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2014/07/12 19:12:47
Subject: Re:Do you really think GW is "going under"?
azreal13 wrote: 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.
Indeed. We now have had in our city, not one but 3(!) LGS's have opened up more or less at the same time. There are a lot of people that are being opened up to new games having never even heard of them previously. They had seen WMH slowly taking over the gaming club but there are several others.
What makes this more interesting is one of the 3 stores has opened up about 30 yards away from GW (the other two are a little out of the way and are not exactly on the high street) If they're smart they'll be open on Mondays and Tuesdays for obvious reasons.
GW might have a fight on its hands for hobby ignorance over here.
Games Workshop Delenda Est.
Users on ignore- 53.
If you break apart my or anyone else's posts line by line I will not read them.
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.
Exactly. IMO "normal" 40k should be the scale of Bolt Action. You get infantry, some extras, 0-1 armored car (not sure what that would translate to in 40k, walker perhaps?), 0-1 tank but you can take transports if you want, and a standard game is 1,000 points which is like 3-4 squads plus extras.
Exactly. IMO "normal" 40k should be the scale of Bolt Action. You get infantry, some extras, 0-1 armored car (not sure what that would translate to in 40k, walker perhaps?), 0-1 tank but you can take transports if you want, and a standard game is 1,000 points which is like 3-4 squads plus extras.
If they ever made a sci-fi bolt action, I'd be down. The only problem is how do you get folks to buy new models versus re-using 40k ones? I think that's the only reason we haven't seen a true competitor to 40k; the large glut of old sci-fi 28mm that exists in the wild.
Shine on, Kaldor Dayglow!
Not Ken Lobb
2014/07/12 19:33:57
Subject: Re:Do you really think GW is "going under"?
I read that 14 part series. It raises some very valid points and is mainly why I wrote my original post. Despite everything in there, I don't see GW totally going under due to their lack of debt, continued profit (however small that may be these days) and the hard core fan boys in upper class areas that are buying more stuff now than ever before.
Toofast wrote: I read that 14 part series. It raises some very valid points and is mainly why I wrote my original post. Despite everything in there, I don't see GW totally going under due to their lack of debt, continued profit (however small that may be these days) and the hard core fan boys in upper class areas that are buying more stuff now than ever before.
Then you just don't understand corporate accounting and finance, which that means you should go read the other threads with discussions from those who do that have been linked previously.
When a company like GW gets in a death spiral, the end of the company is usually resolved in months, not years.
And citation needed for your references as most facts point towards taking out loans to pay dividends (or expunging a large portion of cash reserves), continue profits only sustained through extreme cost cutting measures, and reduced sales volumes that cannot sustain the costs associated with GW's business strategy (stores, in-house manufacturing, etc.).
This message was edited 1 time. Last update was at 2014/07/12 19:53:40
Shine on, Kaldor Dayglow!
Not Ken Lobb
2014/07/12 20:01:06
Subject: Re:Do you really think GW is "going under"?
azreal13 wrote: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.
Great point!
GW has, from as early as the mid-90s, done everything they can to segment their offerings from the larger wargaming hobby. Their business model, like anyone who provides a complete package, benefits from (or maybe even relies on) customer ignorance.
TheKbob wrote: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.
When GW was growing from a UK importer of D&D to an international company selling their own games and figures, their model count and scope is what you are describing. Now it's become Epic in 28mm with bad rules.
WayneTheGame wrote:Exactly. IMO "normal" 40k should be the scale of Bolt Action. You get infantry, some extras, 0-1 armored car (not sure what that would translate to in 40k, walker perhaps?), 0-1 tank but you can take transports if you want, and a standard game is 1,000 points which is like 3-4 squads plus extras.
Bolt Action + House rules is probably what I do 40k with the most often. They classified all their tanks and anti-tank weapons by classes like light, medium or extra-heavy, so it's really easy to find the right rules to represent 40k tanks and anti-tank weapons. Knights and Stompas and whatnot? Keep those off the table except for special occasions and play Epic in 6mm if you want those.
TheKbob wrote:If they ever made a sci-fi bolt action, I'd be down.
The only problem is how do you get folks to buy new models versus re-using 40k ones? I think that's the only reason we haven't seen a true competitor to 40k; the large glut of old sci-fi 28mm that exists in the wild.
People like new stuff. In the CHS lawsuit, GW had to give their sales numbers to the court. In there you'll find that their new releases sell well on launch and then drop off. It's much easier to sell people a new product than an existing one. People like news, excitement and hype. The industry is also better served by multiple smaller companies, so I don't really want to see a single direct competitor to 40k rise up. I like the current trend towards diversity.
I also think it's okay for a rules publisher to sell a game and not miniatures to someone. They'd obviously like to sell as much as possible and people's existing collections of 40k might stand in the way of some miniatures purchases, but I still think there's room to sell people new miniatures. People like buying them.
Toofast wrote:I read that 14 part series. It raises some very valid points and is mainly why I wrote my original post. Despite everything in there, I don't see GW totally going under due to their lack of debt, continued profit (however small that may be these days) and the hard core fan boys in upper class areas that are buying more stuff now than ever before.
I see it the same way except I would also add that GW is declining and also segmenting itself further from the larger hobby. So they're becoming smaller in terms of player base, customer base, sales volume and market share. In short, they're making themselves irrelevant to everyone who's not contained in their ecosystem.
Raising prices and cutting costs can't go on forever, but I think it can go on longer than most people realize.
This message was edited 2 times. Last update was at 2014/07/12 20:03:58
Balance in pick up games? Two people, each with their own goals for the game, design half a board game on their own without knowing the layout of the board and hope it all works out. Good luck with that. The faster you can find like minded individuals who want the same things from the game as you, the better.
2014/07/12 20:05:36
Subject: Re:Do you really think GW is "going under"?
Raising prices and cutting costs can't go on forever, but I think it can go on longer than most people realize.
I'll have to read more in the coming weeks about that new game from Warlord.
And as to your last statement, this would be true of a smaller company with lower operational costs, such as Wyrd. But Games Workshop has warehouse(s) they own, printing machines, retail chains, and more that they must all maintain. Their finances can be just as tight or worse should they begin to collapse. The next TSR is apt if they don't course correct.
This message was edited 1 time. Last update was at 2014/07/12 20:05:47
Oh, it'll eventually implode. There is a point where their actions have alienated enough customers that no price hike can cover the lost revenue and where if they lay off one more person, they can't actually function at their core business.
If GW doesn't do something, they will eventually hit that point.
Their current plan?
Open up as many single employee stores as possible and hope the combination of location and staff members works out to produce a profitable store.
Release more and more products direct only so all the customers the independent trade partners have developed will eventually order from GW direct, allowing GW to capture more of the revenue.
GW is betting on their single employee hard sales approach to retail. They think it'll work.
And it might. There are enough stores that are indeed hitting their sales targets. If they can figure out what that store is doing and standardize those practices then they might be able to find a way to hard sell their way to profitability. Until they cross a pricing line where even the best sales tactics can't close the deal because of the lack of value.
Balance in pick up games? Two people, each with their own goals for the game, design half a board game on their own without knowing the layout of the board and hope it all works out. Good luck with that. The faster you can find like minded individuals who want the same things from the game as you, the better.
2014/07/12 20:45:20
Subject: Re:Do you really think GW is "going under"?
While I talked about this in another thread, it seems appropriate to elaborate a little more here. I wish to start with a disclaimer that what I write is exclusive of my personal feelings about the current state of the game, GW management, or their insane pricing.
First, a quick look at the "death spiral":
There is a reason in business this is called a "death spiral". Not a hiccup, trouble, a bump in the road, or whatever. It is called this because it has a pretty predictable and repeatable pattern historically in a business context. What is important in recognizing a true death spiral is a specific sequence of events, not any particular one in isolation. If there is one thing I have learned about this funnel, is every business owner should be completely paranoid of never getting caught in it. I don't have to say what the usual outcome as you can guess with the title of "death".
The first step that can cause many companies to enter the spiral is of course a decline in financial performance. Companies that experience double-digit declines in revenue are especially susceptible to entering the funnel. This has no happened with GW.
The second step is rushing out products faster and faster in an effort to stem the tide of the funnel deepening. This is also usually coupled with rapidly escalating double digit price increases. GW has been doing this, especially over the last six months.
The result of the second step, leads to the third step, an obvious decline in product quality. We have especially witnessed this with GWs print products over the last six months. This becomes even more acute when the company is raising prices, effectively charging a premium, for sub-par quality.
After this, the company enters towards the bottom of the funnel. Before I explain this phase, let me say this. There is only two documented cases (that I am aware of) of a company saving itself once it has entered that stage of the funnel - Apple, with the return of Steve Jobs, and Nintendo.
The previous steps all obviously lead to poorer sales. This then leads to a company cutting back on expenses. Once these expense cuts reach into sales and marketing, it is pretty much a forgone conclusion that the company is finished. We have seen GW doing this as well - going to one man stores, cutting out Games Day, moving stores from high street to side street, moving over 1,000 products direct only.
One thing to also take note of. The funnel progressively gets narrower towards the bottom because each stage progressively happens faster and faster. Historically, the average for most companies, once they fully enter the funnel, is 22 months to death. Now, that is an average so it means for some it happens faster, others slower. But rarely do these drag out more than four or five years at most.
Strictly speaking from a business standpoint, you need to look at where we think GW is in this funnel. Without a doubt, they are definitely in it. I personally believe they are entering the final stages of the funnel and the next financial report should tell us just how quickly they will be going through that final stage of the funnel.
I would love for GW to come to its senses and pull itself out of the spiral. I would love if GW stopped its aggressive business practices or stopped insulting its customers. I want to like them, they just have to give me a reason.
That said, I don't think they will pull up and avoid crashing.
Also, check out my history blog: Minimum Wage Historian, a fun place to check out history that often falls between the couch cushions.
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.
A good read, And a even better video.
Lots of good ideas, And some interesting observations on GW.
Its hard to be awesome, when your playing with little plastic men. Welcome to Fantasy 40k
If you think your important, in the great scheme of things. Do the water test.
Put your hands in a bucket of warm water,
then pull them out fast. The size of the hole shows how important you are.
I think we should roll some dice, to see if we should roll some dice, To decide if all this dice rolling is good for the game.
I think they'll have enough time to give the single employee store expansion an honest go. They're going to open up tons of them and enough need to stick. If they don't succeed, then they'll have lost money on the cost of opening so many stores and not gotten what they need from them and that'll be that for GW.
If a given GW store with a single employee does somewhere around 60% of the revenue of one of their previously formatted multi-employee stores, then they need to open up twice as many stores to get the same revenue when you factor in ramping up time and the costs of multiple locations.
These stores are either going to be the heroes that sell GW product at great levels or the millstone around GW's neck that drags them down into the murky depths. It'll entirely be a matter of location, lease details and recruitment of employees.
And that "customer experience" position they advertised before may actually be the key to figuring this whole thing out. If they can actually get someone who goes to GW stores that are successfully meeting their sales goals and figures out exactly how they're doing it and then they develop a chain wide process of how to make the single employee stores operate at a profit and then roll that out, they could end up doing great.
The funny thing though, is they're having to learn how to do something they already knew how to do. If they could recognize that something has fundamentally changed about their product, they wouldn't need how to figure out how to sell it again. They could simply make their product like it was when GW was growing and people were loving it and then sell that. Instead they've committed to this epic-in-28mm-to-sell-more-models approach and now have to figure out if there's some way to make this high cost, low value product work.
This message was edited 2 times. Last update was at 2014/07/12 21:56:53
Balance in pick up games? Two people, each with their own goals for the game, design half a board game on their own without knowing the layout of the board and hope it all works out. Good luck with that. The faster you can find like minded individuals who want the same things from the game as you, the better.
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.
A good read, And a even better video.
Lots of good ideas, And some interesting observations on GW.
Agreed. The pertinent discussion starts at 45min in for those less inclined to wait. TL;DR: bunch of fans of 40k disliking GW backed with miniature business based experience. The creator of Creature Caster calls GW plastics highway robbery with good reasoning and not hyperbole. If you are a "head in sand" fan of GW, don't listen. It might make the sand a bit more uncomfortable and travel to lower extremities. Then we might have to hear about that...
This message was edited 1 time. Last update was at 2014/07/12 21:39:32
frozenwastes wrote: I think they'll have enough time to give the single employee store expansion an honest go. They're going to open up tons of them and enough need to stick. If they don't succeed, then they'll have lost money on the cost of opening so many stores and not gotten what they need from them and that'll be that for GW.
If a given GW store with a single employee does somewhere around 60% of the revenue of one of their previously formatted multi-employee stores, then they need to open up twice as many stores to get the same revenue when you factor in ramping up time and the costs of multiple locations.
These stores are either going to be the heroes that sell GW product at great levels or the millstone around GW's neck that drags them down into the murky depths. It'll entirely be a matter of location, lease details and recruitment of employees.
And that "customer experience" position they advertised before may actually be the key to figuring this whole thing out. If they can actually get someone who goes to GW stores that are successfully meeting their sales goals and figures out exactly how they're doing it and then they develop a chain wide process of how to make the single employee stores operate at a profit and then roll that out, they could end up doing great.
The funny thing though, is they're having to learn how to do something they already knew how to do. If they could recognize that something has fundamentally changed about their product, they wouldn't need how to figure out how to sell it again. They could simply make their product like it was when GW was growing and people were loving it and then sell that. Instead they've committed to this epic-in-28mm-to-sell-more-models approach and now have to figure out if there's some way to make this high cost, low value product work.
Most of the facts seen to date is that the stores are already millstones and that one-man type operations are poor business models. Games Workship benefits poorly from their own sales margins in them as they have the rental costs and employee cost associated with them when those burdens could be handled by the independent store fronts with only some change in margins. The only problem is that GW cannot then control the message and would have to openly compete with the third parties eating their lunch. When you're a newcomer and you see an $85 rulebook plus $50 army book or $15 rulebook and $40 starter box, outside of pure aesthetics as a drawing point, you can guess where the money is going.
frozenwastes wrote: 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.
GWs biggest overhead is staff and stores. They also have to project hugely into innovation of revenue because 3D printing is coming.
2014/07/12 22:15:08
Subject: Re:Do you really think GW is "going under"?
I liked the concept of open source games rules. And I do agree GW is cutting one market demographic after another.
Its hard to be awesome, when your playing with little plastic men. Welcome to Fantasy 40k
If you think your important, in the great scheme of things. Do the water test.
Put your hands in a bucket of warm water,
then pull them out fast. The size of the hole shows how important you are.
I think we should roll some dice, to see if we should roll some dice, To decide if all this dice rolling is good for the game.
If the correlation that Painting Buddha pointed out between dividend and earnings per share holds up, then GW might not have the time I think it does.
Balance in pick up games? Two people, each with their own goals for the game, design half a board game on their own without knowing the layout of the board and hope it all works out. Good luck with that. The faster you can find like minded individuals who want the same things from the game as you, the better.
frozenwastes wrote: If the correlation that Painting Buddha pointed out between dividend and earnings per share holds up, then GW might not have the time I think it does.
That's the gist of what I was getting at, but I'm terrible at explaining things financial.
Wayshuba is right that the next report is going to be very, very interesting.
If earnings per share really are down by a full half, then I don't know what to say.
Balance in pick up games? Two people, each with their own goals for the game, design half a board game on their own without knowing the layout of the board and hope it all works out. Good luck with that. The faster you can find like minded individuals who want the same things from the game as you, the better.
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.
Mod edit: In the future, please avoid making an image-only post. Thanks - RiTides
This message was edited 1 time. Last update was at 2014/07/12 23:57:01
I always questioned the need for stores, at least in the U.S, I think that all of that money would be better spent on marketing, advertising, and endorsements that would spread the product much further than sparsley scattered, poorly manned stores can do.
Six mistakes mankind keeps making century after century: Believing that personal gain is made by crushing others; Worrying about things that cannot be changed or corrected; Insisting that a thing is impossible because we cannot accomplish it; Refusing to set aside trivial preferences; Neglecting development and refinement of the mind; Attempting to compel others to believe and live as we do
Mod edit: In the future, please avoid making an image-only post. Thanks - RiTides
You should know that the individual writing that blog not only manages a growing miniatures based product, but is also a massive 40k fanboy and former corporate executive himself. You can read the entire series which begins with his credentials.
I assume you're "making fun", in a poor fashion, of myself and others who are saying that the outlook is currently grim for 40k, but your opinion towards the facts of the matter does not change them. Much like many political issues of today, just because you want to believe something really, really hard, it doesn't change facts.
So, if you'd like to provide your own fact based analysis on why Games Workshop is just fine, I'm sure we'd all enjoy that. But after having three major threads on this topic, none have yet to arise; the only thing that has is name calling from pouting and misplaced angst. So, which category will you likely fit into?
agnosto wrote: I always questioned the need for stores, at least in the U.S, I think that all of that money would be better spent on marketing, advertising, and endorsements that would spread the product much further than sparsley scattered, poorly manned stores can do.
So does 90+% of every other company in the world, the rest do both. Only GW goes the store with only in house advertising route.
Peter: As we all know, Christmas is that mystical time of year when the ghost of Jesus rises from the grave to feast on the flesh of the living! So we all sing Christmas Carols to lull him back to sleep.
Bob: Outrageous, How dare he say such blasphemy. I've got to do something.
Man #1: Bob, there's nothing you can do.
Bob: Well, I guess I'll just have to develop a sense of humor.
Mod edit: In the future, please avoid making an image-only post. Thanks - RiTides
You should know that the individual writing that blog not only manages a growing miniatures based product, but is also a massive 40k fanboy and former corporate executive himself. You can read the entire series which begins with his credentials.
Not only that but he was an executive of a company that makes GW look like small potatoes (he says he was former Global CIO of Aldi, which while I don't have all the data according to Wikipedia made revenue of 53 *billion* Euro in 2009, compared to GW's what, 150 million pounds?), so he's probably the most qualified person to discuss such matters, and if he thinks things are dire then they probably are.
This message was edited 1 time. Last update was at 2014/07/13 01:51:17
