GW issues profit warning..

[Mauglum.]

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

[SandWyrm]

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.

[Denzark]

GW flubbed pretty badly in their attempt to market the game to kids. Although the idea that they can make good money on kids that will be in and out of the hobby in under a year while still keeping all of us hopeless addicts buying is not a bad one, the way they went about it it awful.

The problem is that in order to sell to kids they greatly simplified army rules, removing variant lists, armories, and funky options. The idea was certainly to make the rules more accessible for younger players, but what they forgot was that most kids make up rules as they go along anyway. In other words, kids would just ignore rules that were too "complicated" or make up new rules, but with their "streamlining" they alienated a lot of their older players that really liked the individuality the era of Andy Chambers allowed them to have.

Then to add injury to insult they essentially told Andy to take a hike when he wanted to create a deeper 5th edition instead of just redoing 4th edition with a run rule and transports that people actually bother to put units it. They brought this on themselves, trying to take the geeky complexity out of Warhammer is like taking the naked lady pictures out of Playboy.

This Mr Rain, is the truth!

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

Fair Mr Barn, no money woney, no mini-winis. I like it, Y'all have a day too.

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.

This makes no sense to me. If you spend $200 a month on minis, you spend that amount. Why would cheaper minis automatically make you spend more?

I somehow really doubt that the "financial crisis" has very much to do with GW's problems with sales volume, at least in the States. I'm fairly certain that the people that were buying GW product in the first place are neither the low earners that suffered the most job loss, nor the urban professionals whose precious mindless 10% tanked along with Lehman and pals. In other words, all of the unemployment hooplah we hear about is mostly among groups that traditionally have higher unemployment anyway, teenagers, minorities, and those without a useful college degree, none of which are really people that GW was probably depending on, as the kids/teenagers retained their employed college educated parents.

The other side of the coin is that of course a lot of people lost money they had invested in various index funds, mutual funds, portfolios, etc. but again, I would imagine that most 40k players do not keep portfolios and so the crash would not have done much to em. That said, I don't know enough about the European economy to comment on what happened in merry old England, but in the States, I really doubt it was a factor.

Anyway, I'm pretty sure the problem has to do with GW underestimating just how much money their employed adult fans were dumping into their coffers when they murdered Chaos Marines (the 2nd best seller in 3rd edition) along with Dark Angels, and dragged their feet on updating a slew of other armies, causing people to quit. Hell, I pretty much stopped playing with the Gavdex in 2007 and buying any GW product up until DE launched and I am far from the only case.

Again we are in accord, although, I miss my pure Khorne with Bloodletters, but have had success with this codex.

I have stopped buying GW models and have no plans to buy anymore. They are now far too expensive. I have moved to other systems where the models are more realistically priced. I am also in the process of replacing all of my paint from GW to Vallejo, not so much because of price but because I do not like the new pots at all. I never got my brushes from or glue from GW anyway.

So over a year I have gone from being a regular customer, to only buying spray paint.

How many others are there out there like me?

I am like you Mr A - my greenstuff is milliput, my paints are much humbrol. But it is not a morality thing more a budget.

I'd ...
What does all of this boil down to? Games Workshop is attacking its customers and we are paying for them to do it. GW's business model assumes that its remaining loyal customers will happily pay artificially inflated prices and they are using that money to pay ridiculous management salaries and fund overly expensive lawsuits that attack the very community that they are depending on to accept price increase after price increase.

This not a healthy business model and I, for one, don't appreciate being squeezed by some British company in order to pay a corporate manager's fat salary and terrorize the hobby community. GW's customers need to send a message to GW that this behavior is not acceptable.

Weeble you quote many facts. But I notice you only bring this up AFTER the profit warning - what, before you were happy to pay the price? Let's not jump on a bandwagon of making the evidence fit the facts - it has been a sound business model which has kept them in profit for recent years, and they still may profit this year - just less hence the warning. Another poster mentioned their stock has settled now so hardly a pervasive argument - you still pay for the plastic crack like a good junkie so don't pretend you're sticking it to the man because you blatantly lurk on a majority GW games-system website - methink the lady doth protest...

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.

One profit warning after years of profit including DURING a recession in their home country, which is no longer in recession does not point to bad business to me, rather the opposite.

And I reckon most people got into it not through specialist games in the 90's, but Space Crusade/Heroquest.

[SandWyrm]

I have stopped buying GW models and have no plans to buy anymore. They are now far too expensive. I have moved to other systems where the models are more realistically priced. I am also in the process of replacing all of my paint from GW to Vallejo, not so much because of price but because I do not like the new pots at all. I never got my brushes from or glue from GW anyway.

So over a year I have gone from being a regular customer, to only buying spray paint.

How many others are there out there like me?

This sounds exactly like me.

I've dropped over $1500 into my Guard army over the last 2.5 years, but I can't afford to do that again. My Blood Angels army, by contrast, cost me just a bit over $350. After it's painted I'll be unwilling to jump into any army that costs more than $250 to start. If the new GK codex doesn't let me use some IG units that I already have, then I'll be selling off my old GK models and trying out FOW instead. The system looks fun and there's all sorts of low-cost models you can use.

I also used to use GW's paints exclusively, but am now also transitioning to Vallejo. It's simply a better value. I've barely bought anything from GW since last summer.

[weeble1000]

Weeble you quote many facts. But I notice you only bring this up AFTER the profit warning - what, before you were happy to pay the price? Let's not jump on a bandwagon of making the evidence fit the facts - it has been a sound business model which has kept them in profit for recent years, and they still may profit this year - just less hence the warning. Another poster mentioned their stock has settled now so hardly a pervasive argument - you still pay for the plastic crack like a good junkie so don't pretend you're sticking it to the man because you blatantly lurk on a majority GW games-system website - methink the lady doth protest...

I'm at work today, man. I didn't go sieving through GW's financials at 7:00 a.m. this morning pulling out quotes. I had them all nicely prepared in a file on my desktop that's been sitting around since GW sued Chapterhouse Studios. Honestly, that litigation was the last straw for me. I've complained about GW's litigation tactics for a while now. And you're right, I've been buying the odd GW product here and there. Just a few months ago I got myself two new Cadian Infantry Squads as part of my phase-out-the-old-metal-models initiative. I'm not going there anymore though. Just today I took my Christmas bonus cash and, much the chagrin of my wife, spent twice as much on a Cryx Box instead of the Cadian Command Squad that I've been thinking about getting. For the conceivable future my hobby dollars will be spent on home-made terrain and learning all about Warmachine and Flames of War.

I do not approve of the way that GW handles its business, I do not approve of the way GW treats its customers, and I most certainly do not approve of the way GW manipulates the legal system to egregiously intimidate hobby-minded competitors. As a result, I will be pointedly sending my money to Games-Workshop competitors and doing everything in my power to help those people selfless enough to stand up for the rights of any small business in a IP rich market.

I love Warhammer 40K and it wasn't easy to make the decision to not only boycott Games-Workshop but also spend money on models that I'm frankly skeptical about. This time Games-Workshop has gone too far with me and has officially lost my business until the company changes its tune. I hope that more of Games-Workshop's customers pull their support from the company and make their reasons very clear to Games-Workshop.

[SandWyrm]

One profit warning after years of profit including DURING a recession in their home country, which is no longer in recession does not point to bad business to me, rather the opposite.

And I reckon most people got into it not through specialist games in the 90's, but Space Crusade/Heroquest.

Britain's out of recession? By who's measure?

You're also forgetting that GW's entire North American profit in 2008 was around $50K. Or that they borrowed themselves blind even when LOTR sales were huge. So it would be better to say that they have only had one good year ('09) out of the last 5-6.

[Denzark]

Britain's out of recession? By who's measure?

You're also forgetting that GW's entire North American profit in 2008 was around $50K. Or that they borrowed themselves blind even when LOTR sales were huge. So it would be better to say that they have only had one good year ('09) out of the last 5-6.

Recession by British Government definition, is when there is negative financial growth for 2 or more consecutive quarters of the financial year. When that negative cycle becomes a positive, the recession is over.

So, by the government's measure - I believe most of the europeans use this measure too.

I can't argue with your figures of profits cos I don't claim to know them - its just that if their business plan was working well in 2009 (the figures were if I recall £8m profit worldwide) then their plan must have been good whilst other British high street companies were going down the pan.

[Denzark]

This not a healthy business model and I, for one, don't appreciate being squeezed by some British company in order to pay a corporate manager's fat salary and terrorize the hobby community. GW's customers need to send a message to GW that this behavior is not acceptable.

I love Warhammer 40K and it wasn't easy to make the decision to not only boycott Games-Workshop but also spend money on models that I'm frankly skeptical about. This time Games-Workshop has gone too far with me and has officially lost my business until the company changes its tune. I hope that more of Games-Workshop's customers pull their support from the company and make their reasons very clear to Games-Workshop.[/QUOTE]

Weeble do you know what - I'm seeing most of they 'let's boycott the man' comments from my colonial cousins - you even mention the nationality of the company above.

I'm sure when a US company sticks it to the third world, well, hey, thats capitalism - they wanted democracy, here it is up the jacksie. Well there is obviously something about succesful Brit business that sticks in yank craw - President BO callin BP British Petroleum when they haven't gone by that name for years (the petroleum company formely known as British) is another example

So yes, I hope more GW customers from the US take your constructive advice and vote with their feet. Maybe the US market will no longer be viable. Because at some point in the past, GW started going truly global and it was then that the big corporate attitudes came in and all the problems stem from there. We'll stick to the best SF wargame fluff in the world, with quirky designs and in house jokes, you can have kill the spell caster (aka warmachine) and regular rules updates.


PS half of me is using the subtle art of english wit and sarcasm. The other half hopes that if the 'cut off own nose to spite ones face' crew do succeed to harm the company, that those people suffer with the rest of us.

[Denzark]

Britain's out of recession? By who's measure?

You're also forgetting that GW's entire North American profit in 2008 was around $50K. Or that they borrowed themselves blind even when LOTR sales were huge. So it would be better to say that they have only had one good year ('09) out of the last 5-6.

While we're on the subject check this, courtesy of a Bigred post:

[URL="http://investor.games-workshop.com/downloads/results/results2010/2009-10_FinalFullYearReport.pdf"]http://investor.games-workshop.com/downloads/results/results2010/2009-10_FinalFullYearReport.pdf[/URL]

Page five -shows growth - admittedly small, but growth, for the last 3 years - not bad during a worldwide financial crisis.

[Denzark]

While this is going on, Tom Kirby is making almost $800,000.00 per year in salary and benefits. This is a salary increase over last year and it does not take into account the value of Kirby's stock which, even considering the 18 percent drop, is worth something like 350 dollars per share. Kirby has nearly two million shares! Also consider the fact that Games workshop paid stock dividends this year to the tune of 25 pence per share. Admittedly, GW has been under pressure from shareholders to pay dividends, but in Kirby's case, and others of the top GW brass, that decision clearly had personal benefits. At about 40 cents per share, Kirby alone was paid almost $800,000.00 in dividends, which brings the total amount of cash he's sucked out of GW this year alone well over a million dollars and closer to two. .

Funny. Check this posted by Bigred:

[URL="http://investor.games-workshop.com/downloads/results/results2010/2009-10_FinalFullYearReport.pdf"]http://investor.games-workshop.com/downloads/results/results2010/2009-10_FinalFullYearReport.pdf[/URL]

P20 shows T Kirby total emoluments as £403000 in last financial year. At todays price of about $1.5471 (google provided) - £1 that makes $623481.3 - you're only exagerating by a factor of around 300% but hey, whats a mill or two between friends?