market research.

Without knowing WHY sales in SG went up while core games dipped, they made half educated guesses based on sales numbers alone.

Simply put, their refusal to actively engage in market research to better understand buying habits and reception of their games is astounding.

No one knows WHY one dipped and the other grew.

Hell, if they held out a little longer, maybe BFG would have pushed 40k sales higher in the longterm.
Its about offering variety to customers. BFG could not have been any more of a drain than the releasing of those wonky imperial russian guardsmen.

Except it played a bigger strategic role.

In tactical terms:
You send a platoon to hold a bridge.
Because you have troops on the bridge
OPFOR wont risk capturing it as they lack the resources to take it.
You genius commander says "hey these idiots are just babysitting the bridge when we can send them into the town thats already well defended, but under occasional attack"

OPFOR walk in and take the bridge unchallenged.

That sums up SG, corvus belli, mantic, FFG, and GW well.

GW had some minor competition in their core games, introduced GW gamers to alternate game styles with SG, then left them hanging, which allowed other companies to move into the empty gap.


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NoobLord
29-07-2015, 15:47
There just seems to be such a perception gap between the GW board and the unwashed masses.

'Premium prices for premium quality' or 'overpriced'?

If a sample of people with an interest in gaming were asked to list the first few words or phrases that came to mind in connection to GW, I'm sure 'overpriced' would score more highly than 'premium quality' or 'best miniatures in the world'.

The quote about not reducing RRP to me sounds like 'I know full well what one of our big problems is but I'm too stubborn to address it. If you don't like that then sell your shares.'

Deadhorse
29-07-2015, 15:50
@ Kisanis:
Well said. I particularly liked the part that wonky Imperial Guard units probably "cannibalize" as much sales as some SG's did, and require a similar range of models.

Indeed, this seems like a typical failure to understand data and I'm quite sure that if they did the same thing looking at armies instead of systems, they'd quickly come to the horrifying conclusion that whenever they release anything new, they lose sales from the old stuff. When you release bloodbloodblooders, your previous range of gorebloodgores becomes less successful. So why bother?

The focus on releasing heaps of new miniatures is a bad way to go forward. It is very costly and creates bloat. Actual collectors are put off by the fact that they will never complete their collections because every month there's some new, completely forced unit coming out. And since GW has this customer churn approach anyway, would it not be better to simply have really polished miniature ranges that you can actually collect?

Another thing I always found strange is that they don't want to release several different rulesets for the same miniature range. I mean - rules are pretty cheap to develop. For the Fantasy miniatures range, you could have a skirmish book and a mass battle book. In this case, the cannibalization doesn't really exists, costs are low but you have huge variety.

logan054
29-07-2015, 16:10
They're still making millions and a lot of the old retail guard aren't even standing in the UK.

That's an over exaggeration at best, they certainly aren't doing any better than one's that are remaining either.


They're making millions in profit - how many millions is enough or not? If they didn't pay the dividend (not a requirement) how much more would just sit about doing nothing? They're leaner now than they were. Is that a bad thing in 2015? Don't think so.

So, GW, this amazing company, making millions in profit, leaner than ever is now saying it can't afford pay rises next year, what does this say to you? what about company that expects to maintain high figures without expecting to grow? A company declares it knows it market, doesn't need to market research yet has to cut down to bone in order to maintain it dividends. That sounds like a well run company to you? With all these cuts and price rises It can only manage to maintain it cash flow. Honestly, how long do you honestly think they can maintain this for? I've never known a company that didn't value customer loyalty.


They didn't shed AoS because of Chapterhouse - everyone in the know has talked about WHFB and its decline for a long time even before chapterhouse.

While this is true, a reboot of warhammer didn't require the name changes, they could of rebooted warhammer and still called Orc an Orc.


FFG was still a reasonably big player in 2007 - they took the GW licensing stuff on from early 2008. They may be competitors for the over 21s but for the kids (the target market) GW are really the only game in town - literally with their high street shops over here in the UK

So are you saying that GW is more appealing than Star Wars to anyone under the age of 21? when EP7 hits I'm pretty sure that won't be the case, the kind of person that would be interested in warhammer is going to just as interested in any star wars games that are about. I'm sure we will see another CCG based around the films.


They have. Not a bad thing - not even for GW. Competitors will inevitably have to make them sharper! The fact is that its always hard to innovate as a market leader - nothing lasts forever. GW favour churn because it will generate some sort of change but they're more prone to making mistakes.

So when's that going to happen? All they seem to be doing is raising prices and not expecting any growth. It sounds like a cash cow to me that is starting to run out of milk

The_Real_Chris
29-07-2015, 16:14
GW had some minor competition in their core games, introduced GW gamers to alternate game styles with SG, then left them hanging, which allowed other companies to move into the empty gap.

Well, technically they had run a strategy of periodic small supporting games to keep things fresh, develop fluff, keep people involved. They then moved to focus on the core, then later allowed the games (bar Man O War and Warhammer Quest for reasons unknown, possibly to do with cost and/or sales) to wheeze their last

Note they still consider them a threat to their sales, as evidenced by the enquiries for licences to make certain lines being rejected or quoted silly high prices. In the case of Bloodbowl, which is probably the toughest survivor, it didn't fade away but instead got copied out of all recognition by other companies. Arguably licencing that to one company would ahve at least the spread of diversified competition. Those small companies are no threat to GW but are incubating skills competitors can use.

Of course not all the SG's are equal. Bloodbowl and Epic probably have the biggest possibility for sales going on past performance, but Epic fades more and more each year as competitors open up. 10mm sci fi probably would be a big impediment for Epic to regrow independantly, even if all true gamers know 6mm sci fi is the only real scale for battalion level gaming :) 'Quest would have been great, but now with WFB gone and Dwarf Kings Quest coming out, would it still be big without a lot of effort put in?

Nogginthenog
29-07-2015, 16:56
GW's own figures show that they are haemorrhaging customers (or, at least, it's certain that they are haemorrhaging unit sales, and a reasonable conclusion backed up by evidence elsewhere is that it's fewer customers, rather than - or in addition to - fewer unit sales per-customer). That's not a good thing. That's not evidence they've hit their ceiling or maximised their market. It's just them losing customers, reaping what they have sown. It won't make them bankrupt next year. But it's not good for the health of the company.

That isnt even the biggest problem I see this time. They are talking about restructuring the product line (a sensible idea), but this is in discussion of the last 12 months, when they have rapidly expanded the product line, for no benefit in sales. This for me is the most important point. Sales volume fell, but not by much and hence the treading water illusion. But it fell in an expanding market, and it fell when they pushed out more product than ever before.
The key point here is that when you introduce new lines (like mechanicum, a completely new product line for instance), it HAS to be with the intention of growing sales volume. It would not happen otherwise.
But several new lines have been brought in, and volume has not increased, the reverse in fact. This suggests that they are either losing customers at a reasonably rapid rate, OR they have reached price saturation with the existing stable customer base (who therefore have to buy one thing instead of another rather than in addition) and are not bringing in new customers in any numbers.
They should, in theory, have the metrics to know which situation they are in, and from the report talking of expanding price points, it is perhaps the latter. However, I am not sure that selling 5 tac marines for £12 instead of 10 for £20 will actually make that much difference (because that is what I take he means given the 'no price cuts' mantra), because ultimately, you still need 30 or so of those guys to play the game, however you buy them.

Blutrache
29-07-2015, 17:31
On canoniballsizing their own sales - No I understand their point. I didn't agree, but I got it. Andy H while he was running SG explained it to me from the point of view of someone in the company with the results of the soft relaunch of BFG in the states under the SG label supported by various pushes. Overall sales up, but 40k sales dipped. Overall return on investment was lower. The argument is even if the game is advertised widely on TV you would always be pulling people off your core fantasy or Sci Fi brand onto a side game and raising costs. As it is you drew people in witht he main brands and lost them to internal competition (the idea of the side games acting as recruitment pathways wasn't attractive to them). The idea that people go elsewhere to play didn't worry GW because they always had a high churn.

My counter arguement would always be the long term consequence of not maximising your brand presence and the network effect of gamers in bringin in and retaining customers over the long term. It is somewhat amusing that a company that retains, on the face of it, an inefficient retail network with the idea that it does recruitment wouldn't do game diversification for recruitment and retention. Which is the high cost strategy?

And your argument is very valid, as they never advertise except in obscure channels (their own webstore) to the already converted. Ofc the real figures on BFG and 40k back then (that we'll never see) would be interesting to look at. But if we just look at the scenario that total sales are up, but the 40k part of this dips, it still means you're making more Money, AND you've spread that over wider segments of gaming and miniatures i.e. organic growth. And that "cannibalization"/growth would not be negative at all IF they would have had a strategy for growth and expansion. Which I'm pretty certain they didn't have, as the idea of maximized margin on goods sold probably was very much alive already then.

And just to be clear I am not foreseeing any GW bancruptcy scenarios. Humans have a pretty bad track record when it comes to predicting the future. What can be gleaned from GW's business reports though is their trailing results and reasoning around their business plan forward. And with this in mind it's pretty clear that delivering dividend is what they mean to do.

/Cheers

DonkeyMan
29-07-2015, 18:18
But imagine if they bought Privateer.
:eek: OMG, please no! Nightmare scenario! I need a tea to calm down now.


I've wanted to play warmahordes for a while but the models are a complete turnoff.
:cries: But, ... but they are such nice models!
Jokes aside, tastes are different of course.

But if GW would buy PP, they would only mess it up.
Also, I'm glad GW can't pull stunts like, were they buy companies to simply shut them down.


In regard to all the FFG mentions here. I'm still convinced that if GW would have treated their specialist games right, they would have been today's FFG.

sinat75
29-07-2015, 19:55
The funny thing about this recurring topic which, I admit, it's the only reason I still lurks in GW-oriented forum, is that as someone said earlier, it's recurring for more than a decade but the subject is a completely different company from the one it was in 2005.

GW can be financially well or near the border of bankruptcy, the point is that for me (and many more I think), is already dead. They don't produce games anymore, they don't produce miniatures I like anymore (last are the Lord of the Rings, realistic figures), the fluff of 40K has been declining since the introduction of the Tau, the average model is now more similar to an action figure than a miniature (I think I saw somewhere a picture of a space marine in power armor inside another armor !!!!!!! )

It's funny because I like miniatures games and I used to love GW games, now the company should be called "Miniatures Workshop", or even better.....let's just re brand in Warhammer, at least it will make sense.

GW will probably never die as a company, it's just a completely different company that doesn't make games anymore.

Fortunately many more companies are filling the void left 10 years ago.....

rmeister0
29-07-2015, 20:02
I see three significant things in the report.

First, the consistent use of the word "proven". They're doubling down on the strategies they've been following the last few years, one man stores being the big one.

Secondly, having been an executive at a mid-size marketing company for over a decade, instituting a wage freeze is not the action of a confident management team. Whether intentional or not, it sends a distinct signal to the employees, and having said so publicly to the investors, that things are not looking that good. Couple that with the fact that they're still paying a dividend is troubling, all while doing the wage freeze so they can get their costs back in line with their expectations.

Third, the straight up statement that prices will not be reduced. Past statements have skirted this issue but IIRC this is the first time we've gotten an unequivocal statement about it. Was somebody asking? Who is this statement aimed at? At the very least it indicates that management is aware of the sensitivity of this issue.

It also seems counterintuitive to me that they are going to continue shrinking their product line. That is, again, a cost cutting mechanic and not a growth strategy.

Humanoid
29-07-2015, 20:40
Still available for sale online and in GW stores... how many copies did they make?

For my guess with the Assassinorum Execution Force box set, I start with the following under "Business model and structure":
- At the year end we had 418 Games Workshop stores in 20 countries.
- Last year we had 3,700 independent retailers in 52 countries.

How about 10 units per GW store and 5 units per FLGS? That's 22,680 (4180 + 18500). Of course, some online discounters and/or bits providers could have taken 100-200 units each. How many are there of these online discounters and/or bits providers in the world? 5? 10? So, let's bump up 22,680 to 25,000 for the sake of a nice round number for the production run of the Assassinorum Execution Force box set.

If the GW pre-order online sales go well, then GW can always shave off an unit from each of the FLGSes.

If one considers the 10:5 ratio too high, then what about a 5:2 ratio of 5 units per GW store and 2 units per FLGS? That's 9,490 (2090 + 7,400). In this case, let's bump up 9,490 to 10,000 for the sake of a nice round number. Could this have been the production run for something like the Dreadfleet box set?

Although not part of the 2014-15 financial year, the Age of Sigmar Starter Set is here. What is a good guess as the production run for the Age of Sigmar Starter Set? I am going to use some anecdotes from the "Any news on how sales are going?" thread as follows to set up my guess:


Personally I aimed low and didn't want to take more than 8 boxes despite my rep being very very pressing (got a phone call everyday to check if I had more preorders and wanted to add more boxes). I prefer losing sales than having unsold GW products on the shelves, especially due to the large amount of customers who were very clear they were adopting a wait and see attitude. In the end I sold everything and didn't lose sales at all. In fact it is quite alarming that interest in the product appears to be quite low now that the novelty has passed and alas I didn't see the players who were waiting to learn more about AoS come back for the boxes now that we have more info available.


I bought five AoS boxed sets on preorder, this is less then I preorderd for Black Reach, Island of Blood, and Dark Vengeance (I did around 20 for each on preorder).



My local gaming store ordered 8 copies. They have 1 sitting in the back on hold for an employee that is saving store credit to buy it... The rest are already collecting dust.

He asked his rep how long he had to sit on the stock before he could send it back. The answer was 8 weeks and he would receive a full refund from GW for whatever he didn't sell.. Thought that was rather interesting.



We have 4 flgs and one GW here, and this is what I've heard:

The smallest flgs brought in 10 and hasn't sold 1. The owner is livid with regards to the reps promises. Well, come on man, he's a sales rep- are you new?

The second smallest i have no info on.

The 2nd largest has been okay, apparently. About 20 ordered and 10 sold. Also, it was mostly 40k vets who bought them amd have been playing in store- first bit of fantasy there in ages.

Then there's the big flgs... and i mean biiiiig. From the looks of their overstock. .. not good. You can see, behind the cash area, into the clampack and boxed set storage area. Doesn't look like they've sold more than a handful out of the...well... it looks to be about 70+ they've ordered. The employees are being coy about it- but you can see the "told ya so" written all over their faces.

My guess is a 25:10 ratio of 25 units per GW store and 10 units per FLGS as the production run of the Age of Sigmar Starter Set as it is a flagship product. That's 47,450 (10,940 + 37,000). In this case, let's bump up 47,450 to 50,000 for the sake of a nice round number.

From reading the anecdotes, my guess is that a 20:5 ratio of 20 units per GW store and 5 units per FLGS as the production run of the Age of Sigmar Starter Set would have been the optimal number considering the sluggishness of the sales. That's 26,860 (8,360 + 18,500). In this case, let's bump up 26,860 to 30,000 for the sake of a nice round number.

So, the difference in my two guesses for the Age of Sigmar Starter Set is 20,000 units which are probably sitting somewhere in one or more warehouses, perhaps still in China if China was the manufacturing location.

In my layperson-business view, that's no way to run a lean and mean manufacturing, distribution, and retail machine.

Under "Risks and uncertainties", Kevin Rountree wrote "In my opinion the greatest risk is the same one that we repeat each year, namely, management.". And, you, (executive) management, still are the problem in my view, because GW is not engaging with the customer, me/us, as to how we can cooperate together in a supplier-consumer relationship. I want to buy miniatures. You, GW, want to sell miniatures. (I have no confidence now in GW producing a game that I would like, thus, I have given up on that aspect.) I want low-cost high-quality miniatures. You, GW, want high profits. There must be some way for us to synchronize together.

In a nutshell, what I would like to do is view, order, and pre-pay for miniatures at a discount price per miniature before their production run to get the discount price.

A further discount per miniature would apply if I bought the platoon box set over the squad box set, and would apply if I bought the company box set over the platoon box set. As part of my purchase, I would get a purchase number and password, and select the means of completing the transaction, that is, by mail or at a GW store or FLGS, for example. For the GW store or FLGS, I select the specific store. (The reason for selecting the specific store is to provide a notification to the store, and to ensure the correct distribution.) A GW store should be set up to support a pre-production purchase using cash. When selecting a FLGS, the FLGS still gets a percentage of the sale from GW as if the point of sale was the FLGS on completion of the purchase at the FLGS.

Let's say that this process begins at 6pm GMT on Friday with GW providing pictures of the sprues and painted miniatures on their website. At 8am GMT on Saturday, GW enables the purchasing through their website. At 8am GMT on Monday, GW disables the purchasing through their website. The pre-production discount is only available from 8am Saturday to 8am Monday.

GW, I understand that this may be scarey to you, but do you want to reduce the overruns and underruns of product production or not? If so, then give your customers an incentive to participate.

Deadhorse
29-07-2015, 20:53
Not gonna happen for two reasons:
GW want to support brick and mortar stores. They do not do online discounting and are not very happy if anyone else does it with their product.
GW believe that you will buy their minis anyway if you want them, so giving you a discount does not compute.

Happy to help.

f2k
29-07-2015, 20:58
I see three significant things in the report.

First, the consistent use of the word "proven". They're doubling down on the strategies they've been following the last few years, one man stores being the big one.

Secondly, having been an executive at a mid-size marketing company for over a decade, instituting a wage freeze is not the action of a confident management team. Whether intentional or not, it sends a distinct signal to the employees, and having said so publicly to the investors, that things are not looking that good. Couple that with the fact that they're still paying a dividend is troubling, all while doing the wage freeze so they can get their costs back in line with their expectations.

Third, the straight up statement that prices will not be reduced. Past statements have skirted this issue but IIRC this is the first time we've gotten an unequivocal statement about it. Was somebody asking? Who is this statement aimed at? At the very least it indicates that management is aware of the sensitivity of this issue.

It also seems counterintuitive to me that they are going to continue shrinking their product line. That is, again, a cost cutting mechanic and not a growth strategy.

This one puzzled me as I skimmed through the report.

So far I've been leaning mostly towards the idea that the board (or, at the very least, Kirby) had drunken their own coolaid and had taken to believing their own hype, leading to a fairly incompetent management.

But stating it so outright... Who was that for? It's probably not for the investors who wouldn't know much about the state of the business and probably couldn't care less as long as nice fat dividends are paid. To me, it seems as though it's aimed at guys like us, indicating that Games Workshop does indeed keep an eye on forums - even if they do ignore them - and that they're very well aware that the price is driving customers away.

So, between that statement, and the fact that they pay out a lot more in dividends that they rightly should given their current position, I can't help but wonder if they're not really as incompetent as I thought. The conclusion from that, however, is somewhat chilling. Namely that they're deliberately driving the company into the ground, chasing short term profit even though they know that it will kill the company sooner rather than later.

Herzlos
29-07-2015, 21:19
For my guess with the Assassinorum Execution Force box set, I start with the following under "Business model and structure":
- At the year end we had 418 Games Workshop stores in 20 countries.
- Last year we had 3,700 independent retailers in 52 countries.

How about 10 units per GW store and 5 units per FLGS? That's 22,680 (4180 + 18500). Of course, some online discounters and/or bits providers could have taken 100-200 units each. How many are there of these online discounters and/or bits providers in the world? 5? 10? So, let's bump up 22,680 to 25,000 for the sake of a nice round number for the production run of the Assassinorum Execution Force box set.


Most of those independent retailers won't be FLGS's, but a shelf in a game/hobby/craft/comic store with the bare minimum of stock (a few starter sets and partial paint range), based on the local retailers last time I looked. So I'd assume that at least half of them didn't order any AEF boxes.

logan054
29-07-2015, 21:33
This one puzzled me as I skimmed through the report.

So far I've been leaning mostly towards the idea that the board (or, at the very least, Kirby) had drunken their own coolaid and had taken to believing their own hype, leading to a fairly incompetent management.

But stating it so outright... Who was that for? It's probably not for the investors who wouldn't know much about the state of the business and probably couldn't care less as long as nice fat dividends are paid. To me, it seems as though it's aimed at guys like us, indicating that Games Workshop does indeed keep an eye on forums - even if they do ignore them - and that they're very well aware that the price is driving customers away.

So, between that statement, and the fact that they pay out a lot more in dividends that they rightly should given their current position, I can't help but wonder if they're not really as incompetent as I thought. The conclusion from that, however, is somewhat chilling. Namely that they're deliberately driving the company into the ground, chasing short term profit even though they know that it will kill the company sooner rather than later.

I think it's been evident for a while that GW is just pushing the dividends payments as hard as they can until they have milked GW for everything it's worth. None of the board seem to have any passion for the company, they don't seem to care what they trim to keep the money rolling, it's shame that are destroying all the hard work put into the company.

Reinholt
29-07-2015, 21:52
But stating it so outright... Who was that for? It's probably not for the investors who wouldn't know much about the state of the business and probably couldn't care less as long as nice fat dividends are paid.

You know, I hear this said over and over, but the stock price has been declining for a while and there has been some relatively significant turnover in shares in this allegedly thinly traded small cap stock.

I suspect they are catching heat from at least some of their investors, at least some of whom decided management were a bunch of tone deaf ****** and bailed out. Any competent corporate analyst working on the buy-side who did a decent amount of research on GW would quickly be able to figure that prices and a shrinking customer base are a very large issue for this type of company, and if you don't get answers you like from management about it, you either launch an activist attack or you GTFO and let the stock burn. The latter is more common and easier.

Edit: to that end, I think people often mistake what GW's ultimate fate will be because they fail to consider the dynamics of public companies. Retreat and retrenchment, and higher margins on lower sales are not a long-term viable strategy for GW. Why? The stock price will fall. When it falls enough, someone who believes they can run it better and/or gut it and sell the parts for more than what they bought it for will step in and purchase the company regardless of what GW's management wants. GW's management is a placeholder for whomever controls the stock. If GW continues to lose market cap, it's a matter of time until, to use a 40k analogy, the market commissar shows up and summarily executes management and the board.

Angelwing
29-07-2015, 22:24
If GW continues to lose market cap, it's a matter of time until, to use a 40k analogy, the market commissar shows up and summarily executes management and the board.

The GW internal phrase for clearing a retail store of all staff and replacing them was called Virus Bombing. Seems to fit.

Inquisitor Kallus
29-07-2015, 22:30
The GW internal phrase for clearing a retail store of all staff and replacing them was called Virus Bombing. Seems to fit.

That it was, heard a few happen in my time there. Some crazy stories. I think the biggest faux pas was when a regional years ago managed to infect H/O's computers with a virus. After checking his work laptop they found he'd been using it to surf certain types of sites...

Raptor Mike
29-07-2015, 22:32
I have had a quick look at some of the posts here and tbh a lot of it goes over my head, but if they are loosing sales I wouldn't be surprised. I collected epic in my teens and it was expensive enough then. Now at 36 I'm thinking of getting into the hooby again and getting 40k because my 7 year old son seems very interested in it. But it is very expensive. Dark Vengeance is £65 which to me seems reasonable in GW terms to get started and be able to do land battles straight out a box, but its a lot in game terms. But then you add the paints. I watched the YouTube guides on painting both the DAs and Chaos which gives you a list of paints for each genre. It works out around 24 paints, over £70. I still have some old paints but GW changed them for some strange reason. Then you add tools, expansion sets, vehicles etc and as you all know this works out to be a fair amount.

As a working adult who has be a collector before and knows a little about it I am finding out hard to justify the cost. I realise that £/hr of entertainment its probably worth i but I bet if a teenager who'd never played it before walked into a GW shop genuinely interested, would soon walk out again after seeing the prices.

Satan
29-07-2015, 23:12
Å
You know, I hear this said over and over, but the stock price has been declining for a while and there has been some relatively significant turnover in shares in this allegedly thinly traded small cap stock.

I suspect they are catching heat from at least some of their investors, at least some of whom decided management were a bunch of tone deaf ****** and bailed out. Any competent corporate analyst working on the buy-side who did a decent amount of research on GW would quickly be able to figure that prices and a shrinking customer base are a very large issue for this type of company, and if you don't get answers you like from management about it, you either launch an activist attack or you GTFO and let the stock burn. The latter is more common and easier.

Edit: to that end, I think people often mistake what GW's ultimate fate will be because they fail to consider the dynamics of public companies. Retreat and retrenchment, and higher margins on lower sales are not a long-term viable strategy for GW. Why? The stock price will fall. When it falls enough, someone who believes they can run it better and/or gut it and sell the parts for more than what they bought it for will step in and purchase the company regardless of what GW's management wants. GW's management is a placeholder for whomever controls the stock. If GW continues to lose market cap, it's a matter of time until, to use a 40k analogy, the market commissar shows up and summarily executes management and the board.

Which is why I never understood why they went public. There's not a clear indicator anywhere in what they aim to achieve in regards to growth and/or expansion except "open more stores". In fact, they make it clear they are anti-growth by refusing to buy other companies, which excludes a vertical integration, which in turn should be offset by a partnership or a strategy or goal to outdo the competition, which isn't even mentioned in any IR missives from this company. I don't think they understand their target group at all, and I don't think they realise what the competition is all about at all.

Mawduce
29-07-2015, 23:30
Å

Which is why I never understood why they went public. There's not a clear indicator anywhere in what they aim to achieve in regards to growth and/or expansion except "open more stores". In fact, they make it clear they are anti-growth by refusing to buy other companies, which excludes a vertical integration, which in turn should be offset by a partnership or a strategy or goal to outdo the competition, which isn't even mentioned in any IR missives from this company. I don't think they understand their target group at all, and I don't think they realise what the competition is all about at all.


They freely admitted last year they do no market research. combine last years release with this one... it's jaw dropping from a business stand point. I work for a privately owned business, (granted it's small) and even we get out there and talk to people to see what's going on, watch the news, get involved and listen to our clients needs. If we didn't we wouldn't make money and we would go out of business at some point. It would take a few years, but it would happen.

The_Real_Chris
29-07-2015, 23:32
As a working adult who has be a collector before and knows a little about it I am finding out hard to justify the cost. I realise that £/hr of entertainment its probably worth i but I bet if a teenager who'd never played it before walked into a GW shop genuinely interested, would soon walk out again after seeing the prices.

They aren't the right sort of customer :) honestly at this point if someone wanted a game to paint and play with the kids I would recommend imperial assault not GW, with the bonus of the films coming out and making their models cool with their mates.

I ran a school club three years ago. Got a bunch of mantic plastics cheap from dark sphere, a couple of Christmas crazy boxes and a couple of their cheap paint sets. Enough models for everyone to assemble and play either the undead vs dwarfs Dwarfs kings hold or the orcs vs elves one. Maps printed off at work. £12 from each kid at a £2 a week for the first month or so and free after that and I made the cost back, they got to keep the games and model sets and I still have a pile of models on sprues to do it again with. They got to assemble, play a good little game, and paint at a fair price and a few continued to meet and play after I had to stop.

Years ago I would have picked up GW, probably one of the side games. In fact ran a third ed blood bowl club way back when. But now? Every other company has good enough quality it seems at a better price. The GW games just lack depth, are poor rule sets and the hobby supplies are priced to mock me. Per hour price? So many better alternatives now. Hell, pick up a copy of that new dark future kickstarter and convert some toy cars.


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The_Real_Chris
29-07-2015, 23:35
Any competent corporate analyst working on the buy-side who did a decent amount of research on GW would quickly be able to figure that prices and a shrinking customer base are a very large issue for this type of company, and if you don't get answers you like from management about it, you either launch an activist attack or you GTFO and let the stock burn. T

So how does such a report get written and become public :)


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heliodorus04
29-07-2015, 23:38
The funny thing about this recurring topic which, I admit, it's the only reason I still lurks in GW-oriented forum, is that as someone said earlier, it's recurring for more than a decade but the subject is a completely different company from the one it was in 2005.

GW can be financially well or near the border of bankruptcy, the point is that for me (and many more I think), is already dead. They don't produce games anymore, they don't produce miniatures I like anymore (last are the Lord of the Rings, realistic figures), the fluff of 40K has been declining since the introduction of the Tau, the average model is now more similar to an action figure than a miniature (I think I saw somewhere a picture of a space marine in power armor inside another armor !!!!!!! )

It's funny because I like miniatures games and I used to love GW games, now the company should be called "Miniatures Workshop", or even better.....let's just re brand in Warhammer, at least it will make sense.

GW will probably never die as a company, it's just a completely different company that doesn't make games anymore.

Fortunately many more companies are filling the void left 10 years ago.....

This is my group completely. GW proved to us a certain degree of incompetence and selfishness at which it was easy for us (most of the time) to leave. I actually gave up on 40K first, but fantasy still held the depth of play that I wanted and need (still). I bought Island of Blood but by that time no one was playing fantasy anywhere near me. I watched in horror as 40K introduced Titans and air power to a game I already thought was played with too many models on too small a table. And then I saw them doing End Times stuff, and honestly, I was never remotely tempted. I stopped buying models to a game I no longer played.

Meanwhile someone gave me face value of my entire stock of NIB 40K stuff in trade for his X-Wing models. You know you can still custom paint X-wing models. My 'Carnor Jax' gets lots of compliments :)

I almost got a couple people interested in fantasy this year, just in time to learn of the travesty that would become AoS.

I have boxes of NIB lizardmen and high elves in the basement. Maybe someone will trade me for Malifaux this time. I think that's where I am headed next.

In psychology they say "The best predictor of future behavior is past behavior."
Whatever GW 'was' it clearly is no longer interested in being. GW behavior since 2005 is consistent (to me) and in conflict with what I want(ed). Why they still have customers is the ever more interesting question.

I think it's very true that GW have a masochistic customer base, and that's changing. Is it a linear progression, exponential, logarithmic, or some other pattern that I shouldn't be referencing as if I know what they mean.

AT&T still exists. It's not the company it was in 1990 by any means (and indeed, someone bought the name along the way, and rebuilt the company into something different and competetive).

Gorsameth
29-07-2015, 23:43
Å

Which is why I never understood why they went public. There's not a clear indicator anywhere in what they aim to achieve in regards to growth and/or expansion except "open more stores". In fact, they make it clear they are anti-growth by refusing to buy other companies, which excludes a vertical integration, which in turn should be offset by a partnership or a strategy or goal to outdo the competition, which isn't even mentioned in any IR missives from this company. I don't think they understand their target group at all, and I don't think they realise what the competition is all about at all.
Because it made management a lot of money.

There is a reason people theorize that GW is Kirby and co's cash cow. Keep it running at minimal effort and retire to a life of luxury once it finally dies.

logan054
30-07-2015, 00:04
Why they still have customers is the ever more interesting question.

The customers they have left have invested a lot of money into the hobby, so moving away from the game becomes hard when you realize the models have little use outside of GW. But GW seems intend on making the models we all have useless and remove any investment anyone might have in the hobby.

http://www.games-workshop.com/en-GB/Warhammer-Age-of-Sigmar-Book-LTDEd

I think this speaks volumes about how bad GW sales are getting now, this has been out two weeks, its limited to 2000 copies and it's not even limited stock yet?

Dr. Who
30-07-2015, 00:07
If GW continues to lose market cap, it's a matter of time until, to use a 40k analogy, the market commissar shows up and summarily executes management and the board.

If only we should be so lucky.... :p

- Dr.

Galain
30-07-2015, 00:13
The customers they have left have invested a lot of money into the hobby, so moving away from the game becomes hard when you realize the models have little use outside of GW.

Mantic has been capitalizing this with in KoW, making rules for armies that fit GW models. They're smart, and they know if they hook you in and treat you right, they'll have a customer for life.

logan054
30-07-2015, 00:15
Mantic has been capitalizing this with in KoW, making rules for armies that fit GW models. They're smart, and they know if they hook you in and treat you right, they'll have a customer for life.

As is avatars of war. This is a more recent move which is great for us looking for something other than the same **** GW keeps pushing


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The Inquisitor
30-07-2015, 00:16
If GW continues to lose market cap, it's a matter of time until, to use a 40k analogy, the market commissar shows up and summarily executes management and the board.

LOL. Thanks for making my day. :)

Voss
30-07-2015, 03:21
:eek: OMG, please no! Nightmare scenario! I need a tea to calm down now.

It is a joke scenario. Matt would just laugh (very, very hard) and say no. The joys of not being publicly traded. You can laugh at people who come to you with terrible proposals.



Not gonna happen for two reasons:
GW want to support brick and mortar stores.
Which is crazy from their own reports. Trade sales generate 44 million and have costs around 8 million. Mail order sales bring in 25.5 million and costs about 4 million. Retail has shrunk again, to just under 50 million, but costs them 33 million. Despite desperate hacking at costs (cut about 4 million), the return is only about 1.5 rather than upwards of 5 to 6 times the costs of other revenue streams. Retail is not where their money comes from, because such a huge percentage of it flows right back out.

75hastings69
30-07-2015, 03:51
....Which is crazy from their own reports. Trade sales generate 44 million and have costs around 8 million. Mail order sales bring in 25.5 million and cost about 4 million. Retail has shrunk again, to just under 50 million, but costs them 33 million. Despite desperate hacking at costs (cut about 4 million), the return is only about 1.5 rather than upwards of 5 to 6 times the costs of other revenue streams. Retail is not where their money comes from, because such a huge percentage of it flows right back out.

Agreed. However without bricks & mortar/high street presence GW have NO external advertising that reaches out further than people already buying from them - apart from word of mouth. Now when the words coming out of many mouths are now negative and recommending other alternatives you are on a huge potential loss if you DON'T have B&M stores where you can control the advertising/what gets said about your product vs your competitors.

Mawduce
30-07-2015, 04:09
Agreed. However without bricks & mortar/high street presence GW have NO external advertising that reaches out further than people already buying from them - apart from word of mouth. Now when the words coming out of many mouths are now negative and recommending other alternatives you are on a huge potential loss if you DON'T have B&M stores where you can control the advertising/what gets said about your product vs your competitors.

Heaven forbid they attempt to fight for our money.

jet_palero
30-07-2015, 04:29
Agreed. However without bricks & mortar/high street presence GW have NO external advertising that reaches out further than people already buying from them - apart from word of mouth. Now when the words coming out of many mouths are now negative and recommending other alternatives you are on a huge potential loss if you DON'T have B&M stores where you can control the advertising/what gets said about your product vs your competitors.

But at the same time they don't seem to understand that their B&M presence is the foundation of the company. They've cut it to the bone. Moved to smaller stores. Told players they can't play in the stores, or shrunk the stores to the point where there's no room to do so. They expect a single person to run the store and maintain a community, and replace him at a whim every few months. Their stores are the cows that keep the ranch in business, and yet they've stopped feeding them.

75hastings69
30-07-2015, 04:45
Heaven forbid they attempt to fight for our money.

Exactly the point I'm making GW NEED B&M stores as they are their only portal to potential customers beyond word of mouth (which at the moment won't be doing them any favours).


But at the same time they don't seem to understand that their B&M presence is the foundation of the company. They've cut it to the bone. Moved to smaller stores. Told players they can't play in the stores, or shrunk the stores to the point where there's no room to do so. They expect a single person to run the store and maintain a community, and replace him at a whim every few months. Their stores are the cows that keep the ranch in business, and yet they've stopped feeding them.

Agreed 100%. They need these stores but have cut them to the point where they surely can't be as effective as they were. Last time I went into a GW (one man) store the guy didn't have time to really speak to people let alone answer phones and do admin associated with the store, let alone talk people into buying stuff, showing them how to play games, how to paint etc.

jet_palero
30-07-2015, 07:45
Exactly the point I'm making GW NEED B&M stores as they are their only portal to potential customers beyond word of mouth (which at the moment won't be doing them any favours).



Agreed 100%. They need these stores but have cut them to the point where they surely can't be as effective as they were. Last time I went into a GW (one man) store the guy didn't have time to really speak to people let alone answer phones and do admin associated with the store, let alone talk people into buying stuff, showing them how to play games, how to paint etc.

And if they do talk to you, its all about trying to push a hard sell tactic. While I'm spending the next few years in japan, previously I dreaded going into the GW because it always seemed as thought it was a new manager, and he'd just be trying to hard sell me and I was just sick of it. And the fake excitement and interest was cringe worthy. By the time I got to know one and he knew to not bother me while I browsed, he'd be fired and replaced. Meanwhile the FLGS would be just a friendly "please let me know if you need any help" and a smile. And they had a dozen wargaming tables and suggested nights for drop in games.

jtrowell
30-07-2015, 08:46
So how does such a report get written and become public :)


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Because they don't have the competence to understand that they lack the competence. :rolleyes:

Kisanis
30-07-2015, 10:58
@hastings
Im going to disagree with you there about the need for brick and mortar stores. I seriously think a minor advertising campaign combined with travelling sales reps within territory would provide a better ROI than being tethered to a brick and mortar store.

A guy who goes around doing demos talking to customers etc...visiting the FLGS and providing sales and customer service (esp when trained and supplied effectively) may actually get better growth.

But they dont want growth. Skimping on the brick and mortar is just cost cutting to the last bit they can before closing a bunch.

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75hastings69
30-07-2015, 11:16
@ Kisanis, you are probably right, BUT GW don't do advertising, in fact I'm willing to bet they won't even bother putting a flyer or something in the upcoming Total War Warhammer PC game. A guy going round doing demos is great, except it relies on people attending a random venue at that time on that date AND somehow magically being informed of those details, how do they get these details to potential customers? Meeting at a FLGS only reaches out to people that already attend and as such more than likely know about the hobby. A B&M store is in a constant place, constantly manned (well at least regularly manned even though there'll obviously be times/days it is closed) and even when it is closed they have the window space for either product or advertisements. GW in their current format NEED B&M IMO, but like you say mainly due to their lack of external advertising.

It's like a few years back when they still did the army boxes with Ltd Ed minis in, I bought one (think it was chaos) and inside the box were literally maybe 5 or 6 flyers for various GW products, why send them to me? I already know about the products, I'm already in the hobby, have seen white dwarf/the website etc., these SHOULD have been distributed in perhaps games magazine or maybe even scale modelling magazines. Going to the trouble and expense of producing them then just wasting them was IMO stupid. However that seems to be GWs modus operendi, they are capable of producing great products and occassionaly great ideas it's just when it comes to the final piece of the puzzle they always seem to make an **** of it.

Buddy Bear
30-07-2015, 11:34
If only we should be so lucky.... :p

- Dr.

That would be a dream come true, depending on who does the purchasing. My dream would be for Fantasy Flight Games to buy them out and use their plastic production ability to come up with a great looking Star Wars ground combat game, and then coming up with a solid system usable for both 40k and Star Wars (yes, I want my Space Marines to fight Storm Troopers and Sith).

Herzlos
30-07-2015, 11:43
@hastings
Im going to disagree with you there about the need for brick and mortar stores. I seriously think a minor advertising campaign combined with travelling sales reps within territory would provide a better ROI than being tethered to a brick and mortar store.

A guy who goes around doing demos talking to customers etc...visiting the FLGS and providing sales and customer service (esp when trained and supplied effectively) may actually get better growth.

But they dont want growth. Skimping on the brick and mortar is just cost cutting to the last bit they can before closing a bunch.

Sent from my Z30 using Tapatalk

I agree here. If they spent the £33m they waste on their B&M stores on all forms of advertising*, I'm sure they'd make more than the current £12m (?) profit.

I think we can all agree that whilst B&M stores are their only advertising, it's a pretty lousy approach.

*At least magazine, facebook, gaming events, maybe even TV/Radio and local press. They could also afford to give out a lot of promo packs for events for that kind of money.

Ghal Maraz
30-07-2015, 11:56
I agree here. If they spent the £33m they waste on their B&M stores on all forms of advertising*, I'm sure they'd make more than the current £12m (?) profit.

I think we can all agree that whilst B&M stores are their only advertising, it's a pretty lousy approach.

*At least magazine, facebook, gaming events, maybe even TV/Radio and local press. They could also afford to give out a lot of promo packs for events for that kind of money.
Not only that.
It's a formula that has proved to really work only in UK, and that they are more and more eroding, with every cost-cutting measure and with the always accelerating burning and replacement of store managers. And the pay freeze thing won't be doing then any better.

Harwammer
30-07-2015, 12:41
Decline in sales is slowing, I'm sure last figure I read was a drop of 7, rather than the current 4 and 6 (retail and trade).

Perhaps rather than going down the drain, GW is moving to a new equilibrium?

Has anyone been keeping a close eye on how much sales have been declining?

I have a feeling GW are 'happy' with -7% each year with prices doubling every decade?

Kisanis
30-07-2015, 12:47
The b&M stores seem to barely work in the UK.

I was a little rushed earlier, so I'll clarify.

Basically GW is being dumb in that the B&m stores are competeing with a parallel distribution channel in the FLGS.

GW needs to have a handful of flagship stores in major urban centres. (these could alsso act as distribution hubs for shipping stock, and home bases for reps) Otherwise, they need FLGS's to be distribution partners. Keep using their website for direct sales and bulk orders (with volume discounts).

The travelling REP would be there to ensure proper displays, proper stock. Help the FLGS be the best sales partner they can be. Train FLGS staff in new products, etc...

In addition do the convention and tournament circuits, schedule demo games (most FLGS with game space have a 40k night etc..) and show up and promo the game on these nights.

Combine this with some simple basic advertising and it would have to have a better ROI.

But what do I know, I only have 10+ years in sales experience and 5+ years in industrial distribution....

GW doesnt want to grow. It can grow. But it doesnt want to. These numbers and painful simple fixes are evidence of a lack of will, not a lack of ability.

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ewar
30-07-2015, 12:51
I have a feeling GW are 'happy' with -7% each year with prices doubling every decade?

As the CEO draws out in their press release that a key goal for the next financial year is to grow their customer base, I think your feelings are probably misplaced (as well they should be, given that no business can be considered healthy by targeting ever small numbers of customers).


It is a joke scenario. Matt would just laugh (very, very hard) and say no. The joys of not being publicly traded. You can laugh at people who come to you with terrible proposals.

If Matt (whoever he is) is a businessman then he would/should take an offer of acquisition from a big player like GW pretty damned seriously. Who wouldn't cash out with $20m on the table?

Given the vagaries of the tabletop gaming market, any owner of a successful games company would be literally insane not to think seriously about selling up when the offer comes along.

Note: this has absolutely no bearing on whether GW would make such an offer - personally I think they would benefit hugely from a deal like that, but it's obviously not in their corporate culture.

Tupinamba
30-07-2015, 13:13
To be honest, the idea of evaluating quality based only on the number of sold units is actually pretty bad if your product range is varied in any meaningful way. If a car manufacturer did this, at some point they would reach the conclusion that they should only be selling the cheaper sedan models, which are usually the most popular.

Thus, the car manufacturer would pretty much lose the customer segments interested in luxury cars, vans and all other kinds of cars.

This approach to evaluating quality will lead Games Workshop to the inevitable conclusion that the only viable miniature product is space marines. Which, given AoS, is pretty much what happened, isn't it?

Products which generate lower sales volumes can be profitable and desirable for a variety of reasons, including customer recruitment or retention.

The only think I can hope for is that they apply this philosophy to the nasty boil that is AoS.

Haleluia!

Words.

jet_palero
30-07-2015, 13:37
This is just my opinon.

The reason GW was ever so successful, is purely a result of its one time absolute dominance in gaming stores (in the UK). When people went into the gaming store, there was warhammer (of all varieties). They had the games, they had the tables, they had the hobby supplies, they had the hobbyists running the store. They had the magazine. it was a golden age. They were able to lead a whole generation of wargamers, and it gave them absolute market dominance. It was never this way in the states, and it showed, because GW never (as far as I can tell) understood the advantage they had and why they were able to be so successful. But it didn't matter as much, because the vast majority of wargaming was originating in the UK at that point, so what was popular there just kinda migrated over here. FLGS provided GW the easy avenue to sell their products in america. But GW had the same mindset they had in the UK (where they had already virtually eliminated the FLGS), and never adjusted their behavior.

And then at some point, they decided that the stores were losing them money. So they cut back on all the things that had given them such leadership in the wargaming community.

They turned their magazine into an advertisement brochure aimed at children, instead of a wargaming hobbyist magazine for adults, that children wanted to read. Teenagers are children, but they don't like being treated like children.

GW also took their stores and cut back their employees. They loaded down the remaining employees with too much responsibility. They turned them into sell hard salesmen instead of community leaders (although you'll find plenty of red shirts that are still trying, despite GW management). Before GW hadn't had to sell. People walked into the store and the experience was so good they bought the product. This is the way things mostly still work in FLGS in america. If there's a gaming community for a product line (and that community isn't toxic), then you get the product moving. The game itself doesn't matter half as much as the community. But GW wanted to move more product, so they put quotas onto the employees.

Finnally, GW started going into direct attack mode at the community itself. They started pushing old hands out of the store. Sure, some old hands can be bad influence, those guys need to go. but the majority of them are fun friendly people who will help build a community, and they're probably still buying plenty of product. GW pushed them out when so many stores started moving to demo games only on the tables. And when the stores got smaller and smaller, there just wasn't much room anyway.

Finnally, (and this was more of a failing to take advantage of the future, rather than losing an old skill) GW completely disrespected the online community. Yes, their old forums were a cesspool. But that was GW's fault for not putting in the effort to lead and moderate that community. They completely abandoned any attempt to control the dialogue concerning their product. Instead, all the people who want to discuss GW end up on other websites where GW can't even influence the discussion, let alone moderate or lead.

And these are just the strategic vision failures, I'm not even beginning to get into all their idiotic business decisions over the years.

winterdyne
30-07-2015, 13:45
If Matt (whoever he is) is a businessman then he would/should take an offer of acquisition from a big player like GW pretty damned seriously. Who wouldn't cash out with $20m on the table?


Someone sitting on the Star Wars miniatures games, roleplaying games and card games licenses, with a new trilogy and several spin-off films confirmed for release.
And especially someone who's proved that they can handle those licenses to produce critically acclaimed and extremely popular product lines.

I would think that unless a really big player like Hasbro decided to attempt to purchase the entire Asmodee group of companies in one fell swoop, FFG are basically an unrealistic acquisition prospect.

The only weaknesses FFG seem to exhibit are a difficulty with getting supply to meet demand and logistics, and given the merger with Asmodee was only a few months ago, that may resolve itself fairly well.

It was mentioned earlier, but I have a strong feeling that the coming storm of Star Wars is going to cause severe difficulties for GW.

I'm pretty sure GW will have put some sort of limitation in their licensing of IP to FFG (such as no directly competing 'tabletop 28mm miniatures game'). I would have. However, at a certain point it'll make sense to drop the GW IP and its associated product lines in favour of launching one or more SW product lines to cash in.

Question: If FFG put out a tabletop wargame ruleset (for Star Wars, for example), even with models similar to Imperial Assault (not superb, but nice enough, and functional for their purpose), how popular do you think it'd be, and what effect would it have on GW's primary 40k line?

Gorsameth
30-07-2015, 13:51
What would GW gain by buying a competitor other then killing it off?
Innovation? No onces production/design process is better then GW's
They have no interest in rules as per AoS.
Large parts of the player base will be people who ran from GW. Applying their touch to the game will only chase people away.

So why should they even look into buying?

Deadhorse
30-07-2015, 13:51
A 28 mm game with good miniatures where you use Star Wars units and Jedi with all the cool powers? With actual rules and points costs?
Shut up and take my money!

logan054
30-07-2015, 13:58
I think if they expand imperial assault into an actual table too game (which wouldn't be hard), it's going to be very damaging for GW. Without looking at the rules what's going to have the most appeal? A game based around sons guys you've never even heard of or a game with Jedi, sigh, storm troopers and AT-AT which also has games for the space battles which could easily expand into rather large campaigns. You could very easily play out an imperial invasion campaign.

It's not like they couldn't do higher detail models for a full game and use imperial assault as an intro set.

Any game they produce has a lot of scope, 7 films, several TV shows, books, comics, computer games.

I don't think it's really a case of if but when. It will properly have some ccg to go with the films like the old decipher and wizards of the coast games.

I'm sure GW current strategy will compete with that and not lose a massive chunk of its market share...


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MiyamatoMusashi
30-07-2015, 14:07
Question: If FFG put out a tabletop wargame ruleset (for Star Wars, for example), even with models similar to Imperial Assault (not superb, but nice enough, and functional for their purpose), how popular do you think it'd be, and what effect would it have on GW's primary 40k line?

I love Imperial Assault. Love it. One of my favourite games right now.

But there was a Star Wars tabletop battlegame about 20 years ago (with rules that were not completely dissimilar to 40K if you squinted), and it vanished without a trace... barely anyone was even aware of its existence. Of course that's not to say another attempt could not possibly succeed, I'm just not sure that's what Star Wars is best suited for.

When most people think Star Wars, they either think space battles (X-Wing), or they think Luke and Han versus a dozen Stormtroopers, not a hundred Rebels versus two hundred Stormtroopers. I know, I know - I daresay such battles are canon, and all that, but it's not what most people think of. Hoth and Endor both featured large-ish battles, but it was what Luke and Han were doing at the time that people really remember.

Imperial Assault is a beautiful game, and more people should play it. And, hey, me personally? I'd collect two hundred Stormtroopers and an AT-AT, because why the hell not, but I don't think I'm typical of the wider public. I just don't think a game of that scope would play to Star Wars' strengths - not to mention that with only two or three factions, it doesn't have the same breadth of appeal for players as the fourteen or so in 40K, albeit that most of them are wearing power armour. (Note that I'm not specifically talking about players buying, painting and playing with armies, not whether SW has more or less appeal than 40K in general).

X-Wing is a phenomenal success. Not really my kind of game, but it's huge. And it features, what, up to a dozen ships per side? Usually rather fewer? FFG have smashed it out of the park with that game. With Imperial Assault they have an incredibly good skirmish game, albeit not that successful just yet... but for me it is doubtful whether a 40K-scope Star Wars game would reach X-Wing's level of success. I can't see it.

That needn't be a problem for FFG (more successes like X-Wing would be right up their alley) and could still be a problem for GW (player share matters). I can see tie-in games to the new Star Wars films really hurting GW - the main reason they got the LotR license in the first place was to stop other people getting it, rather than to do much with it themselves, look at how much effort they put into the Hobbit games for proof of that. But I don't think it will be "Star Wars 40K" that will do the damage. It'll be X-Wing, and Armada, and Imperial Assault, and probably a whole bunch of other Star Wars games, some of which we may not even know anything about yet... add it all up, and it's death by a thousand cuts, but it's not a single killing blow from 40K-with-Jedi.

Harwammer
30-07-2015, 14:12
As the CEO draws out in their press release that a key goal for the next financial year is to grow their customer base, I think your feelings are probably misplaced (as well they should be, given that no business can be considered healthy by targeting ever small numbers of customers).

I did put happy in air quotes ;)

Also, growing customer base doesn't have to mean growing sales. It might just mean spreading the sales thinner.

winterdyne
30-07-2015, 14:18
I was thinking something more along the lines of a 6mm scale battle game using prepainted larger models and Armada style coloured mouldings for infantry size models. leaving 28mm for the skirmish mode that IA includes. This would both cash in on the increasing small-scale scifi niche in the market and allow the reuse of many models from the X-wing line- their production pipeline in that scale for prepaints is pretty mature now. Several very large pitch battles in the movies (and likely to be more). Mostly in the prequels (only Hoth in the OT, really - Endor was certainly more skirmish than battle). Remains to be seen what the new films will bring.

logan054
30-07-2015, 14:22
X-Wing is a phenomenal success. Not really my kind of game, but it's huge. And it features, what, up to a dozen ships per side? Usually rather fewer? FFG have smashed it out of the park with that game. With Imperial Assault they have an incredibly good skirmish game, albeit not that successful just yet... but for me it is doubtful whether a 40K-scope Star Wars game would reach X-Wing's level of success. I can't see it.

Think is it doesn't need to reach the same scale, just chip further away at GW's market, it's not like it would cost that much more to turn it into a larger scale battle game, they would already have half the models for it.

Griefbringer
30-07-2015, 15:17
But there was a Star Wars tabletop battlegame about 20 years ago (with rules that were not completely dissimilar to 40K if you squinted), and it vanished without a trace... barely anyone was even aware of its existence. Of course that's not to say another attempt could not possibly succeed, I'm just not sure that's what Star Wars is best suited for.

Are you referring to the Star Wars Miniatures Battles from West End Games? I have somewhere a copy that I once picked from FLGS at hefty discount when they were discounting all sorts of old odds and ends. I also picked two supplements for it. Grenadier also produced some metal miniatures for it, but I have never seen those in person.

Aldavaer
30-07-2015, 15:48
This is just my opinon.

The reason GW was ever so successful, is purely a result of its one time absolute dominance in gaming stores (in the UK). When people went into the gaming store, there was warhammer (of all varieties). They had the games, they had the tables, they had the hobby supplies, they had the hobbyists running the store. They had the magazine. it was a golden age. They were able to lead a whole generation of wargamers, and it gave them absolute market dominance. It was never this way in the states, and it showed, because GW never (as far as I can tell) understood the advantage they had and why they were able to be so successful. But it didn't matter as much, because the vast majority of wargaming was originating in the UK at that point, so what was popular there just kinda migrated over here. FLGS provided GW the easy avenue to sell their products in america. But GW had the same mindset they had in the UK (where they had already virtually eliminated the FLGS), and never adjusted their behavior.

And then at some point, they decided that the stores were losing them money. So they cut back on all the things that had given them such leadership in the wargaming community.

They turned their magazine into an advertisement brochure aimed at children, instead of a wargaming hobbyist magazine for adults, that children wanted to read. Teenagers are children, but they don't like being treated like children.

GW also took their stores and cut back their employees. They loaded down the remaining employees with too much responsibility. They turned them into sell hard salesmen instead of community leaders (although you'll find plenty of red shirts that are still trying, despite GW management). Before GW hadn't had to sell. People walked into the store and the experience was so good they bought the product. This is the way things mostly still work in FLGS in america. If there's a gaming community for a product line (and that community isn't toxic), then you get the product moving. The game itself doesn't matter half as much as the community. But GW wanted to move more product, so they put quotas onto the employees.

Finnally, GW started going into direct attack mode at the community itself. They started pushing old hands out of the store. Sure, some old hands can be bad influence, those guys need to go. but the majority of them are fun friendly people who will help build a community, and they're probably still buying plenty of product. GW pushed them out when so many stores started moving to demo games only on the tables. And when the stores got smaller and smaller, there just wasn't much room anyway.

Finnally, (and this was more of a failing to take advantage of the future, rather than losing an old skill) GW completely disrespected the online community. Yes, their old forums were a cesspool. But that was GW's fault for not putting in the effort to lead and moderate that community. They completely abandoned any attempt to control the dialogue concerning their product. Instead, all the people who want to discuss GW end up on other websites where GW can't even influence the discussion, let alone moderate or lead.

And these are just the strategic vision failures, I'm not even beginning to get into all their idiotic business decisions over the years.

As someone who was already a wargamer and rRg enthusiast before GW existed, I have to agree with most of the above, although I cannot comment on the US situation. I remember when GW sold other companies products in their shops. I used to go into the shops and browse and look at what was knew and often picked up some figures on impulse. Then the hard sell started, I avoided the stores unless I needed something and even then the hard sell irritated the hell out of me. I would go in buy what I planned and leave, no more impulse buys. Finally I stopped playing Warhemmer/RT/40K altogether, I continued Wargaming (historicals) but didn't return until my son started playing with friends at school.

MiyamatoMusashi
30-07-2015, 15:53
I was thinking something more along the lines of a 6mm scale battle game using prepainted larger models and Armada style coloured mouldings for infantry size models. leaving 28mm for the skirmish mode that IA includes. This would both cash in on the increasing small-scale scifi niche in the market and allow the reuse of many models from the X-wing line- their production pipeline in that scale for prepaints is pretty mature now. Several very large pitch battles in the movies (and likely to be more). Mostly in the prequels (only Hoth in the OT, really - Endor was certainly more skirmish than battle). Remains to be seen what the new films will bring.

Yeah, perhaps, though I suspect the new films would have the most impact on what games they'd put out, or how successful they'd be. (Speaking only for myself, but my interest in fighting an army of battle-droids versus an army of Gungans is pretty near zero... Stormtroopers versus Rebels, maybe, but there weren't many big battles where the Rebels took on the Imperials on even terms). If the new films have big battles with interesting factions, they could do this. If not, I suspect they won't.

I guess the point is that they can follow the tone and scope of the movies (much like GW's LotR started off as the Fellowship and ended up as War of the Ring), and between FFG making good games and Star Wars being awesome (on the assumption the new films are better than the prequels), people will play them. And while they're playing them, they're not playing 40K. Some of course will do both, but their time will be split. That has to hurt 40K and GW.


Think is it doesn't need to reach the same scale, just chip further away at GW's market, it's not like it would cost that much more to turn it into a larger scale battle game, they would already have half the models for it.

Absolutely... this is the point I'm making, really. There are lots of different Star Wars games already, and more that could be made (including a 25mm battle game). And no single one of them needs to be as successful as 40K, for 40K/GW to be damaged, if the combined effect of all of them is to get people playing things that aren't 40K.

Mind you, if the films suck, SW games won't be any more successful than before (i.e. X-Wing is huge, everything else is pretty niche). But if the new films are awesome, and the tie-ins are done well, they could really add up.


Are you referring to the Star Wars Miniatures Battles from West End Games? I have somewhere a copy that I once picked from FLGS at hefty discount when they were discounting all sorts of old odds and ends. I also picked two supplements for it. Grenadier also produced some metal miniatures for it, but I have never seen those in person.

Yep, that's the one. I've got the rulebook and supplements, not got any of the figures though. But until about two years ago, I never even knew it existed, and I don't think many people do.

Lars Porsenna
30-07-2015, 16:00
Are you referring to the Star Wars Miniatures Battles from West End Games? I have somewhere a copy that I once picked from FLGS at hefty discount when they were discounting all sorts of old odds and ends. I also picked two supplements for it. Grenadier also produced some metal miniatures for it, but I have never seen those in person.

I have several of the minis. True 25mm and by the time the game was discontinued (IIRC it was because WEG lost the license and it went to WotC) were already becoming long-in-the-tooth, and not matching well the industry trends.

Damon.

Griefbringer
30-07-2015, 16:25
Regarding the Star Wars Miniatures Battles, my impression is that the main focus of the company was on the Star Wars role-playing game, for which they had obtained lisence in the late 80's, with the miniature game more as a sideshow. And I must admit that I did not find said miniatures game rulebook particularly exciting, even considering that it dates from late 80's.

ebbwar
30-07-2015, 16:57
And related to the lets pump more money into dividends things...

http://www.bbc.co.uk/news/business-33718644

paddyalexander
30-07-2015, 17:23
A 28 mm game with good miniatures where you use Star Wars units and Jedi with all the cool powers? With actual rules and points costs?
Shut up and take my money!

You mean FFGs' Imperial Assault?

MusingWarboss
30-07-2015, 17:29
And related to the lets pump more money into dividends things...

http://www.bbc.co.uk/news/business-33718644

Interesting article. I suppose though if it's a trend then the one positive is that these companies will eventually kill themselves off and leave their markets open for smaller and startup business to step in and bring a fresh approach (hopefully) and presumably won't feel the need to give away their crown jewels to prove that they're royalty.

f2k
30-07-2015, 17:57
You know, I hear this said over and over, but the stock price has been declining for a while and there has been some relatively significant turnover in shares in this allegedly thinly traded small cap stock.

I suspect they are catching heat from at least some of their investors, at least some of whom decided management were a bunch of tone deaf ****** and bailed out. Any competent corporate analyst working on the buy-side who did a decent amount of research on GW would quickly be able to figure that prices and a shrinking customer base are a very large issue for this type of company, and if you don't get answers you like from management about it, you either launch an activist attack or you GTFO and let the stock burn. The latter is more common and easier.

Edit: to that end, I think people often mistake what GW's ultimate fate will be because they fail to consider the dynamics of public companies. Retreat and retrenchment, and higher margins on lower sales are not a long-term viable strategy for GW. Why? The stock price will fall. When it falls enough, someone who believes they can run it better and/or gut it and sell the parts for more than what they bought it for will step in and purchase the company regardless of what GW's management wants. GW's management is a placeholder for whomever controls the stock. If GW continues to lose market cap, it's a matter of time until, to use a 40k analogy, the market commissar shows up and summarily executes management and the board.

Point taken.

But what I'm really wondering is just how deep investors will look into a company. Seeing that Games Workshop is in trouble and that unit-sales is dropping is fairly easy. However, do they dig into the underlying reasons for why this is happening? Do they look for customer feedback on forums? Do they consider the fact that falling unit-sales is closely linked with the loss of customers? Do they realize that players have been complaining bitterly about the price for a long time now?

Or do they simply see a company in trouble and decides to get out of Dodge without actually digging into why the company is in trouble?


But at the same time they don't seem to understand that their B&M presence is the foundation of the company. They've cut it to the bone. Moved to smaller stores. Told players they can't play in the stores, or shrunk the stores to the point where there's no room to do so. They expect a single person to run the store and maintain a community, and replace him at a whim every few months. Their stores are the cows that keep the ranch in business, and yet they've stopped feeding them.

This might have been true a long time ago. Now, I'd say, the stores are the big heavy rock that's dragging Games Workshop under.

They grew due to having a virtual monopoly in the UK. But that monopoly is long gone - the internet took care of that. They tried to maintain it by enforcing draconian trade terms, but all they accomplished was the indy-stores sold off their remaining stock and turned to other companies.

The_Real_Chris
30-07-2015, 18:27
If anyone is curious if the investment int he studio is worth it...

http://www.games-workshop.com/en-US/blog/blog.jsp?_requestid=326536Check

Includes such lines as


The Mortal Realms. From the Realm of Fire to the Realm of Heavens and everything in between, the Mortal Realms offer a lifetime of war zones to fight over. The grassy fields of Averland are a thing of the past. Long live the floating islands of the Shimmertarn, the ever-changing Eldritch Fortress and the blood-spewing geysers of the Igneous Delta.

Ghal Maraz
30-07-2015, 19:14
If anyone is curious if the investment int he studio is worth it...

http://www.games-workshop.com/en-US/blog/blog.jsp?_requestid=326536Check

Includes such lines as
Interesting how they bash some characteristics of the previous product... D&D 4th edition marketing campaign anyone? It didn't do any kind of good to WotC...

Psychopomp
30-07-2015, 19:16
When most people think Star Wars, they either think space battles (X-Wing), or they think Luke and Han versus a dozen Stormtroopers, not a hundred Rebels versus two hundred Stormtroopers. I know, I know - I daresay such battles are canon, and all that, but it's not what most people think of. Hoth and Endor both featured large-ish battles, but it was what Luke and Han were doing at the time that people really remember.

This exposes a chunk of what I'm starting to mentally tag "Games Workshop Bubble thinking." Why would a Star Wars TT minis wargame need to be hundreds of miniatures? What I'm seeing both locally and online is a lot of... pushback isn't the right word, maybe abandonment? against Games Workshop's "more, bigger, better, and still more miniatures!" wargaming trend. Sure, you'll still have your Historicals that support massive games, but a lot of GW's strongest competitors (and even the small players nibbling at them) are doing very, very will with skirmish- to company-sized games. There seems to be a sweet spot of 10 - 50 miniatures in your game these days, and I'm seeing a trend of multiple forces for multiple smaller games over GW's last decade of "as many miniatures as you can cram on the board afford" gameplay. Basically, I'm noting that games that resemble from Necromunda size to a 1500 or 2000 point 40K 2e size force are going very, very strong.

X-wing doesn't try and make you play multiple 24-ship squadrons per side. Why would a FFG Star Wars battle game try and make you play hundreds of Storm Troopers in your army? I have no doubt that FFG could make a Star Wars game where the count would be more like 30 Stormtroopers and some command / support that would be a fun game, better represent the small skirmish actions we saw on screen, and still blow 40K away in the fun, balance, and value-for-money departments.


I was thinking something more along the lines of a 6mm scale battle game using prepainted larger models and Armada style coloured mouldings for infantry size models. leaving 28mm for the skirmish mode that IA includes. This would both cash in on the increasing small-scale scifi niche in the market and allow the reuse of many models from the X-wing line- their production pipeline in that scale for prepaints is pretty mature now. Several very large pitch battles in the movies (and likely to be more). Mostly in the prequels (only Hoth in the OT, really - Endor was certainly more skirmish than battle). Remains to be seen what the new films will bring.

This touches on something related to my observations and opinions above: Once upon a time, Games Workshop provided Epic for the scale of battles they're now trying to push in 40K. And I loved it, because 6mm let you play huge battles in the 40K universe. But where once titans strode across massive countryside tables at 6mm, Games Workshop wants them to waddle across tables that scale more to the size of a shopping center in 28mm. I think one of the reason so many small competitors are nibbling GW to death (at least locally, but also in trends I see online) is that people would rather play smaller games with fewer miniatures, so that they can play different games to scratch more gaming itches. And yes, sometimes those itches are for a mass battle game, but even then we have choices of unit-element games rather than an old skirmish system where you put individual models with individual attacks and wounds in units of 10 to 30 miniatures.


Something's going on as people leave the weird bubble of "one game, one company, one hobby" mentality that GW has tried to build around itself. The wargame market is changing as alternative to Games Workshops way of doing things are presented to players, and I'm wondering if its so much a change of gamers' tastes so much as something we always wanted but until the advent of new molding technology, internet marketing, and crowdfunding allowed smaller wargames companies to become viable, it just wasn't available.


And the final thing I want to touch on about Games Workshop and its current downward sales trend, expenses, and business planning - I think its worth getting a visual representation of why Games Workshop's insistence of taking the "muscle in with our stores and try to phase out reliance on local trade accounts" strategy they use in the UK and trying to apply it in the USA is just plain daft:

218002

Some of the states on that map don't have any GW stores at all. There is one in my state, but I personally would have to drive 4 hours by interstate highway to visit it. There's a plethora of FLGS closer than that, one only 15 minutes away. It has been almost 4 years since I laid eyes on an actual Games Workshop store, and its very likely that it'll be years more before I see another. GW's own-store market penetration scheme just isn't going to work over here due to the numbers of stores it would require, and I think they need to stop trying. Maybe keep a few regional hub store/warehouses open in larger cities, especially ones that serve as good transport hubs, but drop the small one-man stores scattered about and rebuild relationships with FLGS around the country. Because that's the only feasible vector of market penetration for GW in the USA.

Note that this would require them to also learn how to compete with other games and products that are actually presented on neighboring shelves. That's another area GW is pretty weak in, in my opinion.

Sephillion
30-07-2015, 19:21
If anyone is curious if the investment int he studio is worth it...

http://www.games-workshop.com/en-US/blog/blog.jsp?_requestid=326536Check

Includes such lines as

The 10th point is the best, as he’s clearly ran out of points to like! And that includes “golden spray” at no3. And the line “but where’s the Dark Prince?”

Hilariously bad. This is the Sharknado of Top 10 lists.

…Take that back, it’s far worse than this even!

Reinholt
30-07-2015, 19:25
Point taken.

But what I'm really wondering is just how deep investors will look into a company. Seeing that Games Workshop is in trouble and that unit-sales is dropping is fairly easy. However, do they dig into the underlying reasons for why this is happening? Do they look for customer feedback on forums? Do they consider the fact that falling unit-sales is closely linked with the loss of customers? Do they realize that players have been complaining bitterly about the price for a long time now?

Or do they simply see a company in trouble and decides to get out of Dodge without actually digging into why the company is in trouble?

GW, in market terms, is tiny. For your average investor with no interest in either activism or acquisition, the answer is that they will not look closely at all.

However, this also means they won't tolerate drama. If the price starts to fall and it doesn't quickly and convincingly get turned around by management, unless the stock has 2x+ upside, it will get dropped. I suspect this is what happened with several of the major funds when the slide started. GW might even be so small it merely gets clipped by basic automated rules like "sell anything below its 200 day moving average". Low effort will mean low effort in both directions, unfortunately for GW.

As to anyone looking to assert control via stock purchasing or acquire the company?

They will look uncomfortably closely, as a general rule.

ObiWayneKenobi
30-07-2015, 19:32
Interesting how they bash some characteristics of the previous product... D&D 4th edition marketing campaign anyone? It didn't do any kind of good to WotC...

Neither did the fact that a few months (if that) after the release they killed off Gleemax (their community site) and admitted the "Virtual Tabletop" was vaporware and the software applications weren't ready yet. I'm sure that didn't help them any.

It seems to me that GW is just adrift. They are basically like an Ork Space Hulk: Derelict and floating through space, but every so often they attract some fringers who stop aboard before continuing on their way.

bound for glory
30-07-2015, 19:40
Are you referring to the Star Wars Miniatures Battles from West End Games? I have somewhere a copy that I once picked from FLGS at hefty discount when they were discounting all sorts of old odds and ends. I also picked two supplements for it. Grenadier also produced some metal miniatures for it, but I have never seen those in person.

funny you mentioned grenadier! back in the very early 1980's, i lived right down the road from the company(in pa.). my friend and i(jason, RIP) would ride our bikes down there and talk to andy(one of the owners). guy loved us, and would give us(free of charge) some d&d minis from time to time. we got to see them making the miniatures and the casting.
man, to be young again...

ntw3001
30-07-2015, 19:54
If anyone is curious if the investment int he studio is worth it...

http://www.games-workshop.com/en-US/blog/blog.jsp?_requestid=326536Check

Includes such lines as
I like 'No matter what army you collect, you can take part!'. Cool, because I have a bunch of Celts from Wargames Factory and nothing to do with them. Wait, you meant I can use any of the armies from this game? So the game contains rules for the armies for which the game contains rules? I guess Sisters players will still be excited.

f2k
30-07-2015, 20:02
GW, in market terms, is tiny. For your average investor with no interest in either activism or acquisition, the answer is that they will not look closely at all.

However, this also means they won't tolerate drama. If the price starts to fall and it doesn't quickly and convincingly get turned around by management, unless the stock has 2x+ upside, it will get dropped. I suspect this is what happened with several of the major funds when the slide started. GW might even be so small it merely gets clipped by basic automated rules like "sell anything below its 200 day moving average". Low effort will mean low effort in both directions, unfortunately for GW.

As to anyone looking to assert control via stock purchasing or acquire the company?

They will look uncomfortably closely, as a general rule.

That makes sense. But it brings me right around to my original question: who's that line for?

Normal investors won't know that prices are an issue, so it's not for them.

Games Workshop doesn't care one iota about ex-players, so it's not for us either.

That leaves the those who're looking into a buyout. But honestly... Who would that be? Who would buy a company that's been run into the ground and has such a bad reputation? A few years ago I thought someone might buy the company to strip it of its manufacturing capabilities. But plastic casting isn't that horribly expensive anymore and there's plenty of companies who're every bit as good as Games Workshop at casting plastic (and MUCH better when it comes to casting resin). I suppose the IP could be considered at least somewhat valuable, but given that they just slaughtered Fantasy and that 40K is based on an amalgam of other ideas that can't be protected, what value does it have beyond the nostalgia of ex-fanboyz?

Sorry if I'm going slightly off topic here, but I honestly can't see what game Games Workshop is playing here or what they hope to gain from it? Save for a very short term profit (immediately paid out as dividends) that will leave Kirby a wealthy man while killing the company in the process. But that might be enough for some...?

ebbwar
30-07-2015, 20:33
And the final thing I want to touch on about Games Workshop and its current downward sales trend, expenses, and business planning - I think its worth getting a visual representation of why Games Workshop's insistence of taking the "muscle in with our stores and try to phase out reliance on local trade accounts" strategy they use in the UK and trying to apply it in the USA is just plain daft:

218002



Blimey, I thought the UK was smaller than that when compared to the US! :D

ebbwar
30-07-2015, 20:36
I like 'No matter what army you collect, you can take part!'. Cool, because I have a bunch of Celts from Wargames Factory and nothing to do with them. Wait, you meant I can use any of the armies from this game? So the game contains rules for the armies for which the game contains rules? I guess Sisters players will still be excited.

So there were armies in WFB that you couldn't take?

3... 2... 1...

And someone comments about Dogs of War, Storm of Chaos and possibly something else I can't be bothered remembering :D

Satan
30-07-2015, 22:14
Question: If FFG put out a tabletop wargame ruleset (for Star Wars, for example), even with models similar to Imperial Assault (not superb, but nice enough, and functional for their purpose), how popular do you think it'd be, and what effect would it have on GW's primary 40k line?

I don't think it'd be particularly popular at all.

After all, we know that the main driving factor for success within the miniatures gaming industry is the quality of the miniatures themselves for collecting purposes, and not IP or rules sets. This, is after all to a major extent evident by the lack of anticipation for the upcoming Star Wars films, thus confirming that IP has little to no bearing on the success or marketing prospects for a product, and the growth decline of the miniature hobby globally after alternative manufacturers began distributing their own games and rules sets which were not derivative of Games Workshop thus causing a major collapse in the hobbyist sphere and decreasing the amount of miniature gamers worldwide.

Oh, wait...

Commissar von Toussaint
30-07-2015, 22:53
It is important to remember that by the time West End got the Star Wars license, the original movies were no longer a thing. There was still fandom, of course, but Lucas, 20th Century Fox and the cast all considered the project done. Star Wars was still a valuable IP, but after the final movie it was a lot less valuable than it had been.

West End tried to breathe some new life into it, explore the universe but they didn't have a lot to work with.

The situation now could not be more different. While we don't know what the new movies will offer, the Star Wars universe is more fully developed and a mass combat system is now viable in the sense of recreating something other than the Battle of Hoth.

As to that top 10 list...holy cr@p. :eek: Was that supposed to get me into the game? :wtf:

My reaction upon reading it was: "No one who doesn't already play Fantasy or 40k is going to give a rip about this."

Can I revise my prediction to immediate, catastrophic fail?

Gorsameth
30-07-2015, 23:07
As to that top 10 list...holy cr@p. :eek: Was that supposed to get me into the game? :wtf:

My reaction upon reading it was: "No one who doesn't already play Fantasy or 40k is going to give a rip about this."

Well on the bright side since GW has done 0 marketing outside of their own customers the only people who will read that top 10 are people playing 40k or Fantasy.

NoobLord
31-07-2015, 00:16
Haven't seen this mentioned yet but as well as the CEO's statement with the annual report there is also a separate chairman's preamble by Kirby:

http://investor.games-workshop.com/wp-content/uploads/2015/07/chairmans-preamble.pdf

This is quite interesting as it seems to be aimed at existing customers more than investors (e.g. 'we have to do what all our customers want, not just a noisy few*' and 'no army is unwelcome in the new system').

Overall the tone seems to me to be less arrogant than when he was CEO but just as defensive if not more so. The claim that they 'make the best miniatures money can buy' is such a stretch though it makes it hard to take anything he says at face value.

* I think by 'the noisy few' he means us here and on other forums ;)

p.s. quite funny that he encourages shareholders to buy a copy of Age of Sigmar when they come up for the annual general meeting. If I held £16m of stock like Raffa I would expect a copy for free!

MusingWarboss
31-07-2015, 02:18
p.s. quite funny that he encourages shareholders to buy a copy of Age of Sigmar when they come up for the annual general meeting. If I held £16m of stock like Raffa I would expect a copy for free!

Eh? Hasn't anyone told him that they're giving away AoS for free? Or is he just asking them to buy a load of miniatures (that doesn't sound desperate at all).

"For those who fret about this sort of thing, rest assured no miniature has been made redundant, no army is unwelcome in the newsystem, no paint job, no conversion is now worthless. As always we make these changes with great care. Your miniatures are the real
‘eternals’."

Tell that to the Squat players. Oh and the Firmir players, the Chaos Dwarf guys and anyone who liked the Specialist game range. ... Oh, you mean the recent stuff you've just shelved... Give it year and we'll see how welcome those old armies still are.

The_Real_Chris
31-07-2015, 02:40
Is that not then telling a lie in a message to shareholders?

MarcoSkoll
31-07-2015, 03:58
Give it year and we'll see how welcome those old armies still are.
I recall that quote from the SG FAQ in Fanatic Magazine #1:
"As long as you are playing the games then we'll keep supporting them and bringing out new material for them (and, in some cases, we may keep on supporting them even if you're not playing!"

Yep - that lasted about a year. The SG releases slowed massively come 2005 and the new material was reduced almost entirely to fan-submitted articles.

Chivs
31-07-2015, 08:20
Blimey, I thought the UK was smaller than that when compared to the US! :D

It is. The original poster used a traditional Mercator map which increases the size of countries closer to the North Pole (particularly the UK and Greenland) and makes the countries close to the equator look far smaller, particularly those in Africa and South America. Try using a Peters World Map for a more accurate comparison. Its about the size of Florida. There's a famous scene about it in The West Wing.

https://youtu.be/vVX-PrBRtTY

https://www.google.co.uk/url?sa=t&source=web&rct=j&url=http://www.buzzfeed.com/hnigatu/19-maps-that-will-help-you-put-the-united-states-in-perspect%23.tgKMKrA0M&ved=0CC8QFjAFahUKEwiZjdny54THAhWmatsKHf57C_o&usg=AFQjCNGtD83U0QSPyTCRIOPi2YeofiFXzg&sig2=s4JRjPXU6W9gsn6mUl4toQ

(Hopefully the links work. It's not easy on a phone.)

ebbwar
31-07-2015, 08:35
From Kirby's blah blah blah...

"I do not often talk about our products, partly because I think they speak eloquently for themselves, and partly because it is important for everyone to remember (that’s owners, customers and staff) we are a business."

Surely talking about your products helps a business more than not talking about them? o_O

Whirlwind
31-07-2015, 08:44
Haven't seen this mentioned yet but as well as the CEO's statement with the annual report there is also a separate chairman's preamble by Kirby:

http://investor.games-workshop.com/wp-content/uploads/2015/07/chairmans-preamble.pdf

This is quite interesting as it seems to be aimed at existing customers more than investors (e.g. 'we have to do what all our customers want, not just a noisy few*' and 'no army is unwelcome in the new system').

Overall the tone seems to me to be less arrogant than when he was CEO but just as defensive if not more so. The claim that they 'make the best miniatures money can buy' is such a stretch though it makes it hard to take anything he says at face value.

* I think by 'the noisy few' he means us here and on other forums ;)

p.s. quite funny that he encourages shareholders to buy a copy of Age of Sigmar when they come up for the annual general meeting. If I held £16m of stock like Raffa I would expect a copy for free!

What is interesting is just how old this statement appears to be since it was written. Sunderland not being relegated that was in April; the UK Election was in May etc.

I particularly like the "no army is unwelcome in the new system" statement. Do you think they would mind if I brought Tyranids to the AoS tabletop or maybe even a Warmachine army?

Poncho160
31-07-2015, 08:51
From Kirbys pre-amble:

I do not often talk about our products, partly because I think they speak eloquently for themselves, and partly because it is important for everyone to remember (that’s owners, customers and staff) we are a business. We need to be here next year if you want more of the exquisite models we make. To be here next year we have to do what all our customers want, not just a noisy few, and find a way of making money doing it. This year, though, is an exceptional year. Not only have we just opened a wonderful new visitor centre on time and under budget (take a bow, Tony) we have also relaunched Warhammer.

"To be here next year we have to do what all our customers want, not just a noisy few, and find a way of making money doing it."

Taking a swipe at the online forums, lol

and

"We need to be here next year if you want more of the exquisite models we make"

or "Buy our stuff or we will go out of buisness!!!"

Herzlos
31-07-2015, 08:52
I doubt it's a swipe at forums specifically, I'm sure at this point there will plenty of direct complaints (in store/email/writing) and some of the other points seem to indicate that some of the shareholders have been asking pointed questions.



p.s. quite funny that he encourages shareholders to buy a copy of Age of Sigmar when they come up for the annual general meeting. If I held £16m of stock like Raffa I would expect a copy for free!

One of the previous pre-ambles told the shareholders they weren't to expect a free beer from Bugmans at the AGM. If they won't do that, they aren't going to give away a box of jewel like plastic.

Buddy Bear
31-07-2015, 09:36
I think in terms of both a source of valuable IP and a miniature gaming company, GW is still valuable and worth a buy out. It says quite a bit that it's still #1 in the industry despite the massive incompetence of their management. And the value of the IP is proven by the number of people who stick with the games because of their love of the setting despite whatever other issues they may have with GW. I think GW has all the tools necessary to come back as a major force within the miniature gaming industry, and the only thing holding them back is incompetent leadership and mismanagement. And you have to imagine that anyone who buys them out will believe that they can provide the proper management which GW is currently lacking.

Sureshot05
31-07-2015, 10:09
"To be here next year we have to do what all our customers want, not just a noisy few, and find a way of making money doing it."




Given the complete lack of marketing, R&D and the terrible rules that AoS presents, this statement shows just how bad the management is. How Kirby can write this, and then release AoS is just comical. If sales don't improve next year, and given the extra costs that have been deferred, I believe the company may be unable to payout dividends, and that will be bad as post-cost cutting they will struggle to find ways to improve without a radical rethink, based on actual research.

Blutrache
31-07-2015, 10:26
Well they're totally uninterested in all types of customer feedback so how's this gonna happen? Maybe its just a finer way to say "we listen to nobody"?
Also, as they're dead set on delivering dividends to shareholders (remember the dividend is the stated reason for investing) they'll likely do almost anything to keep doing that. And that includes pay freeze, reboots, closing shops, pruning lowest margin kits and whatever else they can brain storm on those strategy meetings. God I'd love to just listen through one or two of those... ;)

Btw: a manager that fails to understand that by stating officially that "some of our customers are loudmouthed *****" he'll actually be p*ssing off far more many than those who actually are that, has truly passed his expiry date...
/Cheers

Deadhorse
31-07-2015, 10:27
"To be here next year we have to do what all our customers want, not just a noisy few, and find a way of making money doing it."

I read that as directed straight at the forums and the gamers.

Unlike all the quickly growing companies in the miniature wargames market that are doing pretty much what GW'S "noisy few" customers have been demanding for years, the shrinking GW knows better.

And they are apparently determined to keep knowing better until they become otiose in a niche.

75hastings69
31-07-2015, 10:33
I......And the value of the IP is proven by the number of people who stick with the games because of their love of the setting despite whatever other issues they may have with GW.

You do know they just killed dead 1 of their only 2 settings right?


I think GW has all the tools necessary to come back as a major force within the miniature gaming industry, and the only thing holding them back is incompetent leadership and mismanagement.

I don't. Because they're being held back by incompetent leadership and mismanagement. They have no intention of listening to anyone, let alone their customers, and as such are heading down whilst their competitors are heading up.

Buddy Bear
31-07-2015, 10:41
You do know they just killed dead 1 of their only 2 settings right?

Well, I did use the singular 'setting' rather than the plural 'settings'. :p Speaking for myself, I mostly stick to 40k because of the setting, not because the system is exactly wowing me at the moment.


I don't. Because they're being held back by incompetent leadership and mismanagement. They have no intention of listening to anyone, let alone their customers, and as such are heading down whilst their competitors are heading up.

I'm confused. In content it sounds like we agree, but your tone seems to say otherwise. Would you say GW could come back if it had a top-to-bottom change in management, with competent people replacing the incompetent ones?

paddyalexander
31-07-2015, 10:49
Would you say GW could come back if it had a top-to-bottom change in management, with competent people replacing the incompetent ones?

What many of us "haters" have been saying for years is that this is the only way gwgPLC could make any sort of turn around.

Buddy Bear
31-07-2015, 10:52
I completely agree, which is why I'm hoping we'll see a buy out sooner rather than later. It wouldn't be a guarantee that the new management would be better, but GW's sunk to a level where a classroom of preschoolers could probably do a better job of it.

NoobLord
31-07-2015, 11:15
It is. The original poster used a traditional Mercator map which increases the size of countries closer to the North Pole (particularly the UK and Greenland) and makes the countries close to the equator look far smaller, particularly those in Africa and South America. Try using a Peters World Map for a more accurate comparison. Its about the size of Florida. There's a famous scene about it in The West Wing.

https://youtu.be/vVX-PrBRtTY

https://www.google.co.uk/url?sa=t&source=web&rct=j&url=http://www.buzzfeed.com/hnigatu/19-maps-that-will-help-you-put-the-united-states-in-perspect%23.tgKMKrA0M&ved=0CC8QFjAFahUKEwiZjdny54THAhWmatsKHf57C_o&usg=AFQjCNGtD83U0QSPyTCRIOPi2YeofiFXzg&sig2=s4JRjPXU6W9gsn6mUl4toQ

(Hopefully the links work. It's not easy on a phone.)

Nice clip. As an ex-navigator the thought of trying to explain this to people who really didn't get it is hilarious. Why didn't they bring a globe and a sheet of tracing paper? Much easier than trying to explain the issue on a flat display screen!

Deadhorse
31-07-2015, 11:24
Well, tbh the fact that they killed fantasy for an IP-protectable cesspit of Sigmarrific Ogoroos means that, unfortunately, the clock is ticking and a management change is highly needed sooner rather than later.

At first, the goblins were simply happy to sail the WFB Grand Heritage, though with every "fix" and "improvement" they made parts of Grand Heritage became damaged or useless and the whole thing started leaking.

Now, unfortunately, they decided they need to rip WFB Grand Heritage apart and build a better ship out of its remains. It looks like they managed a raft, but bets are open as to whether it will float at all.

So now only 40K Grand Heritage remains, also riddled with unbound holes and infested with scatbikes. And goblins with blowtorches, saws and hammers are gathering on its decks.

We need someone to get rid of the Goblin infestation FAST, while the WFB Grand Heritage can be rebuilt in some form and the 40K Grand Heritage is still seaworthy.

Blutrache
31-07-2015, 11:45
Well, tbh the fact that they killed fantasy for an IP-protectable cesspit of Sigmarrific Ogoroos means that, unfortunately, the clock is ticking and a management change is highly needed sooner rather than later.

At first, the goblins were simply happy to sail the WFB Grand Heritage, though with every "fix" and "improvement" they made parts of Grand Heritage became damaged or useless and the whole thing started leaking.

Now, unfortunately, they decided they need to rip WFB Grand Heritage apart and build a better ship out of its remains. It looks like they managed a raft, but bets are open as to whether it will float at all.

So now only 40K Grand Heritage remains, also riddled with unbound holes and infested with scatbikes. And goblins with blowtorches, saws and hammers are gathering on its decks.

We need someone to get rid of the Goblin infestation FAST, while the WFB Grand Heritage can be rebuilt in some form and the 40K Grand Heritage is still seaworthy.

Arrgh! Those thoroughly awful, awful, awful, AWFUL names keep getting on my nerves; Orruks? Aelfs? Dwourdins? Squeletoons? WTH is this something they believe any of their customers want? Or is ready to shell out more money than they already did for? -"Oh my god I can finally, after all these years of waiting build an Orruk army!" If anything it'll just foster even more nerd stigmata: "It's not an Orc, it's an Orruk!"

Sorry for the rant, it just had to get out. I know it's for the precious IP of which they just killed 50%...

/Cheers

ehlijen
31-07-2015, 12:15
To be fair, the making up new names worked for Tau, Tyranids and to a degree Necrons. But that's all 40k, actually abandoning the classic names in WHFB is a mistake, I believe.

Buddy Bear
31-07-2015, 12:27
They're all new races, though. GW didn't take existing and well known fantasy races like orcs, ogres, and dwarves, which had previously been called that in their games, and changed them to silly names like orruks, ogors, and steamhead duardin.

ntw3001
31-07-2015, 14:41
Given the complete lack of marketing, R&D and the terrible rules that AoS presents, this statement shows just how bad the management is. How Kirby can write this, and then release AoS is just comical. If sales don't improve next year, and given the extra costs that have been deferred, I believe the company may be unable to payout dividends, and that will be bad as post-cost cutting they will struggle to find ways to improve without a radical rethink, based on actual research.
I appreciate the wisdom of Kirby in managing to somehow identify the silent majority solely by their silence, and the noisy few by their noise. And all without market research!

'What's that, our feedback is 98% negative? Wow, the people who like us are being really silent! They must be an overwhelming majority!'

rmeister0
31-07-2015, 14:55
I read that as directed straight at the forums and the gamers.

Given that the audience for these things is investors and, secondarily management, I doubt that. He's not talking to customer. Which makes the remark even more interesting.

Between that and the comments about price that Wells made in the actual report it feels like there's some internal conversation that they're trying to squash.

MarcoSkoll
31-07-2015, 15:03
GW didn't take existing and well known fantasy races like orcs, ogres, and dwarves, which had previously been called that in their games, and changed them to silly names like orruks, ogors, and steamhead duardin.
*Cough* Guardus Imperialium. *Cough*

logan054
31-07-2015, 17:12
I completely agree, which is why I'm hoping we'll see a buy out sooner rather than later. It wouldn't be a guarantee that the new management would be better, but GW's sunk to a level where a classroom of preschoolers could probably do a better job of it.

Problem with a buy out is getting someone who wants to turn the company around. Chances are they will gutted and sold off. Maybe someone competent will buy just the IP


Sent from my iPhone using Tapatalk

Blutrache
31-07-2015, 17:19
*Cough* Guardus Imperialium. *Cough*
Funny thing is that everyone here still calls it Imperial Guard. Also in the latest 40k rulebook they are still in places referred to as... Imperial Guard... ;)

Tyranids were Tyranids even in RT, Tau and Necrons were shoehorned in later editions. And as the galaxy is pretty big it sorta works with new alien races being "discovered". The Necrons retcon was a bit more effort though as they apparently had to have tie-ins everywhere and with everything and always have been there.

Anyway, time will tell how good Duardings and Orgors stick...

/Cheers

Hengest
31-07-2015, 18:27
Clearly we have an overall negative view of GW and its management here on Warseer but the British financial press seems happy with the reports.
Investors Chronicle currently recommends GAW as a buy and did so on its previous analysis back in Jan. I think before then it was a hold. I haven't seen much brokerage comment though since 2012. Peel Hunt analyse them and expect pre tax profits of £16.5m for the current financial year and an earning per share of 38p compared to £16.9m and 36p for 2014. The price per earning is quoted as 15 which isn't bad.
Historically GAW was always one of the favourite shares for the Motley Fool specifically as an income share rather than a growth share though. I think this remains the case. At todays price the dividend yield is 9.3% which reflects the fact it isn't expected to grow a capital investment.
The shares usually don't trade in high numbers so there can be a big margin between the sell price and the buy price.
People here may not like what they do and may disagree with some of the decisions. GW can also come across as a bit odd and quirky in some of the things they say such as the 10 reasons to like AOS - but that's written for those reading the sales magazines. When it comes to the comments people are making on phrases in the financial report firstly I think people are over analysing them trying to find hidden meanings that aren't there and secondly some are also being taken out of context.
In short I think they are businessmen managing their business - albeit a niche one - its up to the share holders to hold them accountable if they aren't getting a return on their investment. Up to press though the investors are getting a return. In the future who knows but the various management teams over the years have so far steered the company along an adequate track for the investors.
One challenge is that nothing stays the same. To survive GW will adapt itself to whatever maintains the bottom line. If the profit only comes from selling space marines then they will be a company that makes plastic space marine figures. Don't forget being a games company isn't their aim.

Reinholt
31-07-2015, 18:48
Hengest - people in the financial press push losers all the time. Hell, Lehman was rated a "buy" by some people mere months before it went bankrupt catastrophically. Nor, to be fair, should you trust them to the downside; sometimes things rated "sell" are some of the best things to buy.

In reality, you have to do the work yourself. Brokerages are always trying to sell you something; there is a reason they are called the "sell side".

I would tell you, as someone who actually runs risk in a capital markets setting, that I wouldn't buy GW's stock (unless I was intending to acquire them myself, in which case it's more about buying what I see making them into, not what they are). I see more downside than upside in any form of analysis I do other than if I make the assumption that a takeover occurs (low probability in the short to medium term); the E(V) of the stock is just much lower on a risk-adjusted return basis than many other things I could potentially invest in.

And you're talking to a guy who has been long a near-bankrupt ****** mortgage insurer in size for three years. It's not like I won't take risk.

Hengest
31-07-2015, 19:00
No worries - just playing devils advocate and putting another side of the story that's out there to encourage an open debate.
By the way I wasn't meaning to advocate we should all invest our savings here (I certainly haven't - although I did make money buying and selling them in the past).
As you say - always do your own research in these things.
I suppose my point is that I really don't think they are actual idiots or stupid (a bit odd maybe) they just have a different view on how to run their business. Is it a good long term ploy? I've no idea. Does it effect me. To be honest no. I'll admit to liking BFG but I've never played the other games. Tried 40K with the kids many moons ago, but they didn't take to it ("fortunately" says my wallet)

MusingWarboss
31-07-2015, 20:16
Funny thing is that everyone here still calls it Imperial Guard. Also in the latest 40k rulebook they are still in places referred to as... Imperial Guard... ;)

Tyranids were Tyranids even in RT, Tau and Necrons were shoehorned in later editions. And as the galaxy is pretty big it sorta works with new alien races being "discovered". The Necrons retcon was a bit more effort though as they apparently had to have tie-ins everywhere and with everything and always have been there.

Anyway, time will tell how good Duardings and Orgors stick...

/Cheers

I don't know anyone who uses the new 40k names, whether for the Imperial Guard, Sisters of Battle or Space Marines. I don't think many will either - even the newer players/customers find the mangled faux-Latin a mouthful and mostly unmemorable meaningless pap.

As for Necrons, as a race they may be newish having been snuck into 2nd edition but most players at the time when they first saw them had the same reaction - "Chaos Androids!!" - which were in Epic and MB's Space Crusade.

Perhaps it's time we stopped referring to "IP" as that stands for Intellectual Property, and there hasn't been much of the "I" part going on at GW lately. Which just leaves "P". Which is what most of their new fluff and rules have been decried as.

I'm honestly not surprised that a firm run increasingly by lawyers and accountants should look to shift things to the side of trademarkable properties and capitalising on product to provide dividends for shareholder over and above all else. These people don't care for the setting or model designs like fans do. They see them quite differently. The scrapping of Warhammer is a perfect example of this attitude. Someone looked at the spreadsheets, consulted owned trademarks and decided it was not viable.

ebbwar
31-07-2015, 21:05
Kev's blah blah in the report had one important bit in it that shows GW will not be changing how they do things in the near future - That Kev is using Kirby as a consultant. So Basically the new CEO is going to the old CEO to ask him what to do. Lets sit back and see how that works...

Gorsameth
31-07-2015, 21:09
Kev's blah blah in the report had one important bit in it that shows GW will not be changing how they do things in the near future - That Kev is using Kirby as a consultant. So Basically the new CEO is going to the old CEO to ask him what to do. Lets sit back and see how that works...
Everyone knew nothing would change when Kirby stepped back as CEO but remained head of the board

MarcoSkoll
31-07-2015, 21:25
I don't know anyone who uses the new 40k names, whether for the Imperial Guard, Sisters of Battle or Space Marines. I don't think many will either.
Well, I have for some years used Adeptus Astartes and Adepta Sororitas a fair amount when I'm writing, as I started to get a bit wary of the Ronseal naming when it also started getting applied to a surge of stuff like Wolfhammers. (It's a missile used by the Blood Angels. Let's call it a Bloodmissile!)
Calling a group of women warriors Sisters of Battle started to sound a bit like it had started as slang, so there's certain contexts I avoid using it in when I'm writing.

I'm happy with with Imperial Guard though, as while it's an ostensibly similar name, as a) they actually combined an adjective and a noun, rather than two nouns, b) it's a less prestigious organisation and c) a name that has been used extensively in the real world (which is probably why GW wanted to start trademarking).

MusingWarboss
31-07-2015, 22:11
Calling a group of women warriors Sisters of Battle started to sound a bit like it had started as slang, so there's certain contexts I avoid using it in when I'm writing.

In some ways yes, it does. In the "Black Codex" inside 2nd Edition they're just one squad called "Sororitas Squad" under the heading "Adeptus Ministorum". However the same edition bumped them up to full army status and the name of the codex was "Sisters of Battle". Presumably because the army contained more than just Sororitas (sisters), they expanded it to the whole space convent and made it more obvious what they were overall. Anyway that's a bit Off-Topic so... better leave it there.

Agrimax
31-07-2015, 22:58
I just don't get what GW think they're going to achieve with all this "IP naming" stuff. Half the UK still calls a Vacuum cleaner a 'Hoover', but I doubt very much there are many people who actually have any particular attachment to that companies' version when they go shopping for one these days - once you know what a product is at it's core, you'll go to the manufacturer that makes the one you want depending on your selection criteria, be that quality, price, subjective aesthetics or whatever else. The name attached to it isn't going to mean diddly and tends to be used generically whether that's by design, fluke, brand association of the past (which in effect is what the old Tolkien-style races are) or whatever else.

jet_palero
31-07-2015, 23:15
I just don't get what GW think they're going to achieve with all this "IP naming" stuff. Half the UK still calls a Vacuum cleaner a 'Hoover', but I doubt very much there are many people who actually have any particular attachment to that companies' version when they go shopping for one these days - once you know what a product is at it's core, you'll go to the manufacturer that makes the one you want depending on your selection criteria, be that quality, price, subjective aesthetics or whatever else. The name attached to it isn't going to mean diddly and tends to be used generically whether that's by design, fluke, brand association of the past (which in effect is what the old Tolkien-style races are) or whatever else.

Modern business considers licensing to be a holy grail of rent seeking proffit, because it doesn't require you to do any work. GW wants to be able to protect their IP so they can rent it out and make money off someone else's labor. Unfortunately companies won't pay as much for your IP when its so clearly derivitive. Of course GW doesn't realize companies also won't pay for a bland uninspired IP like AoS either. And while oldhammer was derivitive, it had a unique enough spin on it to be marketable.