GW EOY 2014 Investor Statements

[Caitsidhe]

@Mr. Mystery: I'm not sure why you always default back to this notion that how other games are doing matters. We aren't talking about them. They are unimportant to this discussion. Hell, Games Workshop always insists (as do many people here) that their competition doesn't matter. Ultimately, whether or not other game companies are doing poorly has no bearing (nor is it a valid excuse) for a poor performance by Games Workshop. However, I will briefly entertain the other companies since you seem to come back to them so often. If things were "tough all over" as you like to imply, saying that we just can't see it because they aren't public...

1. The number of competitors (new companies) decrease when things are tough for everyone... the opposite of what is happening right now.

2. If things were "tough all over" we would see some of the weak, smaller companies failing. That is what happens when you start up a new company in a bad market.

I think it is safe to say that all all these new, smaller companies seem to be surviving for now. That is an indicator of a healthy market and that they are stable and/or growing. Small companies must grow to survive. Only large companies can handle multiple quarters of stagnation or shrinkage. Now that we have that out of the way, let's go back to Games Workshop.

The shortest distance between two points is a straight line. This can also expressed as, the most obvious answer is normally the correct one, or where there is smoke there is fire. We can try to come up with all sorts of elaborate reasons or excuses for their continuing drops in sales, customer animosity, treatment of independents, bubble business culture, and savage cut backs and firings within their own company, but what would be the point? All of these things are well-known indicators of a company with serious problems.

[Mr Mystery]

You say it's a poor performance, but have nothing to mark it against.

It's not beyond the realms of possibility that all other manufacturers are finding things tougher than expected. If they're taking similar hits - it's not GW specifically doing poorly. If they're taking bigger hits - then GW would, by comparrison, be doing rather well.

Instead, all we get is this peculiar insistence that despite no evidence, everyone else is on the up and up and raking it in, and it's only GW who aren't.

Is it the most obvious answer? Not really, no. And yes, a straight line etc - but helps to know the lay of the land. Straight lines are well and good until a brief detour takes you to a bridge over a wide river.

The problems are there, yes. But are they actually serious and unique to GW? We don't know. Lots of small companies are popping up - but the established players like PP - who knows how they're doing. We don't is the short answer, but in order to hammer facts to support a specific position, it's widely claimed it's all Roses and no manure in their garden.

Customer animosity - from who? Seems everyone who constantly whines about GW's business practices claim not to buy anything from them ever. How does that make you a customer? Gamer, sure. There's very little making anyone use GW products to play GW games. But customer? If your opening gambit is 'I've not bought anything from you for some time' - how exactly are you a customer?

Bubble business culture - evidenced by? Treatment of independents - some say they like working with GW, some say they don't. Heaven forbid it might be a matter of personal preference. Savage cutbacks? Erm - they continue to open stores run on what they consider the most efficient business model. They're the ones with all the figures, not us. Firings? If a job role is dead weight, and not adding value to the business, it gets cut. Again, hardly an entrepeneur myself, but I understand the basics. You employ precisely as many people as you need to get the job done as efficiently as possible and with the maximum possible profit. I don't think there's a company out there in it's right mind that thinks 'wow, more profits. Best hire more people to take care of that'.

People insist GW are badly run, but never seem to have any actual experience running a business on the same scale as GW at all, let alone one with such a peculiar position of biggest fish in a very small, very niche pond.

Again - GW are not making a loss. Takings are down, but profits remain. They have no debt. They own their own infrastructure. About the only things outside their immediate control is cost of raw materials.

GW 'losing' customers to new games is ultimately inevitable. Crap anaolgy time - me and my Beer. Now, I'm a Real Ale man myself. No, not craft ale, as I don't have a ridiculous haircut, wear glasses or lumberjack shirts. It's just Real Ale to me. When I'm up the pub, my standard tipple is Harvey's Best. Pleasant brew, and fairly local (made in Lewes, about 20 milesish away). Price is also agreeable to me (well, relatively speaking). But, being a Real Ale fan, I'm easily swayed into buying a pint of something new that my local landlady has on. Sometimes, these are really, really nice. Like Oscar Wilde. Other times, they're too hoppy for me, as I prefer a malty pint. If I find a different pint more to my liking, then I'll get merrily drunk on that instead. If it becomes a regular visitor to that pub, I'll drink that over Harvey's Best (again, Oscar Wilde springs to mind. Really love that beer!). BUT - if all else fails, Harvey's remains my default, go to pint. Perhaps the other beer Yve has on aren't to my taste. Or I'm in a random pub elsewhere. If they've got Harvey's, I know where I am with it, and I'll drink that (of course, only the one if I'm driving!). Here, Harvey's Best is GW. By no means the best beer on the market, but to me a guarantee of a more than acceptable level of satisfaction. Well balanced, it's pretty much all things to all people. Hoppy enough for IPA fans, Malty enough for Stout fans.

GW offer a similar 'there'll be something about it you like' deal. Me, I'm put off Warmahordes because of the aesthetic. I'm quite anti Steampunk. I've tried the game, didn't get on with it (mostly because it's rolling 2D6 at a time. Prevents me mass rolling, which I greatly enjoy). I appreciate the rules set and what it offers, don't get me wrong, but it's just not for me. X-Wing? Covered that earlier. Groovy little game, but no less cutthroat when it comes to extracting as much money from me as possible as I keep up with the releases. But GW remain the industry benchmark. And because they're the benchmark, it's damned hard for them to adapt to each and every new game that's released. Yet in my experience (as a gamer, and three times GW employee over a 10 year period as a store mook), people often return to GW games, just as I return to Harvey's Best, time after time. It's known. It's familiar, but above all, it's actually pretty damned good. Not necessarily the best for any given person (despite it's monicker), but good.

People go on and on about the rules, yet the vapidity of rules forums kind of shows it's 40% people not actually reading the rule, 45% people not liking what is actually written, and insisting it's therefore badly written, when it's perfectly clear what happens, and 15% peculiar wording/copy past **** ups.

[AirHorse]

Companies can't grow forever. I don't get why there is so much drama when they shrink...

[Mr Mystery]

Reasons dude, reasons.

[Caitsidhe]

You say it's a poor performance, but have nothing to mark it against..

This is incorrect. It goes to the heart of the tunnel vision you are employing. I mark it against Games Workshop's past performance. That is how you measure a business. Like all competitors, they are ultimately competing against themselves, i.e. the best they themselves have ever done. Where is Games Workshop compared to where she was five years ago? They have entirely changed direction since then and have only gone DOWN. Nothing else matters.

[Mr Mystery]

Yes, they are down on the previous year.

But without knowing where the other companies in their filed are, no actual conclusion can be drawn as to the underlying reasons.

Strong GBP does affect them, as a significant part of their business is export. Yet instantly, it's a lie, because they're cooking the books, because that explanation fits the more paranoid arena of their critics. They can't possibly be telling the truth, because everyone knows they're worse than Genghis Khan (take that, Godwin's Law!) and like to kick Grannies and grill Kittens!

[Caitsidhe]

Yes, they are down on the previous year.

But without knowing where the other companies in their filed are, no actual conclusion can be drawn as to the underlying reasons.

Strong GBP does affect them, as a significant part of their business is export. Yet instantly, it's a lie, because they're cooking the books, because that explanation fits the more paranoid arena of their critics. They can't possibly be telling the truth, because everyone knows they're worse than Genghis Khan (take that, Godwin's Law!) and like to kick Grannies and grill Kittens!

Again, what the other companies are doing doesn't matter here. Games Workshop is down. They are about to be down two financial reports in a row coming off an overlapping period when they dropped new Editions and major new product while also cutting their own company expenses to the bone. Let me put that in context, firing a huge part of their workforce to cut costs didn't even manage to keep their revenues stable. That is the single BIGGEST indicator of a free fall. Normally, corporations cut to the bone to make their profits JUMP for quarterly reports. Cutting to the bone and still having a bad report means you are in deep, deep trouble. Two bad reports in a row, after you have already cut to the bone is a disaster, particularly if it is following what is normally the biggest sales season of the damn year. No matter HOW you try to turn this sow's ear into a silk purse, nobody is buying it. There is a problem. The first step to overcoming a problem is admitting you have one.

[Charon]

In short - it's incredibly easy for GW to lose customers, not because they've done something wrong or don't know what they're doing, but because a new game has come out that has captured public imagination.

Doing nothing to KEEP customers is in fact "doing it wrong".
GW boasted that they do not need to spend money on advertising because recruitment happens in their game stores and through veteran gamers introducing new gamers to the hobby.
Stores were cut, a lot of veteran players got alienated and do no longer "advertise" for them. Quite the opposite tbh.
GW focussed entirely on "sell and forget" customers eho will pay their entry fee into the hobby and then get distraced and quit again. Thats their target audience because they spent a lot of money in a single short period of time.
People who are already in the hobby are deemed unimportant as GW assumes that they are not buying a lot of stuff.

And here could be an issue.
These long time gamers recruit new gamers to expand their gaming group. Treat them like they are unimportant and they will feel unwanted and stop recruiting.
These long time gamers will probably buy every single product over time. They are so invested in the hobby that an exit becomes undesireable for them. But if you treat them like ****, they will stop buying everything and spend their money elsewhere while just getting "mandatory" upgrades from time to time.
Even a good ruleset can do wonders for sales. I really would love to expand on my Hellions for example. The models are gorgeous. But with these rules they just feel like a waste of money and space as I would not use them with the current ruleset.
New Archon/Haemi/Succubus? Why the hell should I buy them? I already own some. If the same working hours went into Vect, Malys and an updated Drazhar model... thats probably 70 € right here without asking myself any question about "do I really need them"

[Mr Mystery]

Again, failing to take into account other factors. UK Retail industry didn't do terribly well last Christmas as a whole. Weather over here is going potty, so clothing suffered. That meant fewer people in the high street, so all retailers feel the impact of fewer shoppers, as only those on a mission to buy from you (planned purchases) will be out and about. Impulse sales (you know, whilst I'm here I think I'll pick up X) go down - and when impulse sales go down, particularly for a hobby, your sales go down quite dramatically.

Any factoring of that in? No. Of course not. Because it's all GW. Only them. In isolation. Nothing else could possibly be contributing except the Interwebular opinion that it's them shooting themselves in the foot, because some bloke on the internet said so.

[Caitsidhe]

Any factoring of that in? No. Of course not. Because it's all GW. Only them. In isolation. Nothing else could possibly be contributing except the Interwebular opinion that it's them shooting themselves in the foot, because some bloke on the internet said so.

Yeah, that is about the size of it. The buck stops there. All those things you keep trying to blame their failings on are irrelevant because those are the sorts of things that a GOOD management team gets out ahead of and mitigates. Even if I were to accept those as the cause of Game's Workshop's problems (I don't), I would have to fault them on not figuring out how to offset them. This is a business we are talking about and excuses aren't acceptable. You either perform or you get the sack. All those people Games Workshop fired to cover up the mistakes at the top are a sick, sad joke. They fired the WRONG people.