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If a business has the cash, the growth potential, and the licensing and business deals but no customers, it'll go out of business. The customers are the most important bit really.

I think GW has been shedding hobbyists impressively fast, something that's hidden by an enviable profit margin and various schemes they've been doing.

I'm still uncertain if when the few 'common man' hobbyists who are still into GW leave it'll cause GW to go away or not. I think there is a decent chance of there being a very small number of crazy, eternally obsessive fanboys who are willing to spend any amount of money for their Hobby, despite all kinds of terrible issues. They might even keep the entire company afloat. I hope not, really.

 focusedfire wrote:
The problem with this "old think" business model is that it drives the game design department,.... which ends up forcing more models into a game system and market not designed for such.

This isn't true at all. Having a game where you buy lots of models doesn't have anything to do with GW's game design issues. The rules to 40k suck because the authors are lazy and/or incompetent and think that it's ok to publish rough drafts and scream "BEER AND PRETZELS FORGE THE NARRATIVE" everywhere as if making a "casual" or "narrative" game excuses bad design work. It would be possible to make a large-scale game that sells lots of models without having any of 40k's rule problems, GW's authors just aren't capable of doing it.

To compound this problem, the business model also ends up pushing for a faster and faster release schedule.

And neither is this. GW had the same game with a much slower release schedule for years/decades, it's only recently that we've seen a major increase in the rate of new releases. It has nothing to do with any inherent qualities of 40k's design, it's a desperate attempt to milk the cash cow harder by rushing out new products as fast as possible and hoping that short-term sales offset the customers who get tired of it and quit. And the pace is increased even more by day-1 DLC that creates separate new releases out of things that normally would have been in the codex, another desperate milking of the cash cow.

This in turn encourages cloners/ recasters to use the new technologies in a way that provides "affordability" to the customer base that would not other-wise be there.

I seriously doubt that recasters are even a minor factor. Remember, GW's target market is younger kids buying stuff in GW stores. When a kid wants a box of space marines their parents are either going to buy one from the local GW store or not buy one at all, they aren't going to go on Chinese ebay looking for the best deal on recasts. So those recasts are only going to a small minority of players with both the detailed knowledge of the game required to know that recasts exist at all, and the lack of moral standards required to buy recasts. It's not great for GW, but there are much bigger things for them to worry about.

When customers look around at several unfinished theme armies that they never go to play, more than a few will bow out.

Most of GW's customers never even finish a single army. People with multiple armies are a small minority of dedicated collectors, not a major factor in GW's problems.

That when the 3-d printing / rapid prototyping machinery becomes so affordable that almost anyone can afford one

And this is complete speculation. 3d printing isn't even close to that point yet, and there's no guarantee that it will ever reach it. GW has much bigger problems to worry about right now, problems that make it questionable whether they'll even survive long enough to see 3d printers that are a viable threat to their business model.

By writing rules that keep model redundancy to a minimum GW will reduce both loss to re-casters cloning their products and legal costs of defending their IP.

Err, no, they really won't. If recasters are a factor then what exactly do you think will happen when GW starts selling digital files instead of physical model kits? Every download site is going to have a copy of everything GW produces, and people who are willing to buy recasts will just pirate the files and print their own models for free.


Automatically Appended Next Post:

 Mysterious Pants wrote:
They might even keep the entire company afloat. I hope not, really.

They won't. GW's biggest market is newbies buying starter sets. If they lose market share and no longer get to be the default game that every new miniatures customer starts playing their sales will collapse, the shareholders will dump the company, and WOTC will buy them in the bankruptcy auction.

 focusedfire wrote:
*snip*

You said a lot of words and yet I didn't really catch any particular take home points from your post.

On the 3D printing thing though, it's very speculative. We are a long way off having printers in the home that can print models of GW's scale to any acceptable level. It may never even happen. Even when you think of 2D printers, not all that many people got printers that were so good that photograph printing places went out of business. I think we'll see the same with 3D printers. Most people will realise that they don't need them in the house, at most they'll buy a cheap ones before realising they aren't actually that useful. The high end ones that can actually print a 28mm model sufficiently will be few and far between in homes.

3D printing means more for industry than it does for actual homes IMO.

I've said this for a while and often get replies like "but imagine the possibilities!" and I reply "what possibilities?" and am met with either silence or unrealistic ideals

Is gw 'going under'?

No, but they're pushing an unsustainable model. They're being propped up with massive cost cutting, and are more interested in short term sales than long term stability.

They're on a downward spiral. And have been for the last two or three years. Short term? Yeah, they're not going anywhere, if you ask me. But In five to ten years? Different story, I think.

Very interesting fourteen pages of analysis and discussion. make of it what you will.
http://masterminis.blogspot.co.uk/2013/08/the-future-of-games-days-games-workshop.html

How many models would you have to print to break even on a 3D printer good enough to replicate the detail of GW models? I'm guessing you could build a 4k point army including paints, rule books, codex/supplements for cheaper than a 3D printer good enough to replicate GW models. Also there's the fact that you won't be able to play tournaments or at your local GW store with 3D printed models. Anyone hard core enough to buy a high end 3D printer most likely wants to be able to use their army in those types of settings at least sometimes. High quality home printers haven't exactly put MTG out of business for those same reasons.

Toofast wrote:
Also there's the fact that you won't be able to play tournaments or at your local GW store with 3D printed models.

This is one thing that won't be a factor. If 3d printing is ever good enough to match the quality of current GW models (and it will have to be for anyone to be interested in using it) there will be absolutely no way to tell the difference between a painted 3d printed model and a painted GW model, just like there's no way to tell the difference between a recast and a real model.

(Well, as long as it's not a finecast model, in which case the recast would be obvious because it doesn't have as many casting flaws!)

Peregrine wrote:

focusedfire wrote:The problem with this "old think" business model is that it drives the game design department,.... which ends up forcing more models into a game system and market not designed for such.

This isn't true at all. Having a game where you buy lots of models doesn't have anything to do with GW's game design issues. The rules to 40k suck because the authors are lazy and/or incompetent and think that it's ok to publish rough drafts and scream "BEER AND PRETZELS FORGE THE NARRATIVE" everywhere as if making a "casual" or "narrative" game excuses bad design work. It would be possible to make a large-scale game that sells lots of models without having any of 40k's rule problems, GW's authors just aren't capable of doing it.

I'll try to bear with your highly aggressive and mis-informed arguments.

A) GW admits to being a model company first and game company second. This is an admission that model sales drive the game design, not the other way around. If you can understand this then the fact that each new edition and codex not only pushes for thew customers to abandon their last army but encourages the spamming of what ever is the hot new kit.

B) Don't mistake corporate speak like "Forge the Narrative" as a sign of laziness or incompetence. They are just words to mask a profit based corporate decision in something that the customers will find less objectionable.

C)GW has, over the years, repeatedly said that the rules of 40K and how they play are not much of a concern to them. Why? As long as they sell models, is the only thing that matters to GW.

D) In order to make a large scale game that works GW would have to either drop to 15mm scale or put a cap on the number of models allowed on the table per turn. You think GW will ever do either of those? Why do you think that GW has been introducing the low model count "Warjack" heavy factions? Did I say "Warjack"? Oh uh cough* cough* I mean apoc level mini-titans called "Knights" .

Peregrine wrote:

focusedfire wrote:To compound this problem, the business model also ends up pushing for a faster and faster release schedule.

And neither is this. GW had the same game with a much slower release schedule for years/decades, it's only recently that we've seen a major increase in the rate of new releases. It has nothing to do with any inherent qualities of 40k's design, it's a desperate attempt to milk the cash cow harder by rushing out new products as fast as possible and hoping that short-term sales offset the customers who get tired of it and quit. And the pace is increased even more by day-1 DLC that creates separate new releases out of things that normally would have been in the codex, another desperate milking of the cash cow.

Which goes towards my point that GW is grabbing what money they can before the current business model becomes completely obsolete. Now, you could maybe argue the GW is so short sighted that they can only see or have only planned as far ahead as the cash grab. But, you cannot argue that they have recently stepped up both the number of models expected for the customers to use in the game and a faster release schedule.

Also, every edition has pushed or tried to push the model count up. Why? So the customers have to buy more models. I shouldn't even have to point this out.

Peregrine wrote:

focusedfire wrote:[This in turn encourages cloners/ recasters to use the new technologies in a way that provides "affordability" to the customer base that would not other-wise be there.

I seriously doubt that recasters are even a minor factor. Remember, GW's target market is younger kids buying stuff in GW stores. When a kid wants a box of space marines their parents are either going to buy one from the local GW store or not buy one at all, they aren't going to go on Chinese ebay looking for the best deal on recasts. So those recasts are only going to a small minority of players with both the detailed knowledge of the game required to know that recasts exist at all, and the lack of moral standards required to buy recasts. It's not great for GW, but there are much bigger things for them to worry about.

A) Re-casters and the upcoming tech are a huge concern. As is the Chinese factories keeping the molds that were sent over there a few years back when GW tried to sneak a fair bit of their production to the cheap labor. If you wonder why some of the chinese stuff is so close to GW's stuff it is because they are using the same equipment that GW uses and have more than a few of GW's old molds.

B)GW's primary target hasn't been the "younger kids" for a while now. At least not since the economic collapse of 2007-2008. If you look at their releases since that time they have moved more and more towards rules and codices designed for someone to update an existing army or collection. Why do I say this? Because GW moved from releases that gave a new player a playable start in the game for $250-$400, to here update your army with these 3 new units that will cost about $300 - $500.

Just a note here-With only a single caveat, there is not nor has there ever been a single successful business model based on telling your existing customer base to bugger off in favor of trying to bring in new customers. The exception being when your existing customer base is a liability (Read 1980's yuppification of the Harley Davidson brand where they actively discouraged any connection to the 1%ers / Outlaw Bikers).

Rest of the time you want the positive word of mouth and guaranteed return clients.

C)Parents have not been buying GW products for their children for a variety of reasons since the start of the "Great Recession". This is why the community stopped growing. Parents are increasingly more put off by the hyper-violent setting and it is cheaper to give little timmy a game for the console he got for Christmas, Birthday, Channukah, Parents splitting up or what ever other reason.

D)When a company is failing to grow their client base faster than they are losing customers and the few kids coming in are cash strapped and internet savvy.....recasts become a vedry real concern for GW. Not saying that those buying re-casts are wrong, just that GW's business model and likely 1000% mark up over cost leaves them open to be undercut.

Peregrine wrote:

focusedfire wrote:When customers look around at several unfinished theme armies that they never go to play, more than a few will bow out.

Most of GW's customers never even finish a single army. People with multiple armies are a small minority of dedicated collectors, not a major factor in GW's problems.

Source please.
If you mean that someone buys some model for somebody else as a present and that the majority of those individuals never do anything with them then I agree.

But if you are talking about someone who has become sold on the idea then I would disagree.

And as I pointed out above, When your veterans are the ones keeping the profit in the margin, it becomes a real problem for GW if the stop playing / collecting.

Peregrine wrote:

focusedfire wrote:That when the 3-d printing / rapid prototyping machinery becomes so affordable that almost anyone can afford one

And this is complete speculation. 3d printing isn't even close to that point yet, and there's no guarantee that it will ever reach it. GW has much bigger problems to worry about right now, problems that make it questionable whether they'll even survive long enough to see 3d printers that are a viable threat to their business model.

It is already here. The new rapid proto-typing tech is affordable enough for small start-up business. The hardware is there, the software for rapidly converting scans to a printable 3-d matrix is in place. Only thing the industry is waiting for is the next generation of designers to be trained in such.

Remember, they don't have to print the model, they can use an inverse function to put plastic everywhere the model is not to create the first molds.

Peregrine wrote:

focusedfire wrote:]By writing rules that keep model redundancy to a minimum GW will reduce both loss to re-casters cloning their products and legal costs of defending their IP.

Err, no, they really won't. If recasters are a factor then what exactly do you think will happen when GW starts selling digital files instead of physical model kits? Every download site is going to have a copy of everything GW produces, and people who are willing to buy recasts will just pirate the files and print their own models for free.

It comes down to the profits of large scale versus small scale production. When the tech hits the point that many will have such printers in their homes then the customers will have no reason to spend the money or effort ordering from a re-caster.

Will their still be piracy? Yes but as long as GW keeps their mark-up with in reason and continues to turn out desirable new artwork, there just won't be much motivation for people to pirate the materials.

Edit for spacing and corrections

 focusedfire wrote:
A) GW admits to being a model company first and game company second. This is an admission that model sales drive the game design, not the other way around. If you can understand this then the fact that each new edition and codex not only pushes for thew customers to abandon their last army but encourages the spamming of what ever is the hot new kit.

Except:

1) GW saying stupid stuff doesn't make it true. They're a game company, regardless of whether they try to pretend otherwise to get people to stop criticizing their rules.

2) GW doesn't effectively use power creep to sell new models. For example, how many copies of the Taurox or DA flyer have they sold? Why are Tau and Eldar more powerful than more recent codices? There are probably a lot of balance problems caused by the rule author wanting to do something cool and not bothering to playtest enough to realize how broken it is, but I seriously doubt there is a policy of making things overpowered to sell them.

B) Don't mistake corporate speak like "Forge the Narrative" as a sign of laziness or incompetence. They are just words to mask a profit based corporate decision in something that the customers will find less objectionable.

No, it's laziness and incompetence. GW's idiot rule authors can't write good rules, so they publish garbage and scream "FORGE THE NARRATIVE" to try to pretend that their garbage is actually amazing work. The problems with GW's rules don't help sell the models, they just make it a bad game.

C)GW has, over the years, repeatedly said that the rules of 40K and how they play are not much of a concern to them. Why? As long as they sell models, is the only thing that matters to GW.

And anyone who isn't an absolute ing idiot knows that good rules help sell models. GW just doesn't have anyone capable of writing good rules, so they take a "casual at all costs" attitude and pretend that only TFGs demand better quality.

D) In order to make a large scale game that works GW would have to either drop to 15mm scale or put a cap on the number of models allowed on the table per turn. You think GW will ever do either of those? Why do you think that GW has been introducing the low model count "Warjack" heavy factions? Did I say "Warjack"? Oh uh cough* cough* I mean apoc level mini-titans called "Knights" .

This is not true. Granted, certain things probably work better at smaller scale fluff-wise, but 40k could be a much better game without changing scale or model types at all.

Which goes towards my point that GW is grabbing what money they can before the current business model becomes completely obsolete. Now, you could maybe argue the GW is so short sighted that they can only see or have only planned as far ahead as the cash grab. But, you cannot argue that they have recently stepped up both the number of models expected for the customers to use in the game and a faster release schedule.

But you're missing the point. GW's aggressive milking of the cash cow has nothing to do with game design or how many models you're supposed to put on the table. If GW made Warmachine they'd be doing the exact same thing with new releases.

A) Re-casters and the upcoming tech are a huge concern. As is the Chinese factories keeping the molds that were sent over there a few years back when GW tried to sneak a fair bit of their production to the cheap labor. If you wonder why some of the chinese stuff is so close to GW's stuff it is because they are using the same equipment that GW uses and have more than a few of GW's old molds.

Do you actually have any sales numbers to support this claim? What percentage of GW's sales are going to recasters?

B)GW's primary target hasn't been the "younger kids" for a while now.

Take a look at their financial reports and investor guide, where they openly state that this is their target market. And look at how they continue to operate GW stores aimed at that market instead of dropping the retail division and letting independent stores (which older customers favor) handle all of it.

Just a note here-With only a single caveat, there is not nor has there ever been a single successful business model based on telling your existing customer base to bugger off in favor of trying to bring in new customers.

Well yes, this is one reason why GW is not being a successful business right now.

Source please.

Go to your local gaming store and count how many people have even finished one army. And then realize that these are the dedicated players who have stayed in the game long enough to play in stores.

It is already here. The new rapid proto-typing tech is affordable enough for small start-up business. The hardware is there, the software for rapidly converting scans to a printable 3-d matrix is in place. Only thing the industry is waiting for is the next generation of designers to be trained in such.

No, it really isn't here. Printers that are even close to capable of matching the quality of real models are incredibly expensive and still fall short.

Remember, they don't have to print the model, they can use an inverse function to put plastic everywhere the model is not to create the first molds.

...

This is a joke, right? You do realize that the molds for plastic kits are cut from steel blocks and have to survive high pressure + temperature, right? If you try to 3d print your own molds you're just going to end up with a big mess and a lot of wasted plastic.

Will their still be piracy? Yes but as long as GW keeps their mark-up with in reason and continues to turn out desirable new artwork, there just won't be much motivation for people to pirate the materials.

So let me get this straight: enough people will BUY recasts from Chinese ebay to put GW in real danger of failing, but somehow those people won't just pirate FREE downloads of GW's 3d printing files? I really have no idea how you think those two claims are consistent.

and WOTC will buy them in the bankruptcy auction.

that's if we're lucky. thing is if GW goes out of busniess I suspect they'll be bought out by someone more intreasted in their IPs then anything else

I actually think GW might have a chance to turn it back around here. The 7th Edition book is a big step up in quality from previous efforts, and the Wood Elves releases were a bit cheaper than the Dwarfs that came before them. We can only wait and see going forward, but I have a little faith for once.

 focusedfire wrote:
(words)

Your first post was... interesting, but your second post is all over the place with bad information and weird assumptions. Peregrine covered things pretty well, but just as a round-up:

- you seem to miss what was meant about how the rules of a game can be well or poorly designed to match the "scale" of the battle (as in force sizes/number of models the rules work best with, not physical scale at all - 40k could have smoother, better gameplay and still sell huge armies of 28mm models if improving the rules was actually a design goal)

- you put way too much faith in GW's ability to predict the effects of their own rules (the old saw about "new/unpopular models are always OP to increase sales" should be debunked a hundred times over by now, there's no rhyme or reason to which codexes will be powerful or which models within them will be buffed or nerfed - for every new Riptide there are probably several new Pyrovores or Mutilators whose rules are terrible beyond comprehension).

- you have a very skewed perception of the impact recasters and third party bits makers actually have on GW (recasters probably do hurt Forgeworld for a number of reasons, but no one is effectively knocking off GW's plastics - the low quality Chinese recasts of plastic sprues barely show up on the radar for even the most veteran gamers, let alone the bulk of GW's player base)

- you don't really seem to understand 3D printing, the costs and limitations of the various printing technologies available, or how miniatures design/manufacturing companies actually use them; ditto for 3D scanners (3D printing as a manufacturing process is not a threat to high quality mass produced miniatures and won't be for many, many years, if ever)

- you ESPECIALLY don't understand casting or injection molding (3D printing is completely irrelevant for injection molding, and for casting is only used to make the first male copy of a model; it requires an extremely high quality printer, and if we're talking about replicating GW's models, it isn't even necessary - anyone can already make a mold of GW bits or figures and cast it themselves relatively cheaply, yet it isn't an issue - 3D printing won't affect this in the slightest)

I left 40k in 1993 came back in 2013 same old EXACT conversations... Let's be honest GW are the market leaders... The 'i can do what GW does n do it cheaper' belief has fuelled a lot of corpse companies... Bolt action / warmachine seemed to have bucked this trend... But imho they aren't 3% what gw does i am not biased in fact these 2 games got me looking and i repicked up GW.. Expensive? Yes. Holds / improves value upon painting?? Double yes. It's at worst an investment guys. Can see your GW spent money again? (For the most part) Yes. GW have not gone nuts on prices. They are 35% off to all 3rd parties resllers . So a reseller offering 20% off is still keeping 15%. Terminators were £27 for 10 in 1993... Now are about same for 5 now... Not a massive change in 20+ years... Plus they let them go for 35% off

ConanMan wrote:
I left 40k in 1993 came back in 2013 same old EXACT conversations... Let's be honest GW are the market leaders... The 'i can do what GW does n do it cheaper' belief has fuelled a lot of corpse companies... Bolt action / warmachine seemed to have bucked this trend... But imho they aren't 3% what gw does i am not biased in fact these 2 games got me looking and i repicked up GW.. Expensive? Yes. Holds / improves value upon painting?? Double yes. It's at worst an investment guys. Can see your GW spent money again? (For the most part) Yes. GW have not gone nuts on prices. They are 35% off to all 3rd parties resllers . So a reseller offering 20% off is still keeping 15%. Terminators were £27 for 10 in 1993... Now are about same for 5 now... Not a massive change in 20+ years... Plus they let them go for 35% off

At one of the major cons last year, iirc privateer press made a statement that they had sales worth 15 to 20 million.

You are correct. They are no where near gw's level in terms of size or numbers, but they're still a big fish. Just thought you might like to know some actual figures (second hand, admittedly)

Plenty other miniature producing companies are very likely in the low to low-ish million in terms of sales.

I think that GW is on a self-destructive downward spiral. Whether or not that means they'll "go under" (which likely wouldn't happen anytime soon anyways) is another story, but their business practices are ridiculous, their entire marketing strategy is obsolete and ignorant, and they are basically pricing themselves out of the market by promoting this "luxury product" rubbish. It's extremely telling that while GW is slowly declining, miniature wargaming and all of their competitors are growing. They still have a long way to go to catch up to GW, of course, but when the industry leader is constantly shrinking it's more of the pie open to the competition.

When you raise prices, you often either do it slowly or offer the same value; GW lowers value (e.g. Dire Avengers getting reduced to 5 from 10 and *still* having the price go up) while at the same time encourages more figures - this is the opposite of what you should be doing, because it's basically charging your customers double for the same thing as before. It's a scam tactic.

Go and read two things:

1) "The Future of Games Workshop" 14-part series, written by the former CIO of Aldi so an experienced global executive that knows what he's talking about:
http://masterminis.blogspot.com/2013/08/the-future-of-games-days-games-workshop.html

2) The Parallels of GW and the last years of TSR by our own Wayshuba who, while I have no idea of the size of his company, is a business owner and executive so has insights into running a business that most of us do not:
http://www.dakkadakka.com/dakkaforum/posts/list/584858.page

GW is definitely on the decline, and needs to do something to turn the ship around, because this outdated marketing style of refusing to take advantage of the internet, shunning the local gaming stores and simply cutting costs while raising prices is not sustainable longterm.

All hail the Emperor! OK, now that is out of the way, I love GW. Take a look at the game five years ago. Pretty decent set of rules, but they have evolved
in what I would call a positive direction. And the new model output is awesome in sculpting and new units. Necrons were pretty basic and got a major face lift. Dark Eldar went from
a joke that you couldn't sell to kids to a very stylish dark army. The quality of the books and art (photography, at least) is hugely improved. Terrain kits have emerged that you can
include in your army list.

Now I don't play other game systems and very few video games because A) I'm an old fart, and B) I'm quite happy building (and customizing) GW kits and playing the occasional game.
So will GW go out of business? Not likely unless we have the zombie apocalypse, (and I think some people suspect the zombies have already taken over Nottingham). Can't predict the future,
but you are in a golden era with this company now - high quality product (notice how the fabulous Finecast has disappeared?) and a world-wide franchise. Do you have to pay to play - well, Ja!

Suggestion if you think the prices are to high: divide your expenditures by the number of hours you spend on assembling and painting your models (assuming you paint, which you should), and
the hours you use those models in games. Tweek the numbers if you're heavily analytic. Bet you are coming out spending less than you would on a bouquet of flowers for your sweetie, with a tenuous
return for that expenditure... you will always have your minis.

Where can I get my GW booster T-shirt?

Another reason GW's business model is unsustainable is the players.
GW is actively pushing out veteran players and at the same time, doing nothing to recruit new ones. GW does not advertise and relies on word of mouth. The word of mouth comes from veteran players. Only now, the word of mouth are usually bad words. No new players.
Don't keep current players. Don't get new players. As a business this is simply unsustainable. The only question is at what rate are they losing players and how long can they continue like this? I have no idea. It could be a few years, it could be a few decades, but eventually they'll run out of players.

 MWHistorian wrote:
Another reason GW's business model is unsustainable is the players.
GW is actively pushing out veteran players and at the same time, doing nothing to recruit new ones. GW does not advertise and relies on word of mouth. The word of mouth comes from veteran players. Only now, the word of mouth are usually bad words. No new players.
Don't keep current players. Don't get new players. As a business this is simply unsustainable. The only question is at what rate are they losing players and how long can they continue like this? I have no idea. It could be a few years, it could be a few decades, but eventually they'll run out of players.

This is my worry too.

One of the key selling points about GW (40K/WHFB) was the number of people who played it, many of them veterans of long years of involvement. These guys acted as recruiters and trainers of new players as well as providing a massive pool of potential opponents. How many times have you seen someone post, "I would like to play XXX game but I can't find anyone locally who plays it?"

You only have to look at DakkaDakka now compared to five years ago to see how many of these veterans have changed from being grumbling but still playing grognards to active players and promoters of alternatives.

GW have also thrown away a lot of the support they used to have from independent games shops, at the same time as reducing staff levels in their own outlets. All this adds up to more difficulty in promoting the games professionally.

Whether this has had a big effect is hard to say. GW's profits have been healthily climbing for five years, since the bad couple of years in the mid 2000s following the bursting of the LotR bubble.

However their revenues have been basically flat, despite a high rate of price increases. Codexes for example cost double what they did two years ago. If you are selling £130 million now, and two years ago you were selling £130 million at half the price, it is fairly obvious that you are now selling half as many units, so you probably have half as many customers.

Obviously this example is not true, because all the prices have not doubled in two years, but it shows the basic logic. So it seems that GW are selling the same value of stuff to fewer customers, with higher efficiency (because making fewer units to sell) and making more profit. High prices also form a barrier to entry for new players, and a barrier to continuing for veterans.

The question is whether the player base is really falling away, and at what point it might begin to collapse.

The Dec 2013 interim report showed a shock drop in sales and profits. The end of year report, due very soon, may or may not continue that trend. I think the release of 7th edition should have done well and make the numbers look pretty good. But it might be a false dawn.

All that said, GW have a lot of money in the bank. They are not going bankrupt in a year. If their current strategy proves to be false, they have some time and money to change things.

I think they are trying to change things. The Ork campaign books, for example. The policy of releasing mini-codexes (Knights, Stormtroopers) and dataslates, are all evidence of change.

Of course they could get it wrong. Lots of people didn't like 6th edition, and lots of them like 7th edition even less. If you don't like the core rules, you are much less likely t buy into campaign books and so on.

If you look at their stocks, MiniWarGaming.com, TheWarStore, And Ebay You will see there is more business than EVER before. Customers are not slowing down... Their sales are increasing!

 MordorMiniatures wrote:
If you look at their stocks, MiniWarGaming.com, TheWarStore, And Ebay You will see there is more business than EVER before. Customers are not slowing down... Their sales are increasing!

And a lot of those sales are going to GW's competitors, not to GW.

 MordorMiniatures wrote:
If you look at their stocks, MiniWarGaming.com, TheWarStore, And Ebay You will see there is more business than EVER before. Customers are not slowing down... Their sales are increasing!

Do you mean that GW's sales are increasing?

Nyet.
GW is losing its monopoly position, it will become smaller, but it is not going down.

Once more, with feeling...

If you have not read this entire 14 part series and are commenting here, more so that Games Workshop is going to be fine, you're doing a great disservice to yourself and the discussion. Read it. Understand it.

After the third time in this thread, we should hopefully get some folks to grok what's happening.

And the uptick in eBay sales isn't good for GW. That is meaning more folks are selling off their gaming goods, such as myself. My last two armies are going on eBay tomorrow. I'm keeping my Grey Knights unless I get a large cash offer just because of the work I put into them. If/when GW finally collapses, I look forward to supporting the new company that picks up the IP and game products, assuming they actually listen to us and stop making the game a random pile of nonsense and stop devaluing the models left and right.

 Peregrine wrote:
And in the long run that strategy is just slightly less suicidal than shooting yourself in the head. 40k, like other games, is a social activity where "what are my friends playing" is a dominant factor in a potential customer's choice of products to buy.

The plus side of word of mouth advertising and going after those with money is that their peer groups will have similar resources. GW's market will shift to being more concentrated around locations where the relative wealth of the area's teens can support them. In the areas they will do well, people will have no problem finding opponents.

GW would have one good financial report to brag about their "success", and be bankrupt and sold to WOTC before the next one.

We'll see. I happen to think that they can segment their market enough from the larger miniature wargaming market. We're already hearing reports from people trying to get other games going that the local 40k players are reacting very, very negatively. Like they're in a protectionist or siege mind set where they're willing to see any non-GW competition as something that needs to be actively opposed because everyone of their group that gives those games a try is one less potential opponent. I think the true believers will entrench even further.

Would I rather this not work and GW be forced to return to something like their approach that grew them into an international company? Absolutely. But when I see in people's signature that they have 10,000 points of one army and 8,000 points of another, I think there are plenty of customers who will buy 2,500 points of one army and 2,000 points of another at ever inflating prices instead.

 frozenwastes wrote:

 Peregrine wrote:
And in the long run that strategy is just slightly less suicidal than shooting yourself in the head. 40k, like other games, is a social activity where "what are my friends playing" is a dominant factor in a potential customer's choice of products to buy.

The plus side of word of mouth advertising and going after those with money is that their peer groups will have similar resources. GW's market will shift to being more concentrated around locations where the relative wealth of the area's teens can support them. In the areas they will do well, people will have no problem finding opponents.

Why do you think it is price that is the primary reason for GW haemorrhaging customers? Anecdotal evidence from these many threads would put that factor as being in the middle to low end of people's "why I left GW" lists.

I would say not price, but value. The rulebooks go up in price without offering anything significant in terms of actual game worth. The models are being cut in numbers and raised in price; stealth price increases such as the massive Stompa being cheaper than the Imperial Knight. Stupid rules releases like codex pricing on a book containing 1 units with 2 wargear options, etc. etc. etc.

The value proposition of Games Workshop games is terrible, specific pricing excluded.

 Grimtuff wrote:

Why do you think it is price that is the primary reason for GW haemorrhaging customers?

I don't. I'm saying the price is not the barrier to everyone that it is to some. And that for whatever reason that people leave, the higher prices being paid by those who stay and new customers will continue to make up for it as GW slowly declines in a controlled fashion which allows for cost cutting to provide a cushion on their margins.

I'm saying that if GW ends up with a quarter of the customers they had a decade ago, if the quadruple their prices from that point and watch their costs like a hawk, they can stay profitable and keep paying out Kirby his £400,000 a half in dividends until some sort of merger or sale can be organized and he can retire with a final feather in the cap of his career. He's a multi-millionaire just off the bonuses he issued himself in the last year of the LOTR bubble, so GW has already accomplished all his goals.

I believe that many 40k players will keep buying their plastic miniatures even if they were at current Forge World prices. And for GW not to collapse, "many" doesn't even have to be a majority.

I think that could work as a boutique miniatures company, but GW is organised as a mass production company.

The revenue does not need to decline much to eliminate the profits entirely, because of the enormous fixed cost base.

 TheKbob wrote:
The value proposition of Games Workshop games is terrible, specific pricing excluded.

Absolutely. I'm not really GW's customer at this point. I do my 40k completely independent of them. I use other published rules, get miniatures from people like Kromlech, Anvil and Victoria Miniatures and have the better fluff of Fantasy Flight's RPGs, RT and early 2nd edition to use. 40k's vehicles are just derivative of historical tanks, so I just convert historical vehicles. And making mad-max ork type vehicles from toys and scrap material is super easy and fun.

I just don't think I'm typical of GW's customers. I think enough of GW's customers think the value is there that they keep buying. And within that group is a subset that are prepared to pay even more.

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 Kilkrazy wrote:
I think that could work as a boutique miniatures company, but GW is organised as a mass production company.

The revenue does not need to decline much to eliminate the profits entirely, because of the enormous fixed cost base.

I used to think the exact same way. Then i realized it's all paid for.

Tooling machine? Paid for.
Injection machines? Paid for.
3d sculpting and design stations? Paid for.

So the only real costs going forward are salaries of design and production staff. And the various costs of their building, property taxes, utilities, etc.,. And since you're going to have these people and places around anyway, the only real question is how to allocate their hours of work in the most efficient way possible.

Do I think GW is taking a huge risk in using mass production technologies to only produce in limited quantities? Absolutely. They are in the fortunate position though, of having all their manufacturing capabilities completely paid for by previous revenue.

And if you look in their previous reports, you'll find that administration staff has only just begun to be cut to match the cuts in production and retail staff. So there's a long way to go in terms of cost cutting.

It's obviously not sustainable forever to keep cutting costs and jacking up prices, but I think GW hasn't yet hit that point of going too far. Over the last couple of years Australian prices haven't increased too much while the rest of the world is being increased to levels similar to Australian pricing. I think we'll see UK, EU and US pricing hit parity with both Australia and Forgeworld before GW is in danger of truly having gone too far.

What do I want? GW to have sufficient financial hardship that they are forced to change. Or be bought out by someone with a better vision for their fictional universes.

When do I think this will happen? Not right away. There are enough true believers who keep buying. Until it does, I'll keep enjoying the 40k universe without using GW as my source for anything. It's so derivative that there are enough sci-fi and historical miniatures and models that I have so many options that I just don't need GW for any of it anymore. I would like that to be different though. I'd like the value proposition of their products to return to being something that interests me like they once were. But I'm not GW's target demographic. I'm not a 14 year old boy. So they might never appeal to me again.

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I think most of Gw's customers are just ignorant of the fact that they have other options.

That is of course, GWHQ's ultimate objective by all accounts.

 frozenwastes wrote:

 TheKbob wrote:
The value proposition of Games Workshop games is terrible, specific pricing excluded.

Absolutely. I'm not really GW's customer at this point. I do my 40k completely independent of them. I use other published rules, get miniatures from people like Kromlech, Anvil and Victoria Miniatures and have the better fluff of RT and early 2nd edition to use. 40k's vehicles are just derivative of historical tanks, so I just convert historical vehicles. And making mad-max ork type vehicles is super easy and fun.

I just don't think I'm typical of GW's customers. I think enough of GW's customers think the value is there that they keep buying. And within that group is a subset that are prepared to pay even more.

I'm all for this. I wish it wasn't like this. If they reintroduced a skirmish game, one where having one Predator Tank was a jaw dropping force of reckoning, like the fluff, I'd be all for it. The thought of needing 3 Predator Tanks plus 6 Rhinos, plus 60 Marines, and accouterments just doesn't excite me anymore. I like taking 3~4 different games with me to game night for the same bag space as one 40k army. That means I can play with so many different people and games versus sticking to one.