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 BobtheInquisitor wrote:
GW has dropped prices on some kits? Which ones?

A few of the finecast to plastic kits dropped in price. Things like the GK Strike Squad being moved to 10 in a box and costing less than 2 5-model Strike Squads separately. Basically GW is moving to cheaper plastic production and or more bulk that likely costs them less to produce and is actually for the first time in... forever, passing the savings on (the savings are like $3 less but eh it's better than paying $10 more, so it's a start).

There's also stuff like Stormclaw, Deathstorm and Stormstorm (okay I made that one up), that are being used for promotional purposes and have massive price reductions.

That said I don't think I've seen a kit that has not been modified in some way drop in price.

MaxT wrote:
I'm staggered that GW charge what they do for rules. They claim to be a model company, but they put a massive ~£80 barrier to entry to use those models in the form of rulebook + & 1 codex. Practically every other model company that makes rules has rules are near or actual zero cost. And it's not like the quality of the rules is a factor, in many cases they're superior !

Your claims are a little exaggerated.

My "codex" for Cyriss (Warmachine) retails for $29.99. How much did the soft-cover 40k codexes go for? Not a heck of a lot more, yet both are about the same size. The rulebook for Malifaux retails for $40.00 and is significantly less thick than the 40k rulebook as well as being soft-cover.

But don't Wyrd do a cheap, small format book, and don't PP give the rules away with their models?

Not being smart, genuine question.

 RunicFIN wrote:

Spoiler:

 Azreal13 wrote:

I also agree that I find it baffling that people still seem so loyal to GW in spite of everything, they often appear to be the very "grateful goobers fawning over the latest jewel like releases" or however it was phrased, but if someone is, somehow, happy with their relationship with GW then we can't demand they stop buying, all we can do is try and show them reasons to stop and hope they agree.

So you are, in fact, trying to spread the negative way of thinking?

Is this for a "good" ( heavily debatable... ) cause like trying to force GW to change their ways, or for some other reason entirely?

PP Rulebook and 1 forces book ~ $60, so half of GW's price. They also include the specific rules in with the models you buy.

Mantic = free download for rules

Spartan Games = free download for rules

Wyrd = $15 for the rules, models come with their rules.

X-Wing = $40 including 3 ships and other starter stuff, other models come with their rules.

Etc etc. Oh, and whether rulebooks are hardback, full of background, made of solid gold, come with free hookers and blow, etc are not relevant to the cost of entry debate, as it's still a cost of entry. Peeps don't want to spent $120+ to find they're not a fan, they'll try the cheaper options first. And there's plenty of those, and one of them will capture them before GW gets the chance.

P.S. Not related to the cost of entry debate but it gets even more hilarious if you go the other way and work out how much it costs to get ALL rules. For Wyrd it's like $60. For PP it's like $100 for Ultimate warroom bundle & rulebook. Mantic, still free. GW, for 40K maybe $2000? $3000?

All those other systems still have the rules available for it. None of the rules to play the game were short print runs that are no longer available.

What about wild west exodus? The massive rulebook full of fluff was $50 (same size as large 40k rulebook), a simpler small paperback rulebook is $20, and all models come with their own rules.

Simple cost to entry rules wise? $20!! Thats less than half of a reduced price baseline codex on ebay!

Lets see.... a newb getting into blood angels would have to poney up $85 for the fluff rules or $58 for the small rulebook and then either $165 for the le rules or $50 for the regular rulebook... cheapest cost for one armies rules is $108!

I agree about the cost of 40k. I started in third (thank god) and saved a ton as I had bought a ton when it was cheaper. I was 40k's most loyal customer (preached it from the rooftops... told people 40k was a lifestyle and not just a casual game...) and i have literally stopped buying 40k this past year (unless I had to have a specific book or unit for my armies) and stopped buying every armies codex books due to the price.

I have gotten into several other games with the money i have saved and love that I have options now!

Regarding the codex prices, I think GW seems to have this idea that as long as they keep improving the quality (materials-wise) of the rules, then they can keep up'ing the costs. The special edition books are good example of this- a little additional fluff, a leather-bound cover, and you can charge and extra $40 to that $50 book.

The thing is, I think they're drastically misunderstanding what people use the rulebooks for. They aren't tomes you keep dusted in your black library in the basement, they are game aides that you use on a game-by-game basis to play. And while the books themselves are very nice in terms of presentation, the costs are extraordinarily high.

I understand their desire to keep this "porsche of mini-wargamming" image they try to foster (although I think it's a bit absurd), but their obsession with limited, one-time only, bathed-in-the-blood-of-heretics materials (books and otherwise) is really hurting the game. GW may be convincing themselves that people just collect their models and don't actually care about playing (since a lot of them never get around to it), but they are going to be shocked when the customer base dries up when there's no more game left to play.

A bit off topic but in way of explanation as to how sales volume may be dropping.

I know nothing about Infinity or Malifaux and I absolutely hate Mantic's rules (subjective) so it's a good thing they're free.

But objectively with WM/H. Faction books are completely optional as the rules for units are included with the models. The main rulebook is $30 vs the $85 behemoth from GW. Yes, GW has packaged 3 books together, 2 of which have nothing at all to do with their game rules. To be fair, they recently released the rules by themselves after a 6 month wait for $58 so lets go with that.
PP $30 main rulebook, faction book $0
GW $58 main rulebooks, faction book $33-$49.50

So for the price of just the GW books to get started, I can have the main WM or H rulebook and a faction starter.

PP is a self-professed game company. GW has stated repeatedly that they are primarily a model company. There's a disconnect in what GW is saying and the message that they are sending to customers which appears to be driving a good number of them away, proven over the last several reports with drops in sales volume.

I just hope GW finds a way to become a stable company.
Less "growth oriented", but table, delivering quality miniatures (that is what they do best).

In regard to the books: these have become way to expensive.
I collect since 25+ years, have 3+ versions of many codexes/armybooks and don't see any quality improvement in the background (75+% the same) and characteristics (80+% the same).
The only quality improvement are the photos in some cases, but IMO they had the best graphic artists in the 1st edition 40k books.
Compare GW books to non-GW books (non-fiction) and you also can see the prices are off.

I have stopped buying books, i have not stopped buying nice new models and have not stopped playing.
But many players i know stopped, spent less and look at other games.

I don't expect 40k universe to dissappear, but GW as the copyright owner might get into trouble.

 Arschbombe wrote:

 techsoldaten wrote:
What I wonder about the financials is how much issues with profitability are related to the quality of Codex releases, and whether or not this is something you can actually observe on eBay and other places on the Internet.

How do you measure the quality of a codex?

I think part of why you see an uptick in armies for sale when that army's codex is updated is because the sellers expect there to be a spike in interest around that time. You get more people selling which must mean more people are buying.

With every codex release there are those who get excited by new opportunities and models and there are those who are upset that a specific build, unit, or playstyle has been eliminated. Does that make quality relative? Just look at the 100+ pages of the BA rumor thread. We've people excited about the update and people swearing at GW that their army has been ruined. That's par for the course. Usually the community comes to some sort of consensus about how powerful a codex is relative to others, but I'm not sure that quality equals power.

I think you are looking at this from the perspective of an individual gamer.

What I suggested is that there might be market forces at work that affect what people are willing to sell their armies for in the secondary market, and that these forces might be depressing sales in the primary (new model) market. It's a much more reasonable explanation for GW's loss of profit than shifting currency values.

I don't think anything I can say about the quality of a Codex matters, the Internet pretty much does that already. The only thing that does matter is whether people's perceptions about a Codex release increase the inventory of models available on secondary markets, and if that affects the average price per model.

This doesn't seem to be a supply and demand issue, at least not in the manner your message suggests. More people selling does not automatically mean more people are buying, I see enough auctions on eBay that don't close to know there's not always a buyer. You can have a lot more people selling than there are buyers. And people's motivations for wanting to sell also don't enter into this, it's not really a matter of what costs the market will bear where pricing levels are set by the scarcity of goods.

When we see prices dip to around $2 per model, it means people are giving up or maybe even rage-quitting the game. They are leaving a significant investment of dollars on the table. If it's 1 or 2 people, that's one thing. If that's the average going rate for models, that's a big problem for GW. It's like selling your brand new $25,000 Honda for $3,000 - what makes someone want to do that? Further, if a lot of people start selling their brand new Hondas for the same price, what does that do to new Honda sales?

 agnosto wrote:
A bit off topic but in way of explanation as to how sales volume may be dropping.

I

But objectively with WM/H. Faction books are completely optional as the rules for units are included with the models.

Actually, you need the faction books in order to get the theme force rules for each warcaster/warlock.

I'm a little surprised by this. With Space Hulk and the rate at which they've been churning out army books, I thought they would be able to mask their dwindling customer base for at least another year. If it had just been business as usual for GW then this news wouldn't be very interesting, but the fact that they've finished their webstore, they've done their restructuring, they've done all the easy cash grabs, new editions, unbound armies, re-released Space Hulk, stepped up production on codex books, raised all the prices -- yet business is still slumping! Things might actually be worse than I thought.

It feels like they pulled out all the stops already. If they don't manage to increase profits this year, then it's a safe bet that they never will (At least not with their current business model).

I think this is the biggest wake up call to GW that the fact that their Market Share is shrinking is affecting their profits.

For a long time GW have considered themselves to be "the hobby tm" and in fairness for a long time maybe they were.

However with the advent of kick starter, Fantasy Flight and a wealth of new game systems GW need to realise they are no longer the only kid on the block and that this is a fantastic time for the wargame / miniature market.

Price comparisons aside there are simply a lot more games to choose from and gamers, like everybody else, only have a finite hobby budget which has resulted in a shrink in GW's market share.

If GW engaged in a bit of non centric market research, or any market research at all they would realise that the average gamer now has way more choice than they did 5 years ago and companies that were quite small in comparison are now able to produce high quality, comparatively cheap / good VFM, starter sets which compete directly with GW products.

For example Deadzone, X-Wing, Dropzone Commander, Infinity - Project Ice Storm etc are all starter sets that would have been impossible for small companies to produce (without significant financial risk) several years ago.

And then there is the advent of the independent retailer and the internet.

Not so much in the US but certainly in Europe independent game stores are springing back up everywhere.

In the UK many independents were closed down by GW's aggressive bricks and mortar store openings. They simply couldn't compete with GW stores who used to sell non-GW products at huge discounts and also offered gaming and painting space.

When independents closed down GW would then stop stocking non-GW products, thereby shutting down the market for anything other than GW's core games.

I'm not sure if it's the closure of so many GW stores here in the UK or more a reflection of how healthy the wargames market is now but there are a lot of successful independent game stores that are doing very well - 2 examples being Wayland games and Darksphere.

And there are also the wealth of online stockist, who alongside independents sell GW products at an average 15-20% discount.

So my point is the loss of Market Share combined with more savvy customers buying at discount is having an effect on GW profit, even though they would like to pretend that isn't the case.

The only way they could combat this is to have GW store specific deals, or release more entry level games to try to grab back some market share.

The sad thing is they have such a huge back catalogue of games and a fantastic IP but seem to not want to commit to it.

Batttlefleet Gothic, Necromunda, Mordheim, Epic, Titanicus all would be bale to compete in today's market and would allow GW to draw cash away from other systems but they seem reluctant to invest in future products.

 D6Damager wrote:

 agnosto wrote:
A bit off topic but in way of explanation as to how sales volume may be dropping.

I

But objectively with WM/H. Faction books are completely optional as the rules for units are included with the models.

Actually, you need the faction books in order to get the theme force rules for each warcaster/warlock.

Which are not a necessity to play the game, and you can get them on tablet for there war room app (which is absolutely fantastic btw!) for a few quid you get all the faction cards. So no you don't actually need them there great for fluff though!

I don't really have a dog in this fight anymore since I left the GW verse a few years ago, but I thought I would interject some on the side of Infinity since we are doing cost analysis.

Infinity has (currently) 3 rule books come in at $48 MSRP a piece, the new 3rd Edition book will be coming in at $75. None of those books are required to play as all rules are free to download and they provide a free army builder. One caveat is there is a campaign system only found in the 3rd book.

A Six model starter runs from $48-$54 and a full army consist of 10-20 models top. Single model blisters run from $11-$60 (dependent on the size of the actual model) and 4 model boxes $34-$44.

And I won't even go into Terrain which is a very important piece.

So Infinity has fairly steep prices, but a low model investment and despite that is showing significant growth mainly to what I contribute to the attitude of the company, which could be considered the Anti-GW.

Anyways back to lurking in here

 NuclearMessiah wrote:
I don't really have a dog in this fight anymore since I left the GW verse a few years ago, but I thought I would interject some on the side of Infinity since we are doing cost analysis.

Once hooked people will spend on any hobby, it is the cost of entry that can be the thing that stops them. For infinity, the cost of entry, in UK prices, is £27/ Thats what a faction starter box costs. Download the quick start rules and you can have a game.

This is also where warmahordes scores, a game with similar per model costs to GW (infinity is often cheaper per model than GW, I can buy two pan o metal character models for the cost of one blood angels plastic priest for instance), but it is cheaper to start, a £25 softback rulebook and a £30 starter army box.

GW requires a £35 rule book, a £25 (minimum) codex plus some models, a single unit of 40K is at least £20 and a legal force £100.

And no, before anyone interjects, deathstorm doesn't count. its a limited release for some inexplicable reason known only to Tom Kirby and his financial advisers, and the starter box provides neither codex or a legal army.

Rather than the ongoing costs that plenty of players complain about, but continue to pay (because they are hooked), it is the cost of entry that is likely causing the most issues, they are simply not getting the new peeople they need.

Hi All,

I used to analyze Financial Reports for a major news firm in the US. Upon reading this I can tell you one thing...

Anyone can blame currencies for the fall in stock price...honestly this is a cover up to poor sales...here are the key words to look for:

Games Workshop said that it now expects to report a first-half operating profit GBP1 million " lower than the prior year, " when reported at actual rates.

also the phrase "broadly" in line with expectations is complete and utter BULLSHIZ. That is such a NON-statement.

Financial reports come down to numbers....pure and simple saying "broadly" anything does not reflect the true numbers at all.

My opinion, they are getting pummeled with poor sales.

Investor relations really is about marketing and propaganda. GW (obviously) wants to tell the story in a way that puts them in the best possible light. In the last report Kirby even went so far as to say this about the numbers:

"If your measure of 'good' is the current financial year's numbers, you may not agree. But if your measure is the long-term survivability of a great cash generating business that still has a lot of potential growth, then you will agree."

He's hilarious. There's no potential for growth when you are laying off sales staff faster than you are hiring them and paying out more in dividends than you earn. Where is the growth going to come from? Where's the plan? It's just a baseless claim. He even later sort of admits it:

"That we are ex-growth is a big risk seen by some. As I said above I do not believe it. But if it is true we have built a wonderfully efficient cash-generating machine."

With fluctuating (declining) dividend payouts at an unsustainable ratio. GW is not only "ex-growth" but their "wonderfully efficient cash-generating machine" is producing inconsistent results.

"The bigger risk is the same one I repeat each year, and that is management. So long as we have great people we will be fine."

Paying out all your cash reserves and more than your earnings shows that you couldn't think of a single thing to do with that money to make more money for your shareholders. When GW returned to paying dividends in 2010/11 they said they would not be using a consistent dividend schedule or policy, but would be paying out "truly surplus cash."

The biggest risk indeed is management. A management team that has no plan to reinvest for growth, no path to return to growth and are unable to maintain a stable dividend because the earnings no longer support the crazy pay out ratio they've been using for the last 3 years.

 techsoldaten wrote:
When we see prices dip to around $2 per model, it means people are giving up or maybe even rage-quitting the game.

I don’t think we have enough information to set a Rage Quit Price Index where model prices <$2 means a codex is crap and model prices >$3 means a codex is good. We don’t know that every seller is a former player. Sometimes the prices are ridiculously low because the seller is a spouse, parent, or ex-landlord who cleaning out a closet.

I’ve got a stillborn Word Bearers army that I want to get rid of. Is it better to put up for sale now or wait until the next CSM codex is coming out?

 frozenwastes wrote:
"If your measure of 'good' is the current financial year's numbers, you may not agree. But if your measure is the long-term survivability of a great cash generating business that still has a lot of potential growth, then you will agree."

(I don't agree)

I think this was probably the most infuriating and dishonest part of his statement (with the possible exception of when he compared himself to Steve Jobs). Many people feel that GW has been focusing on "the current year's report" at the expense of long term survivability for too long. Getting rid of specialist games, creating huge barriers to entry, alienating existing customers with price hikes and obvious cash grabs. I've lost count of the number of times I've seen people say "I'm gonna finish up my existing army, but then I'm done with GW". Assuming some of those people followed through, we can say that GW probably did manage to squeeze a bit more cash out of them in the short term, but in the long term they lost a customer. This is what they have been doing for years, and it was bound to catch up with them. Now that it is catching up with them, when we are beginning to see the impact of Kirby's own shortsightedness, he has the audacity to turn around and say that "actually" this is just a short term blip, and he's playing the long game!?!

He's a damn liar. Since he has been in charge he hasn't been able able to look beyond the next six months. Which is why sales have slumped (predictably) year after year.

I don't think GW will be gone yet, give it 5 more years.

They're going to give out some bullcrap which will cause stocks to rise. So if you really want to make a quick profit, drop some money into their stocks in the next week or so, watch it rise 30-50. cash out

 Smacks wrote:
This is what they have been doing for years, and it was bound to catch up with them. Now that it is catching up with them, when we are beginning to see the impact of Kirby's own shortsightedness, he has the audacity to turn around and say that "actually" this is just a short term blip, and he's playing the long game!?!

He's a damn liar. Since he has been in charge he hasn't been able able to look beyond the next six months. Which is why sales have slumped (predictably) year after year.

From his perspective, GW is a very efficient cash machine because he's been able to receive a far greater proportion of the revenue in dividends that his 7% ownership would have gotten them if GW had a sane and responsible dividend schedule and reinvested in the business. Here's a breakdown of the dividend and earnings per share history:
Year - Dividend - Earnings - Ratio 1998 - 9 - 24.1 - 37.3% 1999 - 9.7 - 26 - 37.3% 2000 - 9.9 - 20.2 - 49% 2001 - 10.54 - 22.8 - 46.2% 2002 - 13 - 28.2 - 46.1% 2003 - 17 - 36.3 - 46.8% 2004 - 18.75 - 40.1 - 46.75% 2005 - 18.975 - 29 - 65.4% 2006 - 18.975 - 6.5 - 291.9% 2007 - 0 - (11.2) - loss 2008 - 0 - (2.4) - loss 2009 - 0 - 17.8 - 0% 2010 - 20 - 48.4 - 41.3% 2011 - 45 - 36.1 - 124.7% 2012 - 63 - 46.8 - 134.6% 2013 - 58 - 51.5 - 112.6% 2014 - 36 - 25.2 - 142.9%

Interesting notes: In 2006 they propped up the previous year's dividend by borrowing money. 2007-2009 were the "fat and lazy" years where Kirby wringed his hands and promised to cut costs and be more efficient. In late 2009 and into 2010 they returned to profitability and began paying dividends again. At first it was at a normal rate, but then in 2011 it kicked into overdrive. The high EPS of this era also shows that GW did indeed have expenses that needed cutting. The question is whether or not they went too far and cut too deep. The earnings per share spiked above even the 2004 LOTR boom height. That's how thorough and deep the cuts to jobs and spending have been.

What has all this accomplished? It's allowed Kirby to receive dividend payments above and beyond what his 7% ownership should have entitled him to by paying out a ridiculously high ratio. Had he stuck with a more financially conservative 30-40% pay out ratio and reinvested the rest in the business, GW would be far better off, but Kirby would have less cash in the bank. This "cash generation" talk is just justification for paying himself more than he's entitled to by irresponsibly not re-investing in the company. The other share holders get the money as well, and they are indeed legally entitled to it as owners, but it's looting at the expense of the future of the company.

What the management is saying to the investors by paying out over 100% of their earnings as dividends is that they have no clue what to do with it to reinvest in the company and they're willing to even empty the cash reserves because they can't think of what to do with any left overs from previous years either. When Kirby proposed distributing over 100% of the earnings in a given year, the rest of the board should have said no. They should have said it's not sustainable. They should have stood up for the future health of the company and the long term interests of the share holders. But GW has a yes-man culture where what Kirby says goes. So the company got looted.

Imagine where GW would be now if they had never gone above a 50% pay out ratio and reinvested the difference in growing the company, making better products and keeping their hobby centres as destination locations where you actually participate in the full range of their offerings.

---

 Breotan wrote:

MaxT wrote:
I'm staggered that GW charge what they do for rules. They claim to be a model company, but they put a massive ~£80 barrier to entry to use those models in the form of rulebook + & 1 codex. Practically every other model company that makes rules has rules are near or actual zero cost. And it's not like the quality of the rules is a factor, in many cases they're superior !

Your claims are a little exaggerated.

My "codex" for Cyriss (Warmachine) retails for $29.99. How much did the soft-cover 40k codexes go for? Not a heck of a lot more, yet both are about the same size. The rulebook for Malifaux retails for $40.00 and is significantly less thick than the 40k rulebook as well as being soft-cover.

Softback codexes were average £15. The hardback codexes are average £30. It isn't difficult to discern a possibly incorrect causative factor of reduced sales.

 agnosto wrote:
A bit off topic but in way of explanation as to how sales volume may be dropping.

I know nothing about Infinity or Malifaux and I absolutely hate Mantic's rules (subjective) so it's a good thing they're free.

But objectively with WM/H. Faction books are completely optional as the rules for units are included with the models. The main rulebook is $30 vs the $85 behemoth from GW. Yes, GW has packaged 3 books together, 2 of which have nothing at all to do with their game rules. To be fair, they recently released the rules by themselves after a 6 month wait for $58 so lets go with that.
PP $30 main rulebook, faction book $0
GW $58 main rulebooks, faction book $33-$49.50

So for the price of just the GW books to get started, I can have the main WM or H rulebook and a faction starter.

And it's worth noting that the current edition of Warmachine is four and a half years old--40K players have been asked to buy more than one new edition in that time.

But is it really 4 years old? I mean they have expansions from what I can tell once to twice a year. And not optional ones like Cities of Death or Planet Fall but actual game expansions. Not sure if they are required purchasing for most rules (like how Collosals work for instance) or not but saying they haven't had an edition change is a bit silly. I'd count 4 expansions as equivelent to a 40k edition change (since we all know they are mostly just shake-ups, not fully different games).

But WM/Hordes vs. GW has been discussed to death. WM/Hordes has a lower entry point and is generally cheaper to play overall. Their price per model is generally similar to GW's on equal sized models/units. And tournament armies aren't that different in cost at the 50pt level from what I've seen when I price myself a list every few months when I consider WM/Hordes

 Hulksmash wrote:
But is it really 4 years old? I mean they have expansions from what I can tell once to twice a year. And not optional ones like Cities of Death or Planet Fall but actual game expansions. Not sure if they are required purchasing for most rules (like how Collosals work for instance) or not but saying they haven't had an edition change is a bit silly. I'd count 4 expansions as equivelent to a 40k edition change (since we all know they are mostly just shake-ups, not fully different games).

But WM/Hordes vs. GW has been discussed to death. WM/Hordes has a lower entry point and is generally cheaper to play overall. Their price per model is generally similar to GW's on equal sized models/units. And tournament armies aren't that different in cost at the 50pt level from what I've seen when I price myself a list every few months when I consider WM/Hordes

Nope, not required. Only book required is MkII Prime.

 frozenwastes wrote:
From his perspective, GW is a very efficient cash machine because he's been able to receive a far greater proportion of the revenue in dividends that his 7% ownership would have gotten them if GW had a sane and responsible dividend schedule and reinvested in the business. Here's a breakdown of the dividend and earnings per share history:
Year - Dividend - Earnings - Ratio 1998 - 9 - 24.1 - 37.3% 1999 - 9.7 - 26 - 37.3% 2000 - 9.9 - 20.2 - 49% 2001 - 10.54 - 22.8 - 46.2% 2002 - 13 - 28.2 - 46.1% 2003 - 17 - 36.3 - 46.8% 2004 - 18.75 - 40.1 - 46.75% 2005 - 18.975 - 29 - 65.4% 2006 - 18.975 - 6.5 - 291.9% 2007 - 0 - (11.2) - loss 2008 - 0 - (2.4) - loss 2009 - 0 - 17.8 - 0% 2010 - 20 - 48.4 - 41.3% 2011 - 45 - 36.1 - 124.7% 2012 - 63 - 46.8 - 134.6% 2013 - 58 - 51.5 - 112.6% 2014 - 36 - 25.2 - 142.9%

Interesting notes: In 2006 they propped up the previous year's dividend by borrowing money. 2007-2009 were the "fat and lazy" years where Kirby wringed his hands and promised to cut costs and be more efficient. In late 2009 and into 2010 they returned to profitability and began paying dividends again. At first it was at a normal rate, but then in 2011 it kicked into overdrive. The high EPS of this era also shows that GW did indeed have expenses that needed cutting. The question is whether or not they went too far and cut too deep. The earnings per share spiked above even the 2004 LOTR boom height. That's how thorough and deep the cuts to jobs and spending have been.

What has all this accomplished? It's allowed Kirby to receive dividend payments above and beyond what his 7% ownership should have entitled him to by paying out a ridiculously high ratio. Had he stuck with a more financially conservative 30-40% pay out ratio and reinvested the rest in the business, GW would be far better off, but Kirby would have less cash in the bank. This "cash generation" talk is just justification for paying himself more than he's entitled to by irresponsibly not re-investing in the company. The other share holders get the money as well, and they are indeed legally entitled to it as owners, but it's looting at the expense of the future of the company.

What the management is saying to the investors by paying out over 100% of their earnings as dividends is that they have no clue what to do with it to reinvest in the company and they're willing to even empty the cash reserves because they can't think of what to do with any left overs from previous years either. When Kirby proposed distributing over 100% of the earnings in a given year, the rest of the board should have said no. They should have said it's not sustainable. They should have stood up for the future health of the company and the long term interests of the share holders. But GW has a yes-man culture where what Kirby says goes. So the company got looted.

Imagine where GW would be now if they had never gone above a 50% pay out ratio and reinvested the difference in growing the company, making better products and keeping their hobby centres as destination locations where you actually participate in the full range of their offerings.

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That is an amazing analysis / post, so worth seeing twice! Thank you very much for taking the time to write that up.

It actually makes me a tad angry to think that, assuming this interpretation is accurate, and let's face it, the facts fit it quite well, then Kirby has, in essence, put his own personal wealth ahead of the livelihoods of hundreds of people, their dependants and anyone who has any savings invested directly with GW or one of the institutions that do.

For a leader he makes a fething brilliant taxman.

 Azreal13 wrote:
It actually makes me a tad angry to think that, assuming this interpretation is accurate, and let's face it, the facts fit it quite well, then Kirby has, in essence, put his own personal wealth ahead of the livelihoods of hundreds of people, their dependants and anyone who has any savings invested directly with GW or one of the institutions that do.

For a leader he makes a fething brilliant taxman.

Remember this is the man who managed to funnel £4million for a genuinely crappy storefront(calling it a "website" is a bit of joke) to his wife's company. It's safe to assume at this point that GW's mismanagement is not down to stupidity, Kirby and possibly the rest of the board know exactly what's going on, and they just don't care. Their only concern now is bleeding the company of every last penny they can before it eventually goes tits-up.

I didn't think it was the wife's company, but she got a chunk of it somehow (IT manager?). I'll need to dig into the last report to see what I can find out.