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 Kilkrazy wrote:

 lord_blackfang wrote:

 Kilkrazy wrote:
GW currently have £17.55 million cash in the bank to spend against actual losses, so they could survive for several years.

Or commission 4 new websites!

Nah, I'm kidding. £17.55 million is probably Kirby's severance pay.

My thinking is this year's profit was down from £16 million to £8 million.

If it dropped another £8 million next year they would be in danger of starting to run at a loss. The year after, they could drop another £8 million to make it £8 million loss, to be made up from cash reserve.

Of course the profits drop faster than overall revenue due to the fixed cost base, so perhaps they would run out of cash in two years if things go on as they are.

The only problem with a linear projection like that is that it ignores the network effect. It's a bit tautological, but a very large driver of why people play GW games is that people play GW games. If either a) there are alternative models that people use to play the games or b) there are alternative games that people can easily play instead of GW's offerings, you could see those sales numbers fall very much more quickly.

a) is at the crux of the Chapterhouse debacle. They've been using their size to bully the market for years (anyone remember them suing RAFM back in the '90's for the latter's "Reaction Marines"?), but they were forced to go "all in" when Chapterhouse didn't cave and got pro bono representation and their moat and wall turned out to be built of straw. That's turning into a big hit and with other companies coming out with competitive models (and there Mr. Kirby missed the boat on the impact of 3d printers since some of the great new small companies are using 3d printing not for consumer models to but to open up the field for *designers* to make something using CAD-type skills not old-school sculpting skills), they are in serious danger. Mantic (almost...) isn't quite there yet, but they're closing the gap. And there are many others experimenting with the quality/price trade-offs. Moreover, dropping of in-store gaming at GW stores (using GW models, 'natch) and support for "official" GW events (ditto) lowers the relative "cost" of using non-GW figures.

And on b), when you can go into a FLGS (since GW stores no longer really support gaming) and get a pick-up game of Infinity, Malifaux, Warmahordes, DZC, KoW, or whatever as easily as you can find a game of 40k/WHFB, GW is probably done in its current form...

GW's really living on their installed base to generate new customers, but the more then churn to try to generate sales of the newest shiny, the more they risk eroding that installed base.

Valete,

JohnS

With reference to 3d printing perhaps Mr Kirby needs to have a look at Turbo Squid and Deviant Art to see just how many 3d modeler's are out there. There are plenty of people who can model in 3d software, but would be terrible with using greenstuff.

Bought a pot of liquid green stuff this morning from a GW store (my first purchase from a GW store in 3 years) so the GW fightback starts now!

Rumours of Kirby's demise have been greatly exaggerated!

The only time I play 40k games since 6th edition dropped is as a backup game that has a reasonable chance of finding a random opponent at the FLGS if and only if the games that I actively want to play get cancelled. That network effect and my interest in the background of the universe are the only reasons I'm keeping my existing fully painted armies. The changes in the rules to make all 40k games effectively apoc, the years of price increases, and the general decline in quality of models (both with "finecast" and sculpts like storm talons and hell turkeys) are the reason that I haven't bought anything new other than books and paint for years and why I sold or am selling everything that is unpainted.

 Do_I_Not_Like_That wrote:
Bought a pot of liquid green stuff this morning from a GW store (my first purchase from a GW store in 3 years) so the GW fightback starts now!

Rumours of Kirby's demise have been greatly exaggerated!

And yet much like your pot of green stuff, GWs profits will be all dried up in about six months!

(Serious, though, LGS dries up super fast. Keep the pot sealed in another container or buy Vallejo plastic putty. Its cheaper and better.)

KommissarKarl wrote:
Has anyone crunched the numbers to see how the second half of the year did on its own? We all know the first half tanked, did this carry on into the second half or did it pick up a bit?

"Just for kicks, here's GW's last six half-year revenues:

Autumn 2011: £62.7
Spring 2012: £68.3
Autumn 2012: £67.5
Spring 2013: £67.1
Autumn 2013: £60.5
Spring 2014: £63"

Kirby did mention that sales picked up in the last quarter. However, one would expect that, given it featured heavily promoted webstore campaign (bonus minis and all) and one week of 7th edition.

I still can't believe they spent so much on a website. Maybe they padded their own pockets and wrote it all off as expenditures. Somehow that seems less awful than incompetently paying millions for a crappy on-line store.

Apologies in advance, it's almost 5, and I'm REALLY bored.

 MWHistorian wrote:
I still can't believe they spent so much on a website. Maybe they padded their own pockets and wrote it all off as expenditures. Somehow that seems less awful than incompetently paying millions for a crappy on-line store.

As I pointed out many times, corporate webstores tend to cost millions. VR webstore costed 15 million euros, M&S webstore costed £150 million etc...

I have also often wondered where the heck exactly the money goes, since the result is usually slow, unpleasant-looking site with plenty of technical problems, but it seems that it's the market rate...

From the Telegraph Article on Page 16: "We run a tight ship, and do our damnedest to get more sales. Everything else is just whistling Dixie. "

Do you guys in the UK actually say whistling Dixie?

No but maybe he picked it up when he was in the US for a year bringing the HHHobby to you guys..........

"Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle-class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things are otiose in a niche."

Kirby seems to think that "niche market" means "zombies," as he's simply assuming that the current customers are an undiscerning lot with bottomless wallets who will happily spend without a second thought. The boasting about lack of market research seems at best presumptuous and at worst like disrespect for the customer, and I assume this attitude is common at executive level (remember, as said in the Chapterhouse case our favourite part of the hobby is buying things from GW). I've never run a business, but I'd guess it isn't a good idea to just shut yourself away and take your customers for granted.

"Our market is...people who want to collect our miniatures." Well...yeah. It reminds me of the report where he said "sales is all the money we take in and we quantify it by counting it." He just utters these bland truisms but seems incapable of deeper insight (when not contradicting himself or making clearly incorrect statements like the Pokemon gem). Did he get the CEO's job by sending in tokens off cereal boxes?

In thier defense, I think Cromwell frowned on whistling.

Oh lawd. Those BOLS comments!

Correct the company is running even keel and still growing.

We must have different definitions of 'growing.'

They made a profit as well as launched a buttload of new models and books. It costs money to ramp up like that. Once you ramp to a certain extent you hit "economies of scale" and you plateau or in their case, the production will plateau and level off, while hopefully sales remain strong.
That is your future profit. They didn't kick into high gear this last year and a half or so without knowing it was going to cost them $$ to do it. Most likely, they knew that they would dip, but the future groundwork was being laid.

Great news!

weeble1000 wrote:

 MWHistorian wrote:
GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.

It's the first thing Lego did.

........oh, girls do like Legos...I guess we should have known that...

Is that where the Lego Friends range originated?

alphaecho wrote:

weeble1000 wrote:

 MWHistorian wrote:
GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.

It's the first thing Lego did.

........oh, girls do like Legos...I guess we should have known that...

Is that where the Lego Friends range originated?

Yes.

 Thud wrote:
Oh lawd. Those BOLS comments!

Correct the company is running even keel and still growing.

We must have different definitions of 'growing.'

They made a profit as well as launched a buttload of new models and books. It costs money to ramp up like that. Once you ramp to a certain extent you hit "economies of scale" and you plateau or in their case, the production will plateau and level off, while hopefully sales remain strong.
That is your future profit. They didn't kick into high gear this last year and a half or so without knowing it was going to cost them $$ to do it. Most likely, they knew that they would dip, but the future groundwork was being laid.

Great news!

Yeap. The white knights are out in full force there, saying how GW's prices are fine, and the company isn't in danger at all to anyone other than the typical internet trolls that have been predicting doom for 20 years now.

So, the numbers are out, and I now feel totally comfortable activating Smug Mode. If next year's report continues the doom & gloom(sorry, the "great news"), all but the most glued-to-saddle Knights of the Holy Order of Kirby will have to dismount and acknowledge the reality; if GW don't change tack soon, they're headed for either a crash or a slow ignominious slide into irrelevance.

Once you ramp to a certain extent you hit "economies of scale" and you plateau or in their case, the production will plateau and level off, while hopefully sales remain strong.

This sentence makes absolutely 0 sense...

PhantomViper wrote:

Once you ramp to a certain extent you hit "economies of scale" and you plateau or in their case, the production will plateau and level off, while hopefully sales remain strong.

This sentence makes absolutely 0 sense...

It makes complete sense as long as you don't know a thing about business or manufacturing....at all....then it's completely an intelligent statement.

Its the gift that keeps on giving i swear.

So is it a sure thing for kirbs to be revoted in?

 Desubot wrote:
Its the gift that keeps on giving i swear.

So is it a sure thing for kirbs to be revoted in?

As chairman, most likely. He isn't resigning from the company as a whole, just the CEO position. For the past year or so (?), he's held both CEO and chairman positions, which isn't allowed indefinitely under UK law.

Nothing surprising in this report, except maybe that it wasn't worse. At the risk of sounding like a pessimist, I think we're seeing the beginning of the end.

Bottom line is, unless GW makes sweeping changes, they will continue to shrink and eventually close the doors/be bought. The writing is on the wall, you can't continue to ignore or deny the actual problems.

The PR problem is real and causing them to lose customers as well as steering potential new customers away. They need to foster healthier relationships with the independents.

The competition in the miniatures/wargaming industry is growing in number and quality. Its time to improve the quality of their rules, and reduce the cost of admission into the game.

The attitude and culture of GW needs to change. The product will sell itself, its a hall of fame IP. Using slimy corporate strategy to drive sales is counterproductive. Its driving people away. If they bothered with market research, they might not be so out of touch with their customers.

Adapt to the changing industry, build customer loyalty, or lose the game.

Did I read they're paying out 20p per dividend? What's Kirby's scoop from that?

 agnosto wrote:

PhantomViper wrote:

Once you ramp to a certain extent you hit "economies of scale" and you plateau or in their case, the production will plateau and level off, while hopefully sales remain strong.

This sentence makes absolutely 0 sense...

It makes complete sense as long as you don't know a thing about business or manufacturing....at all....then it's completely an intelligent statement.

I don't know. I think it only makes sense if you don't know anything about the English language. It's obvious that writer has no idea of what economies of scale means. Perhaps he meant the law of diminishing returns. I have absolutely no idea what the rest of it was supposed to impart, but apparently in that dude's world having fewer sales and sales revenue is an indicator of remaining strong.

I recently read that Tom Kirby's wife is IT director for Games Workshop---is that correct?

 AgeOfEgos wrote:
I recently read that Tom Kirby's wife is IT director for Games Workshop---is that correct?

Why would a company need an Impassable Terrain Director?

 AgeOfEgos wrote:
I recently read that Tom Kirby's wife is IT director for Games Workshop---is that correct?

Appears to be true, and likely explains the 4 million for the website. Ah, nepotism. I wonder what Mrs. Kirby's qualifications are in technology to warrant such a position.

Ah who am I kidding I'd bet money she's an accounting/finance type with zero background in IT/computers.

I couldn't find any inflation factored numbers in the report. Probably because it made them look worse.

For instance, the Real Revenue changes would looks like this:

2014: 121.2 GBP
2013: 134.6 BGP

It's about 2 mil worse than what the constant currency makes it out to be. It's very telling that this figure is gone now when it used to be in previous reports. A 13.4 mil drop looks a bit worse than a 11.1 mil. Kirby is trying to cook the books in his financial report.

Looking at the breakdown in revenue (pg 12), UK, Europe, USA and Australia are the 4 largest by far sectors for revenue, and they all went down by several million each. The profit however is a different story. It showed that the UK tanked by about half of it's profit as it ate all of it's losses (no where else to cut?). Meanwhile Europe had a significant loss of .5 mil in profit, no where near as much as it lost. AUS dropped 200 thousand more in profit about 10% of what it actually lost. US gained 400 thousand more in profit for a total of 3.7 mil, which is impressive as they lost 4 mil in revenue. That is some REALLY aggressive cost cutting to keep those numbers afloat.

 Wilson wrote:

 AgeOfEgos wrote:
I recently read that Tom Kirby's wife is IT director for Games Workshop---is that correct?

Why would a company need an Impassable Terrain Director?

Because Kirby is shoveling a metric ton of bull gak!

I think this annual report can be a good thing for the company.

You can spin this as much as you want to the public, but behind closed doors, there is no way to sugar coat this to the rest of the Board of Directors.

A nearly 10% drop in sales during the time you released 7th edition, space marines, and Imperial guard? These are your bread and butter releases. THE flagship products of your flagship range.

You can't spin this. You can't ignore it. It's dangling in your face, exposed for the world to see.

Now is the time for them to address the problems of recent years and DO SOMETHING.