GW EOY 2014 Investor Statements

[Path Walker]

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.

Are you aware of the concept of brevity?

[Psychosplodge]

Are you aware of the concept of brevity?

Based on previous posts I'd suggest not.

[Caitsidhe]

Are you aware of the concept of brevity?

If you want brevity, go to twitter. This is a forum. You can also ignore any poster you like. You could debate him on the points he makes rather than trying to attack him all passive aggressive. Is that brief enough for you?

[Psychosplodge]

We have the same identical thread more or less though every results don't we Caitsidhe? Profits are down but still profitable. no one agrees what that actually means. then someone says something offensive and the name calling starts till the thread gets locked?

[Mr Mystery]

I think he's also somewhat over looking the base costs of infrastructure - something no other Wargames manufacturer has to the same degree.

GW Stores guarantee anyone starting the wargames hobby in them are instead starting the GW take on that hobby. All nicely branded and available in store, and if it's not, easily shipped to same store for free.

All the others have to take their chances with FLGS. Not necessarily a bad thing, but far riskier. All it takes is for the owner/manager to not particularly enjoy a given game, and it won't sell as well, because the promotion of said game won't be there.

Yes, Inifinity, Malifaux and Warmahordes are all cheaper to start. Of course they are. They're a game of smaller scale. Let's take X-Wing as a good example. Never a need to buy a rulebook, just ships. And those ships are anywhere from £10 (sourced online) to £75 for the CR-90. And I get all I need with each ship. ACE! Except....except, well, I'm just about spent out. The only ships I don't currently own? Rebel Transport and Imperial Shuttle - just haven't got around to those yet, and the Millenium Falcon and Slave-1, because I can't get hold of them at a sensible price until the reprints are in-store. And I spent a lot on that this year. Well, I say year, I should say 4 or 5 months. But once I have one of every big ship and two of every little ship? What then? I won't need much more stuff. Oh and FFG are cunning. Ships are cheap, and you only need a few for a playable collection. Except, and here's the rub - you feel compelled to keep up with the releases because each new ship introduces new cards, cards which could benefit your favoured strategy or tactics....Can't buy them separately after all - but gotta have them.

Warmahords - Gets expensive quick as well. Why? Small scale games only require a few models. But with small amounts comes ennui. Same list, same tactics, same strategy. I'll just add X to shake it up. And you know what would compliment X? Y. Best get Y. Oh and go on then, Z as well. Why not? Boof. Before you know it, you're spending just as much on models as you do with GW.

Nothing wrong with any of that. Nice models are nice, and if they tickle your fancy, why not go for them?

What do these games have in common? Other than miniatures and dice and rulebooks and that? Simple. Not one of them, not one, is run for the benefit of the players. They're all out equally to make as much money as they can. So why GW get singled out I'm not entirely sure. Perhaps it the Microsoft affect, where Big = Bad, because reasons. Never mind that GW aren't actually capable of putting a competently run FLGS out of business by moving in next door. Why? GW Stores can't sell at a discount. FLGS are free to charge whatever they like. So it's not as if they can be undercut. Sad truth here - many FLGS aren't all that well run. Many pop up, most fall, simply because the person or persons running it think it'll be fun to make their hobby their income. They think it'll be a great wheeze and doddle. But it's not. It's flipping hard to run a successful business, especially in the early years.

[Caitsidhe]

We have the same identical thread more or less though every results don't we Caitsidhe? Profits are down but still profitable. no one agrees what that actually means. then someone says something offensive and the name calling starts till the thread gets locked?

They are the same debate; I agree there. However, they aren't identical and different issues do get raised. The silly name calling and so on rests entirely on a specific few (including the one who wanted brevity). The very fact that the debate flares up over and over again is indicative in and of itself. It is a good discussion to have. The issues brought up in this thread are interesting. We have kind of glossed over the fact that despite decreasing revenues, Games Workshop continues to promote from within rather than bring in new talent. This is instructive because it bears on two things:

1. A business culture within a bubble
2. An unwillingness to let outsiders see the books, i.e. the real books

The new head of financials was the company secretary. She already knows everything they do, how they do it, and why they do it. No revelations to an "outsider" need be made. They aren't going to get told anything they don't want to hear. More concerning than yet another dip in sales revenue is the fact that the continuing shake up seems to be making the company more insular.

[Psychosplodge]

I'll agree that's a bad thing. Nothing goes well in a company where the people making the decisions are surrounded by yes men, and if that's what is happening it isn't a good sign for the longterm. I personally hope you're wrong on that score, cause I like most of the setting. But it doesn't look ideal.

[Mr Mystery]

Outsiders - you mean like independantly verified books, which is a requirement of UK law yes?

Oh of course, how silly of me. Let's not bring irritating facts to pop bizarre little theories.

You want to know more about how GW is run - buy some shares. They're publically traded.

And is it more insular? Or is it a case of right person for the right job? Have you seen the new people's CVs and covering letters? Or those of the others who went for the roles? Because if you have, please do enlighten us.

[Caitsidhe]

What do these games have in common? Other than miniatures and dice and rulebooks and that? Simple. Not one of them, not one, is run for the benefit of the players. They're all out equally to make as much money as they can. So why GW get singled out I'm not entirely sure. Perhaps it the Microsoft affect, where Big = Bad, because reasons. Never mind that GW aren't actually capable of putting a competently run FLGS out of business by moving in next door. Why? GW Stores can't sell at a discount. FLGS are free to charge whatever they like. So it's not as if they can be undercut. Sad truth here - many FLGS aren't all that well run. Many pop up, most fall, simply because the person or persons running it think it'll be fun to make their hobby their income. They think it'll be a great wheeze and doddle. But it's not. It's flipping hard to run a successful business, especially in the early years.

Heh. While I agree there are a lot of fly by night gaming stores, there are also plenty that not only stand the test of time, they branch out and have multiple successful locations. Dragon's Lair down in San Antonio and Austin, Texas are a good example. This is a very successful company, solvent. I can point out, however, that they do not offer any discounts undercutting Games Workshop.

They are more successful than a Games Workshop store for several key reasons:

1. Diversity of product. American shoppers, at least, like being able to get all their gamer/geek needs in one store. Most gaming stores carry a vast array of products.

2. Dragon's Lair provides MASSIVE gaming areas and support for all the games it carries. Unlike Games Workshop which attempts to get by in as little space as possible, Dragon's Lair goes out of its way to provide lots of tables, rooms, and support terrain, and even game materials for people to proxy and try out. They understand that selling games and figure is tied to there being a community of players. Help that community thrive and you have a customer base.

3. They don't hard sell anything. If you ask them questions they will answer. Beyond that, they let you do the browsing. They rely on variety and convenience for their customers to be their sales pitch. It appears to work.

In short, most of the successful, large gaming stores seem to employ an approach that is 100% the OPPOSITE of Games Workshop. I am not trying to be cheeky in suggesting that perhaps Games Workshop should study their brick and mortar competition, or at least study the successful ones?

[Mr Mystery]

Which isn't far from my point.

Many accuse GW of muscling out the little man - when they have little reason or capacity to actually do so.

Well run FLGS, like any well run business, and barring any disasters (flooding and insurance welching on you, that kind of thing) won't be damaged over much by competition. Particularly FLGS, because they can offer stuff a GW store can't.

GW stores however, for the wider company, can be used a sort of loss leader. In the right places, they help people see about the hobby. I don't know much about the US, mostly because I don't live there, so can't comment much further with any accuracy.

If GW moves to town, and your FLGS goes under, don't go blaming GW for it. If you don't have customer loyalty in any business, you don't have much business.