GW EOY 2014 Investor Statements

[40kGamer]

So GW is telegraphing a profit drop for the upcoming report. (Not a true loss just a drop)


Trading statement
DECEMBER 8, 2014 · OTHER, RNS, TRADING STATEMENTS
Games Workshop Group PLC announces that trading in the six months to 30 November 2014 at constant currency has been broadly in line with the Board’s expectations and 2013/14 first half performance.

The Company has been exposed to the continuing strength of sterling, particularly against the US dollar and euro in the period reported. The adverse impact in the six months to 30 November 2014 will result in operating profit at actual rates being approximately £1 million lower than 2013/14 first half performance.

The Company’s half yearly report for the six months to 30 November 2014 will be released on 14 January 2015.


With this info in hand we can also expect another fairly significant drop in revenue. So for those inclined to place wagers.... do you think we'll see a comparative revenue drop over/under 10%? Just 4 weeks until the half year reports drop.

In other news, they also just announced that a new finance director has been appointed for 2015. Looks like they are still restructuring their executive lineup for the new year.

Appointment of finance director
DECEMBER 17, 2014 · OTHER, RNS
The Board of Games Workshop is pleased to announce the appointment of Rachel Tongue as Group Finance Director with effect from 1 January 2015.

Rachel, 43, is a chartered accountant and chartered tax adviser and joined Games Workshop in 1996. She is currently Company Secretary and Legal and Compliance Manager.

Rachel and her husband hold 8,000 Games Workshop ordinary shares. There are no further details required to be disclosed relating to Rachel Frances Tongue under 9.6.13R of the Listing Rules of the UK Listing Authority.

[Denzark]

I'll just hold this space for someone who wants to say:

1. GW is failing.

2. Hasbro are about to take over.

3. If GW took 25% off the price of Landraiders I'd buy 17.6 a month.

[40kGamer]

I'll just hold this space for someone who wants to say:

1. GW is failing.

2. Hasbro are about to take over.

3. If GW took 25% off the price of Landraiders I'd buy 17.6 a month.

ROFL! The currency shift has been pretty dramatic over the last few months so it's going to make for an interesting report. I'm really excited to see if we can get a baseline on Fantasy Flight in a couple of months when their new parent company reports come out for 2014.

[Caitsidhe]

Hrm. I think it is a red herring to try and blame a decline entirely on currency exchange. They have just released a bunch of new product (all that End Times Stuff in addition to all the 40K releases) and we are in the heaviest shopping period of the year. That ALONE should have at least held them steady. For most companies this time of year is a bump. Garbage in and garbage out. Lying to their investors is not going to fool anyone.

[Erik Setzer]

I'll just hold this space for someone who wants to say:
1. GW is failing.
2. Hasbro are about to take over.
3. If GW took 25% off the price of Landraiders I'd buy 17.6 a month.

I won't say GW is dying, or that Hasbro will take over... but they are currently failing at what a company's supposed to do: Make money. Their sales keep dropping despite the release of more and more expensive products that seems to be in high demand. That's a really, really bad sign. I wish I could see serious numbers breaking down what's being sold, but if I had to guess, I'd bet that most of their sales are going to entrenched customers who are too bought-in to leave the hobby cold turkey, and there's dwindling numbers of new entrants, which is not a good sign.

You're mocking people on the price point, but it's true that a lot of stuff isn't selling just based on price. I know people who would love to run Witch Elves in their Elf armies (whether pure Dark Elf or mixed), but are turned off by the insane price point. No one will buy Blood Knights because they're $100 for five models (and the rules certainly don't justify that). A flat cut wouldn't help, they need to actually take a solid look at their ranges and adjust prices across the board. In most cases, that's a cut, yes. Find the sweet spot where you hit a price that people will start picking up more items.

They've done the work for us in dismantling most of the arguments in favor of their pricing scheme. Claims of the cost of material or the work involved don't work when comparable boxes are half the price. Similarly, defense of the price of hardback sets vanishes when you see a softcover set with no slip cover released for minor savings ($66 as opposed to $74, for example). And given that other companies - let's be kind and skip something like D&D where the volume can be much higher, and rather just look at other miniatures game companies - can sell books that are bigger, equal or better quality, and yet noticeably cheaper... Yeah, that's a problem. It also is stupid from a marketing point, because the rules are the reason people buy the models, not vice-versa, so you want the rules to be pretty cheap and accessible in order to get more people to buy them, which will lead them to then buy more models. The books should be a gateway, with minimal profit (but still some profit), being used to push people to the higher-profit miniatures lines.

There's other areas that they're not doing so well. Product quality went into the toilet in recent years with Finecast. I was already annoyed at my poor Liche Priest's staff warping, but a guy recently pulled out his Bretonnians to play some games to get back into WFB, and several of them had warped lances and other pieces that are seriously out of shape. It's not like this stuff is being left in brutal heat or anything. No one leaves their models in their car for long periods. But just the regular Florida heat is enough to ruin Finecast models. You shouldn't have to keep straightening models, especially after they're painted and doing so could damage the paint job.

But hey, they're doing fine, right? Profits continue to drop, revenue continues to drop even as they push out another edition of their flagship game and several high-dollar products and expenses are down... Yeah, those are signs of things going just fine, and anyone who disagrees is clearly an idiot.

[Eldar_Atog]

They've done the work for us in dismantling most of the arguments in favor of their pricing scheme. Claims of the cost of material or the work involved don't work when comparable boxes are half the price. Similarly, defense of the price of hardback sets vanishes when you see a softcover set with no slip cover released for minor savings ($66 as opposed to $74, for example). And given that other companies - let's be kind and skip something like D&D where the volume can be much higher, and rather just look at other miniatures game companies - can sell books that are bigger, equal or better quality, and yet noticeably cheaper.

When you compare GW's books vs other gaming companies, are you talking about book quality or rule quality? If it is book quality, which company are you comparing them against? Gw's current set of rule books and codices are the best that I know of. The Privateer Press are cheaper but they only have softback books and they are not quite as nice.

Now, if you are comparing rule quality.. I am right there with you. PP's rules are better written and more affordable than GW. I also like the fact that PP provides a card with the model's rules in the box. The army book is not a mandatory purchase.. just the main rulebook and the models. It's a small gesture but it's so rare to find a company lately that doesn't try to leech every single dollar from you.

[Caitsidhe]

It all comes down to use. When CDs first came out (and DVDs later) sales of them did not take off until they dropped the price of the players through the floor. Then the format exploded. If you want to sell models, you need cheap, effective rules. That's the golden ticket. They need to make a tight rules set (not spam books) and effectively make it a loss leader. They need to get back into Tournament support and sponsorship, and thereby put themselves in the driver's seat to say that only their own product gets used.

Right now they are just accelerating their own problem. Ever increasing prices of models drives people to conversions and other suppliers. Ever increasing costs for rules (and spamming books) just drives people into piracy. This is, of course, the people who don't switch games instead. It is almost as if Games Workshop tries to do the absolute worst possible thing it can to its own sales.

[Eldar_Atog]

It all comes down to use. When CDs first came out (and DVDs later) sales of them did not take off until they dropped the price of the players through the floor. Then the format exploded. If you want to sell models, you need cheap, effective rules. That's the golden ticket.

This analogy only works for new players though. If the price point for the rules is too high, that dissuades the person from the initial investment. I usually try to encourage other hobbies/companies to people that can't afford the initial investment. Everything (not just gaming) is so expensive now. I hate to see people saddle themselves with debt for a hobby.

For the older players, the rules might be the only purchase they make in a year. For them, it's a different situation. It becomes an internal debate about how important the hobby is to them vs how much they have invested. For the person that has invested 2K+ in this hobby, a expensive rule book is just the cost of doing business. GW has been counting on this fact for a long time.

[Psychosplodge]

3. If GW took 25% off the price of Landraiders I'd buy 17.6 a month.

If GW took 25% of the price of the Land Raider I'd buy 25% more Landraiders annually.

[Mr Mystery]

This analogy only works for new players though. If the price point for the rules is too high, that dissuades the person from the initial investment. I usually try to encourage other hobbies/companies to people that can't afford the initial investment. Everything (not just gaming) is so expensive now. I hate to see people saddle themselves with debt for a hobby.

For the older players, the rules might be the only purchase they make in a year. For them, it's a different situation. It becomes an internal debate about how important the hobby is to them vs how much they have invested. For the person that has invested 2K+ in this hobby, a expensive rule book is just the cost of doing business. GW has been counting on this fact for a long time.

DVDs in particular benefitted from being a significant step up in quality from VHS, and 'back door' proliferation via the PS2 and X-Box - people bought the consoles, wound up with a DVD player by happenstance, and so started buying the DVDs. Soon as that happened, noticably higher quality was, you know, noticed.

Blu-Ray hasn't done quite as well because the leap in quality isn't so noticable unless you have a home cinema type situation, and even then it's not all that. Though yes, I do have a 3D telly and Blu-Ray for it, because I'm a tart.