Tsilber wrote: "Yeah I'll believe the next Governor of CT is going to lower taxs when I see it''.
Well I feel a bit dumb, that actually clarifies it for me.
Sorry 'bout that.
Tomorrow is going to be interesting regardless.
I am told Lord of the Rings was incredibly popular during the move time period, but after the movies, they crapped on the rules and made it a "pump and dump" product.
Whether you saw it played or not is irrelevant, they sold a ton of that stuff and it drove some of the greatest growth GW have ever seen before the bubble burst.
Tsilber wrote: "Yeah I'll believe the next Governor of CT is going to lower taxs when I see it''.
Well I feel a bit dumb, that actually clarifies it for me.
Sorry 'bout that.
Tomorrow is going to be interesting regardless.
Nah, again perhaps my execution of sarcasm was lost in the translation of non face-to-face conversation. Add that to the fact I have defended GW in the past, add that to your strong position on this matter... well chalk it up to a simple mistake/misunderstanding on both parties.
4 million pounds for a website, i guess the web design team was hired for their attitude and not their skills, or 100.000 for the website and the rest is a secret severance pay for when he steps down?
-it's stupid piece of writing. Of course it is, Kirby's a corporate guy. Corporate propaganda pieces are always stupid and trying to spin everything in best possible light and often end up sounding hilarious. No exceptions. Did you see the letter with which Elop fired thousands of people from Microsoft? Kirby has NOTHING on Elop when it comes to stupid corporate language.
-Kirby's stepping down as CEO. Totally expected, AIUI Kirby doing the double chairs thing was always going to be somewhat temporary. Of course there is a caveat that he hints that he will continue if no suitable candidate is found, AND he will still continue as Chairman of the Board. Meet the new boss, same as the old boss.
-Steve Jobs comparison was surprisingly (though maybe unintentionally) adept in that Apple was and is extremely militant in using legal challenges to hunt down any actors, no matter how small, which it saw as a threat, including Apple fan sites and blogs. Hmm, sound familiar?
-GW website costed £4 million is somehow "OMG". I fail to see why. Sure it's not particularly GREAT site but exorbitant amount of money spent to seemingly crappy result is common enough in the world of corporate websites. Finnish State Railroads spent three years and 15 million euros for this site. It crashed within 3 hours of its induction...
You're early....
It's really depressing sign of the level of discussion, that anyone who does not immediately join to the crowd of baboons throwing excrement and howling, is labelled a white knight.
It's really depressing sign of the level of discussion, that anyone who does not immediately join to the crowd of baboons throwing excrement and howling, is labelled a white knight.
I feel like it's the insurmountable evidence against the "defend GW" stance that makes the position more filled with conjecture than the always lambasted nay-sayers. I mean, as Tsilber put it (and me being slow to pick it up) a stopped clock is right twice a day. It might have been said for awhile, but that time looks to be approaching. We shall see tomorrow.
I know one direct effect losing Merrett would cause (from a 40K lore perspective), but I see this as a "be careful what you wish for" situation.
Yonan wrote: The hooves... the thunder of the hooves is deafening!
As the sun rises, we may need to put on our sunglasses to protect from the blinding reflection.
I doubt that anything would happen to the lore, it has already been well established for the last 20+ years that the 41st millennium and its grimdark nature would actually change very little other than perhaps some minutiae. It would be the same universe with the same factions, nothing significant would change.
Wow. I love it -- from the possibly actionable "they're stealing from us" part, to the awkward little jokes, to the smoke and mirrors over 3D printing ("We are EXPERTS in 3D printers, been using 'em for years, cornerstone of our production capability innit? They're RUBBISH.").
As for the website.... ugh. It's a very generic webstore. Last year, when I was teaching web design to undergrads, I got them to make webstores for their second project, a few months after the "My first webpage!" project. The scale is bigger on the GW one (so, yeah, a few hundred hours' work rather than a few dozen), but my best one or two students could certainly have done a cleaner, more aesthetically attractive, more platform-adaptive web design. And all the ones who passed would, at a bare minimum, have turned in a design that didn't have any errors in the code...
It's really depressing sign of the level of discussion, that anyone who does not immediately join to the crowd of baboons throwing excrement and howling, is labelled a white knight.
I feel like it's the insurmountable evidence against the "defend GW" stance that makes the position more filled with conjecture than the always lambasted nay-sayers. I mean, as Tsilber put it (and me being slow to pick it up) a stopped clock is right twice a day. It might have been said for awhile, but that time looks to be approaching. We shall see tomorrow.
There is a difference between "defend GW" stance, and "don't try to spin absolutely everything as evidence of GW's immediate downfall". Unfortunately, many people here are so entrenched in their "GW sucks" positions that anyone who does not agree on every line of their mantra is automatically labelled a "white knight".
I'm sure that the next financial report is not particularly great (it would be difficult for it to be given that their last half-year was quite bad), however it's unlikely to show an immediate collapse some people are fearing/savouring for.
Kirby is stepping down as CEO (and will remain chairman, "if the board will have [him]") in January.
Games Workshop has had a really good year.
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.
My friend at GW tells me they had a big meeting about the financials today, everybody all at once. Obviously specifics would be a major no-no, but suffice it to say the numbers, while bad, are not as bad as the January report. They seem to have found a way to slow the fall, at least temporarily. Also, I'm told almost everybody was surprised to hear that Kirby is stepping down. It is another one of those 'articles of faith' that Tom Kirby is responsible for everything good about GW.
The numbers might not be that bad compared to January, but if they are still bad after all the cost cutting, rushed releases and quick cash-grabs, some of which are obviously meant for dressing up the annual report, then it doesn't paint a pretty picture.
I wouldn't get excited about a new CEO. It'll likely be an internal appointment for someone who will continue the same ethos, a Kirby yes-man. Kirby isn't resigning as such, he can't hold both chairman and CEO at the same time so is dropping one to go back to a position as when Mark Wells was with the company.
Kirby and his board of kronies will choose the new CEO. Kirby will continue to wield huge influence as chairman.
Nothing is likely to change until the current strategy is proved to be a false one. That could take another year or two, by which time GW's financial position may be under water.
There is a difference between "defend GW" stance, and "don't try to spin absolutely everything as evidence of GW's immediate downfall". Unfortunately, many people here are so entrenched in their "GW sucks" positions that anyone who does not agree on every line of their mantra is automatically labelled a "white knight".
I'm sure that the next financial report is not particularly great (it would be difficult for it to be given that their last half-year was quite bad), however it's unlikely to show an immediate collapse some people are fearing/savouring for.
A few of us have sold off, so we have nothing to lose now if they stay up or go under. I sold off knowing they could fix themselves, right the ship, and then I could reward them in the future with my purchasing of a new Blood Angels army. That's my calculation.
However many others on the "GW sucks" (they kinda do, at least the views of the higher ups, when you see what they think of you as the customer) are still heavily invested and/or actively play based upon what they said. So there's no blood in the water. I'd hate for some of the GW store managers that I've met to lose their jobs. I'd hate for the artists who aren't on the level of the Perry Brothers to get washed out the back door. And I think of all those support folks GW did employ in the states. None of that is fun or amusing. Heckling because of the occasional derpy model or Ward fluff is one thing. This is completely another and most folks have come to the table armed with either open reasoning or expertise in the area of business management or economics that been the strongest proponents of collapse to include a gentleman wagering his personal merit and being the front man of a minis based company himself.
You have the entire industry watching. Some of us chuckleheads are just vocal armchair investors. But the big guys, including the competition, are watching.
shinr wrote: Wolf Lord Balrog posted this on Warseer:
My friend at GW tells me they had a big meeting about the financials today, everybody all at once. Obviously specifics would be a major no-no, but suffice it to say the numbers, while bad, are not as bad as the January report. They seem to have found a way to slow the fall, at least temporarily. Also, I'm told almost everybody was surprised to hear that Kirby is stepping down. It is another one of those 'articles of faith' that Tom Kirby is responsible for everything good about GW.
The numbers might not be that bad compared to January, but if they are still bad after all the cost cutting, rushed releases and quick cash-grabs, some of which are obviously meant for dressing up the annual report, then it doesn't paint a pretty picture.
For sure! If the release of an entirely new edition, on top of all those new codices, didn't bring the reporting period out of the negative trend, then these are serious times indeed for GW.
The have shown declining profits for the last two reporting periods, not actually in the red, I know.
It's almost as though the rule of diminishing returns was ignored for a long time and a panic situation set in.
shinr wrote: Wolf Lord Balrog posted this on Warseer:
My friend at GW tells me they had a big meeting about the financials today, everybody all at once. Obviously specifics would be a major no-no, but suffice it to say the numbers, while bad, are not as bad as the January report. They seem to have found a way to slow the fall, at least temporarily. Also, I'm told almost everybody was surprised to hear that Kirby is stepping down. It is another one of those 'articles of faith' that Tom Kirby is responsible for everything good about GW.
The numbers might not be that bad compared to January, but if they are still bad after all the cost cutting, rushed releases and quick cash-grabs, some of which are obviously meant for dressing up the annual report, then it doesn't paint a pretty picture.
The numbers are still down after Space Marines, an edition change, and something "all out" like Imperial Knights. Will the market really handle more $140 minis or $85 rulebooks so quickly?
Kilkrazy wrote: Prices are part of the problem, in my view, but it's not the whole story.
Pricing is quite a minor issue in my view, its the lack of quality and creative vision that I find perturbing. The serious deficiencies within Games Workshop that have been allowed to fester for years will take a lot of time to clear away, certainly without a complete management restructuring, and by the looks of things there simply isn't much time left. Perhaps a buyout ins't all that far away after all.
Kilkrazy wrote: Prices are part of the problem, in my view, but it's not the whole story.
I actually dont think price per model is an issue at all in isolation, I've just happily paid £66 for a box of 15 metal miniatures from corvus belli.
It is the price to play the game that is an issue.
That £66 got me 15 models, but it also got me two 200 point forces for a game that is tournament ready at 300 points, £60 more, and I have two tournamnet forces with options and some half decent scenery, some dice and templates.Whereas with GW, moving on from the DV starter box costs me £60 just for the rules to play the two armies, I havent even started on the several hundred needed to make some 1800 point forces.
GW games cost too much to play. Rules costs are a huge part of that, minis are too. Its the overall cost that is the problem, price at skirmish level, require mass battle numbers. In todays market, they cannot have both, and the people making decisions need to accept that. Quickly.
For my it's quality control of the game and the cost to play it. I never played Epic, but I trust those calling it Epic 40k now that it has Titans a-plenty in it. Just not feeling that kind of game anymore. Takes up too much space and too much time to paint. If the game was better, I could be convinced because then I could have a good army and not have it go bad on the carousal of crappy rules.
Kilkrazy wrote: Prices are part of the problem, in my view, but it's not the whole story.
I actually dont think price per model is an issue at all in isolation, I've just happily paid £66 for a box of 15 metal miniatures from corvus belli.
It is the price to play the game that is an issue.
...
GW games cost too much to play. Rules costs are a huge part of that, minis are too. Its the overall cost that is the problem, price at skirmish level, require mass battle numbers. In todays market, they cannot have both, and the people making decisions need to accept that. Quickly.
Yes, that is what I mean.
For me to just continue playing current 40K would cost me £110 to buy the new rules and latest versions (already out of date) of the Tau and Tyranid codexes. No new models, but I could field a correctly pointed army using my current models.
A completely new player needs £80 for the rules and codex before buying a single model.
The leap to £30 a time codexes must have surely hurt sales. Certainly I went from "will try to pick up current editions of all codexes eventually" to "will think long and hard about adding a new army, even as allies, if the rules alone will cost an extra £30 for a 100-page book".
Kilkrazy wrote: Prices are part of the problem, in my view, but it's not the whole story.
I actually dont think price per model is an issue at all in isolation, I've just happily paid £66 for a box of 15 metal miniatures from corvus belli.
It is the price to play the game that is an issue.
...
GW games cost too much to play. Rules costs are a huge part of that, minis are too. Its the overall cost that is the problem, price at skirmish level, require mass battle numbers. In todays market, they cannot have both, and the people making decisions need to accept that. Quickly.
Yes, that is what I mean.
For me to just continue playing current 40K would cost me £110 to buy the new rules and latest versions (already out of date) of the Tau and Tyranid codexes. No new models, but I could field a correctly pointed army using my current models.
A completely new player needs £80 for the rules and codex before buying a single model.
There's two other things for me:
1) It's the prices across the board; paying a premium for a well crafted mini is something I can bear (not going to throw a parade, but I feel I can justify it), but then I get gouged on every other product too. Cheap copy paste digital Inquisition codex anyone? Except it's not cheap. They need to decide where to make a profit and where to throw the customer a bone to keep the relationship going, rather than "ALL THE PROFIT, ALL THE TIME!"
2) On a related note, they need to improve quality and bring back some stability to the games; if you are going to gouge me on every single item I want some guarantee that you're going to proof read and play test every single document, critically review every design, such that it's the best it can possibly be. And then leave it alone. No " day one DLC" data slates, sudden edition changes or game changing compulsory expansions. If I've invested this amount of time and money I want to be left in peace for a while to enjoy the game and get some value out of my hard earns brass.
Idolator wrote: Annual report is up. £11 million decrease in revenue from last year. All is woe.
£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.
This is great news!
It even says later in the report that the rolled out a new web store and that revenues were in-line with previous years sales. So..... Almost $7 million spent with no increase in sales. Good descision team!
Ouch - Aside from the big headline numbers being nasty, Cost of Sales is up substantially as a percentage.
In 2013, on sales of 134597k, CoS was 36772k - 27.3%
In 2014, on sales of 123501k, CoS was 36766k - 29.8%
That's an increase of 2.5% of sales (roughly 10% rise in costs), during a time where their retails are rising markedly, so they are selling less product , and making less margin on each one. Now if the story was that they'd had a big expansion in selling via wholesalers or independents, thus their margin has come under pressure, I'd buy that, but they have also tried to concentrate sales through their own channels. Something is going quite wrong in their cost control.
Not a financial expert, but earnings per share down by half and no dividend is surely going to scare off investors?
And despite having "a fantastic cash generating machine" cash generation is down by a sixth. As cash is the lifeblood of any business I'd say that's actually the most worrying bit, more than the other headline figures (profit, sales, etc.)
Jadenim wrote: Not a financial expert, but earnings per share down by half and no dividend is surely going to scare off investors?
And despite having "a fantastic cash generating machine" cash generation is down by a sixth. As cash is the lifeblood of any business I'd say that's actually the most worrying bit, more than the other headline figures (profit, sales, etc.)
doesn't the market open in about 45 minutes? We'll find out!
Idolator wrote: Annual report is up. £11 million decrease in revenue from last year. All is woe.
£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.
This is great news!
It even says later in the report that the rolled out a new web store and that revenues were in-line with previous years sales. So..... Almost $7 million spent with no increase in sales. Good descision team!
Some capital projects will never bring increase in revenue. A new website might bring some, but the main aim is not that, it is avoiding loss in revenue due to outdated technology. It's also possible it has, but sales were lost elsewhere, pr vice versa.
Idolator wrote: Annual report is up. £11 million decrease in revenue from last year. All is woe.
£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.
The profitability will be 'accounted for' by the expenditure, that is what the preamble was designed to do.
The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.
The killer for any wargame is losing players, it is a social hobby, the fact you could get a game of 40K pretty much anywhere was the reason it has maintained its market lead for 20 years, there will be a critical point where the player base erosion tips the game into free fall at some point. I dont think this is it, but even for Kirby et al, this should be a huge wake up call.
Actually, without trying to be facetious, I would bet on the next version of Fantasy being within the next 6 months to bolster the next set of numbers. They are running out of things to throw at it though.
The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.
7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.
But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.
Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.
The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.
7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.
But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.
Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.
Would his "resignation" suggest that the other execs didn't buy his excuse?
The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.
7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.
But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.
Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.
GW doesn't break down their sales figures into smaller increments than 6 months, but I'm willing to bet that 75% of a books sales (especially a core rule book) is made within the first week of release...and they know it!
Also, that drop in stock price is from after hours trading. The market hasn't opened yet. I assume that the London Exchange opens at 9am.
There's still just no plan at all to stop shrinking, let alone return to growth.
Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.
I especially like this line:
"We do no demographic research, we have no focus groups, we do not ask the market what it wants."
I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.
Kirby points out the high exceptional expenses to account for decreased profits as a means to distract from the underlying problem of falling sales. They're released a new edition and a glut of product and have still lost profit. They're still profitable though so are not currently losing money.
frozenwastes wrote: There's still just no plan at all to stop shrinking, let alone return to growth.
Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.
I especially like this line:
"We do no demographic research, we have no focus groups, we do not ask the market what it wants."
I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.
The entire "Business model" section is pretty ridiculous.
frozenwastes wrote: There's still just no plan at all to stop shrinking, let alone return to growth.
Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.
I especially like this line:
"We do no demographic research, we have no focus groups, we do not ask the market what it wants."
I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.
What page is that line on? I missed it. I want to be able to quote that jewel when anyone ever tells me that GW cares about their customer base.
Never mind, found it. I especially like the use of the word "otiose" in regards to market research. Saying that market research is futile explains a whole lot about their business practices.
The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.
7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.
But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.
Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.
Would his "resignation" suggest that the other execs didn't buy his excuse?
I doubt it, Kirby remains as chairman, he's not supposed to permanently be CEO as well so stepping down had to happen eventually.
I just can't get over the preamble. Can you imagine starting a college paper like this???
"____________ has had a really good year. 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 had to write papers like this for Coca Cola and another hypothetical company for a business class and I can't even imagine turning in a paper that began like that. What a joke.
focusedfire wrote: I think that quote is from GW's deposition or testimony in the CHS lawsuit.
It's in the highly entertaining "Business Model" section of the report:
Spoiler:
Business model
We are vertically integrated. We design, manufacture and distribute ourselves; we have our own stores and web store.
With the sole, and rapidly declining, exception of products from Tolkien's books we use only our own imaginary worlds. They are rich enough
and deep enough to accommodate anything we may want to make, and they remain our property.
We sell to third party retailers under closely controlled terms and conditions. Those terms and conditions mean that we are unlikely to be
attractive to heavy discounters, chains or mass-marketers. In other words, I doubt you'll find our products in Toys ‘R’ Us or Walmart.
We publish two magazines. A weekly (White Dwarf) that announces new products and events and a monthly (Warhammer Visions) that
glories in the aesthetics of our miniatures.
Our own stores attract a lot of attention, as they should, because they are the way we recruit the majority of new customers.
Their modal style is small (cheap), off the beaten track (cheap), and with only one member of staff, the store manager (cheaper than five staff, but
with our performance related pay scheme the managers are capable of earning far more than before). We require all our stores
to be profitable. In bad times as well as good. Our growth comes from geographic spread, led by these stores, so it would make no sense to
be growing less and less profitable as we went.
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.
We control the business centrally. The big sales engines are: our own stores, split into three geographic areas (North Americ
a, Europe,Britain and Ireland), trade sales (sales to third parties) and our web store. Each store manager reports to the regional manager (Josh
Wimberly in North America, Elmes Duo in Europe and Grant Peacey in Britain and Ireland) and each of them reports to me qua CEO.
The trade sales manager (John Carter) reports to me, as does the web store manager (
Erik Mogensen). Design, manufacturing and distribution is in Nottingham and the manager of that division (Max Bottrill) reports to me as well.
Back office functions are run largely from Nottingham. They are Accounts (Tim Wilson), IT (Karen Lathbury), Personnel (Vicki King),
Lenton site (Dave Holmes), Legal and Compliance (Rachel Tongue), Projects (Helen Surgey) and they report to Kevin Rountree,
qua
COO.
Outliers are Australia and New Zealand (Ken Warton), Asia (Chris Harbor), and Forge World (Tony Cottre
ll) who all report to me,
Licensing (Andy Jones) who reports to Kevin and Black Library (Rik Cooper) who reports to George Mann in the main Citadel studio.
frozenwastes wrote: There's still just no plan at all to stop shrinking, let alone return to growth.
Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.
I especially like this line:
"We do no demographic research, we have no focus groups, we do not ask the market what it wants."
I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.
Interesting read of the Strategic Report.
As cited two things came to my mind: return of growth and no demographic research. They are pure amateurs.
Ian Sturrock wrote: The leap to £30 a time codexes must have surely hurt sales. Certainly I went from "will try to pick up current editions of all codexes eventually" to "will think long and hard about adding a new army, even as allies, if the rules alone will cost an extra £30 for a 100-page book".
Yeah, this is a big issue, if you want to start the game you need to spend €100 before even getting a single mini. Of course you could always start with the Dark Vengeance, but even then you need the Codex, and if either of the starter armies won't interest you, well...
GW tries to go for the "premium" image with all the books being full-colour and hardcover, but it's just unnecessary excess. The old Codex format was just fine (well they could have been bit more durable). High cost of the printed books is dragging up digital editions as well.
As for the CEO change, as said it's unlikely to change anything. Things weren't different when Mark Wells was CEO.
As cited two things came to my mind: return of growth and no demographic research. They are pure amateurs.
Actually, this is one thing I agree with them. Last thing GW needs is some expensive consult keeping PowerPoint presentations about how "strong, modern female characters in Space Marines range is likely to bring in 14 to 25 year old female demographics". It's that crap which has ruined Hollywood and computer games industry.
focusedfire wrote: I think that quote is from GW's deposition or testimony in the CHS lawsuit.
It's in the highly entertaining "Business Model" section of the report:
Spoiler:
Business model
We are vertically integrated. We design, manufacture and distribute ourselves; we have our own stores and web store.
With the sole,
and rapidly declining, exception of products from Tolkien's books we use only our own imaginary worlds. They are rich enough
and deep
enough to accommodate anything we may want to make, and they remain our property.
We sell to third party
retailers under closely controlled terms and conditions. Those terms and conditions mean that we are unlikely to be
attractive to heavy discounters, chains or mass
-
marketers. In other words, I doubt you'll find our products in Toys ‘R’ Us or Walmart.
We p
ublish two magazines. A weekly (White Dwarf) that announces new products and events and a monthly (Warhammer Visions) that
glories in the aesthetics of our miniatures.
Our own stores attract a lot of attention, as they should, because they are the way we recruit the majority of new customers.
Their modal
style is small (cheap), off the beaten track (cheap), and with only one member of staff, the store manager (cheaper th an five staff, but
with our performance related pay scheme the managers are capable of earning far more than before). We require all our stores
to be
profitable. In bad times as well as good. Our growth comes from geographic spread, led by these stores, so
it would make no sense to
be growing less and less profitable as we went.
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. We control the business centrally. The big sales engines are: our own stores, split into three geographic areas (North Americ
a, Europe,
Britain and Ireland), trade sales (sales to third parties) and our web store. Each store ma
nager reports to the regional manager (Josh
Wimberly in North America, Elmes Duo in Europe and Grant Peacey in Britain and Ireland) and each of them reports to me
qua
CEO.
The trade sales manager (John Carter) reports to me, as does the web store manager (
Erik Mogensen). Design, manufacturing and
distribution is in Nottingham and the manager of that division (Max Bottrill) reports to me as well.
Back office functions are run largely from Nottingham. They are Accounts (Tim Wilson), IT (Karen Lathbury), Pers
onnel (Vicki King),
Lenton site (Dave Holmes), Legal and Compliance (Rachel Tongue), Projects (Helen Surgey) and they report to Kevin Rountree,
qua
COO.
Outliers are Australia and New Zealand (Ken Warton), Asia (Chris Harbor), and Forge World (Tony Cottre
ll) who all report to me,
Licensing (Andy Jones) who reports to Kevin and Black Library (Rik Cooper) who reports to George Mann in the main Citadel stu
dio.
Thanks for the correction, though I believe something along the same lines was said during the aforementioned lawsuit.
As to there stated bisness model.....wow. just wow.
I love the part where they state that due to the geographic spread of their stores "It would make no sense to be growing less and less profitable"... Is GW trolling there investors or is this just delicious irony?
frozenwastes wrote: There's still just no plan at all to stop shrinking, let alone return to growth.
Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.
I especially like this line:
"We do no demographic research, we have no focus groups, we do not ask the market what it wants."
I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.
I want to say I'm surprised by this, but this is after all the same company that thinks Facebook / The Internet in general is some black magic voodoo...
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wuestenfux wrote: I think there is nothing wrong with the business model itself.
The problem is the implementation.
When you not only don't know, but ARE PROUD of the fact that you don't know who the people you are selling your products to are or what they want, something is VERY wrong with your business model...
wuestenfux wrote: I think there is nothing wrong with the business model itself.
The problem is the implementation.
When you not only don't know, but ARE PROUD of the fact that you don't know who the people you are selling your products to are or what they want, something is VERY wrong with your business model...
wuestenfux wrote: I think there is nothing wrong with the business model itself.
The problem is the implementation.
When you not only don't know, but ARE PROUD of the fact that you don't know who the people you are selling your products to are or what they want, something is VERY wrong with your business model...
For me its an implementational issue.
I would very much like to read to your explanation.
@Backfire.
Proper marketing asks actual customers what they want.(Like the old letters to WD .)
Not just assume everyone is a 13 year old boy with rich parents who has £500 per week to spend on toy soldiers.
Actual proper market research would prove people who play the game think the rules are more important than the GW sales department do.
And plastic minatures are sold for a fraction of the price GW charge by other companies.
People like the WHFB /40k settings, or they do not, irrespective of gender or age.
Poor perceived value for money is the primary reason GW products do not sell.
While I agree that GW will indeed continue for quite some time, I believe that there will be some serious tough times ahead. Since Kirby has a penchant for comparisons to Apple I think that it would be good to make a further comparison.
Some of you younger folks may not remember how big Apple was in it's earlier days conversely you also don't remember how far it fell holding on to its (then current) business model. Apple spent years in the doldrums of irrelevancy before making serious changes and coming back on the scene with the iMac. The rest is history, as they branched out from that success and created a company that was unrecognizable from the old. A similar thing has occurred with other companies as well, Harley Davidson also comes to mind.
There is no telling where this downturn in the company will take it, but I predict that in five years time, we will see a different company entirely. Be it a complete tank and bankruptcy (unlikely), a takeover and restructuring from innovative investors (maybe), or a purchase of the company by a larger company in the business (most likely as that is one profitable and diverse IP).
But there will have to be a greater fall before those things occur, be prepared.
Idolator wrote: Annual report is up. £11 million decrease in revenue from last year. All is woe.
£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.
Considering the amount of product being churned out. Especially 6.5 rule set. This is woe indeed.
Well What can you say. You can polish a turd.... but it is still a turd.
Their business model does not work. This BS about their marketing research is so double speak that it is laughable.
But then again I only laugh at all of those fanbois seeing their precious game become more and more a niche/ hole in the wall type game where the trolls live.
When you not only don't know, but ARE PROUD of the fact that you don't know who the people you are selling your products to are or what they want, something is VERY wrong with your business model...
No, in principle it's a great thing. Because it shows that you do it as an art or passion, not merely as a business. There is nothing interesting in sleek corporate design, made by professional market researchers to appeal as broad sample of customers as possible. As I said, that is why most Hollywood blockbusters suck.
Of course, GW reality, where they have been increasingly acting like a big nasty corporation, is pretty far removed from that vision of "passion".
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
If one wants to tie them to major GW events,
-2011....umm...can't remember anything really notable?
-Spring 2012, new paint range came out
-Autumn 2012, 6th edition 40k & Dark Vengeance
-Spring 2013, massively popular Tau release, selling out remaining Specialist games stock
-Autumn 2013, Space Marines 6th edition
-Spring 2014, Knights, 7th edition 40k out (barely)
If the new 7 / 6.5 rules were supposed to get people out in droves and purchase 5 riptides or 10 imperial knights for their Unbound Armies, looks like that plan failed miserably...
Shandara wrote: Those 4.5 mill exceptional expenses would be the CHS trail costs I assume?
Some, but it appears that 3 mill was on personnel. 0.6 million on property and 0.9 million on "other".
They "flattened" their retail structure by eliminating ALL middle management! Having worked in retail for a decade, all of it in the middle management area, I think that this is absolutely insane. It would be like your local post office and everyone else's reporting directly to the White House. Whew!
Ferrum_Sanguinis wrote: If the new 7 / 6.5 rules were supposed to get people out in droves and purchase 5 riptides or 10 imperial knights for their Unbound Armies, looks like that plan failed miserably...
It was the only thing preventing an actual loss probably. With severe damage to long term sales.
I think I understand what you are trying to say, that its better to be loud and proud and unique than a company that tries to appeal to everyone, only to end up alienating everyone for different reasons.
But, I think they're hopelessly out of touch with their customer base and instead of admitting it and addressing plans to recruit new customers they're trying to keep a stiff upper lip and display bravado. It seems really foolish to me.
I can't think of a single person in the hobby who hasn't at one time or another felt like they've been given the finger by GW. Its really, really thin ice they're on.
VanHallan wrote: I think I understand what you are trying to say, that its better to be loud and proud and unique than a company that tries to appeal to everyone, only to end up alienating everyone for different reasons.
But, I think they're hopelessly out of touch with their customer base and instead of admitting it and addressing plans to recruit new customers they're trying to keep a stiff upper lip and display bravado. It seems really foolish to me.
I can't think of a single person in the hobby who hasn't at one time or another felt like they've been given the finger by GW. Its really, really thin ice they're on.
I felt that exact way 6 months ago when the abomination that was the Nid codex came out.
How much are sales down taking into account price increases and averaging the unit cost for new releases going up? (what percentage would be a new release)?
Though if sales numbers go down, unit sales have undoubtedly fallen further.
VanHallan wrote: I think I understand what you are trying to say, that its better to be loud and proud and unique than a company that tries to appeal to everyone, only to end up alienating everyone for different reasons.
But, I think they're hopelessly out of touch with their customer base and instead of admitting it and addressing plans to recruit new customers they're trying to keep a stiff upper lip and display bravado. It seems really foolish to me.
True, GW really seems to be stuck in a kind of limbo there: they like to present themselves as Mom's Friendly Miniature Company, selling Mom's Old-Fashioned Skull-Plated Miniatures. However they tend to act as a big nasty faceless conglomerate. It's bad place to be.
"Exceptional costs" mentioned in the report came from shutting down regional HQ's and laying off their staffs.
Tidbit about LOTR license: "With the sole, and rapidly declining, exception of products from Tolkien's books we use
only our own imaginary worlds."
Guess that range is going to way of the dodo once the release from the final movie is up.
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Daba wrote: How much are sales down taking into account price increases and averaging the unit cost for new releases going up? (what percentage would be a new release)?
That's hard to say: GW price increases were quite uneven, with some items having huge price hikes (like 30% in 2-3 years), some other items not increasing in price at all. But undoubtely it has had effect. GW has not had annual price hikes for two years now, however the prices of new releases keeps creeping up.
xraytango wrote: I doubt that anything would happen to the lore, it has already been well established for the last 20+ years that the 41st millennium and its grimdark nature would actually change very little other than perhaps some minutiae. It would be the same universe with the same factions, nothing significant would change.
Well, let's just say that you don't know what I know and leave it at that. I can't really talk about it, and while the shift in attitude is something I'd welcome, I do wonder what else would change and that worries me more.
I'm guessing Merrett own something significant to 40k's background and would take his ball home with him if he ended up going via a bit of "involuntary redundancy".
Tidbit about LOTR license: "With the sole, and rapidly declining, exception of products from Tolkien's books we use
only our own imaginary worlds."
Guess that range is going to way of the dodo once the release from the final movie is up.
Perfect example. So, you get your hands on a once in a lifetime film franchise, and you mess that up. LOTR had the fan base built in to surpass everything GW had ever done. What happened to it?
By now it seems obvious that they pretty much just release stuff to get impulse buyers and then absolutely abandon the game players.
The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.
7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.
Which means that all the store purchases and pre-orders would count towards the 2013-2014 year, and the majority of sales are in the first few weeks. My local store alone bought in about £6000 (retail, so about £3600 trade) worth of 7th books (ignoring LE's and cards, etc), so there will have been a huge volume of 7th Ed stuff accounted for in this report.
GW did very well out of the original LoTR films in financial terms. The game was well designed and popular. The figures were ditto.
The mistake they made was to assume that all those new players would continue with the game or transfer to other GW games after the film buzz went away. They have also reportedly screwed up LoTR during the past few years by splitting the rules among lots of supplements in an attempt to sell more books.
IMO it was a mistake to make the film models true 25mm, making them incompatible with WHFB. It could have been a bridge from LoTR to WHFB if the two systems had compatible models.
It is not GW's fault that The Hobbit films have not been so popular. Their mistake with The Hobbit game is around pricing and contents of the starter sets. and lack of widespread promotion.
As cited two things came to my mind: return of growth and no demographic research. They are pure amateurs.
Actually, this is one thing I agree with them. Last thing GW needs is some expensive consult keeping PowerPoint presentations about how "strong, modern female characters in Space Marines range is likely to bring in 14 to 25 year old female demographics". It's that crap which has ruined Hollywood and computer games industry.
That's unlikely to be the case, because they already know the demographic they are most popular with.
What they could find out, through market research, is what will make the current customers spend more or why the customers are buying less (are they moving onto other things, finding the rules problematic, finding the value lacking?). They might find that all they need to regain profitability is to introduce a tournament back or run more interstore campaigns, or re-introduce more fun mini-games, or that every other customer wants to get back into Bloodbowl.
They "flattened" their retail structure by eliminating ALL middle management! Having worked in retail for a decade, all of it in the middle management area, I think that this is absolutely insane. It would be like your local post office and everyone else's reporting directly to the White House. Whew!
OTOH, often "middle management" is also a place which easily bloats up when people move there and meet the glass ceiling and they spend their days in cozy jobs moving papers. My pals were in Nokia during last years of cellphone business, and big factor for the downfall was constantly fattening middle management who micromanagered ever-shrinking base of actual project workers. One guy described how he saw a project where one programmer was led by 7 managers. Too many chieftains, not enough Indians.
Kilkrazy wrote: It is not GW's fault that The Hobbit films have not been so popular. Their mistake with The Hobbit game is around pricing and contents of the starter sets. and lack of widespread promotion.
The films and story doesn't really fit a wargame though, it'd make a good skirmish game though if the prices weren't nuts. Several times I've gone to buy The Hobbit box set, just for the Hobbit party to paint, but I just can't bring myself to pay that much for it. The same money will get me an entire new FoW army.
Their annual price increase drew attention. Now they disguise price increases by rolling the new releases with a price creep. Just sticking 10-20% on everything every June isn't exactly subtle. But it's not like halving the contents of boxes like the Dire Avengers went unnoticed either.
They're also trying to insist they own everything still, the preamble, and in the paragraph where they point out the dwindling exception of LotR. But as much as they call it 'stealing', their IP just isn't that robust and their claims of ownership are weak. It might cause concern especially if GW continue to pour money into fruitless legal cases, but I can't tell whether nvestors have the interest to follow the CHS case given that GW is just a tiny part of a portfolio to them.
It is not GW's fault that The Hobbit films have not been so popular. Their mistake with The Hobbit game is around pricing and contents of the starter sets. and lack of widespread promotion.
Really, it looks like GW didn't care anymore about the license. They were just going through the motions, fulfilling the contract and preventing anyone else getting it. Their effort was very half-hearted, and it wasn't helped by general lack of enthusiasm about the movies compared to LOTR buzz.
For whatever reason, LOTR always came across as, I don't know, sterile...compared to the WHFB. I never had any enthusiasm towards it, despite being a big Middle Earth fan. The Hobbit, where even the source movie is very sterile, is even worse in this respect.
Kilkrazy wrote: GW did very well out of the original LoTR films in financial terms. The game was well designed and popular. The figures were ditto.
The mistake they made was to assume that all those new players would continue with the game or transfer to other GW games after the film buzz went away. They have also reportedly screwed up LoTR during the past few years by splitting the rules among lots of supplements in an attempt to sell more books.
IMO it was a mistake to make the film models true 25mm, making them incompatible with WHFB. It could have been a bridge from LoTR to WHFB if the two systems had compatible models.
It is not GW's fault that The Hobbit films have not been so popular. Their mistake with The Hobbit game is around pricing and contents of the starter sets. and lack of widespread promotion.
Given the silly rules about not mixing Warhammer and LotR stuff together for official purposes and clearly dividing the magazine, I would think that the more realistically proportioned scale of LotR was a deliberate choice, possibly imposed by New Line.
The Hobbit stuff was just ludicrously priced. When LotR came out you could get the whole Fellowship for £25. When the Hobbit came out they want £45 for the White council, just four small figures. That's what killed it, cranking prices up to the max when it was already dubious buying boxes of Finecast with the figures unseen.
Really, it looks like GW didn't care anymore about the license. They were just going through the motions, fulfilling the contract and preventing anyone else getting it. Their effort was very half-hearted, and it wasn't helped by general lack of enthusiasm about the movies compared to LOTR buzz.
For whatever reason, LOTR always came across as, I don't know, sterile...compared to the WHFB. I never had any enthusiasm towards it, despite being a big Middle Earth fan. The Hobbit, where even the source movie is very sterile, is even worse in this respect.
The Hobbit stuff was just ludicrously priced. When LotR came out you could get the whole Fellowship for £25. When the Hobbit came out they want £45 for the White council, just four small figures. That's what killed it, cranking prices up to the max when it was already dubious buying boxes of Finecast with the figures unseen.
The story is that New Line cranked up the licensing fees quite a bit. Dunno if it's true, but Lego Hobbit range is crazy expensive as well.
My guess is that GW figured that LOTR range was dead anyway, and they might just as well simply cash on from the LOTR collector fanatics who will buy *anything*, regardless of what it is, or how it's priced.
The Hobbit stuff was just ludicrously priced. When LotR came out you could get the whole Fellowship for £25. When the Hobbit came out they want £45 for the White council, just four small figures. That's what killed it, cranking prices up to the max when it was already dubious buying boxes of Finecast with the figures unseen.
To be fair, the Fellowship were the heroes of the film so would have broader appeal, and were needed to play most of the scenarios in the book. I'm not sure who the White Council is supposed to be aimed at.
I did hear stuff back in the day (as a LotR SBG player but not anything else) about New Line insisting that the LotR figures were a different scale to prevent too much crossover between the lines. This was from a store worker though, so no idea how clued up he really was.
Well, I already commented that the preamble seemed unprofessional yesterday, and I still think that the extended tangent about 3D printing is just a smokescreen - something, anything, that he can spin to try to sound good. But that was before the full report came out. I may not hold any qualifications in business or finance but even a monkey can see that a decrease in profits of nearly a half is not a good thing. Some things I noticed:
With the sole, and rapidly declining, exception of products from Tolkien's books we use only our own imaginary worlds. I assume this means that because the third Hobbit film will soon be out, Kirby is already impatient to drop the game and move on. Well, like it or not it is up there as one of your three core games. This comes off as way too dismissive and typical of this man's "shut up, I'm right" style.
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. Then why are they losing customers? Why the £9 million drop in profits? And really, what company is so opposed to expanding its customer base? Young middle class males might be the group that keeps cropping up, but if,they tried to branch out beyond that group they could benefit. Very dismissive attitude to customers.
What will not change is the eternal desire for some always to want yet more of the small, jewel-like objects of magic and wonder that we call Citadel miniatures. Again, they shouldn't just be taking this for granted. To wave his hand and essentially say "don't worry about them, they'll keep buying whatever we crank out" seems to be a bit too much of a gamble at this time. It obviously hasn't worked for them this year!
Fiddling while Rome burns? More like holding a private rock concert.
Tsilber wrote: So another doomsday report, the sky is falling for GW... Same old song for 20 years boys and girls.
You're entitled to your opinion, of course, but d'you fancy backing that thinking up with any sort of facts or figures at all? Or would you perhaps want to wait less than 24 hours so you'll have all those astonishing performance numbers to make us all look like fools with?
No facts or evidence required and have no intention to make anyone look like fools. I just stated the facts, its another 'Gw is terrible and/or going under type article/post/thread', the same thing thats been said for years (i guess this would be my fancy backing).... Yet the world has kept spinning and will keep spinning and GW will continue to exist is all Im stating, I do not see anything in the report or this thread that has not been seen or accused before. Maybe this will be it, this will be the year,, who knows /shrug...
I'm slightly inclined to agree with this. GW reminds me of the German army in WW2. No matter how many crazy orders they get from the top, they always seem to hang on, year from year. Not that I'm comparing Kirby to the mad man with the dodgy fringe
Ever since I got into GW in the 1980s, the company is always on life support, but years later, it's still here.
I'm surprised nobody has claimed this as a signature: Our crops will wither, our children will die piteous
deaths and the sun will be swept from the sky. But is it true?
Kilkrazy wrote: It is the sales decline that is worrying, not the profits decline.
I'd say it's a combination of both. With a lower profit margin, they are more vulnerable should the trend of falling revenue continue. Their pre-tax profit is now only slightly higher than what they lost in revenue over the last year. If this keeps up, they could be posting red numbers already next summer, and if it remains stable, they will have burned through all their cash in three years.
Kilkrazy wrote: It is the sales decline that is worrying, not the profits decline.
Ha, as I say I'm no expert. Must have focused straight on the figure that looked like it had taken the biggest whack. I'd have more respect for the man if he at least explicitly acknowledged that losing sales was a problem to focus on instead of breezily assuming it would just sort itself.
It's worse; there's been a huge push towards direct only content in the last year i.e. stuff you can only get from the webstore. So that means the direct only thing hasn't pushed sales up.
We can also take "broadly in line with the prior year" to mean down slightly, or they'd have said "our online sales are up slightly compared to the prior year".
We are vertically integrated. We design, manufacture and distribute ourselves; we have our own stores and web store.
With the sole, and rapidly declining, exception of products from Tolkien's books we use only our own imaginary worlds.
They are rich enough and deep enough to accommodate anything we may want to make, and they remain our property. The courts would tend to disagree
We sell to third party retailers under closely controlled terms and conditions. Those terms and conditions mean that we are unlikely to be
attractive to heavy discounters, chains or mass - marketers. In other words, I doubt you'll find our products in Toys ‘R’ Us or Walmart. Or any other retailer as it happens.
We publish two magazines.(catalogs) A weekly (White Dwarf) that announces new products and events and a monthly (Warhammer Visions) that glories in the aesthetics of our miniatures.
Our own stores attract a lot of attention, as they should, because they are the way we recruit the majority of new customers.
Their modal style is small (cheap), off the beaten track (cheap), and with only one member of staff, the store manager (cheaper than five staff, but with our performance related pay scheme the managers are capable of earning far more than before).
We require all our stores to be profitable. In bad times as well as good. Our growth comes from geographic spread, led by these stores, so it would make no sense to be growing less and less profitable as we went.
But they are less profitable
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
And there you have the reasons we're failing as a company
Profits is the money left over after the company finishes spending everything it wants to or needs to on "stuff".
It is important but it is not the whole story and a lack of profit is not always a worry, because a company may be ploughing a lot of money back into investments that will pay off well in the future.
Kilkrazy wrote: Profits is the money left over after the company finishes spending everything it wants to or needs to on "stuff".
It is important but it is not the whole story and a lack of profit is not always a worry, because a company may be ploughing a lot of money back into investments that will pay off well in the future.
Backfire wrote: 7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.
That weeks sales will include a (normally) massive rush of sales as everyone wants the new edition. Although I would assume that would have been slowed down somewhat by the fact that few of their customers were told that a new edition was coming...
It will also include all of the pre-orders, and all of the stock sold to independents.
So yes, it should have had a meaningful impact on the numbers. It was the launch of a new edition of their flagship (and shortly sole, the way they're going) title. If it didn't have a meaningful impact on the numbers, they did something seriously wrong.
(One could theorise that launching a new edition after 2 years, not telling anyone about it in advance, jacking up your prices even further, and not releasing the new rules in a format that people actually want could have had something to do with it. One could also point out that a company would be aware that these things might be potential issues if they were of a mind to conduct market research, host focus groups, and, you know, communicate in a meaningful way with their customer base. )
loki old fart wrote: We do no demographic research, we have no focus groups, we do not ask the market what it wants.
They didn't really say that...?
They did And also in the news.
Games Workshop's Annual Profit Drops On Revenue Fall, Restructuring
Tue, 29th Jul 2014 11:19
LONDON (Alliance News) - Games Workshop Group PLC reported a huge drop in profits and failed to pay a dividend in its last financial year after posting a significant fall in revenue which it said was due to business restructuring.
The maker of miniature figures and gaming sets posted a pretax profit of GBP12.4 million for the financial year to June 1, compared with GBP21.4 million a year earlier, on the back of lower volumes and sales. During the year, the group also booked GBP4.5 million in exceptional costs associated with its restructuring.
Revenue for the year fell by 8.2% on a reported basis to GBP123.5 million, down from GBP134.6 million the prior year, hit by declining sales in most of its markets.
The group said its falling profits and sales across the business has been largely due to the transition from multi-man stores to one-man stores and the reduction of trading hours across the group.
"Next year, internally, there will be some disruption remaining from the big reorganisation we have just made and from the one man store programme. Nevertheless I still believe we should be growing by opening new stores; particularly in North America and Germany," said Chairman and Acting Chief Executive Officer Tom Kirby in a statement.
The games retailer did not declare a dividend for the year, compared with last year when it declared a dividend of 58 pence per share.
"Beyond next year, the business ought to be able to increase sales (single digit growth, not more) for many years and to provide owners with a steady flow of dividends... Nevertheless, with or without growth, I expect to see dividends. I am not planning to sell any of my shares," said Kirby.
Games Workshop said that it expects to benefit from the more focused selling operation and lower cost base, although profits will remain under pressure while it implements these changes.
Games Workshop shares were down 2.7% at 588.88 pence Tuesday morning.
The group said its falling profits and sales across the business has been largely due to the transition from multi-man stores to one-man stores and the reduction of trading hours across the group.
Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.
The group said its falling profits and sales across the business has been largely due to the transition from multi-man stores to one-man stores and the reduction of trading hours across the group.
Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.
Yeah and if something was causing lost sales, You'd stop doing it.
RatBot wrote: Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.
Actually, this time they said they'll make more money starting with the year after the next.
richred_uk wrote: Ouch - Aside from the big headline numbers being nasty, Cost of Sales is up substantially as a percentage.
In 2013, on sales of 134597k, CoS was 36772k - 27.3%
In 2014, on sales of 123501k, CoS was 36766k - 29.8%
So despite all of their streamlining and cost-cutting, cost of sales went up?
Something seems awry.
Cost of sales in the absolute is pretty much exactly the same, just the percentage went up because actual sales are down. Which makes sense. You pay the same lease and wage no matter how many boxes you sell. And all the streamlining has already been done long ago, it's like the Wayland Games warehouse move now, just a fall-back excuse.
When your core sales concept is "They'll buy what we make" rather than "We'll make what they'll buy", well... then you're bound to run into troubles. And here's the proof. And the fact that they seem proud of the fact - even arrogantly abhorred by even the suggestion - that focus groups/talking to the customer base is something they don't need to do just makes them look even worse.
RatBot wrote: Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.
Actually, this time they said they'll make more money starting with the year after the next.
richred_uk wrote: Ouch - Aside from the big headline numbers being nasty, Cost of Sales is up substantially as a percentage.
In 2013, on sales of 134597k, CoS was 36772k - 27.3%
In 2014, on sales of 123501k, CoS was 36766k - 29.8%
So despite all of their streamlining and cost-cutting, cost of sales went up?
Something seems awry.
Cost of sales in the absolute is pretty much exactly the same, just the percentage went up because actual sales are down. Which makes sense. You pay the same lease and wage no matter how many boxes you sell. And all the streamlining has already been done long ago, it's like the Wayland Games warehouse move now, just a fall-back excuse.
Yeah good catch, I've got my manufacturer head on, not my retailer head when looking at CoS and my gut is thinking that the costs are all variable and forgetting the huge fixed costs their retail network has.
Interesting that in North America, 56% of sales are through an independant store, whereas in the UK only 28% are. That is broadly in line with what I would have expected. The store opens/closures are interesting too, I really need to get my teeth into this.
KommissarKarl wrote: Interesting that in North America, 56% of sales are through an independant store, whereas in the UK only 28% are. That is broadly in line with what I would have expected. The store opens/closures are interesting too, I really need to get my teeth into this.
Which is part of why their predatory treatment of independent retailers is so bad. There are very few overall GW stores in the US.
Sales down 8.2%
Op Profit down 42.3%
Op Margin down 5.8%
Even if you buy into the spin of the 4.5MM in special, one time expenses, it still looks like this:
Sales down 8.2%
Op Profit down 21.1%
Op Margin down 2.2%
If the Op Margin was steady, even with the adjustment, one could at least say that the business is maintaining margin while, while retracting on sales. However, they lost both sales and margin, while jacking up the prices and releasing higher volumes and big name content. Declining sales is a very bad indicator of the state of the business. Trying to claim a mulligan and loosing margin after your mulligan is pretty pathetic too.
It's nice to start the morning off on a good foot though.
Kilkrazy wrote: It is the sales decline that is worrying, not the profits decline.
Well, technically their sales went up compared to previous half-year. Positive spin~~!! Of course they're quite a bit down compared to previous year....
So despite all of their streamlining and cost-cutting, cost of sales went up?
Something seems awry.
Their operating expenses went down to £71 million, from £77 million year before.
Re: the website, multi-million pricetag does not seem unusual. Mark & Spencer spent a year and a half, and £150 million for their new webstore. Now admittably, they're multi-billion corporation, but gives you an idea what it can cost.
At my second job my manger had a saying. It was a very special saying, and one he only said when things were going really badly. What was that saying you ask? Well I include it in every post I make:
Should I change the attributed person to Tom Kirby?
richred_uk wrote: Ouch - Aside from the big headline numbers being nasty, Cost of Sales is up substantially as a percentage.
In 2013, on sales of 134597k, CoS was 36772k - 27.3%
In 2014, on sales of 123501k, CoS was 36766k - 29.8%
So despite all of their streamlining and cost-cutting, cost of sales went up?
Something seems awry.
Cost of sales went down by £6m in absolute terms. As a percentage of sales it went down, because there were less sales. So they are cutting back, but not fast enough to offset the falling sales.
H.B.M.C. wrote: At my second job my manger had a saying. It was a very special saying, and one he only said when things were going really badly. What was that saying you ask? Well I include it in every post I make:
Should I change the attributed person to Tom Kirby?
I assumed that was your personal "tribute" to him anyway...
But it's one thing to joke about it, and another to see Kirby actually behaving like that.
Greatest factual statement of the entire document:
Tom Kirby, GW CEO wrote: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.
So how can you FREAKING TELL who is buying your models when you don't even know/do any research?
In part 14 of our mini-series, I tried to see what the crystal ball had to say on how much profit GW would lose in this year's financials. And I estimated it to be 42%.
Turns out that profits are down 42%. OK, some may say it was a lucky hunch, but I am gonna say: "I told you so."
WarOne wrote: Greatest factual statement of the entire document:
Tom Kirby, GW CEO wrote: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.
So how can you FREAKING TELL who is buying your models when you don't even know/do any research?
We assume GW is losing customers, but it could be that everyone is simply buying less. We don't know, and nor do GW, who boast that they do no market research but in almost the same breath claim they sell only to white middle class 16-35 males. How do they know that? It's just assumptions based on prejudices. Where's the distribution of sales within that? Who is buying what? Who are you losing? Where as they going? Are they spending it on Malifaux or X-Wing? Kirby doesn't even think Pokemon exists. GW doesn't know because they ignore competition, don't survey customers and have shut down online avenues for customer feedback.
The boneheaded arrogance on display is astonishing. In years to come GW will be a ruin, bought out for it's IP, everything else wasted. And it'll all be online like an incredibly slow train crash dissected over however many years it takes before the business is unsustainable.
As for the Alan Merritt thing mentioned earlier. I heard long ago that some at GW makes a lot of money from royalties on Space Marines. I don't know if that's true because it sounded a bit suspect, but it's probably something like that. He goes and he could be uncooperative in allowing them to continue using something he has rights to.
xraytango wrote: I doubt that anything would happen to the lore, it has already been well established for the last 20+ years that the 41st millennium and its grimdark nature would actually change very little other than perhaps some minutiae. It would be the same universe with the same factions, nothing significant would change.
Well, let's just say that you don't know what I know and leave it at that. I can't really talk about it, and while the shift in attitude is something I'd welcome, I do wonder what else would change and that worries me more.
I'm guessing Merrett own something significant to 40k's background and would take his ball home with him if he ended up going via a bit of "involuntary redundancy".
Merrett owns nothing to do with 40K. If he had any claim to it, he obliterated it with his CHS testimony.
WarOne wrote: Greatest factual statement of the entire document:
Tom Kirby, GW CEO wrote: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.
So how can you FREAKING TELL who is buying your models when you don't even know/do any research?
This is the most ridiculous thing of all to me. If you don't do research or know what the market wants, how the feth are you selling to them?
Also, updated OP to add link to the report and Future #15 for the lulz
Tom Kirby's pitch to his investors is pretty much what GW asks its customers to do: Just blindly follow us to the promised land and keep ponying up money as we do absolutely nothing to convince you why you gave us money in the first place.
WarOne wrote: Tom Kirby's pitch to his investors is pretty much what GW asks its customers to do: Just blindly follow us to the promised land and keep ponying up money as we do absolutely nothing to convince you why you gave us money in the first place.
That makes it par for the course then, doesn't it?
xraytango wrote: I doubt that anything would happen to the lore, it has already been well established for the last 20+ years that the 41st millennium and its grimdark nature would actually change very little other than perhaps some minutiae. It would be the same universe with the same factions, nothing significant would change.
Well, let's just say that you don't know what I know and leave it at that. I can't really talk about it, and while the shift in attitude is something I'd welcome, I do wonder what else would change and that worries me more.
I'm guessing Merrett own something significant to 40k's background and would take his ball home with him if he ended up going via a bit of "involuntary redundancy".
Merrett owns nothing to do with 40K. If he had any claim to it, he obliterated it with his CHS testimony.
I would have thoughts all rights belong to the business, and ownership of anything is only in shares. You do not let individuals own things - or you have no business.
WarOne wrote: Tom Kirby's pitch to his investors is pretty much what GW asks its customers to do: Just blindly follow us to the promised land and keep ponying up money as we do absolutely nothing to convince you why you gave us money in the first place.
That makes it par for the course then, doesn't it?
It's not even on the frickin' greens!
It's more like Bill Murray rigging explosives on the golf course trying to kill that gopher in Caddyshack. It borders on insane.
KommissarKarl wrote: Interesting that in North America, 56% of sales are through an independant store, whereas in the UK only 28% are. That is broadly in line with what I would have expected. The store opens/closures are interesting too, I really need to get my teeth into this.
Don't put in a lot of effort because next year they are changing the reporting to by channel rather than splitting out the geographical regions.
Automatically Appended Next Post: Cost of Sales is basically the money spent to produce goods for sale. An increase in CoS means they either produced more units, or got less efficient in producing them. Given the number of large launches in the year, and 7th edition near the end, I think the over-production is a big part of the reason.
Kirby and his board of kronies will choose the new CEO. Kirby will continue to wield huge influence as chairman.
Nothing is likely to change until the current strategy is proved to be a false one. That could take another year or two, by which time GW's financial position may be under water.
Yeah, like I said in my previous post, his statements about the hiring process only seem to make sense if it's an internal candidate -- and probably a relatively green one based on Kirby's "resumes don't matter" rant.
Kilkrazy wrote: It is the sales decline that is worrying, not the profits decline.
Well, technically their sales went up compared to previous half-year. Positive spin~~!!
Of course they're quite a bit down compared to previous year....
...
The second half of the year included Christmas, Knight Titans, Imperial Guard, Tyranids, Stormtroopers and 7th Edition.
Cost of sales in the absolute is pretty much exactly the same, just the percentage went up because actual sales are down. Which makes sense. You pay the same lease and wage no matter how many boxes you sell. And all the streamlining has already been done long ago, it's like the Wayland Games warehouse move now, just a fall-back excuse.
Actually, wages were significantly lower. They eliminated "all" of their middle management, closed all the regional HQ's in Europe, and went to one-man stores allowing for further reduction in work force and associated wages. The majority of these things were done in the 2013-2014 fiscal year.
So, their expenses did go down (that being the entire point of the "streamlining"), but the reduction of costs couldn't keep up with the reduction in sales.
Wow, not looking good. I really expected them to do a little better considering the release of Knights, all the DLC and the new edition.
I expect next year to be even worse though, because I think 7th edition shrank the customer base, from what I've seen online at least. I'm not able to check what the situation is like in my city because GW closed the awesome giant store they had there, leaving only independents for me to purchase from who don't stock much GW stuff.
Sheesh. It's difficult to credit the language and what's being said in these reports. I mean, a lot of us make jokes about GW and you get used to it and still have in your head that it's mostly hyperbole. And then you read what Kirby thinks is suitable for a professional publication and remember that actually, we pull our friggin' punches.
If I'd be a random investor in GW, I'd be selling my stock, too. Kirby's rant gives me a very heavy impression that they are stacking their bets on defending what they used to have - often against tiny operators like Chapterhouse - instead of expanding and grabbing new opportunities. It feels like they have no vision where to take things, and that's going to stagnate their stuff even further. Kirby stepping down is a positive sign, IMO - I'm giggling at the thought that he tries to compare himself to Steve Jobs
Blacksails wrote: I seriously wouldn't be shocked if we saw another edition prior to the next annual report.
I would love to see someone defending it.
GW is a business guys, come on, you all act like they shouldn't make money!
I'm kind of surprised I haven't seen someone defend this current report.
They're still making money, and they have money in the bank. The sky isn't falling.
You should read the BOLS article or the Warseer thread, there are a few there
Here's one in particular from a Warseer poster named "HelloKitty"
HelloKitty (Warseer) wrote: The new 40k edition came right at the end of the reporting period. We aren't seeing everything from the release of 7th edition yet.
I think "disaster" is a little hyperbolic. Its certainly not glowing and great and super positive but neither was the report indicative of a disaster either.
I do wonder though if they're going to address this, or indeed if they could. What would it really take? Could a price drop actually happen, and if so would it really save them? I don't think it would; Kirby and his Kronies seem to be adamant about the idea that GW products are worth every penny and it would devalue the brand to lower costs even an iota, even in the face of declining sales.
I just can't imagine what goes on in people's heads who feel the need to defend the honour of a corporation that continues to gak on a game we all love(d).
Regardless, this report is pretty hard to spin in any sort of positive light. I think I covered the only reasonable positive thing, which is that they're still technically profitable and they still have money in the bank.
The rest is pretty...telling.
*Edit* Just saw the edit above.
Dear lord, are you kidding? There were also pre order figures in that report. If the new edition of your flagship game can't help boost numbers in a two week time frame, you have problems.
And remember, each person not buying a 7th ed book is also a person likely to buy a lot less in the future.
Blacksails wrote: I seriously wouldn't be shocked if we saw another edition prior to the next annual report.
I would love to see someone defending it.
GW is a business guys, come on, you all act like they shouldn't make money!
I'm kind of surprised I haven't seen someone defend this current report.
They're still making money, and they have money in the bank. The sky isn't falling.
You should read the BOLS article or the Warseer thread, there are a few there
Here's one in particular from a Warseer poster named "HelloKitty"
HelloKitty (Warseer) wrote:
The new 40k edition came right at the end of the reporting period. We aren't seeing everything from the release of 7th edition yet.
I think "disaster" is a little hyperbolic. Its certainly not glowing and great and super positive but neither was the report indicative of a disaster either.
I do wonder though if they're going to address this, or indeed if they could. What would it really take? Could a price drop actually happen, and if so would it really save them? I don't think it would; Kirby and his Kronies seem to be adamant about the idea that GW products are worth every penny and it would devalue the brand to lower costs even an iota, even in the face of declining sales.
Beat me to it!
HelloKitty is possibly a banned Warseerite who previously went by IcedCrow, who any frequent Warseer visitors will know is pro-GW, fault is all the players blah blah
Kilkrazy wrote: The sky isn't falling, but there are some ominous creaking noises from the vaults of heaven.
GW currently have £17.55 million cash in the bank to spend against actual losses, so they could survive for several years.
Really though I don't think any of us want them to really collapse, just wake the feth up. Although at this point, I think it might be terminal. It's likely that a new CEO is just going to be another buttkissing yes man or Krony (new word! ) that will keep the ship in the same direction, and that's the problem. Two bad reports (I think it's just been two now) aren't that bad alone, but when you don't do anything to fix it and just hope things correct themselves...
What will happen when it's three bad reports? Four? Five? They're going to realize the problem too late, if they realize it at all. I wouldn't be surprised if they think the problem is something completely unrelated (Need more stores?), and not the combination of no marketing, ludicrous prices, gakky rules, no community engagement, etc.
Kilkrazy wrote: The sky isn't falling, but there are some ominous creaking noises from the vaults of heaven.
GW currently have £17.55 million cash in the bank to spend against actual losses, so they could survive for several years.
I saw the same thing mentioned in an analysis of Nintendo. They continue to make losses but with a couple of billion in assets, they're not in danger yet.
Although a profit has been made by GW, it seems to be in spite of their decisions not because of them.
I think that the problem for GW is that they are in a sector that even if all was going ok, the income would be steady. I would of thought that this would of made it attractive to long term investors, who knew that they could rely on the business still making money 5, 10, 20 years on.
Lets say that they got their release times sorted, that the rules were decent and updates were regular. This would leave you with a steady churn of people joining & leaving, as well as gamer's looking for a change of army. Apart from major releases, say like LoTR or major rule changes you would probably see a steady line when it comes to turnover, with some blips connected the afore mentioned updates.
Kilkrazy wrote: The sky isn't falling, but there are some ominous creaking noises from the vaults of heaven.
GW currently have £17.55 million cash in the bank to spend against actual losses, so they could survive for several years.
Really though I don't think any of us want them to really collapse, just wake the feth up. Although at this point, I think it might be terminal. It's likely that a new CEO is just going to be another buttkissing yes man or Krony (new word! ) that will keep the ship in the same direction, and that's the problem. Two bad reports (I think it's just been two now) aren't that bad alone, but when you don't do anything to fix it and just hope things correct themselves...
What will happen when it's three bad reports? Four? Five? They're going to realize the problem too late, if they realize it at all. I wouldn't be surprised if they think the problem is something completely unrelated (Need more stores?), and not the combination of no marketing, ludicrous prices, gakky rules, no community engagement, etc.
I will say I personally want to see the demise of the entire upper management of GW. Tom Kirby and others at the top have built a company of yes-men to replace anyone with a hobby interest and have been seeking exploiting the customer base ever since.
I don't care that they want to make money- that is the point of any company. What I do care about is how they try to make that money. Cutting edition lifespans and up'ing prices on models yearly (either through yearly price rises or the more subtle "new codex" updates) is not a way to build customer loyalty.
Wolfstan wrote: I think that the problem for GW is that they are in a sector that even if all was going ok, the income would be steady. I would of thought that this would of made it attractive to long term investors, who knew that they could rely on the business still making money 5, 10, 20 years on.
Lets say that they got their release times sorted, that the rules were decent and updates were regular. This would leave you with a steady churn of people joining & leaving, as well as gamer's looking for a change of army. Apart from major releases, say like LoTR or major rule changes you would probably see a steady line when it comes to turnover, with some blips connected the afore mentioned updates.
KommissarKarl wrote: Interesting that in North America, 56% of sales are through an independant store, whereas in the UK only 28% are. That is broadly in line with what I would have expected. The store opens/closures are interesting too, I really need to get my teeth into this.
Which is part of why their predatory treatment of independent retailers is so bad. There are very few overall GW stores in the US.
And the ones that do exist offer nothing that can't be found better elsewhere, usually within close proximity due to GW's habit of putting their own retail store in relatively close proximity to an existing game store. I've always wondered why they even continued to bother with North American stores, especially since they've been shrinking them in size for the last decade, do they just not understanding the culture difference?
So do we all believe that Kirby stepping down is a good thing or not? Personally, I will impressed if whoever is next manages to do a worse job, so improvement?
Soggy Kittenz wrote: So do we all believe that Kirby stepping down is a good thing or not? Personally, I will impressed if whoever is next manages to do a worse job, so improvement?
To me, it's like George Lucas giving up the rights to the new Star Wars movies- the new trilogy was terrible, so I'll take basically anything else!
You can rely on Tom Kirby to enliven his company's results with a few interesting quotes
Here’s a new way to judge a company’s performance: totally ignore the numbers.
Games Workshop (LSE: GAW.L - news) , which makes miniature figurines and fantasy games played out in alternative universes, today reported that its pre-tax profits for the year fell 42.1pc, or £9m, to £12.3m as revenues slumped from £134.6m in 2013 to £123.5m this year.
That doesn’t sound great.
But Tom Kirby, the chairman and acting chief executive of Games Workshop who is usually well known for his straight talking, had another take. He said: "Games Workshop has had a really good year.”
However, he did concede that “if your measure of 'good' is the current financial year's numbers, you may not agree”.
Mr Kirby can always be relied on to liven up his company’s results with a few bon mots . Here are some of his best.
On Games Workshop’s strategy (July 2013) :
We run a tight ship, and do our damnedest to get more sales. Everything else is just whistling Dixie.
On the company’s 2014 capital investment numbers (July 2013) :
We think it many be £9.3m. But remember that, as [19th century German military strategist Helmuth] von Moltke said, ‘No plan survives contact with the enemy’.
On a 60pc rise in the company’s share price over two months in 2009:
I don't look at it too often. That way lies madness.
On the bursting of The Lord of the Rings bubble which led to a profits warning in 2007:
It was all a bit too easy. We forgot the basic skills.
On The Lord of the Rings (January 2007) :
Personally I preferred the book. But I suppose I shouldn't say that.
Soggy Kittenz wrote: So do we all believe that Kirby stepping down is a good thing or not? Personally, I will impressed if whoever is next manages to do a worse job, so improvement?
Kirby stepping down is an irrelevance, he will still hold an influential position within the company, he will be instrumental in appointing a successor, who will conform to his ideas of how the company should be run, and will still be pervasive throughout upper management due to established, long term relationships with the remainder of staff who aren't going anywhere.
We might see some small signs of change, but don't expect revolution.
I don't think anything is going to fundamentally change by the next mid year. I would expect sales to be down once again for a multitude of reasons, but I expect GW to continue increasing releases and DLC type contact in an effort to wring the last bit of money out of its current player base.
I expect we'll see GW release the following in addition to what is currently known in the next half year
- New version of Warhammer Fantasy
- New Space Marine Codex
- Several supplements that make certain armies OP, especially for the bigger models.
- Potential for cut and paste of older games a DLC type content (Space Hulk, Necromunda, etc.)
As long as GW doesn't over produce, I expect they'll remain profitable for the next half year. The new CEO will be named sometime in the half year and any downward trends will be blamed on finishing up the transition. I expect this time next year will be very interesting.
We think it many be £9.3m. But remember that, as [19th century German military strategist Helmuth] von Moltke said, ‘No plan survives contact with the enemy’.
..
Wait...who the is the enemy he's talking about here!?
Oh wait...it's us, the customers. Makes perfect sense.
So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
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?
Blacksails wrote: I seriously wouldn't be shocked if we saw another edition prior to the next annual report.
I would love to see someone defending it.
GW is a business guys, come on, you all act like they shouldn't make money!
I'm kind of surprised I haven't seen someone defend this current report.
They're still making money, and they have money in the bank. The sky isn't falling.
Reddit to the rescue:
Bull[poop]. GW is a profitable company without major debts (as displayed in the chart). Not a very profitable one, but no one in this industry will makes millions.
I know there is a lot of people who hates GW around here, but they are still there for a few years at least.
This a "so-so" year for GW, nothing less, nothing more.
8.2% revenue drop: totes normal!
They are by far the oldest and most enduring company in the buisness.
We may not like their buisness model, but it worked for 20 years, and no change in the foresable future (3D printing being the big cloud on the horizon; but it will affect every company in the buisness equally: if it catch up, companies that are not able to adapt will die, but GW is already considering the idea of being a CAD-dealing company rather than a mini company.)
Buisness! Forward-thinking GW know what's up with technology and 3D and all that! Just look at the preamble; Kirby's even heard of it!
This. Also many people seem to conflate a drop in profits with a company making a loss!
So nothing to worry about!
There is a strong wind of change blowing from GW and it would be foolish to ignore it. If you look at some of the major changes that happened you will notice that someone is working hard there to gain back your sympathy (well, that is unless you are blinded by your hatred and ignorance).
Finecast retired, their [poopy] legal chief fired, fantastic free tutorials on their YT channel, Stormclaw (which is an amazing deal), good consumer support, license freed, all books in ebook format (which is easily pirated and GW knows this), etc. Even the more controversial things like Dataslates have, imo, their place as they are basically DLC patches that bring life to useless models (Helbrute).
GW isn't a good or bad company. They make their mistakes and they make good decisions. However they are important as they basically are the train that is pulling the whole industry forward.
Only hatred and ignorance can make someone think this has been anything but a great year! Kirby said so too: it's a good year! And he knows more than you, cause he's like a CEO and stuff! Look it up!
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?
Down but not as much as the first half, hence why the total for the year is down 8-9% where the first half was down 10%.
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.
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...
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.
But this would require GW's upper management admit they were wrong!! They would have to admit they were wrong about things like Pokemon (honestly, who still remembers that thing!?!)
Clearly the only option is to stand proudly on the bow of the sinking ship and curse everyone jumping overboard.
Da Boss wrote: Wow, not looking good. I really expected them to do a little better considering the release of Knights, all the DLC and the new edition.
Here's a new one: One of my favorite posters on BOLS, Auticus, a known GW apologist and someone who finds 40k to be great and amazing and better than everything else (and of course blames the tournament crowd for the perception that 40k sucks), just made the argument that GW can't match Perry, Warlord et all (and of course took the quality jab at Mantic) because they are a public company, so they can't charge $1 a figure while tiny companies like Perry or Warlord can. Of course he also makes the comparison that WHFB costs the same as 40k and WM/H costs the same as 40k, but is a bad game because it's small and doesn't have BIG ARMIES, while 40k and Fantasy appeal to a different crowd.
Auticus (BOLS) wrote: Having to drop my price to $1 a figure because Perry and Mantic do that is not viable for a publically traded company. Perry and Mantic are not publicly traded, nor do they have anywhere near a fraction of the operating costs that GW has. They have to appease the handful of guys that sit at Perry and Mantic. That's all.
For a handful of Perry and Mantic workers, they can get away with $1 a fig to turn a profit because they don't have to appease shareholders and there are a lot fewer people with their hands in the pie.
prowla wrote: Kirby's rant gives me a very heavy impression that they are stacking their bets on defending what they used to have - often against tiny operators like Chapterhouse - instead of expanding and grabbing new opportunities.
GW kinda reminds me of the British Empire. It used to be that England had an enormous empire, and would smash aside all that opposed it, before they could become a threat.
Eventually we stopped doing it, and the empire kinda caved in on itself. But we made amends, and England remains quite strong, despite massive world powers like Russia and the US being left in the world.
What GW is doing is staying in the first stage, smashing the opposition, but the problem is that they are doing it ineffectually. The Empire changed tact at this point, and to some degree survived, but GW is trying to do everything the exact same way constantly, which will not work out. Eventually, unless they change, they will go where the Empire was headed - collapsing under its own enormity, and failing to adapt to change.
Should they take the hint, they could easily stay strong, and just have to accept and live with the competition.
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.
prowla wrote: Kirby's rant gives me a very heavy impression that they are stacking their bets on defending what they used to have - often against tiny operators like Chapterhouse - instead of expanding and grabbing new opportunities.
GW kinda reminds me of the British Empire. It used to be that England had an enormous empire, and would smash aside all that opposed it, before they could become a threat.
Eventually we stopped doing it, and the empire kinda caved in on itself. But we made amends, and England remains quite strong, despite massive world powers like Russia and the US being left in the world.
What GW is doing is staying in the first stage, smashing the opposition, but the problem is that they are doing it ineffectually. The Empire changed tact at this point, and to some degree survived, but GW is trying to do everything the exact same way constantly, which will not work out. Eventually, unless they change, they will go where the Empire was headed - collapsing under its own enormity, and failing to adapt to change.
Should they take the hint, they could easily stay strong, and just have to accept and live with the competition.
Funny. They're also very much like the Imperium. Art imitates life?
So I said I wouldn't pass judgment til I saw the numbers. And now I've seen the numbers.
In all, they were worse than I expected, and I wasn't expecting them to be all that great. I thought that there would have been less of a noticeable "clunk" of dropping because of the speed of new editions and codex releases. So color me surprised on that account.
As far as the takeaway, I'm going to agree with some of the other posters here that while there are signs of a shift, there is not going to be some kind of upheaval anytime soon. There is still a lot of entrenched culture within GW's management and it is going to take time for that to be cleared out entirely. That said, if Kirby does step down, that will be the first step, the first change of course small as it may be in overall effect. The big question of this is how long will GW take to fully change course? And, more pressingly, will they do it in time?
That all remains to be seen.
As for myself, I will continue to play their games and enjoy their products on my personal level. And let all of this talk of the unspeakable evils and unspeakable goods of GW go to those who are far more passionate than I.
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.
Yes, that proud boast of doing no market research astonished me.
It makes it look like GW think that their customers are defined by buying GW stuff because it is GW stuff. Which is fine as far as it goes, but the trend seems to be for people to stop buying GW stuff, and they presumably don't know why.
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. Problems will arise if the board allows egos and private agendas to rule.
He does seem to be talking back to the board a few times in the preamble and here. He must have been seeing some pushback? Also not sure how he thinks sales are going to grow as they have been steadily falling, also from page 6:
Beyond next year, the business ought to be able to increase sales (single digit growth, not more) for many years and to provide owners with a steady flow of dividends. I say ‘ought to’ because no plan survives contact with the enemy and we will not promise what we cannot deliver — in particular our policy of only returning surplus cash as dividends will remain. We will not borrow (nor engage in fancy
financial engineering) to pay a coupon.
Nevertheless, with or without growth, I expect to see dividends. I am not planning to sell any of my shares.
Of course there will be dividends, that's money in his pocket, after all!
WayneTheGame wrote: Here's a new one: One of my favorite posters on BOLS, Auticus, a known GW apologist and someone who finds 40k to be great and amazing and better than everything else (and of course blames the tournament crowd for the perception that 40k sucks), just made the argument that GW can't match Perry, Warlord et all (and of course took the quality jab at Mantic) because they are a public company, so they can't charge $1 a figure while tiny companies like Perry or Warlord can. Of course he also makes the comparison that WHFB costs the same as 40k and WM/H costs the same as 40k, but is a bad game because it's small and doesn't have BIG ARMIES, while 40k and Fantasy appeal to a different crowd.
Auticus (BOLS) wrote:
Having to drop my price to $1 a figure because Perry and Mantic do that is not viable for a publically traded company. Perry and Mantic are not publicly traded, nor do they have anywhere near a fraction of the operating costs that GW has. They have to appease the handful of guys that sit at Perry and Mantic. That's all.
For a handful of Perry and Mantic workers, they can get away with $1 a fig to turn a profit because they don't have to appease shareholders and there are a lot fewer people with their hands in the pie.
Hah! Yeah, pass the expenses onto the customer. They totally won't figure out your stupid plastic men aren't worth the princely sum you demand for them.
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. Problems will arise if the board allows egos and private agendas to rule.
He does seem to be talking back to the board a few times in the preamble and here. He must have been seeing some pushback?
It's hilarious because this sort of thing goes on all the time at GW and has done for a long, long time
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. Problems will arise if the board allows egos and private agendas to rule, except mine.
He does seem to be talking back to the board a few times in the preamble and here. He must have been seeing some pushback? Also not sure how he thinks sales are going to grow as they have been steadily falling, also from page 6:
I read that report and then skipped to the end of the thread, confident I'd see it debunked as a fake. I didn't. Kirby reminds me more and more of Kevin Siembieda (of Palladium Games).
There's a reason why almost all companies (even start up businesses!) do market research: ebecause it fething works. It's not because they're sheeple and they just follow the trend and they can't innovate or whatever bs you want to spin. It's just common sense that you ask customers what they want to buy... and sell those stuff to them.
My friend, who's a much more successful author than me, said:
"There are only two rules of writing. If you readers love it and think it's awesome: do it. If they hate it and think it sucks, don't do it."
GW is ignoring those two simple rules.
heartserenade wrote: There's a reason why almost all companies (even start up businesses!) do market research: ebecause it fething works. It's not because they're sheeple and they just follow the trend and they can't innovate or whatever bs you want to spin. It's just common sense that you ask customers what they want to buy... and sell those stuff to them.
Yeah. It is absolutely incomprehensible that Kirby would boast with not doing market research, especially in a situation where the company is doing badly. If people are not buying your product, one could imagine you might want to know why!
If their strategy is "get good people, and all will be fine", then isn't the corollary something like, "when all is not well, you don't have good people?"
I know I'm spending less with GW and more in other places. I only really buy direct-only items from GW themselves, getting other (and less and less frequent purchases) from discounters.
My local GW shop went to the one-man approach, and that man doesn't work Sunday or Monday (two of the days I might actually make it to the shop). Apparently things are so bad that, with the announcement of the new cityfight battle board, rather than just get one for the store (as they would have in years past), they're actually seeking to get customers to pool money to buy one for the store. I could see that (maybe) at an independent game store.
More of the people I regularly game with are dropping out, and it's not just higher prices, it's the lackluster nature of the game 's recent editions. I don't think they realize that their customers aren't all twelve, and that a "murdernought with a murderfang and a murdershield" doesn't actually come across as cool.
Kilkrazy wrote: It is the sales decline, combined with increasing prices and the fact that major codexes (eldars, orks, tyranids, Imperialum Gardia) and cash cows (Space Marines, new 40k edition) were out, that is worrying, not the profits decline.
Fixed your post that didn't need to be fixed, but if you complete the picture, things look pretty grim.
I'm not a financial expert, and I'll admit that much of the information in the report is lost on me.
But I've got to chime in on that 'no market research' comment. That just blows me away.
How on earth can you justify (or brag about) doing no market research just because you're in a niche market?? I'm at a loss. This shouldn't be a thing. This shouldn't be real. A CEO in a modern corporation basically saying "You know all that research that every other company does in order to facilitate sales? Yeah, we don't do that. No need. We're in a special place, you see."
It hurts my brain. I'm trying to formulate words for that kind of arrogant stupidity, and it just...isn't...happening.
Instead of just looking at revenue, perhaps pay some attention to cash flows as well?
On the negative side: cash from operations is down 22%(!)
On the positive side: net cash flow is positive after GW cut the dividend. (18 million pounds to 5 million pounds)
As long as the dividend remains minimal, GW may be able to defend its position on the basis of that cash reserve. However, it cannot survive if cash from operations keeps declining like that.
Interesting side note: expenditure on product development increased about 32%.
The cash flow may reveal board (and shareholder) unhappiness. As long as the cash from operations keeps declining, there is far less prospect for any increase in dividends. The large cash reserve gives GW room to maneuver, at least in the near term, but if cash flows decrease like that, GW is in trouble.
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.
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.
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.
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...
"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?
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 $$ to do it. Most likely, they knew that they would dip, but the future groundwork was being laid.
MWHistorian wrote: GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.
It's the first thing Lego did.
........oh, girls do like Legos...I guess we should have known that...
MWHistorian wrote: GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.
It's the first thing Lego did.
........oh, girls do like Legos...I guess we should have known that...
Correct the company is running even keel and still growing.
We must have different definitions of 'growing.'
They made a profit as well as launched a buttload of new models and books. It costs money to ramp up like that. Once you ramp to a certain extent you hit "economies of scale" and you plateau or in their case, the production will plateau and level off, while hopefully sales remain strong.
That is your future profit. They didn't kick into high gear this last year and a half or so without knowing it was going to cost them $$ 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.
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.
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.
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.
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.
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.
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.
Surtur wrote: 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.
I only have my single semester accounting class to rely on, but I think that all of the losses being reported in the UK region is due to GWs new centralized management model that they implemented after closing all of their regional offices.
Yodhrin wrote: 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.
It may or may not be slow. It depends on how quickly they can pull their stores and on their lease agreements. If they keep cutting costs the way they do to keep revenue up, they'll have to kill the stores in a year to stay afloat.
Surtur wrote: 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.
I only have my single semester accounting class to rely on, but I think that all of the losses being reported in the UK region is due to GWs new centralized management model that they implemented after closing all of their regional offices.
Someone correct me if I'm wrong.
It's revenue loss for the UK. Management shifting doesn't affect revenue or shouldn't. The thing is, the UK took all the revenue losses into it's profit which may mean that there is nothing left to cut there or they aren't cutting there.
Automatically Appended Next Post:
agnosto wrote: Figure an average FY inflation rate of 2.45% based upon the last 11 months of inflation data from the U.K.
I grabbed 1.9% as my figure. 2.45% would be a bit worse (14.1 mil revenue loss instead of 13.4 mil).
Tannhauser42 wrote: So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
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 don't know how so many people are so bad at reading intent when the phrasing is poor (then again, that's why YMDC exists).
The guy meant that GW invested money into increased manufacturing capacity and the costs of that ate into the resulting increased revenue, but this was a one-time expense, so next year they will have the full benefit of their increased revenue with none of the costs, so a net profit.
This is completely wrong, of course, but not really that hard to follow.
Tannhauser42 wrote: So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
Much bigger, much more successful companies have suffered crippling loss of market share because they believed "we will tell them what they want". The american auto industry nearly collapsed because they blindly continued to make massive gas guzzling boats when the public wanted more modest, affordable, and efficient cars.
Wouldn't being in a niche market make market research more vital?
You have a small customer base, surely you want to know exactly how to get the most money you can from them and the easiest way to do that is to make something most of them want to buy?
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.
They could make changes. Most importantly reaching out to the Independents who are helping their competition thrive after being treated like the enemy for far too long. (Not sure how they think maintaining their sad chain of one man shops is better money spent than having independents do it for you while spending a fraction of the costs in community support to win back those you've marginalized.)
Unfortunately those deck chairs aren't going to rearrange themselves.
Tannhauser42 wrote: So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
Tannhauser42 wrote: So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
I guess they don't have a clue:
They do no demographic research and they don't know what the customers think.
Tannhauser42 wrote: So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
I guess they don't have a clue:
They do no demographic research and they don't know what the customers think.
I think they think that the customers don't think at all.
Tannhauser42 wrote: So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
I guess they don't have a clue:
They do no demographic research and they don't know what the customers think.
If they'd done such research I doubt Dreadfleet would have happened for a start.
Meanwhile Natfka, the former fabricator of early news on GW, has nothing to say on the matter. That guy's really gotten too GW-friendly ever since getting struck down by GW and losing his spine.
This report seems impossible! After all, we were told numerous times in other threads discussing Games Workshop's business outlook that when a guy went to his local Gee-Dubs, it was always crowded, therefore the business must be doing well company-wide!
Tannhauser42 wrote: So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?
I guess they don't have a clue:
They do no demographic research and they don't know what the customers think.
I think they think that the customers don't think at all.
Ouze wrote: This report seems impossible! After all, we were told numerous times in other threads discussing Games Workshop's business outlook that when a guy went to his local Gee-Dubs, it was always crowded, therefore the business must be doing well company-wide!
Don't forget that any loss in revenue was due to the economy in Cyprus
Oh my goodness. After reading this entire thread, and checking out all the new GW finicial reports, and that dreadful preamble, I am appauled by the disdain Kirby has for us, and his over confidence and arrogance in regards to the entire situation.
Where to begin? How did this guy ever become a CEO? What a joke! I sure Ms. Tongue cringed when she got that preamble and was told to post it. I bet at the same time she was posting her resume on Monster or Careerbuilder with a long drawn out sigh!
This company has shot off all its big guns and went backwards. Space marines, imperial knights (cool but that price point, hurtin' me!) 40k 7th ed... whats next in 2015? Are Dark Eldar going to right the profit ship? Will they finally push out Sisters? (Sadly, that ship left port when other companies kickstarted GW's rear while they whistled dixie) Can blood angels cure the black rage of the GW consumers? Let me rephrase all this, they released their updates for their MOST POPULAR LINE AND RANGE AND LOST OVERALL PROFIT.
The customers are rightly enjoying this death spiral. GW deserve it, as to treat your customers like they do, to remain stagnant with regards to the techonology and advancements of the day and age. GW need to apologize for their brazen dictatorial approach to the niche market that is miniature wargaming. They need to acknowledge other companies are taking pieces of the pie, that GW needs to regain their image they once had. GW should EMBRACE kickstarter and facebook, not run and hide. A GW kickstarter may do very well, but its skewed now because of the ill will many customers now have. It's disgusting how much they hold us in contempt while we have started to do so with them. This report clearly shows that they need us more than we need them.
Also, close the fething GW stores, EMBRACE the FLGS, let them pay for the space, let them build the community, and OMG LET THEM HAVE A SALE.
You sell pretty plastic soldiers, not coach purses... strike a deal with a major hobby store chain, or even walmart. Get feedback and improve. I didn't get a vibe from any of this about them changing any practices and its disgusting that it drags on still, year after year.
Just shocking.... attitude over experience.... clearly thats how we ended up with CEO's that write preambles like this... keep the man away from the chairman spot, that would be the start of the turn around in my eyes (if they'll have me..... LOL!)
You have a small customer base, surely you want to know exactly how to get the most money you can from them and the easiest way to do that is to make something most of them want to buy?
You're applying business savvy and logic to a company that clearly does not have any...
loki old fart wrote: We do no demographic research, we have no focus groups, we do not ask the market what it wants.
They didn't really say that...?
I think it's the perfect quote to post whenever people wishlist about the game. A nice reminder about how GW is there to tell yu what to want, not the other way around.
Howard A Treesong wrote:Did I read they're paying out 20p per dividend? What's Kirby's scoop from that?
Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
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.
That preamble struck me as pretty unprofessional. At best Kirby seemed to be arguing for the idea of "survival is winning in business."
If the release of a new edition of 40K and sundry popular codices couldn't turn their year around, they can't have many more tricks up their sleeves for the upcoming year.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
Well, GW could take these issues into account like publishing a supplement for competitive play (as PP has it).
But they don't ask their customers what they want.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
I'm sorry but everything you just typed was utter bollocks. Market research is not JUST about guessing "what the consumers want." Its about looking at what they ACTUALLY bought and looking for TRENDS and PATTERNS in buying habits. Its about looking at the demographics (age income, race) and seeing who bought what.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
Alas, the fragmentation of the customer base is a symptom of the huge deficits in vision and direction where GW's product lines are concerned. Even if no other usable data was gathered, this realisation alone would be important for them.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
The ideal answer to that would be to split 40k in half. Same scale in terms of miniatures but 1 detailed skirmish ruleset that is perfectly balanced (in so far as that is possible), basically Infinity with Space Marines and the ma(e?)ss battle game that is 7th. GW would still gets its miniatures sales, the players would be able to choose which type of game they want without having to play other games and it would considerably broaden the appeal of 40k. You will always get mixed opinions from customers but that is where statistics and metadata come to the rescue.
What I think we will see over the coming year is a scattershot approach as GW flails around and tries to find something that will save them without doing anything so terrifying as actually doing something that will work.
Just because a market is fragmented doesn't mean you have to ditch market research. In fact, it means you HAVe to do market research. Why is it fragmented? What are they buying? Who are buying these things?
It's true that any change will piss off some of your fan base. Market research will make you know how to piss off the least amount of them, and how to win them back.
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 don't know how so many people are so bad at reading intent when the phrasing is poor (then again, that's why YMDC exists).
The guy meant that GW invested money into increased manufacturing capacity and the costs of that ate into the resulting increased revenue, but this was a one-time expense, so next year they will have the full benefit of their increased revenue with none of the costs, so a net profit.
This is completely wrong, of course, but not really that hard to follow.
Well, I'm glad that you cleared that up. Now it's just complete total nonsense. Increasing manufacturing costs would have no negative effects on revenue. Revenue is based on SALES. Profit would be affected by expenditures in manufacturing but not sales. With the caveat that a decrease in manufacturing expenditures can and will result in a decrease in revenue as you would be making less product to sell. He was using the wrong terminology to make his point. "Economies of scale" references a paradigm that was antithetical to his overall point, he should have used the "law of diminishing returns" when discussing the plateau (of profitability, I assume).
Also there was no increase in revenue, it's a raw number, reported before any expenses are factored in. Making his entire premise dog poo from the get go.
Then there the statement that production will hopefully level off!?!? You never want production to level off. In the manufacturing business, which GW directly states that they are, you always want an increase in production along with an increase in sales. It's how you grow.
Sorry to ask again as it's on another page, but I was wondering what Kirby made on the 20p dividends. And does his wife really work for the company? I assume she has holdings too.
IF his wife is owner of the company that changed the web site. It could be that Kirby is expecting GW to fall. And is transferring funds out before it crashes. Happened to a firm I used to work for. Trained everybody, even people he already let go, at 1500 a head. He transferred the funds to a training company he owned. Then put the company I worked for into receivership.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
I'm sorry but everything you just typed was utter bollocks. Market research is not JUST about guessing "what the consumers want." Its about looking at what they ACTUALLY bought and looking for TRENDS and PATTERNS in buying habits. Its about looking at the demographics (age income, race) and seeing who bought what.
well then, by that definition they do market research. They know people bought miniatures. Great success! If we keep making miniatures, people will keep buying them (well we assume they are people and not swamp mutants)
If the units were balanced, far fewer people would have an issue with it. A Baneblade, for instance, isn't really any more powerful than the equivalent points in LRMBT, arguably weaker, whereas a Revenant is a real handful unless you're warned ahead of time and can tailor for it. So that's not really a fracture created by the players, that's a fracture created by poor rules, which GW have the power to fix.
Some want a balanced tourney game. Others want the game to remain unbalanced.
Anyone who doesn't want a balanced game isn't really grasping the argument. If one wishes to imbalance a balanced game, it's very simple, the reverse less so.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
I'm sorry but everything you just typed was utter bollocks. Market research is not JUST about guessing "what the consumers want." Its about looking at what they ACTUALLY bought and looking for TRENDS and PATTERNS in buying habits. Its about looking at the demographics (age income, race) and seeing who bought what.
well then, by that definition they do market research. They know people bought miniatures. Great success! If we keep making miniatures, people will keep buying them (well we assume they are people and not swamp mutants)
Uh no they didn't. Read my sig. They don't do any demographics research whatsoever.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
They don't even know that their market base is fractious, because they don't do market research. See the problem?
The product that they manufacture is so Byzantine and convoluted that none of their customers can find someone to agree on a way to play. See the problem?
There it is in a nutshell. There wouldn't even be a fractiousness if the game wasn't designed in the manner that it currently is.
So, I know very little about business. How bad is this report really? What similarities does this have to other companies that have gone under or managed to recover? Are there parallels to be drawn? And could GW recover if they keep doing largely what they're currently doing?
To me, it looks unhealthy, but I don't know how bad it really is.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
Well this is presumptuous garbage until you actually see the market research, isn't it? Are you saying that based on your exposure to players at your store and on the internet, there are no products or market strategies a large portion of the player base would agree on with their wallets? You're not really saying anything - you're presuming you understand an entire market based on your individual experience, and that's the exact kind of poor thinking that led us to this report.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
I'm sorry but everything you just typed was utter bollocks. Market research is not JUST about guessing "what the consumers want." Its about looking at what they ACTUALLY bought and looking for TRENDS and PATTERNS in buying habits. Its about looking at the demographics (age income, race) and seeing who bought what.
well then, by that definition they do market research. They know people bought miniatures. Great success! If we keep making miniatures, people will keep buying them (well we assume they are people and not swamp mutants)
I assume you're joking, but hilariously enough that seems to be their attitude. A stunning tautology directly from the report:
Our market is a niche market made up of people who want to collect our miniatures.
By GW's definition, any gamer or hobbyist who isn't already buying GW models isn't even in GW's market! I guess at least that way, by definition, they own 100% market share? But like people are pointing out, market research is way more than just knowing that someone buys your product, and GW had better attempt to understand their fracturing and dwindling customer base if they want to hold on to it and grow. Equally important, they should seek to understand why some people buy their competitor's models and not theirs. You know, looking outside the people who already "want to collect our miniatures." With narrow thinking like that, it's no wonder they aren't capturing more players.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
Well this is presumptuous garbage until you actually see the market research, isn't it? Are you saying that based on your exposure to players at your store and on the internet, there are no products or market strategies a large portion of the player base would agree on with their wallets? You're not really saying anything - you're presuming you understand an entire market based on your individual experience, and that's the exact kind of poor thinking that led us to this report.
Truth! The game is designed by (basically) five guys that are fully immersed in the game with (reportedly) no outside input. Then a sales team has their way with it setting prices and affecting points allocations with (reportedly) no outside input. At some point, things will either stagnate or go completely off the rails. They left the track about two years ago, and the momentum is finally slowing.
Blacksails wrote: So, I know very little about business. How bad is this report really? What similarities does this have to other companies that have gone under or managed to recover? Are there parallels to be drawn? And could GW recover if they keep doing largely what they're currently doing?
To me, it looks unhealthy, but I don't know how bad it really is.
It's... not good.
It could have been worse, they've essentially managed to make up a small amount from January, year on year, but as has been pointed out, that period features the relaunch of their flagship product, and arguably one of the most lucrative model releases of recent times (pure speculation on my part, but given even I have become a big IK fanboy, difficult to see that it couldn't have been.)
It's like a scene in an RPG when the floor starts to break away in pieces, and the protagonists leap from one solid section to the next, that plan will only work for so long until you get out of that room or go down the hole.
One of the things even some basic market research would tell them is that dropping the Specialist Games was a bad idea. Just look at all the companies doing quite well for themselves by filling that void.
But, then again, GW thinks their market is only people who already want to buy their stuff.
Howard A Treesong wrote: Sorry to ask again as it's on another page, but I was wondering what Kirby made on the 20p dividends. And does his wife really work for the company? I assume she has holdings too.
In the report he also says this:
Nevertheless, with or without growth, I expect to see dividends. I am not planning to sell any of my shares.
So, yeah, he's still cashing in while driving the company into the ground...
I assume you're joking, but hilariously enough that seems to be their attitude. A stunning tautology directly from the report:
Our market is a niche market made up of people who want to collect our miniatures.
By GW's definition, any gamer or hobbyist who isn't already buying GW models isn't even in GW's market! I guess at least that way, by definition, they own 100% market share? But like people are pointing out, market research is way more than just knowing that someone buys your product, and GW had better attempt to understand their fracturing and dwindling customer base if they want to hold on to it and grow. Equally important, they should seek to understand why some people buy their competitor's models and not theirs. You know, looking outside the people who already "want to collect our miniatures." With narrow thinking like that, it's no wonder they aren't capturing more players.
I've said this for quite a while now. It can also be evidenced in their current practices. Instead of attempting to garner more business and custom their focus has been wringing every last cent from their existing customer base. I have been decried as a heretic more than once for that sentiment, but there it is in their own reports.
It could have been worse, they've essentially managed to make up a small amount from January, year on year, but as has been pointed out, that period features the relaunch of their flagship product, and arguably one of the most lucrative model releases of recent times (pure speculation on my part, but given even I have become a big IK fanboy, difficult to see that it couldn't have been.)
It's like a scene in an RPG when the floor starts to break away in pieces, and the protagonists leap from one solid section to the next, that plan will only work for so long until you get out of that room or go down the hole.
My thinking as well.
I mean, what else can they really offer that will sell as well as marines, IG, and IK, not to mention the core rulebook? Short of them turning their game around and giving us a top quality re-launch of BFG/Epic, I don't know what they're going to be making more money from.
As I said earlier, I wouldn't be shocked if we saw 8th before this time next year.
Howard A Treesong wrote: Sorry to ask again as it's on another page, but I was wondering what Kirby made on the 20p dividends. And does his wife really work for the company? I assume she has holdings too.
In the report he also says this:
Nevertheless, with or without growth, I expect to see dividends. I am not planning to sell any of my shares.
So, yeah, he's still cashing in while driving the company into the ground...
Well clearly it's a good year for someone. No point in holding all those shares if you can't hand out a dividend.
I assume you're joking, but hilariously enough that seems to be their attitude. A stunning tautology directly from the report:
Our market is a niche market made up of people who want to collect our miniatures.
By GW's definition, any gamer or hobbyist who isn't already buying GW models isn't even in GW's market! I guess at least that way, by definition, they own 100% market share? But like people are pointing out, market research is way more than just knowing that someone buys your product, and GW had better attempt to understand their fracturing and dwindling customer base if they want to hold on to it and grow. Equally important, they should seek to understand why some people buy their competitor's models and not theirs. You know, looking outside the people who already "want to collect our miniatures." With narrow thinking like that, it's no wonder they aren't capturing more players.
I've said this for quite a while now. It can also be evidenced in their current practices. Instead of attempting to garner more business and custom their focus has been wringing every last cent from their existing customer base. I have been decried as a heretic more than once for that sentiment, but there it is in their own reports.
Isn't it funny how those of us who are frequently decried as "haters" or "just negative" (despite frequent assurances from me that it isn't the case for me personally) seem to constantly get new information that vindicates, supports or reinforces our arguments, yet for those who take the opposite view, they seem to consistently find themselves with nothing but name calling and handwavium?
Well, there was no big collapse of the stock. Paying a dividend and claiming that you will continue to pay a dividend has a very calming effect on the long term investor. Which most of the major stock holders are. It was the lack of dividend payment that caused the big drop earlier this year. Pensioners like having that source of income.
The overall direction of the company still remains in question however.
It could have been worse, they've essentially managed to make up a small amount from January, year on year, but as has been pointed out, that period features the relaunch of their flagship product, and arguably one of the most lucrative model releases of recent times (pure speculation on my part, but given even I have become a big IK fanboy, difficult to see that it couldn't have been.)
It's like a scene in an RPG when the floor starts to break away in pieces, and the protagonists leap from one solid section to the next, that plan will only work for so long until you get out of that room or go down the hole.
My thinking as well.
I mean, what else can they really offer that will sell as well as marines, IG, and IK, not to mention the core rulebook? Short of them turning their game around and giving us a top quality re-launch of BFG/Epic, I don't know what they're going to be making more money from.
As I said earlier, I wouldn't be shocked if we saw 8th before this time next year.
If they release 8th by this time next year, they will alienate so many of us. It would be akin to 40kTT committing suicide.
Here's the thing: Are they still profitable? Yes. But they've still lost revenue. If you constantly lose revenue without turning it around, eventually you will reach the point where you start NOT being profitable.
They need to take a good, long look at the situation and turn things around, or they aren't going to be around much longer. At this rate, in 3-5 years they'll be a footnote in history.
Blacksails wrote: So, I know very little about business. How bad is this report really? What similarities does this have to other companies that have gone under or managed to recover? Are there parallels to be drawn? And could GW recover if they keep doing largely what they're currently doing?
To me, it looks unhealthy, but I don't know how bad it really is.
One thing to remember is that they're still cash flow positive with quite a bit of margin on that end. Yes, cash from operations declined, but GW still increased their cash position. The balance sheet is also strong, so GW doesn't have to meet interest / debt levels. A problem will be the cost of renting for stores.
This gives GW enough cash to move into other lines in the upcoming year. GW still has flexibility to try to turn things around.
Strategically, I see three components of GW's business:
1. The WH40K, WH, and LoTR IP.
2. Model production business.
3. Gaming Store network in UK and other countries.
If I was going to be aggressive in 'turning around' GW, I would attack the second and third components:
For the model production business, GW should produce models under contract licenses. If GW's quality and production costs are competitive, this can offset the fixed costs of the machines. GW could leverage their large plastic production capability to lock in competitors into long term contracts. Medium term, I think that GW should investigate rapid production of 'good quality' figures to allow for rapid production turnaround.
For the Game Store network, look at each geographical segment. Where GW is not the dominant form of game stores, leave that market entirely. Shift GW stores to 'Battle Bunkers' or roaming sales teams which arrange events at local stores. Eliminate fixed costs and underproductive sales force. Where GW is the dominant segment, diversify the games held at the stores. Treat the stores as a general model store with a range of games from different producers. This cements the GW store network and gives it a wider range of income. It also would strangle any potentially hostile FLGS movement in those markets.
Both approaches diversify GW revenue away from WH40K and they would cement GW's current position in model production and sales. They also mean that GW can profit from other people's IP development without taking that risk.
As for WH40k, that game line needs to be better exploited with a range of products. If GW could produce high quality models cheaper, GW could push into Epic/BFG/ even Aeronautica Imperialis with a speed and scale no competitor could match. Ideally, GW should BFG / Aeronautica Imperialis for sale at any store.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
Alas, the fragmentation of the customer base is a symptom of the huge deficits in vision and direction where GW's product lines are concerned. Even if no other usable data was gathered, this realisation alone would be important for them.
This. GW themselves have created this broken base due to their own incompetence and should be doing their damnedest to fix it.
Goresaw wrote: Although the more I think about it, I will argue market research actually would be kinda useless. Look at the user base. Its so insanely fractured and at odds with itself. We, as the consumer don't even know what we want. Some want lords of war. Some want a balanced tourney game. Others want the game to remain unbalanced. Everything is subjective, and no one out there that plays the game anymore can agree on anything about the game.
Alas, the fragmentation of the customer base is a symptom of the huge deficits in vision and direction where GW's product lines are concerned. Even if no other usable data was gathered, this realisation alone would be important for them.
This. GW themselves have created this broken base due to their own incompetence and should be doing their damnedest to fix it.
Very true.
But alas, I don't think they even realize their player base fractured.
is the enemy he's talking about here!?
