Games Workshop's stock loses 24% value today. It has begun.

[Zaphod Beeblebrox]

Hi guys!

Many of you know our epic series about the "Future of Games Days and Games Workshop".
So far 8 parts have been written in this epic wall of text series, and today, sadly, some of the predictions of the first few parts came true...

Games Workshop lost 24% of stock value today.
Turnover for the half year is down by 12%, profit by roughly 30%.

The facts are in the lines above. [URL="http://masterminis.blogspot.de/2014/01/the-future-of-games-days-games.html"]The rest can be read here[/URL].

If you know the epic length of our articles, you will understand that I will link to my blog here instead of copy/pasting the whole wall. Reading all 8 parts will probably take you a few hours.

SHARE & ENJOY!

Zaphod

[Wolfshade]

As of replying the drop has increased to 24.9%. To put this in context the FTSE-All Share is down marginally.

It isn't that bad when you look at it, the drop in Profit is about £4m, which is identical to the drop in royalties, in fact discounting royalties from 2012 to 2013 figures they are actually up £.6m on the previous year.

It was always going to be known that the royalties would decrease from the massively popular DoWII splash being over, yes Space Marine did well but sold much less units.

But it is a growing concern that this is the second 6month statement where sales have fallen.

The sales business has actually been more profitable across the regions, bar UK and Europe, where the big dip is in the elusive "Product and supply" segment, which has seen profits tumble.

Also of not is that the business costs have decreased slightly.

Hmm this might take more than just a couple minute skim to claim that GW don't know what they are doing.

[Bigred]

[URL="http://investor.games-workshop.com/wp-content/uploads/2014/01/2013-14-Press-statement-final-released.pdf"]Games Workshop 2013 Interim 6-month Financial Report[/URL] (January 16 2014)

Year per year revenue down 12%
Year per year profit down 31%

INTERIM MANAGEMENT REPORT

First half performance
Sales in the first half of the year were down against the comparable period in the prior year, continuing
the trend that developed in the second half of 2012/13. During the first half, the rapid transition from
multi-man stores to one-man stores and the reduction of trading hours across the Group caused
disruption in our retail chain. We also experienced some decline in sales through independent
stockists.

We view these as short-term issues and expect to see growth return in both channels. We continue
with our store opening programme (27 stores opened, 20 closed in the period) secure in the
knowledge that our one man model allows us to ensure new openings are profitable. In the future we
expect to benefit from the more focussed selling operation across all channels against the background
of a materially lower cost base.

Changes to operating structure
We have just announced a major re-organisation of our sales businesses to allow management by
channel: retail, trade and direct. Our retail businesses will be consolidated under a single Retail Sales
Manager for each of our key geographic areas – UK, Europe and North America. Trade sales will be
consolidated into a global business, operating from Lenton, Nottingham.

Prospects
Our costs are well under control and margins remain strong. Cash management is good and our
capital expenditure continues as planned. The principal risks and uncertainties for the rest of the
financial year relate to sales and the implementation of the structural changes we have just
announced. Whilst profit will remain under pressure during the implementation of the structural
changes mentioned above, the board remains confident in the future growth and profitability of the
Group.

Going concern
After making appropriate enquiries, the directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future. For this reason
they have adopted the going concern basis in preparing this condensed consolidated interim financial
information.

[blueshift]

i wonder if GW going out of business would finally stop people from the constant complaining...

[Billy_Mx]

i wonder if GW going out of business would finally stop people from the constant complaining...

Or, here is a crazier idea: Maybe if GW starts to do what is right for its customers, the constant complaining will stop. Crazy I know

[Panther Berg]

Bite your tongue, friend.

[Resinpants]

i wonder if GW going out of business would finally stop people from the constant complaining...

Lol! It would herald a new era of complaints about not being able to get models/rules etc!

[DrBored]

Lol! It would herald a new era of complaints about not being able to get models/rules etc!

This. While playing X-Wing or Warmachine, they'll lament about that game that they hated on for years and years.

[Erik Setzer]

For all the people who told me I was insane or cynical to suggest it, I hold this as evidence of the reason Escalation, Stronghold Assault, and the "Advent Calendar" exist. GW needed to move a lot of stock that it had, and fast, and the best way to do that was to introduce rules letting people use overpowered models in games. Put out rules for the special boxed sets they were coming out with, or using your super-heavies in 40K. It was easy with the two books to copy-paste and add or change a little bit, and then kick them off to the printers. With the digital stuff, they just needed to pull up some old fluff, toss together some rules, put them online and charge for them. Little cost for what they hoped would be maximum reward. That's also the reason Warhammer World in England is moving to "use any models you have!" because it encourages buying more models, especially expensive stuff from Forge World.

I admit, it wasn't a bad plan when you needed a desperation plan to move a lot of product fast. But that's what it was. It wasn't "adding new stuff to the game because it'd be cool and balanced." It was just trying to get product off the shelves and out the door to regain lost profits.

[Benjamin Blanchard]

Or, here is a crazier idea: Maybe if GW starts to do what is right for its customers, the constant complaining will stop. Crazy I know

Maybe they would realize it at last. I know that people are often complaining for almost nothing, but in the case of GW, many complains are fully justified : prices that always goes up many times for exactly same product/less quantity in the box (even a company like Apple, often criticized for the prices on the high-tech market, doesn't do that, the prices are the same but you get the latest stuff), fluff completely stopped since 10 years, White Dwarf ridiculously empty of any part truly about gaming, making customers pay for their failures (yeah, because strangely there has been a general increase of the prices a few months after everyone realized how the whole Finecast affair was messed up)... Not to mention a little thing that can have importance for regular buyers : complete disapearance of any fidelity program since many years. I know that made some other retailers complain, at least in France it did, but at least from the buyer point of view, there was something.

Anyway, I really don't think that's the beginning of the end for GW, but I really hope they'll react in an intelligent way, not like a bunch of crappy money-obsessed people.