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Jim30
05-01-2012, 09:41
GW stock in the UK is up by 8% (40p) in one mornings trading. I can't see any news releases to justify this (last was on 3 Jan on voting rights), and a share movement of this size is very out of character with the companys more usual trading pattern of 1-2p fluctuations per day.

Is there something going on - whispers of a takeover perhaps?

Wintertooth
05-01-2012, 09:45
Half-year report was released: http://investor.games-workshop.com/2012/01/05/half-yearly-report/


Mark Wells, CEO of Games Workshop, said:

“An encouraging first half performance in which we have delivered growth in sales, profit and return on capital from our core business. Good progress has been made on our strategic initiatives; these are beginning to show through in results from our Hobby centres. We also received a significant royalty payment which has been recognised in the first half. In line with our policy of distributing truly surplus cash, we are pleased to report that the board is declaring a dividend of 29p per share.”

Jim30
05-01-2012, 09:48
Thanks - that hasnt shown up on my usual share site (lse.co.uk) RNS feed yet.

Jim30
05-01-2012, 09:51
Interesting - first 6 months including price rises only saw a £2m change in sales totals (£62m vs £60m) - In real terms, with inflation and increased pricing that surely means sales were down?
I can see why the market likes it - 29p dividend per share, and large royalty payments. Call me a cynic but if I were the board, and looking for easy money, I'd see licensing as my main future business and not toy soldiers - easy money for next to no effort.

Wintertooth
05-01-2012, 10:01
You'd focus on something that delivers £2-3m revenue a year (they're not releasing another major console game in the second half of the year) rather than something that delivers £120m+ a year, delivering overall profit of £9m a year?

Cynicism isn't the right word for a policy like that, even if the IP had any value without the Studio to create it and the table-top fan-base.

EmperorNorton
05-01-2012, 10:10
You'd focus on something that delivers £2-3m revenue a year (they're not releasing another major console game in the second half of the year) rather than something that delivers £120m+ a year, delivering overall profit of £9m a year?

Cynicism isn't the right word for a policy like that, even if the IP had any value without the Studio to create it and the table-top fan-base.

Obviously this change of operation would have to be more long term than just looking at the second half of the year. :rolleyes:
THQ's Space Marine game sold upwards of 1.2 million copies (that figure was announced in November, so it's probably considerably higher now). I've seen the number of GW's customers estimated to be in the region of one million.
The market for computer games is simply much bigger and since licensing gives GW pure profit I would not be surprised if at some point they decide that making tabletop minis is not worth the effort anymore.


Looking at the report I'm a bit surprised the embargo seems to have had not much of an effect either way.
No word on Finecast, either.
But I'll wait for the more business savvy members to give their interpretation.

Sureshot05
05-01-2012, 10:22
The report is interesting that in terms of model sales, there has been big increases in the US and in Australia (which will undoubtably reinforce their view on the currency exchange rate!) in model buying, but decreases in Europe, and the UK with minor increases in the other areas.

The big increase is due to the royalties, and a surge in the US of nearly 10%. Now GW need to sustain this into the second half of the year. Good for GW and sets them in a good position for when the Hobbit comes out.

Osbad
05-01-2012, 10:31
A £2m increase in income (after adjusting for currency fluctuations) over the £60m from the same period in last year is 3.3%. Now in November the UK CPI was 1.5%, so this is clearly not "Revenue Growth" in any meaningful terms, unless inflation was much, much lower in the rest of the world, which I don't think it was.

Given all the boycott hoohah in May/June though I think GW will be quite happy with the results. If they can increase prices by what was it, 15 - 20% or so on many items, and only lose 1.7% of their turnover then there are forces on their board that would clearly see this as the right decision.

Looking at the Australia revenue line in particular - a 2% fall in revenue (£4.9m vs £5.0 in 2010) when prices increased by nearly 100% on most stuff means they must be selling nearly half the volume.

It puts the lie to the blether that Wells came out with last year blaming poorer than hoped for turnover growth on inexperienced retail staff. One year on and sales are no higher, yet this year the board are somehow happy? It's all corporate double-speak spin and BS.

GW are still comfortable and still festering. Short term profit-grabbing and opportunistic licence-fee windfalls do not a successful company make in the long run. They are so clearly selling toy soldiers to kids quarter on quarter, not developing a niche hobby market for long term growth. There was a short interview with Rick Priestly on 40k Radio last month, and now he is out of his 12month golden handcuff deal he was free to say what he wanted, and he said that what everyone suspects is true is indeed actually true - that GW's sales team drive the development of the game and model line, not the studio.

lbecks
05-01-2012, 10:49
Obviously this change of operation would have to be more long term than just looking at the second half of the year. :rolleyes:
THQ's Space Marine game sold upwards of 1.2 million copies (that figure was announced in November, so it's probably considerably higher now). I've seen the number of GW's customers estimated to be in the region of one million.
The market for computer games is simply much bigger and since licensing gives GW pure profit I would not be surprised if at some point they decide that making tabletop minis is not worth the effort anymore.


Looking at the report I'm a bit surprised the embargo seems to have had not much of an effect either way.
No word on Finecast, either.
But I'll wait for the more business savvy members to give their interpretation.

I don't think they'll ever stop making miniatures. If Video Games do prove to be consistently successful for GW I can see them going a route like Marvel and DC Comics have gone when their movies proved to be hugely successful. Maybe a Video Game studio will acquire GW and GW Miniatures will just be a division.

Pacific
05-01-2012, 11:11
There was a short interview with Rick Priestly on 40k Radio last month, and now he is out of his 12month golden handcuff deal he was free to say what he wanted, and he said that what everyone suspects is true is indeed actually true - that GW's sales team drive the development of the game and model line, not the studio.

Sadly, I don't think that this was ever in doubt.

Surely sales in Aus (and other RoW territories) should have gone up though due to the embargo and customers being forced to buy from retail there (as well as a minor drop in UK sales?)

StraightSilver
05-01-2012, 12:23
I think for me the most telling aspect is the gross profit margin.

I am amazed in the current economic climate that a company can maintain a gross profit of more than 75%.

That would be something to definitely celebrate if the year on year growth was also positive, but when you take into account inflation it has remained constant.

Having said that though any UK company that isn't making a loss is still quite impressive at the moment. :)

However to generate such a high gross margin without an increase in sales must mean that they have massively reduced their operating costs.

I would prefer them to take a hit on their margin and reinvest the capital generated into their retail arm, as I think this suffering at the moment.

Or it could just be that with a gross profit margin of over 75% their prices are simply too high, and a reduction could actually improve overall sales, although I doubt they'd ever convince the shareholders of that. :)

Jim30
05-01-2012, 12:24
Wintertooth - I don't think we'll see GW abandon minis overnight, but if I were the board, and particularly a new board, given we're likely to see key figures leave soon through old age, then I would actively be questioning whether remaining a mini business was in my shareholders long term interest.

GW could probably, with sufficient time, make a tidy profit from licencing out activities, as seen by games, the various WFRP books and boardgames and so on. It provides the perfect opportunity to step back from the cost of being a retailer, but generate low risk profit through good licence deals. I could easily see it ocurring, particularly if there was a major rise in the cost of raw materials.

Never forget the GW board is in this to make a lot of money for its shareholders, and it will always take those decisions as a priority, and not the interests of the hobbyists.

New Cult King
05-01-2012, 12:33
Ah well. As much as I was hoping they would get enough of a wake-up call to change a few things about their business, it looks like their model works for them.

lanrak
05-01-2012, 16:05
Lets just wait for the full years report shall we...economic recession and increased pull of other companies products, may increase the loss of sales volume later in the year.

And GW cannot keep raising prices to make up for lost sales volume forever.
(Just till Kirby retires maybe?)

Spectrar Ghost
05-01-2012, 17:04
Does anyone know what the "all other sales buisnesses" and "product and supply" groups consist of? They seem to be the primary driver of increased operating profit, at 800k and 700k of the 1.3m increase over last year's same period.

lbecks
05-01-2012, 18:49
Wintertooth - I don't think we'll see GW abandon minis overnight, but if I were the board, and particularly a new board, given we're likely to see key figures leave soon through old age, then I would actively be questioning whether remaining a mini business was in my shareholders long term interest.

GW could probably, with sufficient time, make a tidy profit from licencing out activities, as seen by games, the various WFRP books and boardgames and so on. It provides the perfect opportunity to step back from the cost of being a retailer, but generate low risk profit through good licence deals. I could easily see it ocurring, particularly if there was a major rise in the cost of raw materials.

Never forget the GW board is in this to make a lot of money for its shareholders, and it will always take those decisions as a priority, and not the interests of the hobbyists.

There was an article on Forbes that I read a few weeks ago about a book that related to your final sentence. It's an interesting read:
http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/

rodmillard
05-01-2012, 20:57
As a niche business, we, in general terms, neither benefit nor suffer from macro economic factors as our current results show. The Hobby is healthy and the challenge is to stay focused on what needs to be done to service it efficiently and cost effectively.

Male Bovine Faeces.

I have to give credit to the economists working at GW (not the accountants, the economists) they have played the global recession well, but to say their core business has been unaffected by it is a metric tonne of cow manure. They had not anticipated the Eurozone crisis, and it shows in the fact that sales in continental europe fell by ~3%.

I said it in 2009, and it's still true: the way for a niche business to weather the recession is to anticipate the drop in sales and raise prices accordingly, thereby maintaining constant turnover. However much we as customers may dislike it, this is what GW have done and they appear to have judged it perfectly - but they are far from unaffected by the global economy, they are just riding over it in the only way they can.

A few other points of interest (I haven't read it in detail yet): of the £2.7 million increase in revenue, £1.6 million came from the increase in royalties, and a further £49,000 is attributed to currency fluctuations affecting the value of overseas sales in Sterling. That means that their core business revenue increased by ~£1 million, or 1.6%. UK Inflation in November 2011 stood at 4.8%, so in real terms their core business shrank by ~2.8% even though revenue and profits increased.

Despite the Embargo, sales in Aus continue to fall, although not as fast as they were. Whether they consider this arrested decline to be enough justification to maintain the Embargo remains to be seen, but IMO it is clear from this evidence that the drop in Australian Sales was NOT due to the availability of cheap imports. The Embargo merely treats the symptoms, not the cause (rather like pumping a patient with pneumonia full of paracetamol and proclaiming the treatment a success when their temperature stops rising, even though you should be giving them antibiotics if you want them to survive).

So, credit where its due they have adopted the right business model to survive the macroeconomic factors that they claim they are immune to, and avoid the fate of other UK companies that rely extensively on trade with the Eurozone, but there are signs that it may not work for much longer...

Dr Zoidberg
05-01-2012, 21:31
Surely sales in Aus (and other RoW territories) should have gone up though due to the embargo and customers being forced to buy from retail there (as well as a minor drop in UK sales?)

No, because that works on the assumption people in Aust (and RoW) are willing to pay their local RRP.

I think you'll find that they aren't/weren't, hence why so many of us were buying from overseas in the first place.

With the embargo in place, people didn't simply shrug their shoulders and say 'oh well, now I need to pay almost 100% more for the same product'. They simply stopped buying (either totally or in part).

So that sales figures from Aust have dropped makes perfect sense. What will be interesting to see is what the sales figures here are like 12-18 months after the date of the embargo.

Of course, the release of 6th Ed this year will create a bubble as people who are still buying/playing will buy the new rules and/or box set.

EmperorNorton
05-01-2012, 21:47
No, because that works on the assumption people in Aust (and RoW) are willing to pay their local RRP.

I think you'll find that they aren't/weren't, hence why so many of us were buying from overseas in the first place.

With the embargo in place, people didn't simply shrug their shoulders and say 'oh well, now I need to pay almost 100% more for the same product'. They simply stopped buying (either totally or in part).

That makes sense to me, but where is the corresponding drop in UK sales?
Sales there were up, if only by a small amount. Is the price increase masking the drop?

lbecks
05-01-2012, 21:59
That makes sense to me, but where is the corresponding drop in UK sales?
Sales there were up, if only by a small amount. Is the price increase masking the drop?

I think amidst all the economic wrangling in the last half year GW did make kits that people wanted to buy and did buy. The fantasy push was apparent and I personally bought dreadfleet.

Reinholt
05-01-2012, 22:47
Very back of the envelope here on sales volumes:

Using constant currency revenue, and assuming GW increased prices by approximately 10% across the board over the year, I see the following sales volumes changes by major region:

UK: down ~8%
EUR: down ~12%
NA: down ~1%
AUS: down ~11%

Now, part of the question is also how much of the UK / EUR drop is displaced Australian sales, and how much of the US non-drop is Australian sales flowing there, as it's easier to purchase from distributors and ship to Australia from the US.

So it's more of the same story for GW. Flat to very slightly increased sales revenue, large downward trend in sales volume.

An ominous long-term trend if they can't reverse it, but short-term they remain cash flow positive and operationally functional.

Jim30
05-01-2012, 22:54
Reinholt -tvm for that, I've taken the liberty of reposting on one of the stock market forums I frequent as its useful analysis.

New Cult King
05-01-2012, 23:24
@Rodmillard - I don't think GW were being clever. I just think their yearly price increases coincidentally helped them ride the trough in the economy :p

SugarShark
06-01-2012, 00:03
do businesses rely on customers to carry them through tough times or vice versa
both?

lbecks
06-01-2012, 00:17
do businesses rely on customers to carry them through tough times or vice versa
both?

GW is in the business of making their customers happy. And in turn customers will pay money for that happiness.

decker_cky
06-01-2012, 02:46
Wintertooth - I don't think we'll see GW abandon minis overnight, but if I were the board, and particularly a new board, given we're likely to see key figures leave soon through old age, then I would actively be questioning whether remaining a mini business was in my shareholders long term interest.

GW could probably, with sufficient time, make a tidy profit from licencing out activities, as seen by games, the various WFRP books and boardgames and so on. It provides the perfect opportunity to step back from the cost of being a retailer, but generate low risk profit through good licence deals. I could easily see it ocurring, particularly if there was a major rise in the cost of raw materials.

Never forget the GW board is in this to make a lot of money for its shareholders, and it will always take those decisions as a priority, and not the interests of the hobbyists.

Need to maintain the mini business to successfully licence. See Marvel and DC.


I don't think they'll ever stop making miniatures. If Video Games do prove to be consistently successful for GW I can see them going a route like Marvel and DC Comics have gone when their movies proved to be hugely successful. Maybe a Video Game studio will acquire GW and GW Miniatures will just be a division.

Bingo. Even if the mini business basically is break even, GW could probably do quite well by depending on licensing for their main profit margins. Licensing some of their properties to movie studios would be a good idea IMO.

New Cult King
06-01-2012, 03:06
I would still buy WH40K action figures, if they were the quality of the the WoW figurines, if they ever went that route.

Liber
06-01-2012, 04:35
the way for a niche business to weather the recession is to anticipate the drop in sales and raise prices accordingly, thereby maintaining constant turnover.

And exacerbating the drop in sales!


See this is why I still disagree with these price hikes, people stop buying as much (in this example because of the Eurozone financial crisis) so raising prices is a ******* thing to do, as all it does is further lower the sales volume...effectively breaking even. Which is all GW seems to do lately.

tu33y
06-01-2012, 09:22
i am sort of saddened they have not had their wake up call... i was really hoping this new year would show the genuine PERCEPTION that gamers have that GW stuff is about 30% too expensive. but i am also quite impressed that it is weathering the economic storm, keeping pople in Britain in jobs, paying taxes in the UK economy, making Nottingham, (where I live) that little bit more stable...

maybe they HAVE to be so expensive? i dont know. cutting retail price would be a massive gamble. especially as how the current system is working, the standard of the plastic kits are improving with each release and the second core game, WHFB, is starting to recover.
Maybe kirby is no dunce after all...

blongbling
06-01-2012, 10:24
There was an article on Forbes that I read a few weeks ago about a book that related to your final sentence. It's an interesting read:
http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/

Great article and interesting to see how they interpreted the results of Welch and GE as well, I didn't realise that his results were so close and were engineered.

Really does drive home the fact that GW is driven by the need to satisfy the shareholder, this has been the case for a log time though and isn't really anything new. The issue is that in order for GW to focus on the customer they need to have enough profit being generated within the business to satisfy the shareholders first. The examples of P&G and Apple are ok but those companies were in a position where they "could" focus on the customer as they had established a position of returns to the investors and then built their reputation for the customer as a result.

Something to add to this, jsut read this quote from Steve Jobs: His mission, he says, was plain: to “build an enduring company where people were motivated to make great products.” Then he turned to the rise and fall of various businesses. He has a theory about “why decline happens” at great companies: “The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesman, because they’re the ones who can move the needle on revenues.” So salesmen are put in charge, and product engineers and designers feel demoted: Their efforts are no longer at the white-hot center of the company’s daily life. They “turn off.” IBM [IBM] and Xerox [XRX], Jobs said, faltered in precisely this way. The salesmen who led the companies were smart and eloquent, but “they didn’t know anything about the product.” In the end this can doom a great company, because what consumers want is good products...........

silks
06-01-2012, 10:29
Where do the sales to resellers such as Maelstrom and Firestorm who used to ship to Australia / rest of the world but can now longer come into this? Do they count as lost UK sales or is Trade seperate?

shelfunit.
06-01-2012, 10:31
The indies fall into whichever country they order from - so Maelstrom/Wayland/Darksphere will fall into the UK section, and the Warstore etc would be in the North America section. The idea that people from Aus suddenly stopped using Maelstrom etc and started buying direct from Aus has been spectacularly shattered from these figures, as even less revenue is being generated in Aus now than pre-embargo.

Ozorik
06-01-2012, 10:41
UK: down ~8%
EUR: down ~12%
NA: down ~1%
AUS: down ~11%


However you look at it that is bad news for GW. Are these their worse cumulative sales figures?

FabricatorGeneralMike
06-01-2012, 11:22
GW is in the business of making their customers happy. And in turn customers will pay money for that happiness.


Wrong, GW are in the market of making toy solders and selling them to children. Period. End of statment. ANYTHING else is just icing on the cake.

The games are just a by-product of the models. All they are there for is to help sell the models.

EvilMonkee
06-01-2012, 11:47
Sales revenue now = an inelastic price demand? I think so.

I think the way forward for GW is to trim back on the stores, apart from a few key hubs - save all that money for capital investment in online driven sales and marketing and push the licensing side of things.

Turn stores into hobby centres not mini showrooms with staff pushing the latest releases, concentrate on making the customer key to your business strategy whilst realigning your sales to a lower cost internet alternative.

This would allow them to lower prices. Think how much all those stores cost - retailing in the 21st century is going more and more online and the high street model is rapidly disappearing - GW need to realise this and adjust.

Osbad
06-01-2012, 12:10
All GW "need" to do, to improve things longer term is to bring back the concept of offering "value for money" to their customers. If they had that as their overall goal as opposed to so transparently squeezing their remaining customers for as much as possible, then maybe they recapture some of their lost customer loyalty.

As it stands though, there is an inevitable end to the process when they reach the one customer in the world prepared to pay £100m for a single model. Or possibly before then...

Crymson
06-01-2012, 12:28
The indies fall into whichever country they order from - so Maelstrom/Wayland/Darksphere will fall into the UK section, and the Warstore etc would be in the North America section. The idea that people from Aus suddenly stopped using Maelstrom etc and started buying direct from Aus has been spectacularly shattered from these figures, as even less revenue is being generated in Aus now than pre-embargo.

I continued to buy from Maelstrom, but other companies got my money instead of GW.

Misfratz
06-01-2012, 15:17
..assuming GW increased prices by approximately 10% across the board over the year..Why 10%?

I looked at this a while ago, and I reckoned the long-term GW inflation rate was 5% per annum, and that was being a bit unfair because it ignored the increase in quality from monopose plastics.

If you use a 5% inflation rate then their unit sales are still down, but only marginally.

Osbad
06-01-2012, 15:57
Why 10%?

I looked at this a while ago, and I reckoned the long-term GW inflation rate was 5% per annum, and that was being a bit unfair because it ignored the increase in quality from monopose plastics.

If you use a 5% inflation rate then their unit sales are still down, but only marginally.

The 10% figure Reinholt used was an estimate of the increase in May 2011 as the figures under comparison are just for the one year. Whatever price rises GW may have implemented in the past are irrelevant for this single year comparison of data.

IIRC the price rises in 2011 were pretty hefty and higher than for many years.

Misfratz
06-01-2012, 16:29
The 10% figure Reinholt used was an estimate of the increase in May 2011 as the figures under comparison are just for the one year. Whatever price rises GW may have implemented in the past are irrelevant for this single year comparison of data.

IIRC the price rises in 2011 were pretty hefty and higher than for many years.How you estimae an average is important. The most hefty price rises were on the metal to finecast transition, but those have relatively small sales volumes.

If I remember correctly, the price rises on plastic sets were much more modest. Without having a detailed breakdown of GW unit sales a long-term average provides a more reliable estimate.

lbecks
06-01-2012, 19:36
Wrong, GW are in the market of making toy solders and selling them to children. Period. End of statment. ANYTHING else is just icing on the cake.

The games are just a by-product of the models. All they are there for is to help sell the models.

Models don't make children happy? Happy children don't make parents happy?

lbecks
06-01-2012, 19:44
Great article and interesting to see how they interpreted the results of Welch and GE as well, I didn't realise that his results were so close and were engineered.

Really does drive home the fact that GW is driven by the need to satisfy the shareholder, this has been the case for a log time though and isn't really anything new. The issue is that in order for GW to focus on the customer they need to have enough profit being generated within the business to satisfy the shareholders first. The examples of P&G and Apple are ok but those companies were in a position where they "could" focus on the customer as they had established a position of returns to the investors and then built their reputation for the customer as a result.

Something to add to this, jsut read this quote from Steve Jobs: His mission, he says, was plain: to “build an enduring company where people were motivated to make great products.” Then he turned to the rise and fall of various businesses. He has a theory about “why decline happens” at great companies: “The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesman, because they’re the ones who can move the needle on revenues.” So salesmen are put in charge, and product engineers and designers feel demoted: Their efforts are no longer at the white-hot center of the company’s daily life. They “turn off.” IBM [IBM] and Xerox [XRX], Jobs said, faltered in precisely this way. The salesmen who led the companies were smart and eloquent, but “they didn’t know anything about the product.” In the end this can doom a great company, because what consumers want is good products...........

I think where GW is falling flat is the "creating customers" part of the whole scenario. In the US at least they're doing almost nothing to create customers. And it's an area they've been in 20+ years where there's a factory so they've already made an investment to be here.

Reinholt
06-01-2012, 21:37
If you want a long-term to current estimate, the number that I had roughly computed for 1999-mid 2010 was roughly 8-9% per annum. This is not far off the 10% that I used here.

The quality discussion for GW is a dangerous one. On one hand, I agree the models are significantly greater in quality. On the other hand, I agree that one monopose marine or one new multi-part marine are still the exact same item in the game, and I need the same number of them.

So by some measures quality may have improved, but by others, it is static. I don't have a strong interest in going down this path, and I'm not looking at GW "inflation" metrics, I'm trying to estimate how many customers they have. For that, I need raw unit volume, not quality-adjusted unit volume.

I do agree this is a back of the envelope approach, and if you are very generous with your assumptions you could concievably argue that GW is treading water instead of losing customers (though a minor loss is still the most likely outcome). However, what you pretty much can't argue without extremely aggressive assumptions is that they are gaining customers.

Therein lies the problem, especially if GW management believes their own rhetoric about burnout vs. recruitment. This also leaves unaddressed the issue of costs being high in the wrong places (entry cost) relative to competition.

IJW
06-01-2012, 21:50
I'm tempted to compare the original price of the RTB01 box set to modern snap-fits but that'd be moving into price discussion territory... ;)

yabbadabba
06-01-2012, 23:49
that GW's sales team drive the development of the game and model line, not the studio. Told yer so ;)

Still, as Rick said it I suppose I shouldn't be too insulted :angel::D

yabbadabba
06-01-2012, 23:52
The salesmen who led the companies were smart and eloquent, but “they didn’t know anything about the product.” In the end this can doom a great company, because what consumers want is good products........... I lost count of the number of times we discussed this over the years.

Hey ho.

Killgore
07-01-2012, 00:04
All GW "need" to do, to improve things longer term is to bring back the concept of offering "value for money" to their customers. If they had that as their overall goal as opposed to so transparently squeezing their remaining customers for as much as possible, then maybe they recapture some of their lost customer loyalty.



Compare the old kits to the models GW are producing now.

I think even with the price increases we are getting better value for money, however this has always been a subjective issue.

The fact that GW are generating a profit considering some of the changes that have occurred over the last 6 months (economy, finecast change-over, trading terms) proves the company is in no immediate danger of going down the pan, thank goodness and that there is still customer loyalty for GW products.

Shimmergloom
07-01-2012, 02:09
Compare the old kits to the models GW are producing now.

I think even with the price increases we are getting better value for money,

Exactly. The orc regiment made today is so much higher quality than the orc regiment of 14 years ago...oh wait.

Llew
07-01-2012, 02:41
First off, finding that Forbes article on here has increased the value of the time I waste on gaming forums all worth it.

It's clear the GW hasn't been punished severely enough yet to reverse course. Good for them and the people who are happy buying their products. I'll still be interested in seeing the complete end of year numbers.

Night Bearer
07-01-2012, 03:23
A couple things that may or may not matter here.

There's an excellent (IMO) interview with Rick Priestley that 40k Radio (which I otherwise avoid) did last summer, and they brought up the common perceptions of GW as the originally gamer-made private company vs the now public-traded company run by non-gamers. Rick seemed to clarify and/or shoot down what seem to be a few common myths (and this is a guy who didn't really pull punches about his former employers):

1. He said the real cultural change wasn't when the company went public, but Kirby's management buyout in 1991. The real cause being that Kirby (the primary owner) had borrowed 10 million or so pounds to finance the purchase and he was under real pressure to pay that back - with interest - to the small group of investors that had lent him the money. Rick stated that the later going public had little or no effect on the culture - the perceived 'sales first' culture was already in place by then.

2. He said that, for biz reasons, you have to hire people based on their competency, not hobby knowledge, to run the company, but he said you'd be surprised how quickly such hires in management and sales became gaming converts. They may start out not knowing much, but they get into it - in other words, the 'run by non-gamers' is not the issue many GW customers seem to think it is.

3. Rick claims that the real primary pressure within GW is not investors/company, but sales/studio. The biggest pressure to make rules/models strictly for profit motives rather than gaming/hobby motives comes from sales. He says this is a combination of the sales staffs exploding in size once they started opening GWUS, GW Australia, GW Germany, etc., and the subsequent 'political' shift of power from the single UK studio to all these regional sales offices, and that sales peeps overwhelmingly focus on the here and now and replicating success. His specific example is that Terminators sell (or sold) so well that at one point (at least), sales were pressuring the studio to come up with 'Tyranid Terminators' and 'Eldar Terminators' and whatnot. He also mentioned that it was sales that was driving the current monster trend in 8th edition, because they wanted a fantasy equivalent to 40k vehicle kits, which apparently are big sellers and/or relatively lucrative mark-ups (wasn't clear on that).

He also mentioned that GW is a very inward-looking company, which I got the impression he felt was both a strength and a weakness across the board, including rules and model design, sales and pricing, customer relations, etc.

simonr1978
07-01-2012, 05:54
I'm tempted to compare the original price of the RTB01 box set to modern snap-fits but that'd be moving into price discussion territory... ;)

OT but I posted this back in March last year, not comparing to the snap fits though but to the modern multi-parts:

http://www.warseer.com/forums/showthread.php?p=5374491&highlight=games+workshop+pricing#post5374491

TLDR, it was somewhere between over 2.5 times to over 3 times more expensive (After taking inflation into account) to collect a fully mechanised Marine Comany and back then you'd have at least 20 Marines spare.

Omniassiah
07-01-2012, 06:45
2. He said that, for biz reasons, you have to hire people based on their competency, not hobby knowledge, to run the company, but he said you'd be surprised how quickly such hires in management and sales became gaming converts. They may start out not knowing much, but they get into it - in other words, the 'run by non-gamers' is not the issue many GW customers seem to think it is.


The issue with employee converts is they often have a very distorted view of their own price structure. I work for a US games distributor so have access to an extremely nice employee discount on all the gaming stuff we carry including GW stuff. So for me starting a new GW army is not that much of an outlay of cash but I'm not paying anywhere close to retail. If that was the only experience that I'd have with the game there is a much better chance I would think you all were idiots for complaining that the price was to high on GW stuff.

Hena
07-01-2012, 11:40
I decided to take a closer look at the core sales of the business in page 11. This brings up information in attachment 1. What can be seen is that UK, Cont Europe, Asia and Autralia profits shrunk, while Northern America and Emerging and Capital Cities (EM&CC) grew modestly and Other and Product and Supply grew noticeably. However due to juggling of where the profits are reported this isn't quite exact. Meaning Scandinavian profits were moved out of UK into EM&CC. Now they report that last interim report had 1810 k£ profit for UK while after checking that report it had 2524 k£. Thus that 700 k£ is Scandinavia which is alone most of that EM&CC group.

But looking at the main profit makings parts.

Other includes Forge World and Black Library (and Warhammer World, but I don't think it's turn over matches the other two, could be wrong), which are probably driving it's profits and they seems to be in good situatuation.

Product and supply. This includes the design and manufacture of the products and incorporates production facilities in the UK, North America and until November 2010 in China. So that's the stock. I don't know how the profit is calculated for that so can't comment that much.

Last item in p11 which generates the profit is Licencing which jumped quite much between the two.

So it would seem that GW growth is currently generated by other business than it's own miniature sales.

Max Jet
07-01-2012, 11:41
I lost count of the number of times we discussed this over the years.

Hey ho.

Funnily I remember Reinholt stating it quite some times but not you. Must be the way you both discuss such matters with other users.

Spectrar Ghost
07-01-2012, 13:02
Thank you Hena for that analysis, I posted about Other and Supply being the main drivers of growth a bit back, but was unsure of what exactly they entailed. My question got lost to the page change though.

Liber
07-01-2012, 14:26
He also mentioned that it was sales that was driving the current monster trend in 8th edition, because they wanted a fantasy equivalent to 40k vehicle kits, which apparently are big sellers and/or relatively lucrative mark-ups (wasn't clear on that).


I had a strong gut feeling about this one. But for once, the sales people are right.

Who doesn't like big scary monsters/warmachines in their hobby? A tiny minority thats who, most people (myself included) welcome this 8th ed trend.

That said I wouldn't want to see it continue after all armies have their 8th ed release.


...Thank goodness the studio shot down that "everybody gets terminators" idea, I don't play 40k anymore, but reading that still made me fill rather ill :eyebrows:

6mmhero
07-01-2012, 15:55
I may have to give That interview with Rick a listen.

As for the monster situation, I like it. Warhammer should be about monsters and magic. I understand that this is not everyones cup of tea. I have had some of the best games of Warhammer in 8th and I have played since the box with the High Elves and Goblins in it.

As to the figures I think the full year results will show how well they are doing and see where they are falling down etc.

Sgt John Keel
07-01-2012, 18:06
Product and supply. This includes the design and manufacture of the products and incorporates production facilities in the UK, North America and until November 2010 in China. So that's the stock. I don't know how the profit is calculated for that so can't comment that much.


I would assume that the P&S operations sell the product internally and to independent retailers, and the profits for the Sales businesses is the extra made after paying P&S for the product and other expenses, no?

Reinholt
07-01-2012, 19:42
The sales / production relationship is always a bit complicated to manage, as you do need the perspective on both sides.

On one hand, you can't have your company producing things that don't sell and aren't what consumers want.

On the other hand, you can't produce things only with short-term sales or backwards looking trends in mind, as you have to produce quality product.

The truth is in the middle; if terminators sell well, the question should be why, not how to produce knock-offs for other armies. If something doesn't sell, the same question should be asked.

There always has to be a balance.

Night Bearer
07-01-2012, 21:22
As Rick seemed to describe it, it wasn't that the Termies were selling well because of rules, but because the models looked cool - sales wasn't asking for 'versions' of Termies for other armies, but for other armies to have access to them so more gamers could buy the Terminator models.

lbecks
07-01-2012, 21:30
I had a strong gut feeling about this one. But for once, the sales people are right.

Who doesn't like big scary monsters/warmachines in their hobby? A tiny minority thats who, most people (myself included) welcome this 8th ed trend.

That said I wouldn't want to see it continue after all armies have their 8th ed release.


...Thank goodness the studio shot down that "everybody gets terminators" idea, I don't play 40k anymore, but reading that still made me fill rather ill :eyebrows:

I agree, i really like the big monsters. And there have always been big monsters around, just kind of smaller since they were made out of metal.

As for the terminator thing, it's not terminators but each race does have some kind of large humanoid walker thing. SM/CSM Dreadnought, Dark Eldar Pain Engine, Tau Battlesuit, Eldar Wraithlord, Tyranid lots of things. I think it's important that the sales members have a "GW fan mentality" in their brains and the design team have the same. Having that mentality with the freedom to try new things can also keep everyone one step ahead of the fans and always surprising and making them happy.

96mgb
07-01-2012, 21:34
Hang on so if i buy shares today then i get the dividend paid to me? Whats the catch?

lbecks
07-01-2012, 21:50
Hang on so if i buy shares today then i get the dividend paid to me? Whats the catch?

GW stock is almost 800 dollars.

Sgt John Keel
07-01-2012, 22:00
GW stock is almost 800 dollars.

UK stock prices are quoted in pence.

Anyway, there should be a cutoff date of acquisition for stock eligible to receive dividends, but I can't be bothered to look it up. (Also anyone selling will naturally have factored the dividend into the price.)

lbecks
07-01-2012, 22:05
UK stock prices are quoted in pence.

Anyway, there should be a cutoff date of aquisition for stock eligible to receive dividends, but I can't be bothered to look it up. (Also anyone selling will naturally have factored the dividend into the price.)

That makes a lot more sense now.

I think my next army will be . . . GWplc.

96mgb
07-01-2012, 22:09
Its the 20th jan according to the report.

Misfratz
07-01-2012, 22:12
If GW sales had a lot of influence over the design studio then I'd guess that we would have had plastic Nobz in Mega Armour by now. So the story about Terminators makes me think that either the sales people have less influence than I previously thought, or GW are somewhat incompetent.

Sgt John Keel
07-01-2012, 22:12
Its the 20th jan according to the report.

Reasonably you could expect the stock to fall by 29p on the 20th (21st?) then.

Deadnight
07-01-2012, 22:57
If GW sales had a lot of influence over the design studio then I'd guess that we would have had plastic Nobz in Mega Armour by now. So the story about Terminators makes me think that either the sales people have less influence than I previously thought, or GW are somewhat incompetent.

"spesh mereens seem to sell well. studio peeps, make MOAR spesh mereens! at least half the rulebooks should be spesh mereens i think!"

yeah, being honest, i can see it :)

yabbadabba
07-01-2012, 23:38
Funnily I remember Reinholt stating it quite some times but not you. Must be the way you both discuss such matters with other users. Funny, while I discussed this with more than a few of my fellow work colleagues, I don't remember discussing any of this with you during the years I worked for GW.

Maybe its time you grew up a little Max Jet.

Commissar Vaughn
08-01-2012, 00:04
...Thank goodness the studio shot down that "everybody gets terminators" idea, I don't play 40k anymore, but reading that still made me fill rather ill :eyebrows:

Well you say that....but its a very "Back to basics" idea for 40k when you think about it: Remember back in the day when we were all knee high to a grasshopper and every army could have power armour, Rhino's, Landraiders, Landspeeders etc?

eriochrome
08-01-2012, 04:49
Looks like all the gain in revenue is in North America and Other Sales (Forge World and Black Library). Interesting that the Revenue for Production and Supply was down even with the price increases which definately means lower volume.

iamfanboy
08-01-2012, 05:15
It's almost a bit out of a really bad sketch comedy:

EXEC A: Dammit, we're hemorrhaging customers, our core business is down alarmingly, the only places we're actually GAINING anything are the places without our official retail stores dominating the market, and the only reason we're still afloat is because we've been selling video games licenses like mad. WHAT DO WE DO?

EXEC B: ....Raise prices, cut our paint inventory, put out another Space Marine book?

EXEC A: ......BRILLIANT. Cut yourself a 200k bonus check.



Remember, last year's financial report was conspicuously missing the data on the percentage of independent vs. retail sales that was present in all the other official financial reports I've read back to '98; they're not above massaging data to make their stupidity look less.... stupid.

Wulgar13
08-01-2012, 05:37
About the 29 pence dividend....Thanks royalties, ( and the board)..I'll take it.....

But did anyone else notice that George Soros bought 4%? (at least I assume SFM UK Management and Quantum Partners means George Soros bought some.....) - check out the share announcements....

That's just got to be a dividend play, right? I think he got 1.2 million shares, so he'll get what 348,000 pounds guaranteed return....not to mention if he sells at the right time after.....

Wintertooth
08-01-2012, 13:05
assuming GW increased prices by approximately 10% across the board over the year
Show your working please. Based on the trade spreadsheets that were doing the rounds, they increased the prices of ~25% of the range, for an average increase of about 3.5%. How do you get from there to 10% across the board?

paddyalexander
08-01-2012, 14:14
@ Wintertooth - Where are you getting the idea that gwPLC only increased the the prices of 25% of the range? There was only a small number of products not incresed in the last "price adjustment". Those that were, increased by between 3% and 25%, not including "stealth" increases like models being reboxed into smaller quantities or reboxed from single blisters into multi-model box sets.

Here's a full list of what was increased and by how much in May 2011

https://docs.google.com/spreadsheet/ccc?pli=1&key=0An-qBba7fMe1dEl5dG9uUlVwbTZmUmt4cElqcWNEelE#gid=0

Quite framkly an average increase of only 10% over the year is being conservitive.

Reinholt
08-01-2012, 14:35
A couple of things:

On price increases

10% is the very rough round number I have used based on their historical rate of price increases worldwide; this may vary in any year, this year is more of a pain than usual thanks to continued currency fluctuation issues, an unclear volume of rest-of-world sales having a 50% to 100% price increase, and the fact that GW changes box composition when releasing new armies, leading to pricing variation for several lines that were released. I also didn't back out BL revenues, which someone above me pointed out are up significantly. 5% gives you sales volumes that are still down in the single digit percentage range. 15% pushes them down more. I also don't know where you got only 25% of the range going up... that doesn't jive with the pricing I have seen in the US or the UK.

If you want to use your own assumptions, it's easy to come up with your own numbers. All the balance sheet information is public domain.

What I am looking for is a rough number that will hold broadly across a bunch of assumptions about all these things. The picture, as I stated above in this thread, is that you end up with sales volume somewhere between mildly down to flat if you use assumptions that are very generous to GW. If you disagree and see growth or a precipitous drop in volume, please explain.

On stock prices

Some factual information before my head explodes because of the misconceptions in this thread:

1 - UK prices are in pence, as stated above. That's cents for the US crowd. A share price of 800 means 8 pounds.

2 - Dividends do not provide magical earning opportunities or everyone would pile in when one was announced. Here is the usual trend:

Dividend is announced, and ex-dividend date is set (that is the date you have to own the stock at to receive the dividend).

Ex-dividend date occurs, and the valuation of the stock falls (because now you won't receive the dividend if you buy it after that date), usually by the exact amount of the dividend per share or very close to it (bid/offer, time value of money, etc. all add a little wiggle room).

Dividends are paid to those who owned the stock just before it went ex-dividend.

Rinse and repeat.

eriochrome
08-01-2012, 16:15
So what does this say about the embargo. Australia revenue was up less than 10% which is lower than the average currency change from June-Nov 2010 and June-Nov 2011. Not to mention the normal price increase. The sales department for AU also lost more money than the previous year but their sales probably added about a 1 M pounds(5M to 62M revenue divided into the 12M profit of supply) to Production profits so the 277K loss is not so bad for the company.

snake-eyez
08-01-2012, 20:40
Reasonably you could expect the stock to fall by 29p on the 20th (21st?) then.

Yes, and this is the norm for most businesses listed on any share market.

Thinking of GW shares, its almost tempting to consider if all the members of warseer (and other forums) could buy a sizable chunk of GW's shares collectively to have a significant voting interest (then we can proxy our votes to someone like Wintermute).

I'm not saying GW do everything terrible, but it would be nice if we could put forward the money to make some changes for the better. They sell huge volumes in $$ a year, but with profits being fairly low, their market value on the stock market cant be too high.

blongbling
09-01-2012, 08:16
A couple things that may or may not matter here.

There's an excellent (IMO) interview with Rick Priestley that 40k Radio (which I otherwise avoid) did last summer, and they brought up the common perceptions of GW as the originally gamer-made private company vs the now public-traded company run by non-gamers. Rick seemed to clarify and/or shoot down what seem to be a few common myths (and this is a guy who didn't really pull punches about his former employers):

1. He said the real cultural change wasn't when the company went public, but Kirby's management buyout in 1991. The real cause being that Kirby (the primary owner) had borrowed 10 million or so pounds to finance the purchase and he was under real pressure to pay that back - with interest - to the small group of investors that had lent him the money. Rick stated that the later going public had little or no effect on the culture - the perceived 'sales first' culture was already in place by then.

2. He said that, for biz reasons, you have to hire people based on their competency, not hobby knowledge, to run the company, but he said you'd be surprised how quickly such hires in management and sales became gaming converts. They may start out not knowing much, but they get into it - in other words, the 'run by non-gamers' is not the issue many GW customers seem to think it is.

3. Rick claims that the real primary pressure within GW is not investors/company, but sales/studio. The biggest pressure to make rules/models strictly for profit motives rather than gaming/hobby motives comes from sales. He says this is a combination of the sales staffs exploding in size once they started opening GWUS, GW Australia, GW Germany, etc., and the subsequent 'political' shift of power from the single UK studio to all these regional sales offices, and that sales peeps overwhelmingly focus on the here and now and replicating success. His specific example is that Terminators sell (or sold) so well that at one point (at least), sales were pressuring the studio to come up with 'Tyranid Terminators' and 'Eldar Terminators' and whatnot. He also mentioned that it was sales that was driving the current monster trend in 8th edition, because they wanted a fantasy equivalent to 40k vehicle kits, which apparently are big sellers and/or relatively lucrative mark-ups (wasn't clear on that).

He also mentioned that GW is a very inward-looking company, which I got the impression he felt was both a strength and a weakness across the board, including rules and model design, sales and pricing, customer relations, etc.

Interesting take on this from Ricks point of view, the studio side of things. From the sales point of view it was all about making things that would sell at a good price point rather than things which the studio wanted to make.

Clearly those two things aren't mutually exclusive but it sure felt like it at times when most of the decisions about box sizes, contents and product lists were driven centrally by the studio and the sales compaines were "informed".

I am surprised at Ricks talk of recruiting for skills, maybe at board level but at the middle mgt level and down you were recruited for "fit" and not your skills and also for what is the current fashion for staff recruitment at that time.

blongbling
09-01-2012, 08:18
If GW sales had a lot of influence over the design studio then I'd guess that we would have had plastic Nobz in Mega Armour by now. So the story about Terminators makes me think that either the sales people have less influence than I previously thought, or GW are somewhat incompetent.

Sales has/had almost no input into the products made, this is centrally driven, as is the pricing and box contents listing

Liber
09-01-2012, 10:15
...tempting to consider if all the members of warseer (and other forums) could buy a sizable chunk of GW's shares collectively to have a significant voting interest (then we can proxy our votes to someone like Wintermute).



I kinda like this idea.

lanrak
09-01-2012, 10:47
Hi Blongbling.
What do you mean by 'centraly driven'?

If the primary focus is selling minatures in the short term.(Culture re-inforced from the top down.)

Then 'centraly driven' means everyone focusing on short term minature sales?
Doesnt it?

Eg Make another SM chapter codex for a quick turn around of new minatures (SM sprue + bling =£££££)And a quick cash injection.
OVER adressing issues of armies using codexes 2 editions old....

Using the 'term centraly' driven implies to me that ALL concerns and views are concidered equaly , resulting in a ballanced approach to development and marketing.

EG
Not making a model that is prohibitivle expencive/dificult to manufacture ,but regular updates of ALL factions within a system , irrespective of minature release dates.
Resulting in...

Army composition/ PV information updated when required,to improve game ballance.

New (approved) minatures released with background books to inspire purchases based on asthetic qualities.(Painting ,modeling, and background etc.)

The way GW plc operates seems to be very one dimentional.
Pushing short term sales at the detriment of long term growth.

I can totaly understand Mr kirby pushing this to make as much money for himself before he retires.(Share divedend payouts in the £Ms!)

blongbling
09-01-2012, 12:26
Hi Blongbling.
What do you mean by 'centraly driven'?


Sorry, centrally driven means that the HO drives the business out to the sales companies, HO being the central point. Within that is also the fact that the studio is more central to that as well, with them centrally driving lots of things including pricing, product design and sales strategy

Omniassiah
09-01-2012, 13:02
Sorry, centrally driven means that the HO drives the business out to the sales companies, HO being the central point. Within that is also the fact that the studio is more central to that as well, with them centrally driving lots of things including pricing, product design and sales strategy

Remember that the HO(Head Office) also has the marketing group which is in charge of sales. And that's what they were talking about when they said the studio was being controlled by sales, the marketing department was telling or at least heavily pressuring the studio to do things a certain way to facilitate things down the sales line.

xxRavenxx
09-01-2012, 13:34
I am shocked that a games company puts a focus on profit.


[Spoiler alert]: Jesus dies at the end of the bible...

iamjack42
09-01-2012, 13:40
[Spoiler alert]: Jesus dies at the end of the bible...

I don't think you finished the book.


and, no, I don't mean that the Gospels are followed by epistles and the Apocalypse, I just meant the end of the Gospels.

Night Bearer
09-01-2012, 13:56
Interesting take on this from Ricks point of view, the studio side of things. From the sales point of view it was all about making things that would sell at a good price point rather than things which the studio wanted to make.

Clearly those two things aren't mutually exclusive but it sure felt like it at times when most of the decisions about box sizes, contents and product lists were driven centrally by the studio and the sales compaines were "informed".
My impression from Rick's comments is that he felt both POVs have merit, it's just that sales are more concerned with what's 'easiest' or most profitable to sell (hence since people loved the Termie figs so much, why not make them available to more armies), whereas the studio are more concerned with a 'longer' view as to how to make the games and each army better in terms of gaming and modeling.

So that results in pressure and disagreements, but I felt like he thought that was perfectly healthy as long as the two sides are politically balanced within the company. But once the sales teams started to dominate, that threw things out of whack and leads to poor game systems and armies.

Put another way, I think he'd agree that being dominated by the studio isn't necessarily good for GW either. When he talked about the design competitions that led to the Tau, he mentioned one guy submitted some crazy (but really cool) concept for some sort of energy-based race, which Rick really liked but rejected because you really couldn't model it effectively.


I am surprised at Ricks talk of recruiting for skills, maybe at board level but at the middle mgt level and down you were recruited for "fit" and not your skills and also for what is the current fashion for staff recruitment at that time.
Again, only my impression, but it seemed like Rick was mostly wanting to stress that A) the impression that GW is completely run by non-gamers is not accurate, and B) the impression that GW has been corrupted by evil shareholders is false.

While he seems to disagree/be disappointed with a lot of modern GW (he never flat out states an opinion of GW, just kinda comes out in specific discussions on different topics), he basically seemed to argue that GW as a 'sales-first' company is the result of Kirby's buyout putting a lot of pressure on Kirby to pay back his loans, and the subsequent expansion shifted the political weight to the sales divisions, but even as a 'proper' company hiring for talent over hobby enthusiasm, the people they bring in largely still become interested in the product and make some attempt at learning the hobby, albeit maybe only the "GW hobby" rather than the entire hobby as a whole.

SunTzu
09-01-2012, 16:55
I don't think you finished the book.

<Applause>

ColShaw
09-01-2012, 17:20
I don't think you finished the book.


and, no, I don't mean that the Gospels are followed by epistles and the Apocalypse, I just meant the end of the Gospels.

Okay, that's the first thing I've seen on Warseer in a long time that's made me genuinely smile and laugh.

blongbling
10-01-2012, 08:28
Remember that the HO(Head Office) also has the marketing group which is in charge of sales. And that's what they were talking about when they said the studio was being controlled by sales, the marketing department was telling or at least heavily pressuring the studio to do things a certain way to facilitate things down the sales line.

GW doesnt have a marketing group really; too difficult for me to explain so I will leave it

lanrak
10-01-2012, 09:52
Hi blongbling.
Thanks for the clarification.
I agree that everything is driven by H.O.
(And that Mr Kirby sets the focus of H.O.)

I agree that GW doesnt have what other companies call a 'marketing department'.

As most other companies have much closer involvement with customers, to determine what customers actualy want from the company.
And use this to try to grow the customer base.

GW plc seems to be happy to charge fewer people more money for the same product.(A sensible short term plan while the company asesses its current buisness plan and works out an exit strategies-new directions as required.)

Why are senior GW plc corperate managment not concerned with the increasing loss of sales volumes?(And the long term future of GW plc.)

(I understand the shareholder dont realy care as long as they get paid dividends on thier shares.)

Are there any hints of Mr Wells exploreing new directions to help develop a long term future for GW plc?
(EG a review of the 'B&M store function', more focus on 'viral marketing' etc.)

Avatar_exADV
10-01-2012, 10:30
Keep in mind that the video games -are- "new directions to help develop a long-term future". Lots of people getting exposed to the idea that hey, some of this stuff is bad-ass, maybe I ought to look at it sometime. Doesn't mean everyone runs right out and picks up a paintbrush, but it's market exposure, etc.

(We'll see how the MMO does on that front. Sure, a lot of tabletop gamers will try it out, but if it's even remotely successful, it's got the potential to push people toward the hobby side as well.)

Keep in mind that "GW Sales" isn't monolithic either, even within a region. There are people who are in charge of moving lots of models to the independent retailers, and also people who are in charge of moving lots of models through the GW storefronts. Having a retail business is a little more complicated than having a manufacturing one - there are a lot of employees, a lot of contracts for rental and utilities, extra layers of management, more people in HR, in short, a larger internal constituency. More managers and more management can equal more issues and more attention from the central staff, not because it's a higher priority, but simply because they can shout louder (so to speak).

This is one of the reasons why GW management seems a little schizoid sometimes. Parts of their business are in, if not direct opposition, at least dynamic tension with other parts. The company would like to make more money. Can it do that by increasing sales volume through independents? Or by encouraging people to buy at GW outlets rather than independents? Or by cutting costs by closing retail outlets that underperform? Each department will want to expand, even if the end result isn't necessarily good for the company's bottom line in the long term...

IJW
10-01-2012, 10:40
Only for a given value of 'new', given that the first GW tie-in computer game is approaching two decades in age...

ihavetoomuchminis
10-01-2012, 11:59
This could be a big amount of wishful thinking by CEO Mark Wells.

As another user posted 2 pages ago, their revenue and sales have falled in UK and CE. Their "All other sales business" have risen. But what's it? Licenses? Space Marine helped to that.

The fact is that while they're "healthy" as group they're relying on "one shot" profits. I can't see them selling a license every 6 months, even more now taking in account that THQ has fall nearly an 85% in 2012, wich has led them to close some delegations and/or studies in 2011. Their "core business" (talking about GW now), as Mark Wells calls it, wich is selling models, is far from healthy.

They keep the trend of shrinking their sales volume and their customer base.

AGC
10-01-2012, 17:35
Does anyone know what heading the ongoing Chapter House Studios court case costs are under? Are they borne by GW US or centrally?

Mastodon
10-01-2012, 17:47
Considering HMV have hit the panic button this week and are now refusing to give refunds, only exchanges now, which as everyone knows is one of the first signs a retail company is close to going bust, GW seem to be doing rather well.

iamfanboy
10-01-2012, 18:31
Considering HMV have hit the panic button this week and are now refusing to give refunds, only exchanges now, which as everyone knows is one of the first signs a retail company is close to going bust, GW seem to be doing rather well.
*sigh*

No one with half a gram of sense ever suggests that GW is going to collapse short-term (within the next five years).

But if they don't examine their business model, it's unsustainable for much longer than that.

Each new price raise is followed by a drop in volume of sales, which is 'fixed' by raising the prices again, which is followed by another drop in sales...

If they keep going at this rate, in 5 years time a Space Marine squad will be close to 40 pounds, and battleforce boxes will be nearing 100 pounds apiece. In the US, they'll be creeping close to $80, and as for our Antipodean cousins... gods, $120? $130?

Meantime, other companies are providing games that are just as good (or arguably better depending on pov) for much cheaper.

Mastodon
10-01-2012, 18:45
They'll hit the wall sometime soon in my opinion. That point where people will just not pay it but that could be a few years off. If the economy recovers at the rate its predicted I dont think it will be an issue but if it has another mini collapse GW will be in severe trouble.

The christmas numbers will be very interesting to see when they come out. They were very poor last year, down to the very unsure position people were in at that time so it will be a very good barometer.

Khornies & milk
10-01-2012, 21:12
*sigh*

If they keep going at this rate, in 5 years time a Space Marine squad will be close to 40 pounds, and battleforce boxes will be nearing 100 pounds apiece. In the US, they'll be creeping close to $80, and as for our Antipodean cousins... gods, $120? $130?

40K Battleforce boxes in Oz vary - DE one is cheaper than the SM/IG ones for example. The latter 2 are A$180/190, so US$185+ / £120+.

GW deserve all they get from their Antipodean customers. In my area 2 LGS's have stopped wasting their shelf space for GW Products, but it can still be ordered and at 15/20% off....sales are still dropping though.

lurker1
11-01-2012, 02:34
40K Battleforce boxes in Oz vary - DE one is cheaper than the SM/IG ones for example. The latter 2 are A$180/190, so US$185+ / £120+.

GW deserve all they get from their Antipodean customers. In my area 2 LGS's have stopped wasting their shelf space for GW Products, but it can still be ordered and at 15/20% off....sales are still dropping though.

How about other game systems? (warmachine, malifaux, infinity, etc) do they cost twice as much to buy in australia as well?

New Cult King
11-01-2012, 02:41
Nup. They work out about the same here.

lurker1
11-01-2012, 02:50
Nup. They work out about the same here.

wierd. I thought the pro-gw crowd in australia was ok paying double price there because everything else is double price.

Any idea why smaller companies can charge standard rates while gw has to do double?

Llew
11-01-2012, 04:18
wierd. I thought the pro-gw crowd in australia was ok paying double price there because everything else is double price.

Any idea why smaller companies can charge standard rates while gw has to do double?

Not "has to", but "chooses to". There's your answer right there.

thinkerman
11-01-2012, 08:57
Not "has to", but "chooses to". There's your answer right there.

That's the crux of it right there - as a consumer you have the choice no matter what and where you live....

Either pay their prices or don’t.

Everyone agrees the current pricing and company model of raising prices every year sucks...I too remember to good old days when a 40K squad box here in the UK was £12 and battleforces £40.

Best option is to vote with your pocket on the current prices and trends. I know some stuff is hard to avoid not getting - limited edition releases etc and GD models - but beyond that its not like they are going to stop producing any of their kits overnight so they'll be around for years to come yet.



As for GW and there current financials - expected as much really, I know space marine (the game) was a huge win fall even before the stats came out so a good use of the IP there. I'd expect to see more of this kind of licensing going forward.

On the regular sales stuff and decline I’m not too surprised - consumers in 2011 were looking for a bargain and there were sales all the way throughout. Everyone’s pocket has been squeezed and when times are tough you don't get those luxury products but more important stuff like food, gas and electric.

Think we'll see a drop on the Christmas results as again consumers and everyone on the high street was looking for a bargain and sales (in the uk anyways) and its not like GW were reducing prices to shift stock....

rodmillard
11-01-2012, 11:47
Everyone agrees the current pricing and company model of raising prices every year sucks...I too remember to good old days when a 40K squad box here in the UK was £12 and battleforces £40.


And the battle forces worked out at roughly 1/3 off RRP, rather than the current "throw in an extra sprue" approach!

Those were the days...

Skyth
11-01-2012, 22:42
Does anyone know what heading the ongoing Chapter House Studios court case costs are under? Are they borne by GW US or centrally?

Likely, they aren't expenses yet and thus don't show up on the income statement.

Successful defence of a copyright turns the money spent on the legal fees and adds it to the value of the copyright, which is amoritized over the length of the copyright (29 years?).

Unsuccessful defence of a copyright is expensed as incurred so will show up on the income statement immediately.

Likely, GW has told the accountants that the defence is a sure thing and consider the money spent as an asset not an expense. As an auditor, I would slap them for that as I do not consider the defence to be anywhere near certain or even likely.

If something is material (involves significant amounts of money) and likely, it should be at least in the notes of the financial statements. The court case is something that GW should explain in the financial statement as to how they are handling it. However, this not being the full year report, likely there aren't detailed notes.

paddyalexander
16-01-2012, 17:26
This might be significant considering how much gwPLC has relied on royalties from their computer game licences.

A game industry analayst recently tweeted that THQ had canceled all of their 2014 titles in developement, including Warhammer 40k Dark Millennium Online. THQ made an announcement in response that pretty much said that they were refocusing some of their core games in developement after the poor sales of the uDraw but importantly they said that they were "undecided" when it came to the continued developement of the 40k MMO.

Original story here: http://www.escapistmagazine.com/news/view/115253-THQ-Denies-Cancelling-2014-Game-Lineup

Apart from the MMO I'm not familiar with any other big computer games in developement licenced by gwPLC (Dawn of War 3 maybe?) so will they be able to rely on such large royalties going forward?

Omniassiah
17-01-2012, 22:04
A game industry analayst recently tweeted that THQ had canceled all of their 2014 titles in developement, including Warhammer 40k Dark Millennium Online. THQ made an announcement in response that pretty much said that they were refocusing some of their core games in developement after the poor sales of the uDraw but importantly they said that they were "undecided" when it came to the continued developement of the 40k MMO.


Well from THQ press release as well as a few friends I know who work there it was news to THQ when they heard it from that analyst. I know they have announced some projects canceled but far from all of them, and most were ones that were questionable to begin with.

paddyalexander
18-01-2012, 00:01
In the article THQ denied canceling any of the games that were suggested by the analyst... except the 40k MMO which was the only game the were "undecided" on.

The only reason I mentioned it is that the royalties from their licenced products made up such a big portion of gwPLCs' income last year and if the MMO gets dropped by its publisher what sort of implications will that have for gwPLC?

Ozorik
18-01-2012, 16:37
The latest rumour about THQ is that they aren't cancelling any titles. The point still stands though, GW cannot rely upon royalties.

xxRavenxx
18-01-2012, 19:37
Any idea why smaller companies can charge standard rates while gw has to do double?

Ok, I'll start with this:

I do not agree with the GW practice of fixed prices per zone.


That stated (Which will then be ignored by someone who wants to argue, I'm sure), I'll quickly explain it.


Many (all) companies dealing internationally set a fixed price in an area.

On a specific date (Lets call it 1st Jan, 2001) they will sit down and go:

This boxed set is £10. The currant exchange rate means it is worth $15.36.

We will price it at exactly $15, and there it shall stay.

X months later, they will look at the price again, see that the value is now $18.89, and move the price of the item to reflect that, say at $20.

This is to stop the items needing repricing on a day to day basis.

What GW have done, is to not re-evaluate the prices based on the AUS dollar becoming much stronger compared to the pound.

This practice is not uncommon, for example Hasbro do exactly the same, with MTG boosters costing about 70% more in the uk than in america, and RPG books costing nearly 100% more.

The fact that it is not uncommon does not however make it particularly acceptable. Sadly, business does not deal in rights and wrongs :P

New Cult King
18-01-2012, 20:55
I think the jarring thing for those in the Southern Hemisphere is that within the wargaming hobby, GW seems to be the only company doing it.

Spartan Games, Privateer Press, Infinity, and Mercs, just to name 4 off the top of my head, all cost much the same here as they would if we ordered overseas.

So sure, while Nike, Sony, whomever else (who AREN'T in the wargaming biz) all charge more in Aus for their products, we're looking at manufacturers in wargaming to compare GW to.

Not disagreeing with you Raven, just elaborating a little I guess :)

Baragash
18-01-2012, 20:56
Many (all) companies dealing internationally set a fixed price in an area.

The retailer I just stopped working for set the price in Aus$, US$, € and UK£ so they were relevant to the markets.

ForgottenLore
18-01-2012, 22:11
Many (all) companies dealing internationally set a fixed price in an area.

On a specific date (Lets call it 1st Jan, 2001) they will sit down and go:

This boxed set is £10. The currant exchange rate means it is worth $15.36.

We will price it at exactly $15, and there it shall stay.

X months later, they will look at the price again, see that the value is now $18.89, and move the price of the item to reflect that, say at $20.

This is to stop the items needing repricing on a day to day basis.

What GW have done, is to not re-evaluate the prices based on the AUS dollar becoming much stronger compared to the pound.

What I have heard, and this is complete hearsay, is that they got stuck when the Australian dollar did so well and that if the adjust the prices to what they should be now they would basically be screwing every retailer down under who would suddenly find there entire inventory now retails for less than they paid to get it. Gotta be a better way to fix that issue, but that is what I heard.

Llew
19-01-2012, 00:08
What I have heard, and this is complete hearsay, is that they got stuck when the Australian dollar did so well and that if the adjust the prices to what they should be now they would basically be screwing every retailer down under who would suddenly find there entire inventory now retails for less than they paid to get it. Gotta be a better way to fix that issue, but that is what I heard.

Don't fall for spin. They could have held things unchanged for a while until things balanced out. They do it because they can, or rather, because they've been able to.

And if they decided to adjust things down, they could come to some sort of concessions with their Australian vendors to lessen the pain for both parties. In fact, if they'd done that, they probably would have reaped a huge PR windfall in Australia.

New Cult King
19-01-2012, 01:08
And not to mention several hundred dollars of purchases just by me! :p

Omniassiah
19-01-2012, 04:29
What I have heard, and this is complete hearsay, is that they got stuck when the Australian dollar did so well and that if the adjust the prices to what they should be now they would basically be screwing every retailer down under who would suddenly find there entire inventory now retails for less than they paid to get it. Gotta be a better way to fix that issue, but that is what I heard.

As Llew said all they had to do was freeze the prices where they were till the exchange rate worked out again. But they have had several Price raises well after the Exchange rate went in favor of GW.

lurker1
20-01-2012, 04:24
What GW have done, is to not re-evaluate the prices based on the AUS dollar becoming much stronger compared to the pound.

This practice is not uncommon, for example Hasbro do exactly the same, with MTG boosters costing about 70% more in the uk than in america, and RPG books costing nearly 100% more.

The fact that it is not uncommon does not however make it particularly acceptable. Sadly, business does not deal in rights and wrongs :P

This is kind of what I was thinking of. Everyone compares GW to large companies in different fields. In this case hasbro, in other cases manufacturers of clothes, laptops, etc. Then uses that as some sort of justification as to why GW have to charge double the price to their Australian clientele. However their direct competitors like Mantic, privateer press, etc get to charge the Australian gamer the same price as they would an American or British one.

I was wondering if there was a special Australian law that charges companies that bring X amount of merchandise into the country a certain amount of tariff while excluding companies that bring in less than X amount of merchandise into the country allowing those companies to charge lower.

If there is then it does make perfect sense to compare GW to other big companies as opposed to comparing them with their direct competition which are all significantly smaller.

ExquisiteMonkey
20-01-2012, 05:20
Don't fall for spin. They could have held things unchanged for a while until things balanced out. They do it because they can, or rather, because they've been able to.

And if they decided to adjust things down, they could come to some sort of concessions with their Australian vendors to lessen the pain for both parties. In fact, if they'd done that, they probably would have reaped a huge PR windfall in Australia.

Further to this point, the gaming industry deals with inventory in the pipeline all the time - if a product is suddenly reduced in cost price by the supplier say from $70 to $50, the supplier will issue a markdown to the retailers that they supply, who will provide a snapsot of their stock on hand at a certain point in time, which will then be issued a rebate for the difference in price (ie. SOH x $20 = rebate).
GW could very easily do this.