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  1. #1

    Default GW issues profit warning..

    Hi all,
    Released this morning:


    RNS Number : 9132Y

    Games Workshop Group PLC

    05 January 2011

    Games Workshop Group PLC

    ("Games Workshop" or the "Group")

    TRADING STATEMENT AND NOTICE OF RESULTS

    For immediate release 5 January 2011

    Games Workshop announces that pre-tax profits in respect of the year to 29 May 2011 are likely to be below current market expectations.

    Sales were down 4% in the first half to 28 November 2010. Difficult trading conditions since that time mean that this shortfall is unlikely to be recovered by the year end. The Group's gross margin and costs remain under firm control and cash generation remains healthy. In addition, the outlook for royalties receivable in the current year remains good, although not as significant as in the year to 30 May 2010.

    The Board of Games Workshop currently believes that, as a result of reduced volumes, pre-tax profits in respect of the year ending 29 May 2011 are unlikely to meet current market consensus estimates.

    The Board will announce the Group's half-yearly results for the six months to 28 November 2010 on 25 January 2011.


    I have high-lighted the reference to drop in sales volumes.(Share prices have dropped too!)

    Its taken a while but I belive GW have finaly passed the point of being able to use price risies to compensate for a shrinking customer base.

    TTFN.

  2. #2
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    Default

    This comes after a time in which the financial section of the London Evening Standard was recommending GW shares!

    A couple of thoughts:

    1. A profit warning (to me, semantically - I'm no expert) means they won't make as much as expected. Doesn't mean there will be a loss automatically.

    2. All the reasons the internet people put up, particularly our US colonial cousins who can't believe a service industry pays so little attention to its customers, will not be the sole reason for this - ie its not just because bubba had to wait for his codex or faq, and warmachine players don't. Actually it will be a combination of all things.

    I don't think they will automatically put down prices to have small profits, quick gains. The bricks and mortar stores also won't disappear - this is geared as I have said many times, to be a one stop shop for parents to go with the christmas list thoughtfully provided by GW and get little timmy a 'hobby in one' (said parents probably don't trust buying online and feel stupid googling for space monsters.)

    What I do hope for:

    a. Sideline LOTR.
    b. Stop aiming at preteens + - lets have a wargame with brain melting lead content citadel miniatures that say 'not for under 14s', not all this 'toy soldier' rubbish. Remember when you got Space Crusade and then tried to work out 2ed rules to join in the with the older gamers? We managed, didn't we? So can they.
    c. Don't think 'bitz' and 'collectors' pieces will make us buy more for conversion - open up your old 'cast any part at all' business and see if we can stick it to ebay.
    d. GW to remember to stop letting the so-called 'business gurus' in charge influence game design - let the geeks run things.
    I'M RATHER DEFINATELY SURE FEMALE SPACE MARINES DEFINERTLEY DON'T EXIST.

  3. #3
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    Quote Originally Posted by Denzark View Post
    d. GW to remember to stop letting the so-called 'business gurus' in charge influence game design - let the geeks run things.
    GW is a publicly traded company. This wont, and cant, happen.
    I am the Hammer. I am the right hand of my Emperor. I am the tip of His spear, I am the gauntlet about His fist. I am the woes of daemonkind. I am the Hammer.

  4. #4

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    Quote Originally Posted by DarkLink View Post
    GW is a publicly traded company. This wont, and cant, happen.
    Not so much this. More like Geeks don't know how to make money. If geeks ran things, GW would be bankrupt.

  5. #5
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    My GW purchases decline a little each year. I love building new kits, but I am not a fan of the frequent price rises. I remember when land raiders were $50. I know that some people remember when 50 marines were $5, but I only got back into the hobby a few years ago.

  6. #6
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    Quote Originally Posted by Reikou View Post
    Not so much this. More like Geeks don't know how to make money. If geeks ran things, GW would be bankrupt.
    I believe that's the point I was trying to make
    I am the Hammer. I am the right hand of my Emperor. I am the tip of His spear, I am the gauntlet about His fist. I am the woes of daemonkind. I am the Hammer.

  7. #7

    Default

    Quote Originally Posted by Reikou View Post
    Not so much this. More like Geeks don't know how to make money. If geeks ran things, GW would be bankrupt.
    Could not BE more right

    This is due to the BASIC FACT

    This game and sales were hurt by a GLOBAL ECONOMIC SLOWDOWN

    ONE SIMPLE REASON people lets not all go Crazy and lose our heads.

    If you are scared you will lose your job or you have or your hours were cut you spend less on things not need to in the basic 1. Shelter, 2. Food 3. Utilities . If you are struggling to pay those you do not buy little army soldiers

    Have a DAY

  8. #8
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    Actually, here in the States the economy is starting to look up, so logically their sales would be marginally higher than expected. If their prices were lower, and they stopped hiking them up and lowering their store hours, odds are they'd sell more minis. Hell, if minis cost less I'd buy a hell of a lot more of them. Odds are, as a whole I'd probably end up spending even MORE money at GW than before :U

    Edit: And if their stores were open longer, they'd probably sell more as well. Many of the players I know spend their time testing new models and whatnot in-store, and then chunking/buying new ones. Experimentation aside, just the general elongated exposure to the minis would produce a greater amount of sales.
    Last edited by LoverzCry; 01-06-2011 at 01:14 AM.

  9. #9

    Default

    Hi Winter12.
    The sales problems are due to GW NOT offering value for money.(Compared to other companies products that compete for GWs POTENTIAL customers.)

    It doesnt matter how good the sales man is,if the customer can not justify spending money on a product they wont.
    £200+ on a load of plastic bits glue paint and rules -army book, and in a month or two, you MAY be able to squabble with a stroppy teenager in the middle of a cramped shop...

    Or pick up a games console that works straight away , and you can just use it at home...and game with any one in the world on the internet.

    When GW priced its products in its B&M stores 'for convenience' eg 150% to 200% of the price of similar products.
    The store staff could just emphisise the 'endless crativity and fun of the hobby' to justify the higher price.
    When the shop is full of customers armies and has several games running ,(some run by the vets helping the store staff...) Its easier to sell the' long term value' of the products.

    GW saw the B&M stores as recruitment centres more than retail outlets back then.

    However, since Tom Kirby decided GW was 'in the buisness of 'selling toy soldiers to kiddes', GW have just alienated the long term customers.
    Its made the sales staff job a lot harder!
    And increasing prices 100% above inflation rate for the last decade has not helped at all!

    A prime example of effectivley discouraging the vets is the relase of WHFB 8th ed.
    NOT the rules changes.

    But ONLY selling a 'rules only book' in the boxed game .
    OR a Rule book with 400 pages of fluff and prety pictures.
    Both of these appeal to new customers.

    BUT the vets have to pay an extra £30 for fluff or minatures they may not want.

    WHY not sell a 'Rules Only' book for £15 to £20?ALL the existing players would have a cheap upgrade alternative , to keep them interested in GW.

    How many existing WHFB players have picked up alternative rule sets or kept using 7th ed rules and minatures?

    GW continue to lose customers , and all they can think to do is raise prices .It NEEDs more than that .
    GW HAS to adress its primary problems, at some point .
    Maybe not under its current manegment though...

    TTFN

  10. #10

    Default

    Quote Originally Posted by TheBitzBarn View Post
    This game and sales were hurt by a GLOBAL ECONOMIC SLOWDOWN

    ONE SIMPLE REASON people lets not all go Crazy and lose our heads.
    Slowdowns (or more properly, recessions) don't excuse bad business decisions. If the economy is down, then a business had better not be raising prices. In fact it had better find a way to lower them or at least keep them steady. Most people still have money to spend on their hobbies. It's just not as much as we had before. So GW's rules, armies, and miniatures had better adjust to that fact, because this recession is systemic and isn't going away anytime soon.

    From a design standpoint, they need to start working on lowering the minimum model count of a typical 40K game. That means balancing out the rules at the 500, 1000, 1500, 1750, and 2000 levels. Right now the game is balanced the best at 1500 - 2000, and is almost unplayable below 750. That drives away new players and discourages older players from starting new armies. Because coming to the table at 1500 requires at least a $450.00 investment, even for Marines. That's too much even for me, and I'm doing much better than most people out there in this economy.

    From a model standpoint they need to start reducing the complexity (and therefore the development/mould cost) of new sets. They also need to start considering more budget options for large armies like Guard. Things like more 2-piece infantry kits. Space Hulk shows how well they can put out nice models that are easier to assemble and cheaper to produce.

    Thirdly, they need to revive their specialist games. Because this is how most people in the 90's found the hobby. The price of entry to the 40K universe needs to come down.

 

 
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