5394
Post by: reds8n
Press announcement reads :
Games Workshop Group PLC ("Games Workshop" or the "Group") announces its half-yearly results for the six months to 28 November 2010.
Highlights:
· Revenue at £60.0m (2009: £62.5m)
· Revenue at constant currency* at £59.5m (2009: £62.5m)
· Gross margin at 76.7% (2009: 74.4%)
· Operating profit pre-royalties receivable at £5.8m (2009: £6.9m)
· Operating profit at £6.7m (2009: £8.1m)
· Pre-tax profit at £6.7m (2009: £7.9m)
· Earnings per share of 15.3p (2009: 21.5p)
· Net funds of £11.5m (2009: £4.3m)
Mark Wells, CEO of Games Workshop, said:
"Sales fell by 4% although this was largely offset by gross margin improvements. Efficiency initiatives were implemented in both sales and manufacturing operations. Pre-tax profit was down £1.2 million to £6.7 million. The focus remains on investing in Hobby centre openings and improving retail volume. Cash generation remains strong."
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=10770556
fuller/more boring read
http://investor.games-workshop.com/downloads/results/results2011/2010-11_FinalHalfYearPressStatement.pdf
299
Post by: Kilkrazy
Core message: Sales and profits are down. Efficiency savings are stopping things from looking as bad as they might. That shows in the improved gross margin figure.
The problem with efficiency savings is that there is a limit to how much you can improve efficiency. GW have done very well for a few years, because they had let themselves get very inefficient before that, so there was a lot of improvement to be done.
Having done a lot, GW need to find a way to jack up sales in real number terms, not just improve revenues by increasing prices.
"Sales through independent retailers grew in Northern Europe and North America."
To me that indicates that more customers are going to indies for the lower prices.
9892
Post by: Flashman
Interesting that sales fell by 4% because the Office for National Statistics just reported that the UK economy contractd by 5%
24190
Post by: rodgers37
Does that include the DE releases? (i assume it does)
18410
Post by: filbert
rodgers37 wrote:Does that include the DE releases? (i assume it does)
Presumably so. And WHFB 8th Ed to so one can conclude that even with arguably two of the biggest releases in a fairly long time, sales are still down. Personally, I think some of it comes down to the general economic downturn and some of it due to GW's pricing policy.
37976
Post by: arkapello
Hope they don't get to fixated on increased margins because that of course would lead to price rise thinking (and they do love a price rise). To be honest they are doing well when you consider that when times are hard people tend to cut down on stuff they don't need and an expensive hobby like this would more than likely be the first thing to cut down on. If they can just keep plowing on for the next 3 - 5 years things will probably get better again, just prey they combat tight wallets with more stunning stuff like the DE releases and not mugging you in-store instead.
4588
Post by: Destrado
4% sales drop in this economical period isn't that bad, is it?
Also, how much would they stand to gain if they lowered prices by a bit instead of constantly jacking them up?
24190
Post by: rodgers37
But also, does this include sales to the independent retailers? (Again i presume so....)
I think GW are making less money, because they are selling a lot more stock at 65% of the price to the independent retailers, they have been getting stricter with rules for them (No ebay selling etc), as they know how tempting it is too buy from other places (I thought i might go into the store and buy a Storm Raven on the day of release, but when i can get it for £10 cheaper on darksphere+ postage (still at least £5 cheaper) there is no reason to buy direct from GW.....)
Making more from cheaper prices is interesting, i don't think it actually works that well (i will give an example, the football club i support, are now being run by someone who actually has a financial and business knowledge finally, and match day tickets, are more expensive now, but even though that may get 500-1000 less ticket sales, than say if it were the same price as another club is charging, but that extra £5 or so on the tickets, gets more money in...) I think the fact GW are selling more and more (presumably) to the independent retailers, means they are making less revenue, if they sold all their stock themselves they would be making another £10 million or so on top of those figures...
30356
Post by: Jaon
If prices lowered, even by $10 dollars, I would buy twice as much gak as I usually do.
10525
Post by: Arwel
Flashman wrote:Interesting that sales fell by 4% because the Office for National Statistics just reported that the UK economy contractd by 5%
Make that -0.5% in the last quarter, and +0.7 in the third quarter.
http://www.statistics.gov.uk/cci/nugget.asp?id=192
38279
Post by: Mr Hyena
I don't think its as easy to do a price drop like that.
If they were going to drop prices significantly, they'd have to do something about stopping other retailers from selling stock from them. Otherwise they wouldnt last.
18410
Post by: filbert
Jaon wrote:If prices lowered, even by $10 dollars, I would buy twice as much gak as I usually do.
People always say this whenever the discussion of GW's sales performance or price rises comes up but I think the majority of people say they would buy more but in reality, would spend the same amount of money that they do now but obviously get more for it, which is not really of much benefit to GW, business-wise.
So what they will do is continue to jack the prices up until they reach a point where people start decreasing their spend 9and some would argue that GW financial figures are starting to reflect this already happening).
299
Post by: Kilkrazy
filbert wrote:rodgers37 wrote:Does that include the DE releases? (i assume it does)
Presumably so. And WHFB 8th Ed to so one can conclude that even with arguably two of the biggest releases in a fairly long time, sales are still down. Personally, I think some of it comes down to the general economic downturn and some of it due to GW's pricing policy.
GW themselves say
GW's half year report wrote:As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.
In other words, GW themselves do not ascribe their results to the state of the economy.
18410
Post by: filbert
Kilkrazy wrote:
GW themselves say
GW's half year report wrote:As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.
In other words, GW themselves do not ascribe their results to the state of the economy.
A fairly brave statement then I would say given that it could be fairly easy to blame under performance on economic factors like pretty much every other business that is reporting financial figures at the moment.
I wonder then, what they do attribute the drop in sales to? I have to confess i haven't read the full report, only skimmed through so I may have missed it...
2711
Post by: boyd
Kilkrazy wrote:filbert wrote:rodgers37 wrote:
GW's half year report wrote:As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.
In other words, GW themselves do not ascribe their results to the state of the economy.
Thats only a half truth - if the market is in a recession, all businesses will be down. When it comes down to choosing between food, house, vehicle, or toys, you're probably going to put toys at the end of your list.
Overall the financial position looks pretty strong. The best judge of how a company is doing is to look at their statement of cash flow (how they are getting their cash). The more cash from operations and the fact that they had a net income is always a positive thing, ESPECIALLY in today's market when losses are still the common place. Only get worried when GW shows a net loss but still maintains cash and is financing their activities as that is showing they are acquiring debt to pay their bills and cover their operating loss. Investing activities on the cash flow statement can be good or bad - operating profit they are great, net loss usually not a great sign as it shows they have some project they are working on which they should have disclosed in the financial statements (usually under CIP or investments).
33661
Post by: Mad4Minis
"The focus remains on investing in Hobby centre openings and improving retail volume"
They could try opening a store or 3 in Florida. A state with a population of aprox 16 million, and one of the largest tourist destinations in the USA, and it doesnt have a single GW store. Not a single one.
Closest one is around 400+ miles away.
10093
Post by: Sidstyler
filbert wrote:I wonder then, what they do attribute the drop in sales to? I have to confess i haven't read the full report, only skimmed through so I may have missed it...
Well all I know is that they sure as hell won't be ascribing it to anything they've done. lol...
33248
Post by: SkaerKrow
filbert wrote:People always say this whenever the discussion of GW's sales performance or price rises comes up but I think the majority of people say they would buy more but in reality, would spend the same amount of money that they do now but obviously get more for it, which is not really of much benefit to GW, business-wise.
I disagree with this, actually. The biggest obstacles that most gamers face when buying models are sticker shock and buyer's remorse. With the current price points set by GW, it's really easy to talk yourself out of making purchases, even when you're excited about a new release. Beyond that, I know a couple players as well who still spend good hobby money, but only on eBay auctions as they don't feel that they get enough bang for their buck from paying GW new product prices.
Finally, you have the stagnation of the customer base that comes with the extremely high buy-in rate for GW's games. If the game was cheaper, it would be easier to sell to new players, which creates growth. As it stands, Anima, Malifaux and Infinity seem to be enjoying a fair amount of growth in my area (along with War Machine/Hordes, which I know goes against my affordability argument  ), while the market for Warhammer/ 40k has either become entirely static or started to recede.
18410
Post by: filbert
SkaerKrow wrote:filbert wrote:People always say this whenever the discussion of GW's sales performance or price rises comes up but I think the majority of people say they would buy more but in reality, would spend the same amount of money that they do now but obviously get more for it, which is not really of much benefit to GW, business-wise.
I disagree with this, actually. The biggest obstacles that most gamers face when buying models are sticker shock and buyer's remorse. With the current price points set by GW, it's really easy to talk yourself out of making purchases, even when you're excited about a new release. Beyond that, I know a couple players as well who still spend good hobby money, but only on eBay auctions as they don't feel that they get enough bang for their buck from paying GW new product prices. Finally, you have the stagnation of the customer base that comes with the extremely high buy-in rate for GW's games. If the game was cheaper, it would be easier to sell to new players, which creates growth. As it stands, Anima, Malifaux and Infinity seem to be enjoying a fair amount of growth in my area (along with War Machine/Hordes, which I know goes against my affordability argument ), while the market for Warhammer/ 40k has either become entirely static or started to recede.
What I would suggest in defence is that GW traditionally relies on churn of users; the number of people already playing is of little or no relevance to them - they are really only interested in getting in the new players who make their one-off 'big bang' purchases and then very often drop the hobby after a short time. GW's strategy is all about getting these new people in and getting their spend. If that rate of entry had dropped then I think we would be seeing a greater dip in GW sales; as is, I think we are starting to see more and more 'veterans' ,for want of a better term, not buying as much or at all, because the price rises are starting to hit a saturation point.
1021
Post by: AesSedai
I wonder if GW will run out of fat to trim before the economy regains some semblance of health. The whole enterprise seems like a half staved winter hare already. Remember when GW had a bitz service and real games days? I'm just waiting for the official announcement that hobby centres will be replaced by red shirts in vending machines.
I'm mostly kidding, but I would love to see a "you gotta spend money to make money" attitude take over right about now, rather than this cut-and-hide-and-cut-some-more BS.
4588
Post by: Destrado
Not all niche markets are created equal. If it's the high-market oriented, then probably growth is expected. The miniature/wargaming niche-market, however, doesn't work like that.
They seem to forget that less money coupled with more expensive essential stuff means people will be more "price sensitive", i.e. higher priced non-essentials will suffer from an almost constant comparison to other products.
I remember when they did the "buy three, get cheapest one free" campaigns. Promotions and special days probably bring in a lot of cash; they make the customer happy for a lot of reasons. Or the Skulls campaign, etc.
Thinking that their profits depend on the newcomers is absurd, and GW keeps the same modus operandi that's been giving it so much grieve.
11834
Post by: Superscope
There is also a point of incoming video games based on their IP.
Both Space Marine and DoW: Retribution are shaping up rather nicely.
Those two games should generate a healthy amount of royalties.. Which hopefuly funds the next generation of GW products and their quality.
19377
Post by: Grundz
Kilkrazy wrote:Core message: Sales and profits are down. Efficiency savings are stopping things from looking as bad as they might. That shows in the improved gross margin figure.
But, but the price increase was because of VAT!!!
299
Post by: Kilkrazy
I know many of us including me have often said that GW stuff is price inelastic, meaning that people go on buying it despite the price increases.
But when revenues drop 4% in a year, which GW themselves don't both to explain, only talking about how the economy doesn't affect a niche market, you have to wonder.
So for a laugh, I price up what a youngster or their father might need to spend to get into the HHHobby.
AoBR £55
IG Army Book £17.50
Eight tanks and vehicles at average £20 = £200
10 boxes of infantry £155.50
Some special models, like characters £30
Paints, tools and stuff £40
Total = £498
You should get a pretty reasonable army out of that, however compare it with the cost of a PS3 and a bunch of games, or a holiday in Italy, and so on.
Maybe they really have priced themselves too high.
3294
Post by: pombe
They can't reduce prices all at once, because it would instantly reduce the worth of not only their inventory, but the inventory of all FLGS overnight.
If they were to reduce prices, it would have to be gradual, starting with new kits. Then, they would have to allow the FLGS to clear their old inventory as they reduce their wholesale prices slowly.
19377
Post by: Grundz
pombe wrote:They can't reduce prices all at once, because it would instantly reduce the worth of not only their inventory, but the inventory of all FLGS overnight.
If they were to reduce prices, it would have to be gradual, starting with new kits. Then, they would have to allow the FLGS to clear their old inventory as they reduce their wholesale prices slowly.
The other issue they have is saturation.
I have at least 20k points in warhammer stuff, none of which I got new, the only thing I got "new" was bits.
People clearing out and selling stuff from years ago are a huge market for the thrify and the converter.
I would not be supprised if in the future things get scaled up enough that older models are obsolete.
4588
Post by: Destrado
pombe wrote:They can't reduce prices all at once, because it would instantly reduce the worth of not only their inventory, but the inventory of all FLGS overnight.
If they were to reduce prices, it would have to be gradual, starting with new kits. Then, they would have to allow the FLGS to clear their old inventory as they reduce their wholesale prices slowly.
The problem is how they've priced their products, and they keep doing it.
The reason (I'm guessing here) that their target-audience are the newcomers is probably because they don't have a "price-comparison" system like people who've been in the hobby longer.
For example, I bought a box of Space Ork Boyz for 12.50€, online, with 11 Orks. With the release of the Dark Eldar, I bought a Kabalite Warriors box for 17.50€ from the same store, and by becoming an official GW distributor, they had to raise their prices accordingly, meaning that the Space Ork Box is now priced 17.50€.
Instead of buying two boxes of Dark Eldar for 25, I bought a single one. Instead of buying an Ork Box, I bought nothing, as I compare the new price/old price and see that an increase of nearly/exceeding 50% is ridiculous for a product that is already expensive.
The new player comes in, buys a couple of boxes, will probably stay a while in the hobby but he will start to do the same comparison many of us already did, and turn his back on the hobby as little by little the senseless price increases, together with ( IMO) a bad costumer relationship,will mean that whenever they lower their prices, most of their real costumer base will be too alienated with the hobby to notice/care. The fact that it would be gradual, given their release schedules, means we're looking at a 12 year period (first to latest release of Dark Eldar for example), unfortunately.
26407
Post by: Bloodwin
Well it doesn't look horrific so I see that as a good sign. Warhammer Fantasy is a strange beast to predict because they are trying to sell stuff to existing players and get new players in. The big problem with that is that GW keep pushing the Apocalypse scale games whilst their competition focuses on games with a dozen figures either side. I think GW need to focus on small scale games for kids on pocket money and older players on reduced incomes who want to get involved again. Unfortunately the new hotness is hordes which flies in the face of small scale games. While I like the models in the Island of Blood, I think it is a terrible introduction as there are no starter game scenarios or army lists.
Longer term if GW maintain the Tolkien/Middle Earth licence then they will be in a good position for the Hobbit films.
2873
Post by: Salacious Greed
GW's half year report wrote:As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.
In other words, GW themselves do not ascribe their results to the state of the economy.
GW no longer subscribes to the economy. Though it costs less than White Dwarf, it was cut out in the name of efficiency.
They do, however, still subscribe to the Sun. But only 'cause of the topless weather girls.
-Greed
24567
Post by: Kroothawk
Kilkrazy wrote:GW themselves say
GW's half year report wrote:As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.
In other words, GW themselves do not ascribe their results to the state of the economy.
Every year, GW has a revenue decline of about 4% (this year 4.8%) including the average 10% price hike per year (more so for introductory products), so about 10-15% less products sold each year. That's a stable trend independent of macro economic factors, only attributed to the achievements of the GW management.  Guess what, the management is pleased with this decline and goes on with no changes in strategy (maybe fire some creative staff, some retail staff and close some more stores).
459
Post by: Hellfury
Salacious Greed wrote:GW's half year report wrote:As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.
In other words, GW themselves do not ascribe their results to the state of the economy.
GW no longer subscribes to the economy. Though it costs less than White Dwarf, it was cut out in the name of efficiency.
Win.
6872
Post by: sourclams
Bloodwin wrote:The big problem with that is that GW keep pushing the Apocalypse scale games whilst their competition focuses on games with a dozen figures either side.
I would agree. WM/H and Malifaux have entry level costs of $50 for the equivalent of a 750-1k pt level for 40k--and all armies are priced at this $50 entry area, and all armies are valid. To make any sort of mech build for 750-1k 40k you're going to spend double that on transports. 40k's per-model cost is pretty similar to other gaming systems, but the buy-in and the end target price levels are very much higher.
This is a huge deal when it comes to recruiting players to the game systems. Malifaux and WM/H really do basically sell themselves just by dint of new players wanting to join the gaming community, and being able to for $50.
4183
Post by: Davor
I have quit spending. How come Blackreach box set when it first came out was $75, and now 2, or is it 3 years later, it is now over $108, WTF?! That is almost a $35 increase and then add in taxes.
Geez, when I got my Blackreach boxset, it costed me $75. What extra do you get now? Nothing. So they increased the price, so now that is less money for a codex or other minis or supplies.
And speaking of codex, $40 fracking bucks for a Codex? Are you kidding me? Yeah GW has priced themselves out, with me at least.
As someone said, $100 for GW stuff, OR 2 games for the 360 or PS3. Hmmm.... I wonder what my son will enjoy more.
Also why would I want to spend my money on GW when I am not even considered anymore since I spent my $500. Why do I want to come when I feel like I am more of a burden to them?
I went to a GW store, was going to buy something, but as soon as some "fresh blood" came into the store, I was ignored, so I left without even buying anything. I can see how important I am too them.
I hope GW goes Bankrupt. Not like they want me in the store anyways, so I don't care if they go away anymore. There is more things to do than play with plastic toy soldiers. At least my son is smart, he wants IG, he goes to the dollar store and buys them from there, and gets 100X more than he ever would buying at GW.
13937
Post by: BrassScorpion
Slashing costs is no long-term strategy. All corporations slash costs to give their stock price a short-term boost in value when it's sagging, but in the long-term one has to have a strategy to grow the business or the stock price and the company quickly fade to nothing. This crazy one-man store cost slashing strategy that is being used all over the globe leaves stores closed at all kinds of hours shoppers would normally expect to be able to buy product, especially since every time there are unforeseen circumstances now it forces those stores to close. My local store's busiest day is often Wednesday and yet every quarter when GW has their sales conference in Las Vegas the store is forced to be closed the Wednesday after due to travel time back from Las Vegas. GW stores were like this back in the early 1990s just before they closed all of them completely for 2 years in the US and I fear they are going back to that kind of unreliability that heralds the closure of many if not all their stores here. If stores cannot maintain reliable hours customers will and do go elsewhere.
24567
Post by: Kroothawk
Some number crunching from Sureshot05 over at Warseer:
It appears that their drive to save costs was worth it, but still hasn't addressed a key issue in lack of sales.
Key figure's that I see of relevance are:
Revenue
2010: 60,035
2009: 62,539
Cost of sales
2010: 13,995
2009: 16,014
So it cost them 2 mill less to produce their goods, but they suffered a 2.5 mill reduction in total sales. Every region suffered loss of revenue. With a large loss in Northern Europe (UK) (see below).
Location, this year (last year) Change in sales
Northern Europe, 16,999 (18,250) LOSS - 1251 7% decline
Continental Europe 17,514 (17,756) LOSS - 242 1% decline
North America 14,520 (14,840) LOSS - 320 2% decline
Australia 5,032 (5,159) LOSS - 127 2% decline
Emerging Markets and Japan 1,647 (1,857) LOSS - 210 11% decline
All other sales businesses 4,323 (4,677) LOSS - 354 8% decline
BTW Northern Europe includes UK and those numbers are not considering inflation and price increases.
21148
Post by: KOS
what if they are going to close everything ? Could they really go bankrupt ?
I've always heard this in the last couple of years but I've seen no collaps yet and furthermore... they are investing in new miniatures.
33955
Post by: crimsonfist832
I'm confused by all this because I haven't a clue of what it means. But could someone please simply explain to me whats happenning. Is GW going to go bankrupt????
1795
Post by: keezus
All in all, the starter kits are still good value. If I recall correctly, they have always been very expensive prior to the new direction introduced with "McCragge". I think the 3rd Edition starter circa 1998 was $150cdn.
Blisters appear to have gone up 40% in price over 10 years.
Tanks have been mostly stable, with certain ones getting cheaper, but the majority seem to have only increased a modest 25% in price over 10 years.
Plastic infantry have increased in price drastically where basic infantry are 100% more expensive now than they were 10 years ago.
My 3rd edition 1500 point Biel-Tan Eldar army is 50% more expensive now than it was 10 years ago. It is a mix of metal and plastic and covers all GW pricing bands with an Avatar, 33 aspect warriors and 20 guardians, mostly mounted, with vyper support. That said, the new models are nicer and weapon options are much easier to get. Unfortunately, the standard sized game has crept to 1850, pushing the overall cost of the army towards the 1k range.
Considering that for the same price, one can afford a 40" 1080p HDTV and an xbox360, I can not see how GW can expect to entice new customers to the fold.
4588
Post by: Destrado
I don't think so. They just keep doing bad decisions (like raising prices - "we might sell less, but we'll make more!" ) which is eroding the company. They aren't going bankrupt, at least not yet.
Sincerely, I don't know how the Administration of such a large-spanning company has such a blocked mentality.
2764
Post by: AgeOfEgos
Well from my limited education in accounting/finances it appears;
They gained from the currency shifts
They gained from efficiency/production relocation efforts
They gained from IP branding via HH novels and video games
...yet....
Sales still dropped across the board. People aren't buying the miniatures as much anymore....perhaps they finally priced themselves out of their target.
37976
Post by: arkapello
Im sure i heard they nearly went to the wall once before, but pulled it back with heavy investiment in plastic kits and just generally upping their game design wise. Plastic is certainly alot better than it was 10 or so years ago.
Products are really good, just slow to come out and not alot of variety from month to month. The last release for orks was a year ago and there is nothing on the horizon, thats alot of time in which its easy to get board with no love from WD either...
and of corse there is price which will always be the biggest prohibitive factor. I think they put too much investment into stores (in the UK, i'm aware elsewhere the opinon is there isnt enogh). opening a new store might be exciting for the local area for a while but inevitably it dies down and in the smaller UK towns there is only one person manning it at a time anyway - how is that providing any kind of gaming hub? one person cant run a store, paint the armies for the window and still have time to talk you through the game or fluff or help you paint... so all your left with is an expensive store that bearly operates manned by one person who is then manager by default so costs another 16 - 19k a year, pointless. So prices have to support the stores which are used by perhaps 10 - 20 regular gamers there, usually all kids.
i just count myself lucky that i have access to a great gaming group in my area because if the GW stores were all that were on offer i wouldn't be at all interested in playing - and therefor not interested in buying much.
13937
Post by: BrassScorpion
...perhaps they finally priced themselves out of their target.
I've been discussing that with friends off and on for the past 15 years every time they raise prices and it never seemed to actually happen before, but this time I see signs of it all over their stores. There are certain kits that people just do not buy virtually ever due to the pricing on those specific sets. And the number of such sets keeps increasing each year as GW pushes the limits of pricing. Sometimes they win big with certain items, others clearly do not excite customers enough to pay the premium pricing on them and they languish on the shelves and in the warehouses.
38451
Post by: Guildsman
I know, for me, GW stuff has become cost-prohibitive. Spending $500 on a decent-sized army? That's excessive, especially when I can get an army for Malifaux for $50, or Flames of War for $100.
Now, I don't know much about economics, but it's probably way too early to be talking about bankruptcy. GW isn't going under any time soon, right?
1021
Post by: AesSedai
Emerging Markets and Japan 1,647 (1,857) LOSS - 210 11% decline
The first time I saw the prices of GW product in Tokyo my eyes bulged out of my head like an old fashioned cartoon. It was the first and last time I was in a Japanese GW. It saddens me to think that Japanese people may lose out being exposed to such a rewarding hobby because GW didn't figure out the right approach for this particular market.
6084
Post by: theHandofGork
So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.
When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?
I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.
181
Post by: gorgon
Kilkrazy wrote:"Sales through independent retailers grew in Northern Europe and North America."
To me that indicates that more customers are going to indies for the lower prices.
Nonsense. We all know their path to success in NA relies on blanketing it with one-man GW stores. All 7,248 that it'll take.
Good luck with that, GW.
38067
Post by: spaceelf
If GW keeps on their current course I would not be surprised if they go under. They neuter their retail stores by going to the one man system. This not only effects the hours that they are open, but also things like the academy program which is very important for beginners. On the other hand they spend like pigs to send their managers to Las Vegas four times a year.
I would not be surprised if they closed many, if not all, of their stores. However, if they do so I suspect that their sales will plummet as people will not have places to play.
34120
Post by: ruminator
They made less profit, but they still made profit.
Look at gross margin - 76%, this is essentially the sale price/cost of production. So a £10 box only costs them £2.40 to produce. This will though ignore any central/admin costs, office rental etc but still a pretty decent lump.
If they get the planned codex launches, second wave of BA and DEldar etc out on time, then no real problems for 2011 ...
2711
Post by: boyd
crimsonfist832 wrote:I'm confused by all this because I haven't a clue of what it means. But could someone please simply explain to me whats happenning. Is GW going to go bankrupt????
No they are not going bankrupt. Refer to the Company's Statement of Cash Flows from their last Audit Report (or equivalent in the UK).
36433
Post by: Lord PoPo
You think we can convince our respective governments to bail out GW in case of bankruptcy?
To be honest however, when a company is going out of business, typically they try to get rid of as much crap as they can. I think that only an extremely suden and huge drop in prices would be a sign of the apocalypse *ahem* GW closing down for good. Then again, that could also be them growing a soul, compassion, and some common sense as well.
In the meantime, I'm hitting the swap shop 
1478
Post by: warboss
Guildsman wrote: I know, for me, GW stuff has become cost-prohibitive. Spending $500 on a decent-sized army? That's excessive, especially when I can get an army for Malifaux for $50, or Flames of War for $100.
Now, I don't know much about economics, but it's probably way too early to be talking about bankruptcy. GW isn't going under any time soon, right?
even though my income has increased, my purchases are down year after year. i'm just not interested in paying their prices for the products in general. the only official new "army" i've gotten is my space hulk deathwing force and that was because the space hulk box was a steal (12 terminators if you include the dead one plus 25+ genestealers and the actual board game for less than the price of 10 terminators). i kept one complete set and traded/sold the genestealers/board pieces/rules from the second to get my third set of terminators. there is NO way i would have paid another 80% more for my 30 terminators and 2 HQs. i've pretty much restricted myself to trading/selling my old collection for the stuff i want. i don't have a problem trading a $50 kit i own already for a $50 kit i want (especially if i only paid $30-35 for it way back). i agree that quality has significantly increased since the old RT days and comparing the old RT marines to the current ones is not fair (both in price and quality)... but comparing the 3rd edition marine tact squad that started at $20 with the current one at $37.25 (which is IDENTICAL except for the accessory sprue) is fair. i've got 15,000pts of painted figs the last time i checked and there is NO way i would have collected even half that at the current prices. i vote with my wallet.
6084
Post by: theHandofGork
ruminator wrote:
If they get the planned codex launches, second wave of BA and DEldar etc out on time, then no real problems for 2011 ...
Except even with the first wave of DE, the release of 8th WFB, and cutting costs profits still fell. But sure, maybe DE and BA can right the ship.
1021
Post by: AesSedai
GW isn't the only dealer in town anymore.
Even though I hear about warmachine and hordes in passing on these boards, it was not until I read the first couple posts in this thread that I checked out their site for the first time. I must say, I liked what I saw. Not quite there yet...but it feels like an honest to goodness alternative. Just a little push...
2764
Post by: AgeOfEgos
ruminator wrote:They made less profit, but they still made profit.
Look at gross margin - 76%, this is essentially the sale price/cost of production. So a £10 box only costs them £2.40 to produce. This will though ignore any central/admin costs, office rental etc but still a pretty decent lump.
If they get the planned codex launches, second wave of BA and DEldar etc out on time, then no real problems for 2011 ...
Right, I think they outlined this with their shift of production facilities/efficiency efforts. However, the question I have is have they exceeded their price point? Before, I said "Whatever, people are still buying". It doesn't appear they are now, even with a given 20% discount from online retailers.
Plus, I would also add I think their pricing mentality is leading to FLGS death. If they assume that vendors will sell their products at 20% discount and price accordingly, then it makes very difficult for your FLGS to compete with the Warstore.
4042
Post by: Da Boss
Not suprising, but they are still making profit. I've been reading these commentaries for a long, long time now, and I think it's the same general tone each and every year, or half year, or whatever. What 2010 is notable for is the sheer sparsity of releases, which I wonder if it has to do with firing creative staff. They seem like the worst people to fire, to me.
221
Post by: Frazzled
Kilkrazy wrote:I know many of us including me have often said that GW stuff is price inelastic, meaning that people go on buying it despite the price increases.
But when revenues drop 4% in a year, which GW themselves don't both to explain, only talking about how the economy doesn't affect a niche market, you have to wonder.
So for a laugh, I price up what a youngster or their father might need to spend to get into the HHHobby.
AoBR £55
IG Army Book £17.50
Eight tanks and vehicles at average £20 = £200
10 boxes of infantry £155.50
Some special models, like characters £30
Paints, tools and stuff £40
Total = £498
You should get a pretty reasonable army out of that, however compare it with the cost of a PS3 and a bunch of games, or a holiday in Italy, and so on.
Maybe they really have priced themselves too high.
Are the figures they are using currency adjusted?
2711
Post by: boyd
Destrado wrote:I don't think so. They just keep doing bad decisions (like raising prices - "we might sell less, but we'll make more!" ) which is eroding the company. They aren't going bankrupt, at least not yet.
Sincerely, I don't know how the Administration of such a large-spanning company has such a blocked mentality.
I didn't see this in their last set of financial statements, could you reference this for me? I did see that they are still making a profit and their margins have remained relatively consistant (only a 2% increase). What that tells me, is that they raised the price of their product by 5% and only saw a 2% in their gross margin. That is in no way indicative of anything less than adjusting the price for increase in materials charges. Also their price increases are based on historical trends (based on the PY) so they adjust their prices to reflect this so they didn't lose money producing their product.
For those of you who don't know what gross margin and gross profit are, its Revenues less cost of goods sold. Cost of goods sold does not include administrative charges, accounting, back office support, marketing, et al. So unless you're actively part of producing their miniature or a sales person, your salary should not and would not be included (US GAAP) and as an FYI UK GAAP is VERY SIMILAR in nature since we based US GAAP originally on UK GAAP. Our GAAP has evolved to be more stingent than UK GAAP due to the SEC Acts of 1933/1934.
299
Post by: Kilkrazy
crimsonfist832 wrote:I'm confused by all this because I haven't a clue of what it means. But could someone please simply explain to me whats happenning. Is GW going to go bankrupt????
Not quickly.
The situation is that since the glory days of the Lord Of The Rings films, GW's annual sales and revenues have been declining.
They have managed to compensate for this by increasing efficiency in the supply chain, and by increasing prices faster than inflation. This means they are still making a profit, but the profit is shrinking.
This is not viable as a long term strategy, since it is impossible to be more than 100% efficient, or increase prices to infinity.
GW therefore need to increase sales numbers to increase profits without increasing prices.
The problem people on Dakka Dakka are having is that as GW Management do not explain their falling profits by the bad economy, they also can't expect a growing economy to help them. Therefore they need some other plan to increase sales. They do not seem to have one.
9892
Post by: Flashman
I wonder if part of their problem is that its too easy to pick up GW goods second hand. I mentioned in another thread that I scooped a sealed box of Thunderers (RRP - £18.50) for less than £6.00 on ebay the other day.
My personal circumstances (wage cuts, mortgage and baby) mean that I very rarely buy new these days if I can find it somewhere else for much cheaper.
299
Post by: Kilkrazy
Frazzled wrote:Kilkrazy wrote:I know many of us including me have often said that GW stuff is price inelastic, meaning that people go on buying it despite the price increases.
But when revenues drop 4% in a year, which GW themselves don't both to explain, only talking about how the economy doesn't affect a niche market, you have to wonder.
So for a laugh, I price up what a youngster or their father might need to spend to get into the HHHobby.
AoBR £55
IG Army Book £17.50
Eight tanks and vehicles at average £20 = £200
10 boxes of infantry £155.50
Some special models, like characters £30
Paints, tools and stuff £40
Total = £498
You should get a pretty reasonable army out of that, however compare it with the cost of a PS3 and a bunch of games, or a holiday in Italy, and so on.
Maybe they really have priced themselves too high.
Are the figures they are using currency adjusted?
The figures presented in the financial statements are currency adjusted.
My figures aren't as I am just doing a rough calc based on the British market, for purposes of illustration.
2711
Post by: boyd
ruminator wrote:They made less profit, but they still made profit.
Look at gross margin - 76%, this is essentially the sale price/cost of production. So a £10 box only costs them £2.40 to produce. This will though ignore any central/admin costs, office rental etc but still a pretty decent lump.
If they get the planned codex launches, second wave of BA and DEldar etc out on time, then no real problems for 2011 ...
Also remember that just because the product has a MSRP does not mean that they will sell for this price. Remember, GW is a distributor, that means they sell to FLGS's at a discounted price. If you buy directly from them, than yes you would have the 400% mark up but if you don't then you may have a mark up of 300%. Remember that all of their other costs must be covered somehow. So that means, rent, factory overhead, payroll, shipping, marketing, game development, and events.
299
Post by: Kilkrazy
Flashman wrote:I wonder if part of their problem is that its too easy to pick up GW goods second hand. I mentioned in another thread that I scooped a sealed box of Thunderers (RRP - £18.50) for less than £6.00 on ebay the other day.
My personal circumstances (wage cuts, mortgage and baby) mean that I very rarely buy new these days if I can find it somewhere else for much cheaper.
I think that could be true, and the availability of secondhand stuff is a reflection of their strategy of ignoring veterans and churning n00bs.
Churned n00bs make a lot of first hand buys every year, followed by second hand sales a couple of years down the line, when the n00bs get out of Warhammer and into girls. This allows the vets to pick up stuff cheap. I got half my Tyranid army off eBay, for about half the price of new.
Veterans tend to hang on to their armies. I still have plenty of Rouge Trader era Beakies and Spulk terminators.
16689
Post by: notprop
Hmmmm.
Lotta scare mongering fellers, please don't upset the kids  . GW are not going bankrupt nor would it appear that they will for many years yet according to these and previous figures. I would suggest that this time next year will be a good indicator of what GW are currently trying to accomplish. Personally I have hopes that while the GW of the 20 year past will not return they may align themselves in this direction more.
Re price increases over the longer term the 40/50% increase that Kroothawk highlight tracks inflation in the UK over a 10-15 year period as well so not quite the gouging that is complained about. That doesn't take away from the fact that the individual models can seem quite steep, certainly the plastics prices are the exception here. Indeed with GWs bias towards oil, metals, property and labour [broad I know] I would expect inflation to be more that the general rate for that period.
Re Killkrazy's £500 prce tag for entry to 40K, I never quite see where this type of example orginiates from.
The basic set and a paint set are all that is required, so not even £100. Building up to the 2000 point army that seems to the starting point for some examples [who actually does this?] is an extreme example that I would more often associate with someone pushing the advantages of Warmahordes i.e. small forces, convieniently forgetting that 40k is just a good game below 1000pts as it is above [make of that what you will ]. I started with the basic set up, a copy of RT and 30 marines, and probably didn't have a force that we would recognise today for quite some years. All saved for from pocket money.
Anyway the City seems to like it curently trading is up 2.14% (7.5pps) on the opening price.
2711
Post by: boyd
Kilkrazy wrote:Frazzled wrote:Kilkrazy wrote:I know many of us including me have often said that GW stuff is price inelastic, meaning that people go on buying it despite the price increases.
But when revenues drop 4% in a year, which GW themselves don't both to explain, only talking about how the economy doesn't affect a niche market, you have to wonder.
So for a laugh, I price up what a youngster or their father might need to spend to get into the HHHobby.
AoBR £55
IG Army Book £17.50
Eight tanks and vehicles at average £20 = £200
10 boxes of infantry £155.50
Some special models, like characters £30
Paints, tools and stuff £40
Total = £498
You should get a pretty reasonable army out of that, however compare it with the cost of a PS3 and a bunch of games, or a holiday in Italy, and so on.
Maybe they really have priced themselves too high.
Are the figures they are using currency adjusted?
The figures presented in the financial statements are currency adjusted.
My figures aren't as I am just doing a rough calc based on the British market, for purposes of illustration.
The financial statements are translated back to the functional currency in which the parent operates in. To get this you would take the subsidiaries financial statements and for the balance sheet convert to the functional currency at year end (or reporting period) and for the income statement you would use the average conversion rate for the year (or reporting period). All gains or losses related to translation would be noted below the line but before taxes and would be run through other comprehensive income. If you're comparing items on a specific day, you would look at the spot rate for currency translation. If you're comparing a period of activity, you're going to use the average rate for that period.
7361
Post by: Howard A Treesong
KOS wrote:what if they are going to close everything ? Could they really go bankrupt ?
Not yet. They could end up in trouble but there's a long way they could decline yet. They won't disappear all together though, what could happen is that they end up in a really bad way and get bought out by another company like Hasbro.
Oddly enough I looked up the wikipedia entry on TSR as they went this way and were the biggest RPG company in the world. Here's a few choice bits from that entry...
After its initial success faded, the company turned to legal defenses of what it regarded as its intellectual property. In addition, there were several legal cases brought regarding who had invented what within the company and the division of royalties, including several lawsuits against Gygax.[16] These actions reached their nadir when the company threatened to sue individuals supplying game material on Internet sites. In the mid-1990s, this led to frequent use of the nickname "T$R" in discussions on RPG-related Internet mailing lists and Usenet, as the company was widely perceived as attacking its customers. Increasing product proliferation did not help matters; many of the product lines overlapped and were separated by what seemed like minor points (even the classic troika of Greyhawk, the Forgotten Realms and Dragonlance suffered in this regard).
...
Ryan Dancey, Vice President of Wizards of the Coast, believed that TSR failed because of "...a near total inability to listen to its customers, hear what they were saying, and make changes to make those customers happy."
There's something awfully familiar about some of this...
1478
Post by: warboss
notprop wrote:The basic set and a paint set are all that is required, so not even £100. Building up to the 2000 point army that seems to the starting point for some examples [who actually does this?] is an extreme example that I would more often associate with someone pushing the advantages of Warmahordes i.e. small forces, convieniently forgetting that 40k is just a good game below 1000pts as it is above [make of that what you will ].
every 40k player i've ever gotten to be friends with has done that (planned to build up to 2000pts or so from the get go). i've never met anyone that got the starter and said, "yup, that's all i want or need to continue playing the game." the basic set isn't required, just the rulebook and a combat squad... but that doesn't mean you'll frequently see people doing that outside of store demos. i've never had anyone offer me a game at 1000pts or under unless they were severely time constrained ("i've got an hour before i need to go... feel like playing 750pts?") or unless it was dictated by an escalation league rule where you didn't have a choice. playing 40k at 1500-2000pts is the standard everywhere i've played (multiple stores, multiple states in the US). in order to play the game at smaller levels, you NEED to adopt house rules (like the old kill team rules in previous editions or the combat team rules from adepticon) as the game rules are optimal at higher points. pricing a 1500-2000pt army is a very valid example.
6872
Post by: sourclams
notprop wrote:The basic set and a paint set are all that is required, so not even £100. Building up to the 2000 point army that seems to the starting point for some examples [who actually does this?] is an extreme example that I would more often associate with someone pushing the advantages of Warmahordes i.e. small forces, convieniently forgetting that 40k is just a good game below 1000pts as it is above [make of that what you will ].
Everybody at my gaming store plays between 1500 and 2000 as "normal". 2500 is often an upper range, but never 1,000 or fewer unless it's an escalation-type league culminating in 2k or 2.5k points.
40k really is not a good game below 1,000 points. Oftentimes it's not feasible to take a special or named character (Ghaz for example is considered near-mandatory at 2k, but you'll never see him at 750) and your options are pretty cramped due to the necessity of troops in 2/3 of missions for many armies. Some 'iconic' model combinations, like Terminators in a Land Raider, are nearly impossible to field while balance gets thrown in favor of armies that have superior troops options relative to the other FOC choices.
Although it is possible to play 40k at a lower points level, I nor anyone I game with regularly do so or consider it fun.
15599
Post by: AdeptArtificer
My new Dark Eldar army cost $800. The IG army I bought in 2010 cost the same amount. Both were purchased from online Vendors with a 25% discount. So what drove up the price of these 2000pt armies? Forgeworld orders. I couldn't get what I needed from eBay. My fault for not being patient but hey I like my stuff to look good and I like to buy and build my armies all at one time.
I just got back into video games after a 3 year break and it is very hard to justify spending the time to build and paint models, then drive all over creation to play with fellow table top gamers. All I have to do now is sit on my duff and connect with gamers all over the world. It is not the same I know but it is instant gratification and easier to accomplish. I hope GW doesn't fail but I will not be buying anything directly from them until I see some changes in their business plan. Forgeworld on the other hand will continue to get my money as they are the only show in town for certain items.
24567
Post by: Kroothawk
Kilkrazy wrote:I think that could be true, and the availability of secondhand stuff is a reflection of their strategy of ignoring veterans and churning n00bs.
Churned n00bs make a lot of first hand buys every year, followed by second hand sales a couple of years down the line, when the n00bs get out of Warhammer and into girls. This allows the vets to pick up stuff cheap. I got half my Tyranid army off eBay, for about half the price of new.
Veterans tend to hang on to their armies. I still have plenty of Rouge Trader era Beakies and Spulk terminators.
Found this nice analysis by frozenwastes over at Warseer which hits the mark IMHO:
The thing about new players vs retaining vets is that there's a disconnect with their product and their targetting of new (younger) players. Their product is designed that you need to spend a good amount of time to collect and build a full sized army. They expect people to quit playing and no longer collect their models before they can even experience a full sized game.
So they have new young gamers as their target market, but then have rules sets that require so many miniatures that only those who stick around to be vets will have the full experience of their product.
GW is a company of disconnects. They produce in a way that encourages volume sales (high up front capital costs, but low per unit costs) but market and sell in a way that encourages lower unit sales at higher prices. They make a rules set with such a high model count, but then have a sales and retention plan that expect the customers to never fully utilize their product.
If GW truly wanted to target young new players, they should have a product that can be fully experienced upon entrance and not plan from the get-go to lose the customer within two years.
2711
Post by: boyd
notprop wrote:Hmmmm.
Lotta scare mongering fellers, please don't upset the kids . GW are not going bankrupt nor would it appear that they will for many years yet according to these and previous figures. I would suggest that this time next year will be a good indicator of what GW are currently trying to accomplish. Personally I have hopes that while the GW of the 20 year past will not return they may align themselves in this direction more.
Agreed. Personally, I attribute the loss of profit to the fact there were no big releases during 2010. What was their big release last year? Dark Eldar? When do you think most of the purchases were for that? I would expect right before Christmas or shortly thereafter and as the line starts to flush out, there will be more sales as the army becomes more viable. Same with Skaven - why would you play a force where the coolest rares are not available yet?
They have been aligning themselves this way as Rogue Trader and Warhammer 2nd Edition were largely skirmish games (2000 pts) in 2nd edition is about 1100 points now a days as this would have been 2 HQ (about 600 points), 2 tactical squads (600 points + wargear and weapons), terminator squad (approx 400), Devastator squad (400 points). Now a days this is between 1000 to 1200 points depending on equipment. Their newer rules require more as they are trying to get you the player to think about it more as a war not skirmish of a larger war (hence there are no strategy cards for strafing runs, artillery strikes, etc)
GW is about selling models, thats why they always refresh their line. My space wolf army shows exactly that too - I've got some RTB01's, Some pewter units, some of the 3rd edition models, and the latest box set as well.
Look at Warmahordes - they are just now doing the GW thing and are starting to refresh their line. Is Privateer Press a public company? If so you would need to compare them to each other. I will let someone else search the SEC Edgars if they are a US Public Company or go to their website to find press releases. Compare the two and you can find out which one is run "better". Since their sales won't be comparable, you're going to rely heavily on ratio analysis which isn't always the best way to analyze a company or derive "value" of a Company.
13937
Post by: BrassScorpion
What was their big release last year?
No big releases, yeah, except for the $74 core rule book for their oldest major game system plus an all new starter set for that same Warhammer Fantasy Battle system. Cognitive dissonance again. Just because a product is not important to one person doesn't mean it wasn't "big". At least, it should have been when that much of their business and shelf space are devoted to it.
5256
Post by: NAVARRO
I think the more GW grows the more it expands to bigger armies with more models and higher prices... Its a model but you do need those spacehulks and mordheims skirmish games to grab the attention of people and keep them happy... IMO these are like essential because it lets the people with few bucks to enter the GW worlds... as things are people need to splash big money all at once in order to play a game... they either go to other hobbies or go to alternative miniature games that dont have such high prices in order to play a game.
Probably specialist games are peanuts to GW but they are the introduction card you must invest. Videogames/movies are cool but do they convert people to the GW core, the miniatures? 
299
Post by: Kilkrazy
boyd wrote:notprop wrote:Hmmmm.
Lotta scare mongering fellers, please don't upset the kids . GW are not going bankrupt nor would it appear that they will for many years yet according to these and previous figures. I would suggest that this time next year will be a good indicator of what GW are currently trying to accomplish. Personally I have hopes that while the GW of the 20 year past will not return they may align themselves in this direction more.
Agreed. Personally, I attribute the loss of profit to the fact there were no big releases during 2010. What was their big release last year? Dark Eldar? When do you think most of the purchases were for that? I would expect right before Christmas or shortly thereafter and as the line starts to flush out, there will be more sales as the army becomes more viable. Same with Skaven - why would you play a force where the coolest rares are not available yet?
...
.
Tyranids
Dark Eldar
WHFB 8th edition
Dawn Of War Chaos Rising
Who knows what else
If none of these is an important release, shouldn't a £100+ million company be able to manage a major release once a year?
Not to mention, GW has been in decline since the mid 2000s.
Today's Evening Standard carried a report that GW Mgt attributed its bad results to lack of experienced, trained staff last summer, resulting in a failure to explain the benefits of the HHHobby to potential customers.
Would that be the same GW Mgt that spent the past several years closing stores, laying off experienced staff, reducing shops to one-man operations, and pissing off the veterans who help spread the word?
32644
Post by: Mr Mystery
RE: Prices.
I'm coming into quite a bit of cash later in the year, and have decided to treat myself to a company of Blood Angels, including spangly converty bits* Right now, I've assembled in my online basket all the GW kits I need to do my take, which comes to a grand total of £1,240.65. This is beyond just the standard 6 Tac, 2 Ass and 2 Dev squads, as due to the aforementioned spanglies, I've included lots of conversion bits. Not to mention 4 Stormravens, 4 Dreads, 6 Rhinos, 2 Drop Pods and 3 Baal Predators.
Therefore, as a particularly extravagant purchase, I think it goes to highlight just how much of price complaints are down to personal predilictions. Happy to post up the entire contents if anyone cares.
And Navarro, DoW as brought a lot of old schoolers back into the fold. At least, it was when I worked there (made redundant September 2010)
*Anyone know where I can get Devastator Shoulder Pads? GW do Assault and Tactical, but not Dev. IIRC, this is possibly due to the pads being moulded on...but advice is appreciated!
13937
Post by: BrassScorpion
Tyranids were huge last year, so huge that the same week this year it was virtually impossible for GW stores to make their goal of meeting or exceeding the same week the year before. The Tyranid Codex and new models, both boxes and blisters, flew off of shelves in piles.
32644
Post by: Mr Mystery
^^^True dat! Store I worked in hit target that month!
299
Post by: Kilkrazy
I bought Tyranids because of the new book.
What a pity that GW couldn't manage to make a model or conversion kit for the Tervigon, one of the best units in the codex.
Luckily for both n00bs and vets, GW have decided to remedy that omission by suing Chapterhouse, who filled the gap.
2711
Post by: boyd
Kilkrazy wrote:boyd wrote:notprop wrote:Hmmmm.
Lotta scare mongering fellers, please don't upset the kids . GW are not going bankrupt nor would it appear that they will for many years yet according to these and previous figures. I would suggest that this time next year will be a good indicator of what GW are currently trying to accomplish. Personally I have hopes that while the GW of the 20 year past will not return they may align themselves in this direction more.
Agreed. Personally, I attribute the loss of profit to the fact there were no big releases during 2010. What was their big release last year? Dark Eldar? When do you think most of the purchases were for that? I would expect right before Christmas or shortly thereafter and as the line starts to flush out, there will be more sales as the army becomes more viable. Same with Skaven - why would you play a force where the coolest rares are not available yet?
...
.
Tyranids
Dark Eldar
WHFB 8th edition
Dawn Of War Chaos Rising
Who knows what else
If none of these is an important release, shouldn't a £100+ million company be able to manage a major release once a year?
Not to mention, GW has been in decline since the mid 2000s.
Today's Evening Standard carried a report that GW Mgt attributed its bad results to lack of experienced, trained staff last summer, resulting in a failure to explain the benefits of the HHHobby to potential customers.
Would that be the same GW Mgt that spent the past several years closing stores, laying off experienced staff, reducing shops to one-man operations, and pissing off the veterans who help spread the word?
I thought 8th edition and Tyranids were an 09 releases my mistake.
I think its poor timing on GW's part not to have a larger year for Fantasy. New edition should mean more excitement, I wish they would have kindled the excitement or at least fanned the flames a bit more...
19588
Post by: mrblacksunshine_1978
i would have to agree with the disappointment withthe lack of model for Tyranid's Codex. I still remember that it took GW over three years to come out with a new drop pod. on the other hand, I just recevied the Black Box Storm Raven and on the back you will know that the Grey Knights are going to get this model....hint hint. But GW did indeed miss the boat on the Tyranid.
299
Post by: Kilkrazy
Exactly!
That is what strikes to the heart of the issue.
GW basically have four product lines
1. 40K
2. WHFB
3. LoTR
4. Everything else, like Black Library, that hangs off of one and two.
If they couldn't manage a good splash from the relaunch of their no.2 product line, there is something wrong.
32644
Post by: Mr Mystery
Oddly, new edition of Fantasy shook things up so much, I had customers starting new armies left, right and centre. The Horde mechanic made some older, dustier armies a lot more usable (Ogres!) and thus appealing.
Could a new book have helped? Of course, but to say it didn't work or was a flop (slightly paraphrasing from other threads before anyone gets their knickers in a twist) is disingenuous.
1478
Post by: warboss
Kilkrazy wrote:Today's Evening Standard carried a report that GW Mgt attributed its bad results to lack of experienced, trained staff last summer, resulting in a failure to explain the benefits of the HHHobby to potential customers.
Would that be the same GW Mgt that spent the past several years closing stores, laying off experienced staff, reducing shops to one-man operations, and pissing off the veterans who help spread the word?
is gw a big enough company to warrant regular coverage in a major newspaper in the UK? i don't generally see reports about hasbro let alone a subsidiary like WOTC over here. also, is your H broken or is that a meme i'm not familiar with?
299
Post by: Kilkrazy
The Evening Standard often picks small companies with some resonance to do little pieces on. For example, local brewers, or GW. They don't get regular coverage but they get some press when their results come out.
Wise observers know that the state of the economy isn't indicated by the results of Rio Tinto Zinc and British Telecom. It's indicated by small signs like being able to easily get a taxi on a rainy evening, or the amount of champagne drunk in wine bars.
The HHHobby thing is my little dig at GW trying to define all of Wargaming as their private intellectual property.
FIGHT THE POWER!
32644
Post by: Mr Mystery
To be fair, PP describe things as the Warmachine Hobby and nobody bats an eyelid.
6902
Post by: skrulnik
BrassScorpion wrote:Tyranids were huge last year, so huge that the same week this year it was virtually impossible for GW stores to make their goal of meeting or exceeding the same week the year before. The Tyranid Codex and new models, both boxes and blisters, flew off of shelves in piles.
I can't find DE Wyches or Warriors on the shelves at my local GW.
They keep selling out.
Though there are always Ravagers, Mandrakes, and Incubi. Automatically Appended Next Post: Mr Mystery wrote:To be fair, PP describe things as the Warmachine Hobby and nobody bats an eyelid.
I have never heard that.
They do mention the "wargaming" hobby.
299
Post by: Kilkrazy
Mr Mystery wrote:To be fair, PP describe things as the Warmachine Hobby and nobody bats an eyelid.
PP never claimed to be 95% of wargaming.
32644
Post by: Mr Mystery
skrulnik wrote:BrassScorpion wrote:Tyranids were huge last year, so huge that the same week this year it was virtually impossible for GW stores to make their goal of meeting or exceeding the same week the year before. The Tyranid Codex and new models, both boxes and blisters, flew off of shelves in piles.
I can't find DE Wyches or Warriors on the shelves at my local GW.
They keep selling out.
Though there are always Ravagers, Mandrakes, and Incubi.
Automatically Appended Next Post:
Mr Mystery wrote:To be fair, PP describe things as the Warmachine Hobby and nobody bats an eyelid.
I have never heard that.
They do mention the "wargaming" hobby.
I think it was their website on it.
And KK...it's not like PP could even claim to be 95% of the Hobby either. And I do believe you are referring to an external view of the company, rather than one they issued themselves.
30305
Post by: Laughing Man
I think it was their website on it.
Sauce plox?
32644
Post by: Mr Mystery
Will have a squizz. I think it was on the page linked about the new big modelly stuff they are doing. Gimme a mo.
299
Post by: Kilkrazy
Mr Mystery wrote:skrulnik wrote:BrassScorpion wrote:Tyranids were huge last year, so huge that the same week this year it was virtually impossible for GW stores to make their goal of meeting or exceeding the same week the year before. The Tyranid Codex and new models, both boxes and blisters, flew off of shelves in piles.
I can't find DE Wyches or Warriors on the shelves at my local GW.
They keep selling out.
Though there are always Ravagers, Mandrakes, and Incubi.
Automatically Appended Next Post:
Mr Mystery wrote:To be fair, PP describe things as the Warmachine Hobby and nobody bats an eyelid.
I have never heard that.
They do mention the "wargaming" hobby.
I think it was their website on it.
And KK...it's not like PP could even claim to be 95% of the Hobby either. And I do believe you are referring to an external view of the company, rather than one they issued themselves.
No, it was a view they issued themselves. It was widely reported and discussed on DakkaDakka a couple of years ago.
What PP don't claim is irrelevant to what GW do claim
9892
Post by: Flashman
Part of GWs problem is that you have two eras...
The pre-business era where they expanded their worlds and universes in a haphazard fashion based on what the designers felt like doing...
...followed by the post-business era where management come in say "What sells? The guys in power armour? Cool... lets do them." This subsequently alienates all xenos players who essentially stop buying because there's not much for them to buy. I imagine most Necron players reached the limit of their collections some time ago (you only need so many Monoliths right?). Not the largest portion of the market maybe, but still a significant pool of hobbyists not parting with their cash.
With my business hat on, I would have got ruthless and cut down the amount of races to a more manageable number, so that each player got a big release every 2-3 years or so. Failing that I would have concentrated on throwing the xenos players a frigging bone once in a while... plastic Wraithguard, a new Tomb Spyder kit, Flash Gitz, plastic Battle Sisters etc etc, anything to keep the cash rolling in from all sections of the hobby.
1795
Post by: keezus
AgeOfEgos wrote:However, the question I have is have they exceeded their price point? Before, I said "Whatever, people are still buying". It doesn't appear they are now, even with a given 20% discount from online retailers.
In my opinion, GW needs to wise up and fix a number of things with regards to pricing...
1. Prices across regions need to be harmonized. GW Australia is so infamous for providing EXCEPTIONALLY BAD VALUE that it has become its own sort of meme. GW Canada, which had made great strides as of late has reverted to the usual +25% premium over the US.
2. They need to take a good look at how they price things. Even without the ridiculous discrepancies in costs between regions, some items themselves are ludicrously bad value compared to other items in the same category. It's one thing when the entire range is expensive, but when you have some items that are reasonably priced - the rest of the range looks ludicrously overpriced in comparison. Goldswords, Blood Knights and Ogryn aside, no better place is this illustrated than in their scenery department. In GW Canada...
Good value:
The Ruins of Osgiliath is $30.50. The Dreadstone Blight and Temple of Skulls are $35. The Temple of Skulls deserves special mention, as it is HUGE.
Bad value:
The pitiful Lord of the Rings Scenery Pack is $30... The LOTR set is exceptionally bad value. It contains about the same amount of stuff as their "Battlefield Accessories" set!
The goddamn FENCE pack is $30. The resin FENCES are $35!!!
The Arcane Ruins is $40... Not the worst kit, but grossly overpriced compared to the above good value kits.
Don't even get me started on the Chaos Bastion. It is unexplanably $60.
Granted, this problem is less pronounced in the US, but IMHO it is a problem none-the-less, and an easy one to fix.
32644
Post by: Mr Mystery
Founds it! Was just about to give up and retract my comment (what, I would have!)
http://privateerpress.com/community/privateer-insider?page=5
Mentioned in the first paragraph.
6902
Post by: skrulnik
Um, they are talking about the division of the company that they call Privateer Hobby. Like the 'Eavy Metal Studio.
32644
Post by: Mr Mystery
Article what I linked wrote:today Privateer Hobby will collect and display the best parts of the Privateer Press hobby experience
It is there.
P.S. I'm not criticising this. I see there is a PP Hobby as much as a GW Hobby. Neither is denying the wider side, so much as just not promoting it. What sensible company would?
27004
Post by: clively
Pricing a product to optimize sales is a very hard thing to do. There's no magic formula to apply to work that price out. And you can't ask people prior to pricing a product because that information is extremely unreliable.
The only way to do it is to put the product on market at a given price and see what happens. Then change that price (up or down) and see what happens. What might surprise some people is that there are the exact same sales problems below a certain price point as well. In other words if you charge too little no one will buy, if you charge too much no one will buy. Finding that sweet spot is insanely difficult. Compounding it, the price point is different depending on region and even down to the individual.
Now, the wargammer market is a fairly static market. There's only so many people that will take the time to collect, paint and play an army. So GW has to figure out who that person is and how much of their money they are willing to part with. Which raises another point most people miss: the amount of money it takes to create and distribute a product is only loosely (and very loosely at that) related to the retail price of that product. This means that things like the price of oil, employees, etc will have a very limited impact on the actual price they charge the customer. Those things might impact profitability, but they aren't a prime driver of the retail price.
So, where does this leave us?
Whatever you might think, GW management has been turning the company around. The GW of today has a lot better outlook than the GW of 2006; and no, they aren't going out of business anytime soon. I think they've probably identified the sweet spot of pricing (hint: they have currently shot past it) and will leverage this years releases to start reigning them back in. Pricing of DE models seems to be a step in the right direction. I expect others will follow. Further, they absolutely have to take a global look at pricing: Australian prices should have absolutely nothing to do with UK pricing and instead need to be driven entirely by local market conditions. It shouldn't be possible for an Aussie to buy the product from a different country, have it shipped to them, and pay significantly less than they would at a LHS.
Personally, I think they need to look into a simplified model on how to get new gamers in the door. One way to do this would be to revamp all of the battle forces. Namely, each one should have a HQ, 2 complete troop units, and a codex to complete the basic Force Org Chart. Perhaps with a $70(US) price point. From there everything else is an addon. Sell both versions of the rulebook: the small AoBR one for like $20 and the big one for more. This would put pricing in line with buying a video game which Mom and Dad usually don't think too much about. Next, encourage the retailors to run smaller games. Such as between 500 - 750 points. This is the number of points that should be available in a battleforce. Which means little Johnny can get into the hobby for under $80 (after paint) and should have somewhere to play. Smaller games have a lot of advantages such as taking a lot less time. And if Johnny keeps with the game he'll start buying the other stuff.
This is a completely different model than their current one, but takes advantage of ideas they already have. However, I've seen tons of kids walk into a store with their mom begging for some models. Each time mom's eyes will bug out at the bewildering array of products and has absolutely no idea where to even start. If they ask an employee what to do, that employee will create a pile including a BF, Codex, RuleBook and a few other required models to get a basic force going (~ $200). Inevitably her eyes pop out and drag the kid out of the store. Another lost opportunity.
For the veterans, you still have all of the additional models to buy and, obviously, can run games as large as you want.
My $0.02
1795
Post by: keezus
PP runs seasonal league events with limited edition prize support (not buyable on the open market) which keeps the action fresh and drives sales. Irrespective of the fixed outcomes of GW's worldwide battle campaigns, (Armageddon and Eye of Terror), they generated a lot of interest in the gamer community and drove a corresponding amount of sales. These days, with the move to one man stores, I don't know how this impacts in-store events. I am certain that some keener managers will continue to run them, but I expect that YMMV. With the downsize of their events staff, it looks like GW is increasingly relying on the independents to run events and drum up interest. The lack of unique prize support outside of product is also disapointing. GW's old 3rd edition prize support was the stuff of legend. I still have one of their old plaques with the resin insert. Saddly, my Rogue Trader Tournament pewter pin is now a bit worse for the wear.
4588
Post by: Destrado
boyd wrote:
I didn't see this in their last set of financial statements, could you reference this for me? I did see that they are still making a profit and their margins have remained relatively consistant (only a 2% increase). What that tells me, is that they raised the price of their product by 5% and only saw a 2% in their gross margin. That is in no way indicative of anything less than adjusting the price for increase in materials charges. Also their price increases are based on historical trends (based on the PY) so they adjust their prices to reflect this so they didn't lose money producing their product.
I was merely speculating on their business model. I can understand slight price increases to cover the basic costs of material, distribution, etc - the four P's in Marketing Mix (price, placement, product and promotion) assume as much, the pricing for their products is dynamic, as they should try to compensate in order to cover expenses and still make a winning.
If I didn't get it wrong, however, their business strategy so far as been one of constant price increases not to combat base material prices, distribution, manufacture, et al, but to increase gross profit. While the increase in base materials would eventually be carried to the final costumer, it would be a rather negligeable increase because it is distributed all across the range - they're not selling a single product here, they're selling a lot of different products. If based on the quantity of material, then surely the Space Marine Tactical Squad would cost the same as the Dark Eldar Hellions. If I am incorrect in my assumption, do correct me, as it's been a long time since I had Marketing classes.
I say GW's administration is bad, because the discrepancy in price rises - they are not covering for the increased cost of transports and base materials, or even stores and administration, they are charging a lot more on their products so as to compensate for lower sales.
I'm sorry if I do mix up some terms. I also don't have an insight as to how the Board determines this. As I said, I'm merely speculating about their business models.
459
Post by: Hellfury
Mr Mystery wrote:Oddly, new edition of Fantasy shook things up so much, I had customers starting new armies left, right and centre. The Horde mechanic made some older, dustier armies a lot more usable (Ogres!) and thus appealing.
Could a new book have helped? Of course, but to say it didn't work or was a flop (slightly paraphrasing from other threads before anyone gets their knickers in a twist) is disingenuous.
Your example is anecdotal, just as it is when people say it was a flop. What's in fact disingenuous is thinking that either anecdote somehow equals empirical data.
26541
Post by: jake
Products are really good, just slow to come out and not alot of variety from month to month. The last release for orks was a year ago and there is nothing on the horizon, thats alot of time in which its easy to get board with no love from WD either...
This is a problem. Can I mention Rackham and Confrontation? Yes, the company folded, but not because of the way they released their products. Every month or so Rackham would release a wave of models containing new units and characters for several different armies. One month you might get Kelt Centaurs, Orc Trackers, Dirz Abominations and Griffin character. The next month you'd see new units or characters for Devourers, Goblins, Drunes and Archon. With a few exceptions you could count on your army getting 2-8 new releases every year.
This was totally awesome! Because Confrontation miniatures were packaged with profile/stat cards it created a constantly evolving and changing meta game. Plus, a constant stream of awesome new models! As an Orc player I was thrilled to be able to buy new models every few month, and to know that something new would be available for my army in the next few weeks or months. It kept me interested in the game as both a player and a collector. The constant stream of new models for ALL of the armies eventually enticed me into picking up a Goblin and an Archon force as well.
It's been disheartening to return to 40k and the philosophy of only updating armies every few years.
35796
Post by: Gr3y
Destrado wrote:
If I didn't get it wrong, however, their business strategy so far as been one of constant price increases not to combat base material prices, distribution, manufacture, et al, but to increase gross profit. While the increase in base materials would eventually be carried to the final costumer, it would be a rather negligeable increase because it is distributed all across the range - they're not selling a single product here, they're selling a lot of different products. If based on the quantity of material, then surely the Space Marine Tactical Squad would cost the same as the Dark Eldar Hellions. If I am incorrect in my assumption, do correct me, as it's been a long time since I had Marketing classes.
I say GW's administration is bad, because the discrepancy in price rises - they are not covering for the increased cost of transports and base materials, or even stores and administration, they are charging a lot more on their products so as to compensate for lower sales.
I'm sorry if I do mix up some terms. I also don't have an insight as to how the Board determines this. As I said, I'm merely speculating about their business models.
The actual material cost is nearly insignificant. Pewter, having doubled in price over the last few years, is still only a buck an ounce. Resin and plastics are even cheaper. The real costs that get passed on to the consumer are shipping, packaging, and most of all creation. GW probably pays good money for its sculpts and molds, and has to recoup that somehow.
The 2% increase in profits, if due mainly to raises in efficiency, is kind of bad news. Because they aren't going to be able to make the same changes again next year. Declining sales plus a drive to open more retail outlets seems like it could backfire in a big way as they're increasing their overhead in hopes of getting more business rather than as a response to demand.
The underlying issue is that GW has a bad case of Big Company Syndrome. They're so used to being on top and operating in a market without competitive pressure that they assume that the market will adapt to their decisions rather than adapting their decisions to the market. For the first time in its history GW has actual, honest to god, competition in the form of Battle Front and Privateer Press and they don't seem to have figured out how to build value in their product when compared to the other choices on the market. If Wyrd and Corvus Belli survive the next few years then the market is going to be even more crowded. Good news for war gamers, bad news for war game companies who aren't ready to evolve.
21148
Post by: KOS
Howard A Treesong wrote:KOS wrote:what if they are going to close everything ? Could they really go bankrupt ?
Not yet. They could end up in trouble but there's a long way they could decline yet. They won't disappear all together though, what could happen is that they end up in a really bad way and get bought out by another company like Hasbro.
Oddly enough I looked up the wikipedia entry on TSR as they went this way and were the biggest RPG company in the world. Here's a few choice bits from that entry...
[CUT]
There's something awfully familiar about some of this...
yes it's ... familiar.
They just don't care about customers or what people requests from the game and models. We are just cows to squeeze and then throw away. Sad.. but true.
735
Post by: JOHIRA
clively wrote:Pricing a product to optimize sales is a very hard thing to do. There's no magic formula to apply to work that price out. And you can't ask people prior to pricing a product because that information is extremely unreliable.
So recently I was reading up on why companies have coupons as opposed to sales (to my mind a coupon was nothing but a sale with extra paper that has to be thrown away), and it turns out that coupons are a way to do market research on a variety of things, one of them being pricing. They help you see what lengths people are willing to go to get a discount on your product.
That, plus your post, made me realize I have never seen a coupon for a GW product, let alone a sale. It seems if you don't have the good fortune to live near a store that is having it's grand opening, you don't get sales with GW. Or coupons, or discounts of any sort.
Seems like that would be a good way to optimize their price points. Issue coupons (in WD perhaps? Give that magazine a reason to exist) and set up sales in different regions and test exactly what happens when prices are lower, without having to lower prices all at once. Makes more sense than shrugging and saying, "Well, I guess our followers will pay whatever we ask them to." Automatically Appended Next Post:
Alright. If I agree that Privateer Press has just as terrible a view of their customers as GW, will you be happy?
18410
Post by: filbert
JOHIRA wrote:clively wrote:Pricing a product to optimize sales is a very hard thing to do. There's no magic formula to apply to work that price out. And you can't ask people prior to pricing a product because that information is extremely unreliable.
So recently I was reading up on why companies have coupons as opposed to sales (to my mind a coupon was nothing but a sale with extra paper that has to be thrown away), and it turns out that coupons are a way to do market research on a variety of things, one of them being pricing. They help you see what lengths people are willing to go to get a discount on your product.
That, plus your post, made me realize I have never seen a coupon for a GW product, let alone a sale. It seems if you don't have the good fortune to live near a store that is having it's grand opening, you don't get sales with GW. Or coupons, or discounts of any sort.
Seems like that would be a good way to optimize their price points. Issue coupons (in WD perhaps? Give that magazine a reason to exist) and set up sales in different regions and test exactly what happens when prices are lower, without having to lower prices all at once. Makes more sense than shrugging and saying, "Well, I guess our followers will pay whatever we ask them to."
They used to give away coupons in WD but they disappeared around the same time as they stopped doing their annual sales (buy 2 red dot items, get a yellow one free).
21148
Post by: KOS
Were these coupons good or just a waste of time ?
18410
Post by: filbert
KOS wrote:Were these coupons good or just a waste of time ?
Pretty good as I remember but let's not kid ourselves; GW has always been expensive. I remember saving up to buy an Ork Great Gargant and thinking (£15 I seem to recall) was a lot of money for 1 model. At least with the coupons and sales you could actually make some discernible saving as opposed to now, where the only real way to save is to shop around or buy second hand. What I mean to say is back then, at least you got the impression that GW actually gave a toss about its consumer base unlike now, where as a long-term player, I feel like the proverbial red-headed stepchild.
24567
Post by: Kroothawk
Some things hidden in the report:
Netherlands is shifted from Northern Europe (which includes UK) to Continental Europe, spoiling the statistics.
The only Chinese factory will be closed and paint and resin operations go back to Nottingham. This still allows for external production in China like printing or large moulds (ROB).
Fun fact by PsyberWolf over at Warseer:
Also, I should commend Kirby on a "bang up job" here in the states. Let's look at what he's accomplished on his US vacation... uh, I mean his US assignment:
-He fled the Maryland HQ and sought refuge in Memphis
-He pulled out of many areas in the US including the entire southeast
-He moved a "yes man" (woman I mean) from the same failed chain of command to the lead
-Under his leadership this year they sustained losses in sales
Yes, MISSION ACCOMPLISHED... time to head home 
123
Post by: Alpharius
I know we've heard it MANY times before, but as previously mentioned in this thread, it appears as if GW may have actually priced themselves too high, and in to some serious trouble.
Time will tell, but I wonder if this year we'll hear about how they are "Holding the line!" on pricing, and perhaps even some (many?) price adjustments this year will be downward?
9892
Post by: Flashman
At the very least, they should at least 'round down' those VAT increases. They make the prices look daft and it would be a something of a respectful gesture...
...although I recognise that this only effects UK buyers.
13937
Post by: BrassScorpion
Alpharius wrote:I know we've heard it MANY times before, but as previously mentioned in this thread, it appears as if GW may have actually priced themselves too high, and in to some serious trouble. Time will tell, but I wonder if this year we'll hear about how they are "Holding the line!" on pricing, and perhaps even some (many?) price adjustments this year will be downward?
I love this optimism. I'm going to let some of it rub off on me! They really do have a growing list of items that simply don't move at their current prices. The problem with adjusting them down and the reason they don't do so quickly probably has to do with the fact that if they were to do so it would send a message that if consumers don't like the price of an item they can just wait a few weeks or months and GW will lower it, which would be an admittedly bad strategy for GW. But some kits like the Greatswords, Bestigor, and Nazgul On Flying Beast have been languishing now for a long time due to their high price points. I hope you are correct and that GW gets more realistic on pricing certain items, if not on existing ones then going forward on some of the upcoming releases.
6872
Post by: sourclams
I kinda doubt a flat price decrease as the 'story' through late 2010 and into 1H2011 is largely inflationary and telling your shareholders that your stuff is simply too expensive would be far too much crow to eat.
What we might see is 'blowout features' like 25% off X items for X timeframe or product bundles priced to move.
Quite clearly they're going to have to do something to entice new people into the hobby as well as a better job at retaining existing customers.
299
Post by: Kilkrazy
Alpharius wrote:I know we've heard it MANY times before, but as previously mentioned in this thread, it appears as if GW may have actually priced themselves too high, and in to some serious trouble.
Time will tell, but I wonder if this year we'll hear about how they are "Holding the line!" on pricing, and perhaps even some (many?) price adjustments this year will be downward?
If the UK enters a second dip depression, with deflation, falling real salaries and 10 years of economic gloom, as some economists are predicting, it is going to be very hard for GW to get away with an exuberant annual price rise.
I wasn't planning to buy any GW stuff anyway, but my overall wargaming plan for the year is to build and paint the stuff I have on hand, and play the various games I haven't had a proper go at, rather than spending money on buying new things.
That way I can devote all my spare cash to drink.
24567
Post by: Kroothawk
I am missing a paragraph in the report on how much money they saved by firing Alessio and Rick
722
Post by: Kanluwen
You're also still missing that it's not been confirmed that Alessio or Rick were actually fired.
But hey, don't let that get in the way of you spreading rumours. You post Stickmonkey's stuff, might as well keep posting that.
5394
Post by: reds8n
Kanluwen wrote:You're also still missing that it's not been confirmed that Alessio or Rick were actually fired.
Alessio wasn't fired. He'd been working on/under a part time contract for about a year before he left.
Mr. Priestley, alas, did not part company with GW under such pleasant circumstances.
But hey, don't let that get in the way of you spreading rumours. You post Stickmonkey's stuff, might as well keep posting that.
...  .. hmmm.. okay. I think we'll leave this line of commenting here please. Ta.
5245
Post by: Buzzsaw
skrulnik wrote:
Um, they are talking about the division of the company that they call Privateer Hobby. Like the 'Eavy Metal Studio.
Mr Mystery wrote:Article what I linked wrote:today Privateer Hobby will collect and display the best parts of the Privateer Press hobby experience
It is there.
P.S. I'm not criticising this. I see there is a PP Hobby as much as a GW Hobby. Neither is denying the wider side, so much as just not promoting it. What sensible company would?
Wow, I've seen some pretty half-hearted defenses of GW, but this one takes the cake...
Just to be clear, the sentence that Mystery here is construing as the equivalent of "The HHHobby thing is my little dig at GW trying to define all of Wargaming as their private intellectual property" (KK's original point) is within;
Starting today Privateer Hobby will collect and display the best parts of the Privateer Press hobby experience! Starting with gallery shots of our terrain and figures, we'll soon be adding galleries of our painting competition winners, player submissions, and tutorials for hobby projects! You can check out the new page here.
Just to be clear, the link is in the original, and it leads to a part of their website called, you guessed it, Privateer Hobby. Or, put another way, the claim " PP describe things as the Warmachine Hobby" is remarkably misleading.
I'm sure he'll "give up and retract [his] comment"...
Because PP asking for pictures of panted PP scenery to post on the part of their website devoted to such things is totally the equivalent of " GW trying to define all of Wargaming as their private intellectual property". Yup.
By the by, the link Mystery originally posted is incorrect now; the way PP's "Insider" works is every new thing posted pushes things back, when I retrieved the quote, it was page 6. That's because, in the day since Mystery posted his link, PP has already updated their Insider Blog.
It's almost as if they use the ease of updating a website to facilitate easy familiarity with their customers and create excitement about their upcoming releases. What mad fools they must be...
320
Post by: Platuan4th
Buzzsaw wrote:
It's almost as if they use the ease of updating a website to facilitate easy familiarity with their customers and create excitement about their upcoming releases. What mad fools they must be...
Psssh...
Everyone knows this internet thing is just a fad, anyway. It'll go the way of the MP3 Player and the Cellphone Telephone soon enough.
35352
Post by: prime12357
As many before me have said, GW is concentrating on having new players make one big purchase and then never buy anything again. In that vein, it would make some sense to open as many stores as possible, in order to convince passers-by to make a large purchase. However, GW seems to be missing out on a big chunk of sales in assuming (and maybe even planning for) that new players will only make one large purchase ever. If they can keep people playing their game, they can continue to milk cash from their wallets (or their parent's wallets). In four years, I cannot add up the price of all the gak that I've purchased from GW, and I would assume that the ammount that some of the vets has spent is beyond astronomical. Of course, eventually the older players will have bought enough to be "satisfied," and will either stop buying product, or will begin to buy less. To keep the cash flow going, they need more players, and then the cycle repeats.
Of late, it seems that GW is getting over their reduced sales by jacking up prices, assuming that they can make up the difference, and keep their profit margin. Higher prices then lower sales, forcing yet higher prices. I would spend much more money on more models if they were, say, 5 USD cheaper. The average box of troops is $25. If each were five dollars cheaper, I would probably buy two boxes for every one I buy now, and this seems a common opinion: if models were cheaper, I would buy more. Period. Currently, it seems that GW is quite happy continuing to treat us like pinatas, beating us until we bleed candy.
38356
Post by: kevlar'o
Give a break to the little guy.... like me. I'm in australia and the prices are scaring my wife '' Honey, look at what i'm going to get!!'' '' oh what!!!, thats more then the phone bill!!!''
494
Post by: H.B.M.C.
Why are you buying products locally?
5470
Post by: sebster
crimsonfist832 wrote:I'm confused by all this because I haven't a clue of what it means. But could someone please simply explain to me whats happenning. Is GW going to go bankrupt????
No, the hyperbole is just people on the internet doing what people on the internet do. I can't remember a time in the last 20 years when people weren't convinced GW was just about to go under because they charge too much. Yet here they are, the biggest company in the industry, by a long way. Thing is, GW doesn't have particularly flash underlying indicators. Sales growth isn't great, and hasn't been particularly great since they expanded into the US all those years ago. Nor is it likely to suddenly become great, their core product is a niche product that's expanded everywhere it can across the planet. People take that and use it to declare that doom is coming for GW and the prices that are obviously too high because they're more than they personally want to pay. Meanwhile there's a steady line of miniature companies going bankrupt because being a sustainable miniatures company is a really hard thing to do, and yet no-one was ever able to predict their demise. It's almost as if people are just speculating wildly... Automatically Appended Next Post: sourclams wrote:40k really is not a good game below 1,000 points.
That's right. But you're average starting player has no idea about that. What he sees is dudes in power armour and big guns and buys AoBR. He plays some games, paints some dudes and thumbs through his army bok and sees all this new stuff. He starts forming army lists; this is what I'll have at 750 points, this is what I'll have at 1,000.... It doesn't matter than the game sucks at 750 points, because in a month's time he'll have new stuff and he'll be at 1,000 points. It doesn't matter that it sucks at 1,000 points because... This hobby is largely based on how awesome things will be with just a couple more purchases, it's why people keep expanding their armies, start new armies, switch from 40K to WHFB and back, dream of how awesome it would be if only Epic were mainstream. Then they go to some other company because thinking it'll be different if it isn't GW. And yeah, sometimes it actually is better. I know 40K at 1750 points is a lot more fun than it is at 750 points. And I've gotten plenty of fun out of FoW. But the point is true or not we keep dreaming of the next purchase, whether it'll actually make things more fun or not.
735
Post by: JOHIRA
sebster wrote:But the point is true or not we keep dreaming of the next purchase, whether it'll actually make things more fun or not.
That was a lovely apology for GW, but I wanted to point out the flaw in your conclusion.
It doesn't matter if people dream of the next purchase if they never put the money down on it.
And going by the evidence, as opposed to anyone's feelings about GW, it seems that fewer and fewer people are putting money down on GW product.
You're right that the company isn't going bankrupt any time soon. But the numbers pretty clearly show they are in an unsustainable position and need to change something about the way they do business in order to increase their sales.
11029
Post by: Ketara
JOHIRA wrote:sebster wrote:But the point is true or not we keep dreaming of the next purchase, whether it'll actually make things more fun or not.
That was a lovely apology for GW, but I wanted to point out the flaw in your conclusion.
I read no 'apology' there. Why the use of such a loaded phrase?
6872
Post by: sourclams
sebster wrote:Automatically Appended Next Post:
sourclams wrote:40k really is not a good game below 1,000 points.
That's right. But you're average starting player has no idea about that. What he sees is dudes in power armour and big guns and buys AoBR. He plays some games, paints some dudes and thumbs through his army bok and sees all this new stuff. He starts forming army lists; this is what I'll have at 750 points, this is what I'll have at 1,000.... It doesn't matter than the game sucks at 750 points, because in a month's time he'll have new stuff and he'll be at 1,000 points. It doesn't matter that it sucks at 1,000 points because...
Maybe that is how it goes in a GW store or in some other area, but in my FLGS and in my area it's more like:
New potential player strikes up convo with guys playing games
"Hey, this game looks pretty cool" "Yeah, it's pretty cool"
"Is this how games are usually played?" "Yeah, typical game size is about 2k points"
"How much it cost to get into a game?" "Bout $500, sometimes more"
::cue conversation with Malifaux or WM/H players::
New players really seem to gravitate toward the cheaper skirmish games. Our new 40k players seem to be people who already played/collected 40k and have a respectable 1500+ force, and are simply new to the store in search of new players or having just discovered the gaming store.
1795
Post by: keezus
prime12357 wrote:However, GW seems to be missing out on a big chunk of sales in assuming (and maybe even planning for) that new players will only make one large purchase ever. If they can keep people playing their game, they can continue to milk cash from their wallets (or their parent's wallets). In four years, I cannot add up the price of all the gak that I've purchased from GW, and I would assume that the ammount that some of the vets has spent is beyond astronomical. Of course, eventually the older players will have bought enough to be "satisfied," and will either stop buying product, or will begin to buy less. To keep the cash flow going, they need more players, and then the cycle repeats.
It is perception of value too. It seems to be a matter of strategy and GW chooses to ignore that by simply tightening the main rules and putting out codexes more frequently with SMALL model updates will encourage the veterans to BUY NEW ARMIES - This seems non-sensical to me, as the veterans need no recruitment and are the ones who are cash rich enough to afford every new army that GW puts out there...
In my case, the "streamlining" of the 40k ruleset followed by continuous GW price increases (at a time when GW Canada's product was on average 30-50% more expensive than ordering it from the US, shipping-in) led me to try PP which has a ruleset that I find more enjoyable, mostly due to the PP's increased unit level flexibility. As a direct result, my LIFETIME PP expenditures are almost even with my GW expenditures... and I am a 15 year veteran of the GW hobby!
-edit- I had a huge falling out with the main ruleset in the transition from 3rd to 4th edition. 5th Edition is an improvement, but won't bring back the glory days of 3rd in my mind. Saddly, GW has also killed most of the non-gaming things I loved most about the hobby: GD Canada, GT Canada, Battle Campaigns, Chapter Approved etc.
For me personally, GW's perceived indifference towards game balance in 40k coupled with their glacial release of ever-more-expensive army updates has made me re-evaluate my involvement in the GW hobby in the last few years. Money's tight these days. 2011 resolution is to mostly keep the PP collection even and downsize my GW collection in a major way.
38507
Post by: daviessa
i think its disgusting that you have posted this on a fourm, things like this are not meant to be seen by the public, i hope whoeverposted this on here gets found out and is fired.
11029
Post by: Ketara
daviessa wrote:i think its disgusting that you have posted this on a fourm, things like this are not meant to be seen by the public, i hope whoeverposted this on here gets found out and is fired.
Errrr.....the chap who posted it works at my University. Last I heard, their employment agenda wasn't regulated by GW.
You do realise all this stuff is in the public domain right?
299
Post by: Kilkrazy
daviessa wrote:i think its disgusting that you have posted this on a fourm, things like this are not meant to be seen by the public, i hope whoeverposted this on here gets found out and is fired.
Posted what?
If you mean the financial reports, international company and accounting law requires them to be published, so there is no problem.
18410
Post by: filbert
daviessa wrote:i think its disgusting that you have posted this on a fourm, things like this are not meant to be seen by the public, i hope whoeverposted this on here gets found out and is fired.
Congrats on winning the 'Overreaction of the Year' award...
5256
Post by: NAVARRO
daviessa wrote:i think its disgusting that you have posted this on a fourm, things like this are not meant to be seen by the public, i hope whoeverposted this on here gets found out and is fired.
Funny! Tell me its a joke
722
Post by: Kanluwen
Ignore the troll.
5394
Post by: reds8n
daviessa wrote:i think its disgusting that you have posted this on a fourm, things like this are not meant to be seen by the public,
.... have you been browsing my personal photos ? Look, as I explained before : it was a one time deal, I was young and I needed the money.
BUT SOCIETY IS SO JUDGEMENTAL ! . 
35352
Post by: prime12357
"No, I can't go now. Someone on the internet is wrong."
38507
Post by: daviessa
sorry about that, that person was a friend who decided to as usall mees around with my laptop.
5394
Post by: reds8n
..okay. These things happen. Let's leave that there then alright folks.
5245
Post by: Buzzsaw
sebster wrote:crimsonfist832 wrote:I'm confused by all this because I haven't a clue of what it means. But could someone please simply explain to me whats happenning. Is GW going to go bankrupt????
No, the hyperbole is just people on the internet doing what people on the internet do. I can't remember a time in the last 20 years when people weren't convinced GW was just about to go under because they charge too much. Yet here they are, the biggest company in the industry, by a long way.
Thing is, GW doesn't have particularly flash underlying indicators. Sales growth isn't great, and hasn't been particularly great since they expanded into the US all those years ago. Nor is it likely to suddenly become great, their core product is a niche product that's expanded everywhere it can across the planet. People take that and use it to declare that doom is coming for GW and the prices that are obviously too high because they're more than they personally want to pay.
Meanwhile there's a steady line of miniature companies going bankrupt because being a sustainable miniatures company is a really hard thing to do, and yet no-one was ever able to predict their demise. It's almost as if people are just speculating wildly...
Not to be confrontational, but it would seem rather... romantic, to describe consistently negative sales figures as "Sales growth isn't great". It seems generally agreed that the number of retail units being moved are consistently shrinking, while at the same time, aggressive price increases have only managed to keep the amount of revenue declining slightly.
You talk about people "speculating wildly", but it's important to realize that with some exceptions, many miniature companies are not publicly traded: since we don't have access to their financials, the suddenness of their demise always seems to come out of the blue. GW, by contrast, is relatively transparent and so we can see the trends developing.
That said, of course there is a lot of speculation going on: we know what GW is doing, but there are a lot of details that we don't know (I'm not sure anyone knows them), things like what is the overall size of the market? What are the shares of the market that various companies have? We know GW is moving fewer units, are other companies moving more? Is GW losing market share, or is the market as a whole in contraction?
Since the amateur consensus seems to be that the hobby market seems to be fine overall, the only conclusion we can tentatively draw (given that GW is moving fewer units) would seem to be that GW is declining relative to other companies.
sebster wrote:Automatically Appended Next Post:
sourclams wrote:40k really is not a good game below 1,000 points.
That's right. But you're average starting player has no idea about that. What he sees is dudes in power armour and big guns and buys AoBR. He plays some games, paints some dudes and thumbs through his army bok and sees all this new stuff. He starts forming army lists; this is what I'll have at 750 points, this is what I'll have at 1,000.... It doesn't matter than the game sucks at 750 points, because in a month's time he'll have new stuff and he'll be at 1,000 points. It doesn't matter that it sucks at 1,000 points because...
This hobby is largely based on how awesome things will be with just a couple more purchases, it's why people keep expanding their armies, start new armies, switch from 40K to WHFB and back, dream of how awesome it would be if only Epic were mainstream. Then they go to some other company because thinking it'll be different if it isn't GW.
And yeah, sometimes it actually is better. I know 40K at 1750 points is a lot more fun than it is at 750 points. And I've gotten plenty of fun out of FoW. But the point is true or not we keep dreaming of the next purchase, whether it'll actually make things more fun or not.
While there is a certain logic to this, the problem is the scenario you are describing is basically the one that GW seems to have rejected: their attitude, of selling in a single big sale to a fresh consumer, would seem to be at odds with the 'slow-growth' consumer you're describing. Certainly there seems, from what everyone is saying, no systematic incentives designed to retain players and have them develop multiple armies/multiple systems.
Also, the notion that the remedy to " 40k really is not a good game below 1,000 points" being the fact that "you're average starting player has no idea about that" seems, first, somewhat dubious. Yes, someone that only buys one codex and the main rulebook doesn't realize how poorly balanced the game is at lower levels, but someone that takes some time and looks at the various codices will quickly come to that conclusion. Further, discussion with anyone in the hobby or on the various web-forums will quickly inform them of the fact.
"This hobby is largely based on how awesome things will be with just a couple more purchases," but that doesn't fit GW's model of selling. The consensus seems to be that GW wants to "Sell 'em young, sell 'em big, send 'em on their way."
24567
Post by: Kroothawk
daviessa wrote:sorry about that, that person was a friend who decided to as usall mees around with my laptop.
Okay, but until things are cleared up, you keep the forum title "Stinky Spore"
5470
Post by: sebster
JOHIRA wrote:That was a lovely apology for GW, but I wanted to point out the flaw in your conclusion.
My point wasn't an an apology for GW, and I really have no idea how you managed to read it as such.
It was an explanation of behaviour, that people look at just the next purchase, and believe that next one will make it all so much more fun.
It doesn't matter if people dream of the next purchase if they never put the money down on it.
Well, obviously.
And going by the evidence, as opposed to anyone's feelings about GW, it seems that fewer and fewer people are putting money down on GW product.
You're thinking people on the internet are evidence of something...
Seriously, dude, people have been claiming prices are too high and that they're quitting and therefore GW will go bankrupt since at least the early 90s. In that time they've steadily become a hundred million pound company that utterly dominates the industry. I'm not going to declare they're never, ever going to disappear or that they're business model is terrific, but I'm certainly not going to think of the people on the internet as evidence of anything.
You're right that the company isn't going bankrupt any time soon. But the numbers pretty clearly show they are in an unsustainable position and need to change something about the way they do business in order to increase their sales.
The numbers do not clearly show an unsustainable position. That's just internet experts making crap up. There are no business analysts here, and if there were they'd tell you need to look at a whole lot more detail than what's in the annual report before you knew anything of substance about the underlying business position.
5470
Post by: sebster
Buzzsaw wrote:Not to be confrontational, but it would seem rather... romantic, to describe consistently negative sales figures as "Sales growth isn't great". It seems generally agreed that the number of retail units being moved are consistently shrinking, while at the same time, aggressive price increases have only managed to keep the amount of revenue declining slightly.
No, 'isn't great' is about right. The sales position indicates to investors that GW is not going to be a growth stock, but it doesn't signal imminent demise. To make any better assessment we'd have to get a decent idea of what is really driving the sales decline, and where (if) the sales decline will stop. From there we'd need to establish if GW can be profitable at that
Without that information, all we've got is a company dropping sales growth in the midst of an economic downturn, and that's not really indicative of anything at all.
And for the record, back when GW actually recorded a loss and people were really declaring their imminent demise, I posted that a one-off loss is not really a big deal, they really ought to be more worried about declining sales growth.
You talk about people "speculating wildly", but it's important to realize that with some exceptions, many miniature companies are not publicly traded: since we don't have access to their financials, the suddenness of their demise always seems to come out of the blue. GW, by contrast, is relatively transparent and so we can see the trends developing.
We aren't seeing trends developing. We're looking at the annual report and we're speculating wildly, same as we've been doing for a long time now. I mean, you've been around yeah? You'd know how year in and year out people declare the annual report has signalled the death of GW.
I'm not a business analyst, but I am in finance so I know enough to know that if you attempted to forecast anything about a company from nothing but the annual report beyond the bleedingly obvious such as 'they're losing $50mil a quarter and there's only $25mil in liquid assets so they're probably stuffed' then people will laugh at you then tell you to try auditing or something else.
Actual analysis would ask what the company's primary strategic assets are, and ultimately that'd come down to the fact that they've got an established network of stores while their competitors do not. It would then look at what value those stores deliver to the company, basically asking if the cost of renting all those mainstreet locations is worth it, basically looking at what value there is in GW's primary strategic advantage. It's a good question and one I'd love to see answered, but you'll never see it answered in an annual report.
That said, of course there is a lot of speculation going on: we know what GW is doing, but there are a lot of details that we don't know (I'm not sure anyone knows them), things like what is the overall size of the market? What are the shares of the market that various companies have? We know GW is moving fewer units, are other companies moving more? Is GW losing market share, or is the market as a whole in contraction?
And as importantly, is the GW retraction a permanent thing, or are we looking at a movement towards a new equilibrium (either the same share of a smaller market or a smaller share of the same market). If we are, is GW a sustainable entity at that new level of sales?
Since the amateur consensus seems to be that the hobby market seems to be fine overall, the only conclusion we can tentatively draw (given that GW is moving fewer units) would seem to be that GW is declining relative to other companies.
Sure, but note that that is purely an amateur consensus, on a board inclined to predicting GW's horribleness and imminent doom every other day, and that a declining market share is not the same thing a business collapse.
While there is a certain logic to this, the problem is the scenario you are describing is basically the one that GW seems to have rejected: their attitude, of selling in a single big sale to a fresh consumer, would seem to be at odds with the 'slow-growth' consumer you're describing.
Note that GW's model doesn't rely on all those purchases being at once. All those purchases can happen over a year or even longer. I'm not describing a 'slow growth' model, I'm describing how a customer can spend $500 or $1,000 over the course of a year, without ever predicting or seriously considering the fact that he's about to spend $500 or $1,000 in total.
Also, the notion that the remedy to "40k really is not a good game below 1,000 points" being the fact that "you're average starting player has no idea about that" seems, first, somewhat dubious. Yes, someone that only buys one codex and the main rulebook doesn't realize how poorly balanced the game is at lower levels, but someone that takes some time and looks at the various codices will quickly come to that conclusion. Further, discussion with anyone in the hobby or on the various web-forums will quickly inform them of the fact.
He doesn't have to believe the game is perfectly playable at 1,000 points, he just has to believe it is playable enough, that space marines are cool, and that he'll really, honestly find the time to paint everything he's going to buy. From then on he doesn't have to believe all the above, or any of the above for most of the time, he just have to believe when he next really, really wants to convince himself that it's true on the day he makes the next purchase.
The thing to remember here is we're not looking at people rationally considering the pros and cons of a purchasie we're looking at people who want to justify a spending decision they really, really want to make. It's a well documented phenomenon that's hardly unique to GW, it exists for a wide range industries that could collectively be described as 'over priced and unnecessary consumer goods'. Think fashion, think perfume, think remote controlled cars, 'collectable' plates...
5245
Post by: Buzzsaw
sebster wrote:Buzzsaw wrote:Not to be confrontational, but it would seem rather... romantic, to describe consistently negative sales figures as "Sales growth isn't great". It seems generally agreed that the number of retail units being moved are consistently shrinking, while at the same time, aggressive price increases have only managed to keep the amount of revenue declining slightly.
No, 'isn't great' is about right. The sales position indicates to investors that GW is not going to be a growth stock, but it doesn't signal imminent demise. To make any better assessment we'd have to get a decent idea of what is really driving the sales decline, and where (if) the sales decline will stop. From there we'd need to establish if GW can be profitable at that
Without that information, all we've got is a company dropping sales growth in the midst of an economic downturn, and that's not really indicative of anything at all.
And for the record, back when GW actually recorded a loss and people were really declaring their imminent demise, I posted that a one-off loss is not really a big deal, they really ought to be more worried about declining sales growth.
First, thanks for the respectful tone. That said, I find your analysis remarkably unpersuasive. So, when they posted a loss a decline in sales growth was something that they needed to be worried about in the past, but even though now GW has been experiencing sustained sales contractions over the period of years, things just "isn't great"?
Also, saying "it doesn't signal imminent demise" is a bit of a straw man: does GW have to be on the brink of bankruptcy for re-evaluations of their corporate philosophy to be valid? Isn't a sustained downturn coupled with dramatic austerity measures sufficient to merit rolling out the caution flags?
sebster wrote:You talk about people "speculating wildly", but it's important to realize that with some exceptions, many miniature companies are not publicly traded: since we don't have access to their financials, the suddenness of their demise always seems to come out of the blue. GW, by contrast, is relatively transparent and so we can see the trends developing.
We aren't seeing trends developing. We're looking at the annual report and we're speculating wildly, same as we've been doing for a long time now. I mean, you've been around yeah? You'd know how year in and year out people declare the annual report has signalled the death of GW.
I'm not a business analyst, but I am in finance so I know enough to know that if you attempted to forecast anything about a company from nothing but the annual report beyond the bleedingly obvious such as 'they're losing $50mil a quarter and there's only $25mil in liquid assets so they're probably stuffed' then people will laugh at you then tell you to try auditing or something else.
Actual analysis would ask what the company's primary strategic assets are, and ultimately that'd come down to the fact that they've got an established network of stores while their competitors do not. It would then look at what value those stores deliver to the company, basically asking if the cost of renting all those mainstreet locations is worth it, basically looking at what value there is in GW's primary strategic advantage. It's a good question and one I'd love to see answered, but you'll never see it answered in an annual report.
Again, with due respect, it's my impression from other posters on these boards that GW's sales have been in decline for the better part of a decade. At what point, exactly, does that become a "trend"?
Further, you point out that "know how year in and year out people declare the annual report has signalled the death of GW" as if this is support for the argument that it is doing 'not great'. That's akin to the following fact pattern;
-At Christmas one year, Uncle Bob has a wet, wheezing cough, particularly noticeable when he comes in from the outside after smoking his unfiltered Camels. You admonish him, saying "you know you should quit, those things are going to kill you," to which he replies "they haven't yet!"
Again and again, you see him at family gatherings, again and again he wheezes and sputters and hocks up chunks of phlem, again and again you admonish him, and every time he replies that he's still standing.
Given the logic surrounding your statement about "year in and year out people declare the annual report has signalled the death of GW"; at what point does Uncle Bob's retort become wisdom and the admonition to quit smoking become folly?
sebster wrote:That said, of course there is a lot of speculation going on: we know what GW is doing, but there are a lot of details that we don't know (I'm not sure anyone knows them), things like what is the overall size of the market? What are the shares of the market that various companies have? We know GW is moving fewer units, are other companies moving more? Is GW losing market share, or is the market as a whole in contraction?
And as importantly, is the GW retraction a permanent thing, or are we looking at a movement towards a new equilibrium (either the same share of a smaller market or a smaller share of the same market). If we are, is GW a sustainable entity at that new level of sales?
Since the amateur consensus seems to be that the hobby market seems to be fine overall, the only conclusion we can tentatively draw (given that GW is moving fewer units) would seem to be that GW is declining relative to other companies.
Sure, but note that that is purely an amateur consensus, on a board inclined to predicting GW's horribleness and imminent doom every other day, and that a declining market share is not the same thing a business collapse.
There are a number of problems with this, the first is twofold within "on a board inclined to predicting GW's horribleness and imminent doom every other day"; this is first, an ad hominem (the Devil can quote scripture when it suits his purposes), second, of dubious factual nature. Note that what would appear to be a relevant poll has GW almost 2/1 on Like/Dislike, so the notion that the board is institutionally biased against GW seems counter-factual. That said, there are certainly many critics of GW's business model. Perhaps we can attribute that to something other then simple innate hostility? Presuming that, as you point out above, year after year GW's financial disclosure has prompted cries of doom and gloom. In what way is that inconsistent with a company in a sustained decline?
Of course, a declining market share is not the same thing as business collapse, especially if it is just one element among several positive ones. What exactly would those positive elements be? The understanding seems to be that GW has stripped it's retail assets to the bone in many places, has fired several of it's long time employees, is consistently raising it's prices at a rate outpacing inflation...
sebster wrote:While there is a certain logic to this, the problem is the scenario you are describing is basically the one that GW seems to have rejected: their attitude, of selling in a single big sale to a fresh consumer, would seem to be at odds with the 'slow-growth' consumer you're describing.
Note that GW's model doesn't rely on all those purchases being at once. All those purchases can happen over a year or even longer. I'm not describing a 'slow growth' model, I'm describing how a customer can spend $500 or $1,000 over the course of a year, without ever predicting or seriously considering the fact that he's about to spend $500 or $1,000 in total.
Also, the notion that the remedy to "40k really is not a good game below 1,000 points" being the fact that "you're average starting player has no idea about that" seems, first, somewhat dubious. Yes, someone that only buys one codex and the main rulebook doesn't realize how poorly balanced the game is at lower levels, but someone that takes some time and looks at the various codices will quickly come to that conclusion. Further, discussion with anyone in the hobby or on the various web-forums will quickly inform them of the fact.
He doesn't have to believe the game is perfectly playable at 1,000 points, he just has to believe it is playable enough, that space marines are cool, and that he'll really, honestly find the time to paint everything he's going to buy. From then on he doesn't have to believe all the above, or any of the above for most of the time, he just have to believe when he next really, really wants to convince himself that it's true on the day he makes the next purchase.
The thing to remember here is we're not looking at people rationally considering the pros and cons of a purchasie we're looking at people who want to justify a spending decision they really, really want to make. It's a well documented phenomenon that's hardly unique to GW, it exists for a wide range industries that could collectively be described as 'over priced and unnecessary consumer goods'. Think fashion, think perfume, think remote controlled cars, 'collectable' plates...
Again, you seem to be saying that what GW needs is not so much a consumer as a border collie with an expense account (perhaps that's not quite fair to the collies). The most basic problem with your analysis is you are comparing "luxury" items with GW items without the critical element, what people use "to justify a spending decision they really, really want to make": Advertising.
Let us look at the ultimate luxury good: the Diamond. As is fashionable these days to note, diamonds are by no means the rarest of gems, but they remain the priciest. This is the result of a massive, coordinated and consistent advertising campaign that has added value to these lumps of carbon. GW's lumps of carbon, by contrast, suffer under GW's cone of silence.
I'm a bit mystified by what exactly is driving this fellow to buy? You seem to share GW's basic conceit that people simply want to buy their products. Like them, you also seem to be proposing that new players exist within a cloud of sorts, where they are only exposed to the positive elements of the hobby, without being snapped out of their revere by contact with vets with... more sober perspectives.
5470
Post by: sebster
Buzzsaw wrote:First, thanks for the respectful tone.
And thankyou for the same.
That said, I find your analysis remarkably unpersuasive. So, when they posted a loss a decline in sales growth was something that they needed to be worried about in the past, but even though now GW has been experiencing sustained sales contractions over the period of years, things just "isn't great"?
Also, saying "it doesn't signal imminent demise" is a bit of a straw man: does GW have to be on the brink of bankruptcy for re-evaluations of their corporate philosophy to be valid? Isn't a sustained downturn coupled with dramatic austerity measures sufficient to merit rolling out the caution flags?
Thing is, they need to be worried about it. It's a factor in assessing the level of profitability of the company in the medium to long term, and would be the difference between expecting 5 million or 8 million in profit (numbers made up on the spot obviously, but you get the point, yeah?)
But in terms of the rhetoric people have put forward in this thread, it really doesn't mean anything of the sort. New entrants will capture a portion of the market, and that comes from the existing members. Seeing this happen doesn't mean the the existing members will keep shrinking until they collapse. What matters is where, long term, the markets shares will stabilise, and that's something we the internet pundits cannot possibly know.
Again, with due respect, it's my impression from other posters on these boards that GW's sales have been in decline for the better part of a decade. At what point, exactly, does that become a "trend"?
They haven't been in decline for a decade. That's just more stuff that people on the internet are throwing about. Sales in 2001 were about £90million, and they grew every year until the high water mark in 2004. They declined for two years, stabilised at around £110 million before spiking in 2009 then dropping back in 2010. Seriously, the internet is full of lovely people but they are very imaginative, and I really wouldn't take anything they say at face value.
Further, you point out that "know how year in and year out people declare the annual report has signalled the death of GW" as if this is support for the argument that it is doing 'not great'. That's akin to the following fact pattern;
-At Christmas one year, Uncle Bob has a wet, wheezing cough, particularly noticeable when he comes in from the outside after smoking his unfiltered Camels. You admonish him, saying "you know you should quit, those things are going to kill you," to which he replies "they haven't yet!"
No, it's more akin to folk who claim eating potato chips causes brain cancer. It may be true, I don't know. But I do know that when these people talk constantly about
how potato chips cause cancer, then my uncle notices the mole on his arm might be changing colour, sure as anything they'll declare it's cancer and it's because he was always eating those potato chips.
Those people are silly, because we just don't have the information to know if it's cancer, and even if it was there's nothing tying it to the potato chips.
Given the logic surrounding your statement about "year in and year out people declare the annual report has signalled the death of GW"; at what point does Uncle Bob's retort become wisdom and the admonition to quit smoking become folly?
That lots of people like saying something is very poor evidence for considering it is true. Not when they lack the the access to information or the expertise to actually make a decent assessment of the matter. And especially not when there's lots of reasons for them to want to believe it without any consideration of the actual evidence (annoyance over price increases, flair for drama, traditional geek hatred of the biggest product).
There are a number of problems with this, the first is twofold within "on a board inclined to predicting GW's horribleness and imminent doom every other day"; this is first, an ad hominem (the Devil can quote scripture when it suits his purposes), second, of dubious factual nature. Note that what would appear to be a relevant poll has GW almost 2/1 on Like/Dislike, so the notion that the board is institutionally biased against GW seems counter-factual.
Nah, read what I said more carefully. I said "on a board inclined to predicting GW's horribleness and imminent doom every other day". I didn't state a majority of users were hostile to GW (that'd be a weird thing on a board set up to discuss their games), I said this board is inclined to predict GW's doom every other day, which is still possible if the minority is loud enough. Indeed, it isn't just possible but directly observable, read this forum and note how often someone says GW is about to collapse...
That said, there are certainly many critics of GW's business model. Perhaps we can attribute that to something other then simple innate hostility? Presuming that, as you point out above, year after year GW's financial disclosure has prompted cries of doom and gloom. In what way is that inconsistent with a company in a sustained decline?
Except that GW's business model was the subject of attack while revenue grew year after year. As they came to utterly dominate the market people still declared that GW’s time was almost over, and the some new company or another was just about to take their place. It never happened, but the predictions have carried on regardless.
And I never said it was innate hostility. I simply said it had nothing to do with any kind of analysis of GW's business. Which would be very hard for you to deny, given that no-one commenting in this thread, or any other thread I've ever seen on the subject, has proffered anything like actual business analysis.
Instead we’re getting the wild speculation of disgruntled customers.
Again, you seem to be saying that what GW needs is not so much a consumer as a border collie with an expense account (perhaps that's not quite fair to the collies).
It’s a fantastic demographic if you can reach it.
The most basic problem with your analysis is you are comparing "luxury" items with GW items without the critical element, what people use "to justify a spending decision they really, really want to make": Advertising.
No, I’m really not forgetting it. Advertising simply isn’t a part of the business model of a wide range of high priced consumer goods. In fact, advertising is often counter-productive, as it can be seen to remove exclusivity. More applicably in GW”s case, miniatures simply aren’t that mainstream a business, so instead promotion needs to focus on events days and, you guessed, all those mainstream stores.
I'm a bit mystified by what exactly is driving this fellow to buy? You seem to share GW's basic conceit that people simply want to buy their products. Like them, you also seem to be proposing that new players exist within a cloud of sorts, where they are only exposed to the positive elements of the hobby, without being snapped out of their revere by contact with vets with... more sober perspectives.
What dirves someone to start buying GW stuff shouldn’t be a mystery. It isn’t to me, because I’ve been one, a lot of friends have been or are such people, and I presume it’s the same for you.
And yes, setting the price to never, ever turn anyone away is terrible business practice. You want the price set right at the point where the increase in revenue per unit sold is equal to the loss in customers, but no further. Finding this point is no science, and companies can be unsure of it even with all marketing analysis in the world. But all that study means they’ve certainly got a better guess that we do.
36641
Post by: Hans Chung-Otterson
Mad4Minis wrote:"The focus remains on investing in Hobby centre openings and improving retail volume"
They could try opening a store or 3 in Florida. A state with a population of aprox 16 million, and one of the largest tourist destinations in the USA, and it doesnt have a single GW store. Not a single one.
Closest one is around 400+ miles away.
Same in Oregon! Washington, just to the north, has NINE stores (all more than 2hrs drive away from the OR border), while Oregon has NONE. And the Portland-Metro area has a gak-ton of gamers. I don't get it. 
3806
Post by: Grot 6
daviessa wrote:i think its disgusting that you have posted this on a fourm, things like this are not meant to be seen by the public, i hope whoeverposted this on here gets found out and is fired.
Or at least get a C and D letter?
I love tragic overkill as much as the next one, but you do have to know that the info is public knowledge, don't you? I'm going to sig this one, by the way.
And now for something completely different.....
On a lighter note, I don't agree that small games suck. I think that they are crucial if you want to get people into gaming, and in use as a teaching tool for basics and the game in general. Along with that, there are many things you can do to encourage your mates to play games and add in thier units, either as a result of a game objective, ALA Dawn of War, or as a result of scenario driven play.
Ive played many games, in the same scheme as the "Tale of Four Gamers", as well, where we would pick a different faction - start out with a basic 2 troops and an HQ, and both buid and play in public, as a training tool for new players.
As a sales tool, the small game is invaluable to teach, increase interest, and get your fanbase to care and actually buy smart, along with being able to have good conversations about how to get the most bang for your buck.
When a squad box costs around twenty bucks or so, then you add in the tanks and other heavys, the fast attack stuff, and everything in between, it might be high time for the troop selection template to change, as in to get rid of it altogether.
As for the decline of buying, it has to do with more then a number of factors that arn't atributed to one or two reasons, it has to do with the differences in European, and American play styles, The opinions of price have always been there, but in this period, they have come to the forefront, because GW has been in point of fact, pretty much throwing it in customers faces as of late. Along with the preemtive strikes on fan based materials, and the C and D craze, it doesn't do much to endear them to players.
Everyone seems to forget that GW was on the higher end of the spectrum in as far as wargaming is concerned. They've always had higher prices then most. In investigating the way that Great Britians Economy works, I can honestly say that most american players really don't have a fathom as to the impact that outside factors have on the prices the reasons behind the increases, and the through and through high cost it actually is to run a company over across the pond.
" They haven't been in decline for a decade. That's just more stuff that people on the internet are throwing about. Sales in 2001 were about £90million, and they grew every year until the high water mark in 2004. They declined for two years, stabilised at around £110 million before spiking in 2009 then dropping back in 2010. Seriously, the internet is full of lovely people but they are very imaginative, and I really wouldn't take anything they say at face value. "
Thats kind of a blanket statement, seeing as we have this conversation at least three or four times a month, consistantly. And as for informed ,Osbads had some pretty good conversations, as well as other people who are in the trenches, living the dream, firsthand. Of course it would be nice that the Sky would fall, but in point of fact, even if it were, GW would be the last ones to hear it from. You have to remember that they are a bonified business, and even hints of doom and gloom hit them where it hurts.
Just one Grot's opinion.... 
6872
Post by: sourclams
sebster wrote:They haven't been in decline for a decade. That's just more stuff that people on the internet are throwing about. Sales in 2001 were about £90million, and they grew every year until the high water mark in 2004. They declined for two years, stabilised at around £110 million before spiking in 2009 then dropping back in 2010. Seriously, the internet is full of lovely people but they are very imaginative, and I really wouldn't take anything they say at face value.
I would recommend charting out GW's share price versus the S&P500 index to get a more market-anchored impression of GW's financial performance. From an investment perspective, it's not just about what a stock does, moreso about what it does in relation to everything else.
In 2002-2005, the "spread" was roughly steady at around -300 points. GW and a basket of other end consumer-centric companies performed comparably. In '05-07 the spread widened about a thousand points, a clear gross underperformance by GW; in a market environment where most other companies were able to increase in value by 30% GW managed to lose 60% of their net worth.
The 08-09 global recession was a bit of a tail wind for GW since they managed to maintain roughly the same overall value when most equities dropped 50%. Still, at this point the spread narrowed to less than its old highs in 02-05, and in the last 2 years has retraced to 50% of its lows.
GW is very probably far, far from bankruptcy, but from an investment perspective it's definitely a bit of a stinker. At best, they're a "safety" stock, that you can toss some money into on the assumption that a big negative economic event will allow GW to be a safe harbor against market volatility--at worst you'd be a fool to put your assets into a stock that has underperformed a basket of similar equities for 8 of the last 10 years.
1036
Post by: fullheadofhair
sourclams wrote:sebster wrote:They haven't been in decline for a decade. That's just more stuff that people on the internet are throwing about. Sales in 2001 were about £90million, and they grew every year until the high water mark in 2004. They declined for two years, stabilised at around £110 million before spiking in 2009 then dropping back in 2010. Seriously, the internet is full of lovely people but they are very imaginative, and I really wouldn't take anything they say at face value.
I would recommend charting out GW's share price versus the S&P500 index to get a more market-anchored impression of GW's financial performance. From an investment perspective, it's not just about what a stock does, moreso about what it does in relation to everything else.
also, sebster, I am afraid you are more than likely wrong. If you go back through the results and chart sales/ revenue and then start thinking about the LOTR bubble, currency and the rapid increase in BL sales over the last 10 yrs you will soon see that the core part of the business ( 40k and WFB) has been in decline continually. a friend and I did just such a thing 2 yrs ago I believe - both of us are what you in the UK would describe as F. analysts.
I have never believed GW was in trouble until now - this set of results, if not arrested during the rest of the year, has all the hallmarks of the beginning of what is in slang terms a death spiral which takes years to actually happen. the trouble is, as with anything in life, no one extreme works. A focus on the costs with out a focus on revenue retention (and hopefully growth!!) has to go hand in hand. Often, a focus on only cost can lead to a drop in revenue that outstrips cost savings. The one man store is a perfect example - less cost but less revenue and less growth equals few new customers and as current customers drop off who is going to replace them - hence the need to focus on growth at same time to avoid the death spiral.
24567
Post by: Kroothawk
Another fine analysis by Psyberwolf over at Warseer:
While looking back over several years of financial statements and press announcements, trying to glean some additional insight, it struck me that many of the statements made by the Chairman and CEO were sometimes funny but often ironic, sad and confused when viewed over the course of many years. I wanted to try and pull some of these out and add some comments. I tried to put a reference for each statement but some of them were left out.
Return to growth
Statement: …sales in September, October and November reinforce our confidence that the business is returning to growth. (November 2006 Interim report)
Statement: We believe that it is only a matter of time and hard work before we re-establish our historic linear growth rate. (June 2007 Full year report)
Statement: …our energies are now focused upon returning the business to profitable growth. We believe that the sales declines of the last three years have been arrested and that the business has stabilised. (June 2008 Full year report)
Statement: So a pleasing set of results. But the real story this year is that we have been preparing ourselves for growth. (June 2009 Full year report)
Statement: The principal risks and uncertainties for the balance of the year lie in the ability of the sales businesses to establish and maintain sales growth… (June 2010 Full year report)
And we are still waiting…
Focused on growing sales
Statement: …sales delivery remains an area of key focus. (November 2007 Interim report)
Statement: Although sales have declined in the first half of the year in constant currency terms… (November 2009 Interim report)
Statement: …our principal focus remains restoring real sales growth. (June 2010 Full year report)
Statement: Sales fell by 4%... (Nov 2010 Interim report)
A lot of focus but not much growth in sales.
Continental Europe
Statement: Management's response to the decline in sales since 2005 has led to changes in the management teams in all but one of our Continental European territories… appointed our most experienced senior manager as head of sales for Continental Europe in order to increase the focus on profitable growth. (June 2007 Full year report)
Statement: We still have work to do in Continental Europe to re-establish sales growth. However, we believe that the right managerial and operational steps are being taken. (November 2007 Interim report)
Statement: As you will see we have not had such great success in Continental Europe. I expect to be extolling their virtues next year. Or else. (June 2008 Full year report)
Statement: The work needed to establish growth in all channels in all territories goes on with some significant progress being made in this half-year where, with the exception of Continental Europe. (November 2008 Interim report)
Statement: Northern Europe and North America both showed growth in the year, while Continental Europe continued to decline, although at a slower rate than in previous years. (June 2010 Full year report)
Statement: Continental Europe made similar staff reductions in retail a year ago and that territory is in growth in the first half. (Nov 2010 Interim report)
Finally… only took 5 years. Must have been those management changes 3 years ago, back in 2007 – yeah, that’s it!
Restoring growth through Warhammer
Statement: In 2010/11 our focus will be the issue of restoring LFL growth in our Hobby centres.
Statement: The third global project has been the relaunch of Warhammer this summer. We relaunched Warhammer 40,000 in 2008/09 and this created a great amount of excitement, gaming activity and purchasing. After four years of development, we expect the Warhammer relaunch to create similar levels of excitement and purchasing activity in the coming year.
Statement: Sales fell by 4%...
A great amount of excitement, gaming activity and purchasing for the new version of Warhammer… eh, not so much.
Emphasis on opening new stores
Statement: Our emphasis has been to focus on the development of our own Hobby stores and on investing in recruitment and also in structured training at all levels of management and staff. We are strengthening all direct channels to market. (Nov 2005 Interim report)
Statement: Our strategy to underpin this growth remains the same: we will continue to open new stores. (Nov 2006 Interim report)
Statement: Investment has been focused on two key drivers of performance, opening more Hobby centres… (June 2009 Full year report)
Statement: We make things. We are a manufacturer. Not a retailer. (June 2010 Full year report)
Customer retention or lack thereof
Statement: There are no silver bullets for growing sales at Games Workshop. It requires a consistent focus on the basics of recruiting new hobbyists through our Hobby centres and using our games to teach them how to buy, build, paint and collect ever larger armies of miniatures.
There is only one other industry, business, group, etc. that I know of that spends so much energy on finding new clients and so little focus on retaining them – and that would be caretakers – but that’s only because they literally can’t sell anything else to their customers.
Employer loyalty?
Statement: The return to growth has also been assisted by the US business, and a lot of credit must go to the head of that business - Ernie Baker. He has been working tirelessly for many, many months to re-instil the simple disciplines we need and recruit the right kind of people for our future, and all the while displaying and championing the attitudes and behaviours we ask of all our staff. (Full year report 2008)
Statement: We have also asked Ernie Baker, head of our US business, to take responsibility for our Canadian business as well, ensuring that we have a co-ordinated strategy across the Americas. (Full year report 2008)
Interesting that the individual that returned them to growth was sacked about 1.5 years later. My, how things change…
Bad economy is no excuse
Statement: We said at the last half year announcement that as a niche business we do not usually suffer, or benefit from, macro-economic factors. (Interim 2009)
Statement: We are not significantly affected by economic factors, as recent results show. (Full year 2010)
I wonder why when sales goes down GW defenders blame it on the overall economy? They must not think that GW’s management knows what they are talking about!
A pathetic excuse to raise prices
Statement: Amongst the product delivery risks are those relating to input prices. The cost of raw materials, such as metal and plastic, represents no more than 4% of our sales and therefore we do not believe that the price volatility of these inputs represents a significant threat to our long-term profitability. (Full year 2007 report)
Statement: The cost of raw materials, such as metal and plastic, represents no more than 5% of our sales and therefore we do not believe that the price volatility of these inputs represents a significant threat to our long-term profitability… However, the recent increases in the price of both metal and plastic have been significant, and we will take action to protect our gross margins. (Full Year 2008)
Statement: Among many other concerns the world has been struggling with the rising cost of energy, transport, and materials... Today we are contacting all of our Trade customers globally to announce that due to these rising costs, we too will be raising some of our prices. We do not do this lightly. We fully understand that the timing of the price rise directly conflicts with our annual July price review and for that we deeply apologize. I hope that you understand that this price rise is not something Games Workshop Global desires to do, it is something we have to do. (Sept 2008) (emphasis mine)
So we have statements here that say costs for raw materials represent no more than 5% of sales and that price volatility does not represent any long term threat but then a month or 2 later they raise prices on metal miniatures 25% because of the price of raw materials. Note – their gross margin increased. Worse, when the prices later dropped there was no corresponding drop in price.
Outsourcing fail
Statement: We implemented a new factory layout in Nottingham which will help deliver gross margin improvements as volumes increase. We have improved our resin manufacturing processes in Nottingham and implemented a new resin cell in Shanghai to manage the significantly higher levels of sales growth we have been experiencing from Forge World. (Full Year 2009 report)
Statement: The decision was taken in the first half to close the Shanghai facility as the global cost benefits no longer justify its continuance. The paint and resin manufacturing operations have been consolidated in our Nottingham factory thereby achieving greater operational efficiencies. (Nov 2010 Interim report)
Wow! I got to give credit on this one… kudos for actually recognizing that in many cases you don’t save that much money by outsourcing/offshoring. Unfortunately, it took them a couple of years to figure it out.
The buck stops with...?
Statement: The main source of risk to this business remains management error. This is one of the reasons why management recruitment, development and succession planning are so important, and this is why we will continue to invest in our internal Academy which is our 'people development' function. (Full year 2008 report)
Statement: As we have stated in previous years, we believe that the key risks which face Games Workshop are not external but internal... Performance shortfalls in the past have been down to the quality of management and decision making. (Full year report 2010)
Statement: Sales were down largely as a result of shortfalls in Northern Europe and North American retail following staffing changes in Games Workshop Hobby centres to reduce overheads.
Well whose fault is the staffing changes?
GW & Quality
Statement: In addition, we can, and do, defend our intellectual property rigorously against imitators, thus ensuring that our worlds are synonymous with quality.
How about producing quality products to ensure that your “worlds” are synonymous with quality. About half of the sets I have gotten from GW have been miscasts – where one half of the miniature is offset from the other half. Or what about the holes that are common in the marine backpacks? What about poorly fitting models that you have to use “Greenstuff”on to fill huge gaps?
CoD GW
Statement: We are also clear that we will only make fantasy miniatures, not historical ones. Fantasy miniatures from our own Warhammer and Warhammer 40,000 worlds allow us unlimited scope for product innovation.
Statement: Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 382 Hobby centres which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. (emphasis mine)
Sounds a bit paranoid to me! GW has steered away from historical because it would mean they have to compete. It’s like they’re holed up in a CoD ruin with the windows boarded up and the only weapons they have is lawsuits and retail stores (except wait remember - they’re not retailers – they’re manufacturers) So dang – they only have lawsuits – sorry CHS!
735
Post by: JOHIRA
Ketara wrote:I read no 'apology' there. Why the use of such a loaded phrase?
Because the loaded phrases in sebter's post, particularly: sebster wrote:No, the hyperbole is just people on the internet doing what people on the internet do. I can't remember a time in the last 20 years when people weren't convinced GW was just about to go under because they charge too much.
...communicated to me that he's more interested in protecting GW from criticism than in seriously attempting to understand why this financial statement has generated 5 pages of mostly critical opinions about the way GW does business. sebster wrote:Instead we’re getting the wild speculation of disgruntled customers.
In most industries, a body of disgruntled former-customers this large and going to rival companies products would normally be cause for concern, don't you think?
958
Post by: mikhaila
HA! Every GW financial report generates at least 5 pages. I expect them to go 10 or 12 minimum. That means people like to talk on the internet.) People were blasting them in the years they make money, and the years they lose money.
As far as Sebsters statement:
No, the hyperbole is just people on the internet doing what people on the internet do. I can't remember a time in the last 20 years when people weren't convinced GW was just about to go under because they charge too much.
..that's essentially true. Whether or not this report shows anything, people have been talking about GW going under for charging too much for a couple of decades. But in those decades I've seen a couple dozen miniature games grow up and then slide into bankruptcy.
GW is selling less now than before. Then again, the economy sucks, and one hell of a lot of people are selling less than before. I worry more about Privateer than GW. I could sell a lot more Privateer if they would just make more models. They've sucked at getting out re-orders since august. My sales are down on their line, for the simple reason they aren't shipping our product in a timely manner.
GW certainly has problems. And I don't like the trend in pricing. Don't like it in Privateer either, or board games, comics, gasoline, and beer at the local pub. My problem with selling more GW right now,(and anything else), is lack of money in people's pockets, not so much with the products I have to sell.
But if nothing else, the financial reports give people something to talk about, and flex our internet muscles every six months.)
38279
Post by: Mr Hyena
I hope they don't go under. I havent found another mini game that has an Inquisition faction with as good a quality as GW's.
26
Post by: carmachu
sebster wrote:
They haven't been in decline for a decade. That's just more stuff that people on the internet are throwing about. Sales in 2001 were about £90million, and they grew every year until the high water mark in 2004. They declined for two years, stabilised at around £110 million before spiking in 2009 then dropping back in 2010. Seriously, the internet is full of lovely people but they are very imaginative, and I really wouldn't take anything they say at face value.
And this is why we do anaylsis, as do other people, with more knowelege then you. Your looking at the gross sales, which is fine. What your NOT doing is looking at the real indicator, which is unit sales- how many units moved, which has been in decline since 2001(with the exception of If I recall, 2004 was a bump up, then slide back down). With cutting costs and a few other things the numbers your showing hide the underlying problems- less units sold at a higher prce, which is eventually unsustainable. When that point is reach is a debatable point.
30632
Post by: psychosid04
Well lets hope price don't go up anytime soon.
35796
Post by: Gr3y
Statement: Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 382 Hobby centres which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. (emphasis mine)
This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.
299
Post by: Kilkrazy
A lot of what GW say in their report is BS for investors who don't understand how the wargames market works.
To be fair to GW, the wargames market is so tiny, and so fragmented between dozens of small companies, that it isn't possible for anyone really to know how it works.
That said, anyone who can read a financial report can see that if sales are declining continuously for years, despite whatever measures the management takes to increase them, there is a problem.
Even if no-one can say what it is.
There is only one other industry, business, group, etc. that I know of that spends so much energy on finding new clients and so little focus on retaining them – and that would be caretakers – but that’s only because they literally can’t sell anything else to their customers.
24150
Post by: ChocolateGork
Superscope wrote:There is also a point of incoming video games based on their IP.
Both Space Marine and DoW: Retribution are shaping up rather nicely.
Those two games should generate a healthy amount of royalties.. Which hopefuly funds the next generation of GW products and their quality.
Dont forget dark millennium in the next few years.
7433
Post by: plastictrees
Gr3y wrote:Statement: Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 382 Hobby centres which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. (emphasis mine)
This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.
It's not a barrier to entry for customers...
24567
Post by: Kroothawk
GW raises the barrier for new customers every year, but this was not what that quote was talking about.
37505
Post by: Nagashek
theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.
When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?
I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.
Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!
5470
Post by: sebster
Grot 6 wrote:Thats kind of a blanket statement, seeing as we have this conversation at least three or four times a month, consistantly. And as for informed ,Osbads had some pretty good conversations, as well as other people who are in the trenches, living the dream, firsthand. Of course it would be nice that the Sky would fall, but in point of fact, even if it were, GW would be the last ones to hear it from. You have to remember that they are a bonified business, and even hints of doom and gloom hit them where it hurts.
Just one Grot's opinion....
No, it isn't a blanket statement, to be a blanket statement I would have to state that all internet posts are always wrong, or something like that. Instead, I said that information on the internet is unreliable, and shouldn't be taken at face value. Which is pretty damn hard to argue against. Especially given the claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong.
And no, conversations among staff don't count as informed on the overall state of the business, they're certainly interesting and useful information, but filling out stock orders just does not tell you the overall health of the company. And no, the idea isn't to wait until GW's annual report says 'we're boned', the idea is to wait until someone has actually undertaken analysis of the company's health and long term viability, by studying a full range of indicators, only a handful of which can be gathered through the annual report. Automatically Appended Next Post: sourclams wrote:I would recommend charting out GW's share price versus the S&P500 index to get a more market-anchored impression of GW's financial performance. From an investment perspective, it's not just about what a stock does, moreso about what it does in relation to everything else.
You've misunderstood my point. I said that it was categorically wrong that GW's sales had declined every year for a decade. And that's completely true. You're trying to turn that into some kind of analysis of GW as an investment option, which is something I never commented on.
I agree with you, GW is a poor performing stock. I think you were very generous in calling GW a safety stock, when personally I wouldn't advise anyone to buy in, as profits and projected future profits just do not justify the current stock price. Automatically Appended Next Post: fullheadofhair wrote:also, sebster, I am afraid you are more than likely wrong. If you go back through the results and chart sales/ revenue and then start thinking about the LOTR bubble, currency and the rapid increase in BL sales over the last 10 yrs you will soon see that the core part of the business (40k and WFB) has been in decline continually. a friend and I did just such a thing 2 yrs ago I believe - both of us are what you in the UK would describe as F. analysts.
I am completely right in three things; (i) GW have not had continually declining sales for a decade despite that claim being made in this thread, and (ii) people have been predicting GW's imminent demise for a twenty years and the exact opposite has happened, and (iii) no-one in this thread or any other I have seen have produced anything near an actual analysis of business performance that indicates GW is in long term trouble.
If you have produced the last one, then by all means I'd love to read it. And no, simply noting sales trends is not a complete analysis of the future viability of the company, and as a financial analyst that's something you should know. Because you'd know that companies can take a reduced share of market and remain profitable.
I have never believed GW was in trouble until now - this set of results, if not arrested during the rest of the year, has all the hallmarks of the beginning of what is in slang terms a death spiral which takes years to actually happen. the trouble is, as with anything in life, no one extreme works. A focus on the costs with out a focus on revenue retention (and hopefully growth!!) has to go hand in hand. Often, a focus on only cost can lead to a drop in revenue that outstrips cost savings. The one man store is a perfect example - less cost but less revenue and less growth equals few new customers and as current customers drop off who is going to replace them - hence the need to focus on growth at same time to avoid the death spiral.
I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative. Surely it would start with a consideration of the impact of recent market entrants and the growing second hand market? Automatically Appended Next Post: JOHIRA wrote:...communicated to me that he's more interested in protecting GW from criticism than in seriously attempting to understand why this financial statement has generated 5 pages of mostly critical opinions about the way GW does business.
Then you've misread me terribly, and so badly I have to wonder if you ever even bothered to read what I was saying. I've got no interest in defending GW from fan criticism.
My only interest is keeping the conversation focused on known, and calling out the wild speculation where it exists.
In most industries, a body of disgruntled former-customers this large and going to rival companies products would normally be cause for concern, don't you think?
In most industries, yes. But it's very important to understand not all industries are the same, and one should be very wary in applying the general rules to specific cases. GW has not only survived, but flourished despite their being a constant stream of embittered former customers, something that was observable two decades ago.
As such, I'd say that whatever GW's problems may, embittered former customers are not one. I know it sucks to realise that you don't matter, but there it is. Automatically Appended Next Post: carmachu wrote:And this is why we do anaylsis, as do other people, with more knowelege then you. Your looking at the gross sales, which is fine. What your NOT doing is looking at the real indicator, which is unit sales- how many units moved, which has been in decline since 2001(with the exception of If I recall, 2004 was a bump up, then slide back down). With cutting costs and a few other things the numbers your showing hide the underlying problems- less units sold at a higher prce, which is eventually unsustainable. When that point is reach is a debatable point.
No, I wasn't looking at anything. I was informing people in this thread that a claim made was, in fact, completely wrong.
You are right that units sales are an important indicator. You are quite wrong in claiming unit sales are the real indicator, as both unit sales and total sales revenue are both important indicators, along with up to a hundred other possible indicators that might matter.
Because the important thing that really needs to be stressed in this thread is that you can project a long term decline in sales and not have a doomed company, provided there is a point where the decine will plateau, and that the company can remain viable at that new level of sales.
At which point we're left with a lot of things up for debate, can we predict long term sales decline?, if there is long term sales decline is there an end point or will it fall forever?, and can GW continue to operate profitably at a lower level of sales?
Given no-one here has undertaken into any actual analysis of any of those questions, I think it's fair to say any comment on their long term future is wild speculation. Automatically Appended Next Post: Gr3y wrote:This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.
You need to read the quote more carefully. GW didn't even mention pricing in their quote, so I have no idea how you interpreted that. GW said they have to primary advantages that give them an advantage over competitors (a barrier to other company's taking GW's market share), and those are the appeal of their defendable intellectual property (I'm personally dubious over this, as their setting is not that original nor are its strengths difficult to emulate) and their network of stores in bringing in new customers (this is a tremendous strength).
35352
Post by: prime12357
Nagashek wrote:theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.
When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?
I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.
Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!
lol, The Simpsons
GW needs to change their business strategy, else they will soon "run out of ice."
5245
Post by: Buzzsaw
Sebster, while I am glad to see the effort you are putting into this discussion, I fear that have been led to make at least one elementary error, either through accident or by zeal, which serves to undermine your points rather dramatically.
sebster wrote:Grot 6 wrote:Thats kind of a blanket statement, seeing as we have this conversation at least three or four times a month, consistantly. And as for informed ,Osbads had some pretty good conversations, as well as other people who are in the trenches, living the dream, firsthand. Of course it would be nice that the Sky would fall, but in point of fact, even if it were, GW would be the last ones to hear it from. You have to remember that they are a bonified business, and even hints of doom and gloom hit them where it hurts.
Just one Grot's opinion....
No, it isn't a blanket statement, to be a blanket statement I would have to state that all internet posts are always wrong, or something like that. Instead, I said that information on the internet is unreliable, and shouldn't be taken at face value. Which is pretty damn hard to argue against. Especially given the claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong.
And no, conversations among staff don't count as informed on the overall state of the business, they're certainly interesting and useful information, but filling out stock orders just does not tell you the overall health of the company. And no, the idea isn't to wait until GW's annual report says 'we're boned', the idea is to wait until someone has actually undertaken analysis of the company's health and long term viability, by studying a full range of indicators, only a handful of which can be gathered through the annual report.
...
Automatically Appended Next Post:
fullheadofhair wrote:also, sebster, I am afraid you are more than likely wrong. If you go back through the results and chart sales/ revenue and then start thinking about the LOTR bubble, currency and the rapid increase in BL sales over the last 10 yrs you will soon see that the core part of the business (40k and WFB) has been in decline continually. a friend and I did just such a thing 2 yrs ago I believe - both of us are what you in the UK would describe as F. analysts.
I am completely right in three things; (i) GW have not had continually declining sales for a decade despite that claim being made in this thread, and (ii) people have been predicting GW's imminent demise for a twenty years and the exact opposite has happened, and (iii) no-one in this thread or any other I have seen have produced anything near an actual analysis of business performance that indicates GW is in long term trouble.
...
Then you've misread me terribly, and so badly I have to wonder if you ever even bothered to read what I was saying. I've got no interest in defending GW from fan criticism.
My only interest is keeping the conversation focused on known, and calling out the wild speculation where it exists.
...
Automatically Appended Next Post:
carmachu wrote:And this is why we do anaylsis, as do other people, with more knowelege then you. Your looking at the gross sales, which is fine. What your NOT doing is looking at the real indicator, which is unit sales- how many units moved, which has been in decline since 2001(with the exception of If I recall, 2004 was a bump up, then slide back down). With cutting costs and a few other things the numbers your showing hide the underlying problems- less units sold at a higher prce, which is eventually unsustainable. When that point is reach is a debatable point.
No, I wasn't looking at anything. I was informing people in this thread that a claim made was, in fact, completely wrong.
You are right that units sales are an important indicator. You are quite wrong in claiming unit sales are the real indicator, as both unit sales and total sales revenue are both important indicators, along with up to a hundred other possible indicators that might matter.
It's quite clear that you feel strongly about the point regarding the "claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong"; this, unfortunately, only serves to reduce the quality of your other points, as you will see. The problem lies in that this is (at least appears to be) a re-iteration of a point made in response to a statement of my own, here...
sebster wrote:Buzzsaw wrote:Again, with due respect, it's my impression from other posters on these boards that GW's sales have been in decline for the better part of a decade. At what point, exactly, does that become a "trend"?
They haven't been in decline for a decade. That's just more stuff that people on the internet are throwing about. Sales in 2001 were about £90million, and they grew every year until the high water mark in 2004. They declined for two years, stabilised at around £110 million before spiking in 2009 then dropping back in 2010. Seriously, the internet is full of lovely people but they are very imaginative, and I really wouldn't take anything they say at face value.
For those inclined to read quickly, the problem is that the statement was made " GW's sales have been in decline for the better part of a decade", to which Sebster replied that "They haven't been in decline for a decade". Sebster's statement is true, it' simply is irrelevant to the original statement, because (either through zeal or misunderstanding), Sebster has confused " for the better part of a decade" with "a decade". For those unfamiliar, the phrase "for the better part of" means the most of, the the majority of a thing. As has been pointed out, GW turnover has been in decline since 2004, nearly 7 years, certainly " the better part of" a decade. Thus the original claim, pace Sebster, is in fact, correct*.
Now, this error originally appeared in a post with little meat otherwise objectionable, so I didn't feel that it merited much discussion; however, the originally small error has been compounded upon in the post above several times, morphing into "Especially given the claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong." So enamored of this rebuke that Sebster makes it into one of the three legs of the stool on which he sits, claiming "I am completely right in three things" (bold and underlined above).
As is pointed out above, the claim that this is a refutation of an earlier statement is incorrect, leaving him standing with two legs in his stool, and his stool all in disarray. What a mess! All of this is by no means to be an exhaustive critique of the errors in the aforementioned post, but it is certainly the easiest instance of what is either a misrepresentation or misunderstanding; repeated literally again and again and again.
*While even excluding the upturn in 2009 the conditions are still met, for those looking to 2009 as a year that bucked the trend, a cautionary codicil is raised by Osbad in his post addressing the matter; "Bear in mind that 2009 and to a lessr extent 2010 included a large amount of "tunrover" that was purely due to exchange rate gains in sales demonitated in non-sterling currencies following the collapse of the £."
6084
Post by: theHandofGork
prime12357 wrote:Nagashek wrote:theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.
When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?
I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.
Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!
lol, Futurama
GW needs to change their business strategy, else they will soon "run out of ice."
Fixed
5470
Post by: sebster
Buzzsaw wrote:For those inclined to read quickly, the problem is that the statement was made " GW's sales have been in decline for the better part of a decade", to which Sebster replied that "They haven't been in decline for a decade". Sebster's statement is true, it' simply is irrelevant to the original statement, because (either through zeal or misunderstanding), Sebster has confused " for the better part of a decade" with "a decade". For those unfamiliar, the phrase "for the better part of" means the most of, the the majority of a thing. As has been pointed out, GW turnover has been in decline since 2004, nearly 7 years, certainly " the better part of" a decade. Thus the original claim, pace Sebster, is in fact, correct*.
Ah, thankyou on picking out my error, I did misread the original comment. My mistake. As is pointed out above, the claim that this is a refutation of an earlier statement is incorrect, leaving him standing with two legs in his stool, and his stool all in disarray.
That has an unfortunate other meaning... What a mess! All of this is by no means to be an exhaustive critique of the errors in the aforementioned post, but it is certainly the easiest instance of what is either a misrepresentation or misunderstanding; repeated literally again and again and again.
It was a mistake, not a misrepresentation. And 'decline' doesn't represent GW's overall sales position. It is a fair descriptor of GW's sales position in adjusted historic price, from 2004 until today, that I will agree. So we can probably agree on the statement ' GW's overall sales position, adjusted for price equivalence, have declined in five of the last six years'. We can then proceed to argue all day and night on the other issues, such as whether GW this decline is likely to be permanent, if there's likely to be a floor to the decline, and whether GW is a sustainable entity at a lower level of unit sales. To all of which I will continue to say "I don't know, and I'm pretty certain none of you lot do either"
24150
Post by: ChocolateGork
prime12357 wrote:Nagashek wrote:theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.
When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?
I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.
Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!
lol, The Simpsons
GW needs to change their business strategy, else they will soon "run out of ice."
FOR SHAME! Its from Futurama
35796
Post by: Gr3y
plastictrees wrote:Gr3y wrote:Statement: Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 382 Hobby centres which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. (emphasis mine)
This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.
It's not a barrier to entry for customers...
Blarg! Speed reading is not my forte.
But do they really think that their stores are going to slow down the competition? I don't know of any GW stores in my area (we had one years ago but I think they closed due to... something). However we have a plethora of indy stores that do swift business in all sorts of games.
27241
Post by: Lord_Of_Morthan
Jaon wrote:If prices lowered, even by $10 dollars, I would buy twice as much gak as I usually do.
Same here, tbph
35352
Post by: prime12357
ChocolateGork wrote:prime12357 wrote:Nagashek wrote:theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.
When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?
I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.
Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!
lol, The Simpsons
GW needs to change their business strategy, else they will soon "run out of ice."
FOR SHAME! Its from Futurama
Whoops......
Thus is the curse of those who watch both, and possess a very bad memory of such things.
5470
Post by: sebster
Gr3y wrote:Blarg! Speed reading is not my forte.
But do they really think that their stores are going to slow down the competition? I don't know of any GW stores in my area (we had one years ago but I think they closed due to... something). However we have a plethora of indy stores that do swift business in all sorts of games.
They do, yes. In fact, all those stores are the cornerstone of their business model. And it's a business model that makes a lot of sense, in a lot of ways. Most gaming stores are hidden away, in the dingier part of town. GW puts its stores right in mainstreet, and this means greater awareness for anyone passing by, and it means the company and hobby looks a lot more reputable (very important to the parents who will be investing in the hobby for their kids). It also means there's staff on hand to teach kids how to assemble and paint miniatures, something the competition can't guarantee. But more than anything, its a specific community and likely social group for people, all centred around GW games.
Now, the effectiveness of that model is going to vary from market to market, depending on the state of local hobby stores, and the demographic of the hobbyists in those locations (a more mature market is going to find less value in a mainstreet GW store). But given GW's success over more than two decades and their one real point of difference to the competition, those mainstreet stores, it's pretty safe to say they've been a major point of success.
There's is still plenty of scope for wondering if they will continue to be, or if they might become a huge expense hanging around GW's neck. The primary success of GW was in the UK, which is a different market to Europe and the US, where there's plenty more independant gaming stores. And more than that, the internet has expanded massively and can now freely provide much of the feeling of community the stores used to offer (the world of gaming was a pretty lonely place in the 90s, and it was great to know there were stores full of people playing the same games you were... but now with the internet that's just not the case).
1036
Post by: fullheadofhair
sebster wrote:fullheadofhair wrote:also, sebster, I am afraid you are more than likely wrong. If you go back through the results and chart sales/ revenue and then start thinking about the LOTR bubble, currency and the rapid increase in BL sales over the last 10 yrs you will soon see that the core part of the business (40k and WFB) has been in decline continually. a friend and I did just such a thing 2 yrs ago I believe - both of us are what you in the UK would describe as F. analysts.
I am completely right in three things; (i) GW have not had continually declining sales for a decade despite that claim being made in this thread, and (ii) people have been predicting GW's imminent demise for a twenty years and the exact opposite has happened, and (iii) no-one in this thread or any other I have seen have produced anything near an actual analysis of business performance that indicates GW is in long term trouble.
If you have produced the last one, then by all means I'd love to read it. And no, simply noting sales trends is not a complete analysis of the future viability of the company, and as a financial analyst that's something you should know. Because you'd know that companies can take a reduced share of market and remain profitable.
That was a couple of years ago. You are making the mistake of comparing revenue. I am not interested in revenue. In a niche market with several competitors from similar entertainment industries competing for the same customers $ revenue (whilst important) isn't the key factor. Number of units sold is a better indication of that. What we did was strip out approximate price rises, currency fluctuates, impact of the black library big increase in sales over the last five years (based on comments made by management from several sources) and strip out the potential impact of LOTR bubble (harder, but based again on comments form several sources). There were a few other things we did to ensure we were comparing like with like but memory is a little foggy and obviously it was rough and ready but from it you could see a defintely flattening and/or decline of sales. From that one could then draw the conclusion that unit sales must be flator declining all other things being equal.
As a analyst, which you say you aren't, a decline in units sold is not a trend I would like to see. Short term increases in profitability from declining sales is a glaring warning sign if you are looking for a growth stock or simply a safe place to put your money.
fullheadofhair wrote: have never believed GW was in trouble until now - this set of results, if not arrested during the rest of the year, has all the hallmarks of the beginning of what is in slang terms a death spiral which takes years to actually happen. the trouble is, as with anything in life, no one extreme works. A focus on the costs with out a focus on revenue retention (and hopefully growth!!) has to go hand in hand. Often, a focus on only cost can lead to a drop in revenue that outstrips cost savings. The one man store is a perfect example - less cost but less revenue and less growth equals few new customers and as current customers drop off who is going to replace them - hence the need to focus on growth at same time to avoid the death spiral.
sebster wrote:I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative. Surely it would start with a consideration of the impact of recent market entrants and the growing second hand market?
Again you are, as you say, not an analyst and that is why you don't understand and said what you said. Cost saving programs can affect revenue in multiple ways - it is analysis 101. The traditional example often used is switching to a cheaper material that reduces costs but then over the longer term then reduces revenue as people don't like the reduction in quality and switch to a competitor.
For GW, by focusing on one man stores that are only open in cheap not so visible places, open very limted hours for 5 days a week with only one person in the store is a big cost saving. To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong. IOften a lost sale doesn't come back. Having to shut a store because a staff member is ill is dumb. Shutting down the stores for a conference in LV is also dumb. Lost sales ....
There is also a possibility of not attracting more new customers thant those who leave the GW Hobby because it takes time and effort to attract and persuade new hobbyists - one man stores open 37.5 hrs a week cannot do it as affectively. The old saying is it costs more to get a new customer than retain the ones you have. Hence my comments about how you cannot focus purely on the cost side - you have to focus on both. There is a simple saying "no one extreme works". Life and business isn't about extremes - it is about balance.
You say you aren't an analyst. If you are going to argue at least look at what an analyst does first. With out that it would be like me arguing with the lawyers on this forum about IP without researching what IP laws actually are. I wrote about cost saving iniative because it is a fun little nugget that amuses me.I have analysed and produced reams of reports on potential costs savings from putting in $10 million high speed manufacturing lines - I do have just a tad bit of experience behind me. As I am not being paid for this and writing for fun on a silly little forum I started where I felt I wanted to start - you want to pay me $90 per hour and pay for 10-15 hrs I will give you and 8-10 page analysis of that report with research taken from other sources accompanied 8-10 years worth of trend analysis and then you can tell me where you would like me to start.
6872
Post by: sourclams
@Fullheadofhair
I'm a commodity analyst, specifically ag commodities, so retail-based equities may as well be the moon as far as my experience base is relevant.
If I'm reading you correctly, the cost savings initiative is actually a revenue bubble? There's short term benefit as overhead on stores drops and customer base remains relatively unchanged but over time customer recruitment declines to a point that cost cutting cannot compensate for?
Seems that at best GW is a 'hold', and the speculator would be looking to sell.
1036
Post by: fullheadofhair
sourclams wrote:@Fullheadofhair
I'm a commodity analyst, specifically ag commodities, so retail-based equities may as well be the moon as far as my experience base is relevant.
If I'm reading you correctly, the cost savings initiative is actually a revenue bubble? There's short term benefit as overhead on stores drops and customer base remains relatively unchanged but over time customer recruitment declines to a point that cost cutting cannot compensate for?
Seems that at best GW is a 'hold', and the speculator would be looking to sell.
Basically yes. But more of a Gross Profit/ Margin bubble. If recruitment declines and fails to keep up with those leaving the GW Hobby it will start to put pressure on the margin as revenue drops but fixed costs remain fairly stable. Personally, I don't get GW's approach - it isn't how you usually run retail and as a I said earlier (as have others I am sure) a pure cost focus never works.
What I don't get is GW's revenue increasing strategy seems to be just to produce great looking models. As I am sure you know, a revenue strategy is comprised mainly of having the right product, at the right time, in the right market/ segment and for the right price point. I think the "wave strategy" is not working (right time). We can debate pricing until cows come home but a decline in revenue with a major release of of WFB that should feed into these figures means one of two things:
1) Despite what GW says their product is showing elasticity and that is being exacerbated by the economy
2) Pricing strategy is wrong.
Both points should be worrying for an investor because either point means management don't understand a) their product b) the customer and c) the market in which they operate.
So if I was advising anyone, I would say hold until you see their plan to maintain and then grow revenue at the product/ store level. Sell if you don't have the nerve. Definitely don't buy. The next 2 years are going to interesting as we see the full impact of the one person store strategy grow.
ps, ag commodities. Sounds fun, especially with the recent up swing in world wide food prices.
21678
Post by: Karon
Superscope wrote:There is also a point of incoming video games based on their IP.
Both Space Marine and DoW: Retribution are shaping up rather nicely.
Those two games should generate a healthy amount of royalties.. Which hopefuly funds the next generation of GW products and their quality.
And, more far off, we have a massive money generator: Dark Millenium Online.
6872
Post by: sourclams
fullheadofhair wrote:What I don't get is GW's revenue increasing strategy seems to be just to produce great looking models. As I am sure you know, a revenue strategy is comprised mainly of having the right product, at the right time, in the right market/ segment and for the right price point. I think the "wave strategy" is not working (right time).
Again, I deal in fungible goods so any marketing plan reliant upon premiums paid for significant differentiation is somewhere over on the moon relative to my expertise, but the "wave" strategy makes no sense to me, either, and seems completely counterintuitive.
Monolithic releases seem to cause demand rationing; consumers arguably want to buy everything released but at high price points must cherrypick among the options available. That sort of internal competition results in fewer total sales before the initial hype period wears off, which wouldn't occur to the same extent if GW released fewer kits but more consistently. Maybe I'm way off base here, but it seems GW invites volatility with its marketing schedule.
ps, ag commodities. Sounds fun, especially with the recent up swing in world wide food prices.
It's been a good year.
5470
Post by: sebster
fullheadofhair wrote:That was a couple of years ago. You are making the mistake of comparing revenue. I am not interested in revenue. In a niche market with several competitors from similar entertainment industries competing for the same customers $ revenue (whilst important) isn't the key factor. Number of units sold is a better indication of that.
As I've explained several times in this thread, number of units sold is an indicator of future financial activity, one of many dozens of indicators that needs to be established.
No-one has attempted to gauge any of those other indicators, or even flesh out the range that would be appropriate to assessing GW's health. In short, as I've said repeatedly, no-one has attempted the grunt work needed to begin to build an informed opinion of GW's future sustainability. I really don't know how much more clearly I can say this.
As a analyst, which you say you aren't, a decline in units sold is not a trend I would like to see. Short term increases in profitability from declining sales is a glaring warning sign if you are looking for a growth stock or simply a safe place to put your money.
It's not a good sign for GW, but it is far from the only possible indicator. Companies can maintain profitability with lower sales levels, this is standard in any mature industry facing new market entrants (so the business strategy shifts from expansion to market retention and cost control). Building a full and complete range of indicators will tell you how likely GW is to survive and produce profits into the future, whereas simply staring at unit sales trends will not.
Which is a thing I've now explained many, many times. It is a thing, that if you had any practical experience in analysis you would know.
Again you are, as you say, not an analyst and that is why you don't understand and said what you said. Cost saving programs can affect revenue in multiple ways - it is analysis 101. The traditional example often used is switching to a cheaper material that reduces costs but then over the longer term then reduces revenue as people don't like the reduction in quality and switch to a competitor.
Obviously cost savings can impact sales. The problem here is not my level of financial understanding (I have an extensive financial background, I just don't have direct practical experience in analysis) so don't spend any time explaining stuff from first year business school. Instead, spend time reading the thread. Specifically, read the part where I stated "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"... note that I specified GW's cost savings initiative?
That's because we're not talking about the theory of cost savings iniatives, which might impact sales... we're talking about GW's cost savings initiative. It's an initiative which began after the downward trend in sales. It's an initiative primarily focussed on warehousing and distribution savings, which do not impact sales. In short, "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"
For GW, by focusing on one man stores that are only open in cheap not so visible places, open very limted hours for 5 days a week with only one person in the store is a big cost saving. To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong. IOften a lost sale doesn't come back. Having to shut a store because a staff member is ill is dumb. Shutting down the stores for a conference in LV is also dumb. Lost sales ....
This is incredibly speculative, and as I said before not a sensible starting point to explain GW's decling in unit sales (especially when everyone acknowledges the cost savings measures began after the decline in sales).
Hence my comments about how you cannot focus purely on the cost side - you have to focus on both. There is a simple saying "no one extreme works". Life and business isn't about extremes - it is about balance.
Why are you quoting business cliches at me? I've been arguing this whole thread that a proper review of GW would require an analysis of dozens of differenet points of performance, that merely looking at sales was a terriblely simplistic approach.
And now you're coming back and trying to tell me you need to look at more than one thing, that you actually need to look at two things? No. It's still dozens of things that need to be studied.
You say you aren't an analyst. If you are going to argue at least look at what an analyst does first. With out that it would be like me arguing with the lawyers on this forum about IP without researching what IP laws actually are. I wrote about cost saving iniative because it is a fun little nugget that amuses me.
I know what an analyst does, and I respect the profession enough to point out that what is being done in this thread falls miles short of anything close to proper analysis.
This thread is the equivalent of people arguing over the very basics of IP law, and you, me or anyone else coming in to say I'm not an IP lawyer but I'm pretty certain none of you are either, and I know IP law is a lot more complicated than what's going on in this thread.
I have analysed and produced reams of reports on potential costs savings from putting in $10 million high speed manufacturing lines - I do have just a tad bit of experience behind me. As I am not being paid for this and writing for fun on a silly little forum I started where I felt I wanted to start - you want to pay me $90 per hour and pay for 10-15 hrs I will give you and 8-10 page analysis of that report with research taken from other sources accompanied 8-10 years worth of trend analysis and then you can tell me where you would like me to start.
I have ten years experience as a management accountant, in a variety of companies. I've produced countless reports on the operating efficiencies of minute and company wide processes. I know the depth of knowledge required to gain a decent understanding of a company's core strengths and weaknesses.
All that experience has taught me, as expertise in any field will, how many areas of finance I do not know, and couldn't know without first hand practical experience. It's taught me to appreciate the scope of things I don't know, and couldn't every understand until I've done them myself
And $90 per hour is a bargain. If that's the price you're honestly asking, I can get you a whole load of work.
1036
Post by: fullheadofhair
sebster wrote:No-one has attempted to gauge any of those other indicators, or even flesh out the range that would be appropriate to assessing GW's health. In short, as I've said repeatedly, no-one has attempted the grunt work needed to begin to build an informed opinion of GW's future sustainability. I really don't know how much more clearly I can say this.
ummm ... why would they. This is a gaming site not a financial site. Hence why people are picking on elements of the report and not doing a full size analysis. I did it a couple of years ago when bored contracting at Microsoft and I am not going to do it again.
sebster wrote:It's not a good sign for GW, but it is far from the only possible indicator. Companies can maintain profitability with lower sales levels, this is standard in any mature industry facing new market entrants (so the business strategy shifts from expansion to market retention and cost control). Building a full and complete range of indicators will tell you how likely GW is to survive and produce profits into the future, whereas simply staring at unit sales trends will not.
duh.
sebster wrote:Obviously cost savings can impact sales. The problem here is not my level of financial understanding (I have an extensive financial background, I just don't have direct practical experience in analysis) so don't spend any time explaining stuff from first year business school. Instead, spend time reading the thread. Specifically, read the part where I stated "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"... note that I specified GW's cost savings initiative?
That's because we're not talking about the theory of cost savings iniatives, which might impact sales... we're talking about GW's cost savings initiative. It's an initiative which began after the downward trend in sales. It's an initiative primarily focussed on warehousing and distribution savings, which do not impact sales. In short, "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"
and moving to a one man store strategy away from the metro strategy isn't a cost saving initiative?
sebster wrote:
fullheadofhair wrote:For GW, by focusing on one man stores that are only open in cheap not so visible places, open very limted hours for 5 days a week with only one person in the store is a big cost saving. To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong. IOften a lost sale doesn't come back. Having to shut a store because a staff member is ill is dumb. Shutting down the stores for a conference in LV is also dumb. Lost sales ....
This is incredibly speculative, and as I said before not a sensible starting point to explain GW's decling in unit sales (especially when everyone acknowledges the cost savings measures began after the decline in sales).
The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.
I deleted the rest of you post instead of replying to it because I got bored. There is a big difference between throwing out a few thoughts for a friendly discussion and indepth analysis - there is nothing wrong with focusing on a few cost/ revenue drivers for fun discussion on business strategies so don't go sucking the fun out of it.
Perspective of fun is what you are missing. I bet a casual chat gun control in a bar is not your forte in life.
2764
Post by: AgeOfEgos
For the record, I've found this thread vastly more informative than I had initially thought it would be.
I'll also state, at risk of being told I'm not keen on marketing affairs, I feel the wave strategy to be a failure. I'll even add to that by stating that GW's marketing/model strategy is not a strategy at all, else they would at least produce first wave models that will be in demand....so either their creative studio is out of touch or they have little say in model production.
Take the Nid dex for example. Venomthrope was quickly released....yet here Nid players sit months later with no Tervigon kit. I know upon first reading of the codex, I was 'amped' that they had that Venomthrope model available over the more lackluster Tervigon.
8248
Post by: imweasel
AgeOfEgos wrote:For the record, I've found this thread vastly more informative than I had initially thought it would be.
I'll also state, at risk of being told I'm not keen on marketing affairs, I feel the wave strategy to be a failure. I'll even add to that by stating that GW's marketing/model strategy is not a strategy at all, else they would at least produce first wave models that will be in demand....so either their creative studio is out of touch or they have little say in model production.
Take the Nid dex for example. Venomthrope was quickly released....yet here Nid players sit months later with no Tervigon kit. I know upon first reading of the codex, I was 'amped' that they had that Venomthrope model available over the more lackluster Tervigon.
Tervigons? I'm still waiting for space wolf tcav...
5470
Post by: sebster
fullheadofhair wrote:ummm ... why would they. This is a gaming site not a financial site. Hence why people are picking on elements of the report and not doing a full size analysis. I did it a couple of years ago when bored contracting at Microsoft and I am not going to do it again.
They don't have to, obviously. No-one here is under any obligation to put any work into studying GW's financials, which is why no-one has done it (even if they wanted to, they'd lack expertise and access to information). It's what is needed, though, if anyone is going to do anything more than speculate wildly. And given that all I've done is point out that people are speculating wildly, it's good to see you agree with me.
And no, you didn't do a full analysis. By your own statements you broke down the unit sales of GW products, which is a very small part of the overall picture of GW's financials.
duh.
So you think my point that you need a wide range of indicators is very obvious... yet I've had to explain it to you several times before you finally stopped thinking unit sales analysis was sufficient. Well, you got there in the end, at least.
and moving to a one man store strategy away from the metro strategy isn't a cost saving initiative?
Hence my use of the word 'primary', which would indicate their might be other, secondary elements... Read.
The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.
The cost savings measures started two years ago. The decline in unit sales began several years before that.
At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.
It's clear that you really, really don't like the idea that your suggestion could have been very obviously wrong. But it happens. You put out ideas, they get shot down. You must have learned by now that you've just got to let the ego go, be man and admit you were wrong. It's okay, no-one cares that you suggested something that wasn't possible. But carrying on defending a wrong idea makes you look silly, and it makes talking to you tiresome.
I deleted the rest of you post instead of replying to it because I got bored. There is a big difference between throwing out a few thoughts for a friendly discussion and indepth analysis - there is nothing wrong with focusing on a few cost/ revenue drivers for fun discussion on business strategies so don't go sucking the fun out of it.
And while doing so it is only sensible to recognise that it's very superficial analysis that won't assess the company in any meaningful way.
Perspective of fun is what you are missing. I bet a casual chat gun control in a bar is not your forte in life.
I've learned a few things in my time. I've learned in real life that when someone starts protecting an obviously wrong idea like it's his first born child, that it's best to let it go.
1036
Post by: fullheadofhair
oh my dear god, you are now becoming almost amusing....
sebster wrote:
And no, you didn't do a full analysis. By your own statements you broke down the unit sales of GW products, which is a very small part of the overall picture of GW's financials.
Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me.
I have read the financials and have done over the last 8-10 years. Just because I don't quote everything in my post doesn't mean I haven't read it, digested it, ruminated and cogitated on it. After 20 years I can read a set of financials to get the gist of what is going on with out formal analysis and just a scrap bit of paper. I think a gist is good enough for a fun discussion despite you attempts to suck the fun out of this thread.
Based on that reading I tried to speculate reasons/ drivers behind what may be going on. That is what all analysts do because HELLO {raps knuckles on forehead} no-one has the inside info. Everything you read in the newspapers is speculation - unless you have taken the CFO out and gotten him drunk to get the inside scoop.
sebster wrote:
So you think my point that you need a wide range of indicators is very obvious... yet I've had to explain it to you several times before you finally stopped thinking unit sales analysis was sufficient. Well, you got there in the end, at least.
No, "duh" because it is obvious and this place isn't appropriate to have a full depth discussion about the weaknesses in the balance sheet & multiple business indicators that have come and gone over the years. "duh" because you don't seem to get appropriateness and that not everyone is an analyst and wants to wade through pages of justifications and are therefore happy with some simple speculation for fun and that might just be all that is needed. If we were having this discussion in a financial forum that would be different.
sebster wrote:
fullheadofhair wrote:and moving to a one man store strategy away from the metro strategy isn't a cost saving initiative?
Hence my use of the word 'primary', which would indicate their might be other, secondary elements... Read.
No you are reaching to protect your position. Changing their entire retail structure and strategy from a metro to single person store and ripping out a layer of retail management (area managers) is this years PRIMARY element. You simply don't get more primary than that. The warehouse and distribution was last years I believe.
sebster wrote:
The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.
The cost savings measures started two years ago. The decline in unit sales began several years before that.
Now you are being dense. There has been a 4% drop in revenue this year v last (from memory). Last year they had a metro strategy of mall stores feeding smaller stores with multiple stores open 80-100 hrs a week with multiple staff members. Now they have small one person stores in cheaper locations. Decrease in revenue, decrease in cost this year v's last and obviously gives a margin increase - the question is whether or not it is a healthy increase in margin and is the increase sustainable is what I am thinking to myself and have vocalized.
sebster wrote:
At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.
sill boy, not what I said at all. The decline in sales over the last decade (which took fancy foot work for you to even admit that Mr Literal) isn't what I am putting down to a one man strategy that started 6months or so ago. For you to think that is just plain weird. It is possible to have two thoughts in a post. Sourclams read the same thing and he got the point - but then he is an analyst not just a management accountant with a finance background.
sebster wrote:
It's clear that you really, really don't like the idea that your suggestion could have been very obviously wrong. But it happens. You put out ideas, they get shot down. You must have learned by now that you've just got to let the ego go, be man and admit you were wrong. It's okay, no-one cares that you suggested something that wasn't possible. But carrying on defending a wrong idea makes you look silly, and it makes talking to you tiresome.
This almost amused me. Other than you, haven't really had anyone disagree to much with my thoughts. Of-course my suggestions could be wrong because they are obviously speculation - but based on what I know until someone can present a better argument or a set of logical alternatives and reasons that fit in with my knowledge of what is going one why would I change my position.
The only real posts against what I have said is your frankly pitiful posts that are devoid of reasons and logic or fail to offer a substantitve alternative explanation with supporting reasoning and explanation of the drivers of the business. Why would I even consider your point of view as valid?
As for sticking to ridiculous positions dare I mention the words "decline over a decade". Management accountant with finance background indeed.
sebster wrote:
I've learned a few things in my time. I've learned in real life that when someone starts protecting an obviously wrong idea like it's his first born child, that it's best to let it go.
yawn.
5245
Post by: Buzzsaw
Dear Sebster; while I can appreciate the passions this discussion appears to have aroused, I think it may behoove you to take a moment, perhaps then to look at things with fresh eyes? Because, in all frankness, these last several posts seem to have less the look of reason and more the odor of your stool about them. In the interest of harmony, I'll attempt to isolate what these issues (I apologize in advance for referring to participants by full name, it is not my intent to be standoffish, but it seems the only efficient way);
sebster wrote:fullheadofhair wrote:The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.
The cost savings measures started two years ago. The decline in unit sales began several years before that.
At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.
It's clear that you really, really don't like the idea that your suggestion could have been very obviously wrong. But it happens. You put out ideas, they get shot down. You must have learned by now that you've just got to let the ego go, be man and admit you were wrong. It's okay, no-one cares that you suggested something that wasn't possible. But carrying on defending a wrong idea makes you look silly, and it makes talking to you tiresome.
Here, I fear, you're definitely making a mess of your stool again. What's so distressing is that, again, is that a statement that is either misunderstood or misrepresented is becoming the linchpin of a very direct attack, wholly unrelated in intensity to the original statement.
Fullheadofhair said: "If you truely(sic) believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended." Now, if I were to phrase that same statement I would put it more as: 'It is not wild speculation to posit that a store going from 80 hours a week to 35 hours a week, concomitant with a reduction from several to a single member of staff, will impact sales; to suppose that it will not impact sales is unreasonable.' Indeed, that would appear to be an entirely unremarkable statement.
And yet, when we look at the reply, "At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level." This reply is astonishing, as it seems to have almost nothing to do with Full's statement. Yes, the statement that cause can follow effect would be mad, and indeed I do not suppose that Fullheadofhair believes that; but I see little to no support for the interpretation that that is what Fullheadofhair is saying. On the contrary, his statement seems essentially pedestrian, yet the reply would seem to find quarrel with a straw.
I would refer to fullheadofhair's earlier post to further refine this point: "The one man store is a perfect example" and"To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong."
It would seem to me that the store austerity measures are but one straw in the broom fullheadofhair is using to brush off GW; yet it is treated as the alpha and omega of his analysis. Moreover, as before, an edifice is built upon this misunderstanding or misrepresentation that seems disproportionate and, even more unfortunately, distressingly offensive.
sebster wrote:fullheadofhair wrote:I deleted the rest of you post instead of replying to it because I got bored. There is a big difference between throwing out a few thoughts for a friendly discussion and indepth analysis - there is nothing wrong with focusing on a few cost/ revenue drivers for fun discussion on business strategies so don't go sucking the fun out of it.
And while doing so it is only sensible to recognise that it's very superficial analysis that won't assess the company in any meaningful way.
I've learned a few things in my time. I've learned in real life that when someone starts protecting an obviously wrong idea like it's his first born child, that it's best to let it go.
I think the problem that is arising here is, at least the appearance of, a double standard on your part sebster: I will explain and illustrate by reference to an earlier post;
sebster wrote:Buzzsaw wrote:Not to be confrontational, but it would seem rather... romantic, to describe consistently negative sales figures as "Sales growth isn't great". It seems generally agreed that the number of retail units being moved are consistently shrinking, while at the same time, aggressive price increases have only managed to keep the amount of revenue declining slightly.
No, 'isn't great' is about right. The sales position indicates to investors that GW is not going to be a growth stock, but it doesn't signal imminent demise. To make any better assessment we'd have to get a decent idea of what is really driving the sales decline, and where (if) the sales decline will stop. From there we'd need to establish if GW can be profitable at that
Without that information, all we've got is a company dropping sales growth in the midst of an economic downturn, and that's not really indicative of anything at all.
And for the record, back when GW actually recorded a loss and people were really declaring their imminent demise, I posted that a one-off loss is not really a big deal, they really ought to be more worried about declining sales growth.
Now, the phrase "it isn't great" is one where meaning is almost entirely dependent on inflection: this being type, we must go to context, and that context would appear to be that this is meant more as "it's good, not great", more then "it's not great, it's barely adequate". Which is to say, that this is a positive evaluation of GW, and I base that on what I think I can equanimously characterize as a fairly strident defense of GW's prospects.
Now, why does that occasion me to say there is the appearance of a double standard? The common theme found in all of Sebster's posts is an almost scientific instance that without proper data, we cannot draw conclusions, and also that we do not have adequate information; thus, no conclusions can be drawn. This idea has been applied consistently to those advancing the position that GW's current scheme may be to GW's corporate detriment. The double standard, however, becomes quite obvious on reflection: if we can draw no conclusions, why is the positive evaluate of GW that at least appears to be present in sebster's posts appropriate? If no conclusions at all can be drawn, then to remark that GW's sales position "isn't great" is, as I remarked it seems so long ago, "rather... romantic".
This is especially pronounced given the extremely binary constraints seemingly being imposed on evaluations by sebster: to wit;
A) there is sufficient information for a full and complete analysis and so conclusions may be drawn, or,
B) there is insufficient information for a full and complete analysis, so no conclusions may be drawn.
The problem with that is that, while it may be an appropriate standard for formal analysis in the lab when it comes to publication time, it ignores the reality that there are middle grounds, levels of information insufficient for formal analysis, yet enough to impute some useful analysis.
Here, for example, we do not have No information; we have several years of data gleaned from periodic annual reports. Now,what data we have would seem to support the generally pessimistic view of events. On this point, of course, there can be argument: the problem, as I've noted above, is that the impression being conveyed by sebster's posts is that he has a positive impression of events, but any positions contrary to that will be dismissed for lack of sufficient information for a formal analysis.
One of the foremost reasons I have remained unconvinced by sebster's points is that to say that we lack information for a formal diagnosis is no dispute of a tentative diagnosis. What we need to do is focus on facts that we have, rather then obsess over the inadequacy of the available data. That said, I do hope that I have avoided offense, and it's my intention not to belabor this point any longer. I have other things to say about points brought up, but the hour has grown far too late for such matters.
So, for the moment, ciao!
18410
Post by: filbert
I think this thread demonstrates the old adage; that a little knowledge really is a dangerous thing...
37976
Post by: arkapello
filbert wrote:I think this thread demonstrates the old adage; that a little knowledge really is a dangerous thing...
yes. This debate seems to largely be one of nuance anyway...
27872
Post by: Samus_aran115
I think they do quite well for such a selective Niche of a business. Just lower the price of Codexii, and I'll be happier. 30 dollars for 100 page book? I mean, yeah, it has nice pictures, but twenty seems a bit more reasonable.
171
Post by: Lorek
Quit the antagonism and snide remarks, people. You all know better. (Not all posters in the thread are doing this, but those of you who are: stop it.)
5470
Post by: sebster
fullheadofhair wrote:Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me.
What? Seriously, what? You're claiming no-one has claimed serious analysis? One post ago, you claimed exactly that, I responded to it, and in your response to that you're now denying you or anyone else has ever claimed You claimed that you'd done that very thing.
I said, "In short, as I've said repeatedly, no-one has attempted the grunt work needed to begin to build an informed opinion of GW's future sustainability."
You responded with, "ummm ... why would they. This is a gaming site not a financial site. Hence why people are picking on elements of the report and not doing a full size analysis. I did it a couple of years ago when bored contracting at Microsoft and I am not going to do it again."
To which I responded with, "Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me."
You're being ridiculous, and you're making yourself look extremely silly. Step back, think long and hard about what argument you're actually trying to make in this thread, and set about trying to make it. Because this thing where you're just saying 'nuh uh' to each point I make is causing you to claim some very silly things, and it's wasting my time and yours. You may well have an interesting argument in you, but the way you've approached this thread has resulted in basically gibberish.
I have read the financials and have done over the last 8-10 years. Just because I don't quote everything in my post doesn't mean I haven't read it, digested it, ruminated and cogitated on it. After 20 years I can read a set of financials to get the gist of what is going on with out formal analysis and just a scrap bit of paper. I think a gist is good enough for a fun discussion despite you attempts to suck the fun out of this thread.
You can ruminate and cogitate for hundred years for all it matters, if you think that you can gain anything other than a vague impression from the Annual Report then you're being ridiculous. It serves as a very broad overview, and as a first reality check on management's claims. Anything else and you really, really need greater depth than what's in the Annual Report.
Based on that reading I tried to speculate reasons/ drivers behind what may be going on. That is what all analysts do because HELLO {raps knuckles on forehead} no-one has the inside info. Everything you read in the newspapers is speculation - unless you have taken the CFO out and gotten him drunk to get the inside scoop.
You... think there's the annual report and everything else is inside information? And you have twenty years experience. Wow.
No, "duh" because it is obvious and this place isn't appropriate to have a full depth discussion about the weaknesses in the balance sheet & multiple business indicators that have come and gone over the years.
Yeah, so when I pointed out that no-one here really has that much of an understanding and that what we're seeing instead is wild speculation... you'd agree. Because that's all I've been trying to say. Somewhere in there this has become such a great affront to your person that you've tried to invent my argument as all kinds of things you can actually against... but the plan fact is that I've not said anything other than that without greater study, this is wild speculation.
No you are reaching to protect your position. Changing their entire retail structure and strategy from a metro to single person store and ripping out a layer of retail management (area managers) is this years PRIMARY element. You simply don't get more primary than that. The warehouse and distribution was last years I believe.
Hang on, so because they're in different financial years they are seperate programs? That's not how business initiatives work. Probably something you'll learn in your 21st year in the industry.
Now you are being dense. There has been a 4% drop in revenue this year v last (from memory).
No, I'm not. It's just a case of you, once again, reinventing your position to say 'nuh uh' to whatever my last sentence was.
We're talking about the long term downward trend in unit sales decline. You stated that you believed GW's cost reduction scheme was responsible. I pointed out this was very unlikely and it would be more practical to look at the growth in second hand sales and the like, you quoted the textbook bizarrely assuming that my issue was with the underlying theory of cost reduction impacting quality or marketing, and I explained that it was because the underlying decline in unit sales began a long time before the cost reduction strategy.
sebster wrote:
At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.
The decline in sales over the last decade (which took fancy foot work for you to even admit that Mr Literal)
No, that's just plain wrong. I said from the start that it is only one measure, and nowhere near as complete a measure as you were claiming. I explained this to you many times, before the lightbulb finally pinged and you in all your humility agreed by posting 'duh'.
isn't what I am putting down to a one man strategy that started 6months or so ago. For you to think that is just plain weird. It is possible to have two thoughts in a post. Sourclams read the same thing and he got the point - but then he is an analyst not just a management accountant with a finance background.
If you want to claim that the decline in unit sales for this year is due to such, then you'd need to explain why all the other factors that were driving down unit sales in previous years suddenly disappeared, to be replaced by this one factor in this year. Or you'd need to quantify what portion of this year's decline was due to the old factors, and what portion is due to this new factor.
Otherwise you've got incoherent gibberish.
This almost amused me.
Best of luck to you. I can assure you nothing you've posted has come close to even slightly amusing to me. In fact, the whole thing is reminiscent of my undergraduate days, where these clowns would read some article, or skim an annual report, and try to base our entire investment around them. And you'd say, I think we need more information, and then they'd start getting snippy, and you'd keep trying to explain how they need more information...
Remember those days? I mean, they would have been a whole 20 years ago for you, so maybe you don't. But trust me, they were exactly as fun as this thread has been for me.
Other than you, haven't really had anyone disagree to much with my thoughts. Of-course my suggestions could be wrong because they are obviously speculation - but based on what I know until someone can present a better argument or a set of logical alternatives and reasons that fit in with my knowledge of what is going one why would I change my position.
As long as you recognise that they are merely speculation, then you can back to my first post, agree with it and we can forget thisstupid little thing ever happened.
And I would argue that GW is in a death spiral, cutting costs to retain profits against revenue that's dropping ever faster. But I would recognise that your position is a reasonable speculation, and point out that I certainly do not believe GW's position is healthy, and certainly not desirous.
As for sticking to ridiculous positions dare I mention the words "decline over a decade". Management accountant with finance background indeed.
Yeah, I misread 'better part of a decade' as 'decade'. Better go hand in my IMA membership...
You'll note though, that I was man enough to see my error, own up and move on. If you could only do the same then this ridiculous exercise could end.
5470
Post by: sebster
Buzzsaw wrote:Dear Sebster; while I can appreciate the passions this discussion appears to have aroused,
I don't think you get how I work. I've never really been interested in the argument, I figure a more or less reasonable conclusion will be reached as long as everyone involved tries to be as honest and rational as possible.
To the extent that fullheadofhair is failing to do this, and is ending up with some very silly claims as a result, is the extent to which this farce is continuing.
I would put it more as: 'It is not wild speculation to posit that a store going from 80 hours a week to 35 hours a week, concomitant with a reduction from several to a single member of staff, will impact sales; to suppose that it will not impact sales is unreasonable.' Indeed, that would appear to be an entirely unremarkable statement.
No, the issue is that he's claimed the policy as a major cause of the long term decline in unit sales he himself was championing. Which didn't make any sense.
And yet, when we look at the reply, "At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level." This reply is astonishing, as it seems to have almost nothing to do with Full's statement. Yes, the statement that cause can follow effect would be mad, and indeed I do not suppose that Fullheadofhair believes that; but I see little to no support for the interpretation that that is what Fullheadofhair is saying. On the contrary, his statement seems essentially pedestrian, yet the reply would seem to find quarrel with a straw.
You're missing the context in which his claim developed.
I was quoted by sourclams, where I was talking about GW not having a decade long decline in sales (which you later pointed out was not the issue, and I happily retracted). Sourclams responded with a reference to tracking the share price, and fullheadofhair quoted this, to explain that I was wrong and he'd tracked GW's core business and it had been in decline for a decade. He then went on to explain that GW shouldn't just be focussing on cost reduction.
I replied, telling him that no sensible review of the sales decline would start with the cost savings initiative. Now, at this point he could have explained he was only referring to this year's decline in sales, and provided some explanation for why he had previously lurched from a point about a long term decline in unit sales to suddenly talking about the reason behind this year's decline in sales. Instead he made some bizarre assumption that I lacked an undergraduate's knowledge and attempted to enlighten me. I explained the issue was that the initiative began after the downward trend in sales.
At this point fullheadofhair could again have explained he was only attempting to explain this year's decline in sales. Indeed, it would have been on the forefront of his mind if that had ever been his intention. But he didn't. Instead, he dishonestly summarised the argument by pretending the issue was that I thought reducing store hours couldn't impact sales, then said he wasn't responding to the rest of my post because he got bored.
I, once again, explained to fullheadofhair that the problem comes from him attempting to explain the long term trend with a new development. So he called me dense, and then suddenly and for the first time, declared that he was only ever talking about this year's decline. Which makes no sense in the context of it's original thread, and even less sense given his unwillingness to provide that explanation in all his posts after that. It is, basically, a very obvious retcon.
Now, remember at the same time fullheadofhair was continuing to defend unit sales as a single and complete indicator of a company's (until he finally conceded that point by pretending he was never claiming otherwise). And then compare it to how we've talked in this thread, points have been made and good and bad ones acknowledged.
The issue here really is that fullheadofhair hasn't been capable of admitting when he's been wrong. Instead he's reacted to me pointing out his mistakes with abuse and general pettiness. It hasn't helped that his efforts at analysis have been terrible and full of holes, perhaps if he'd only made the one mistake he might have reacted better when I pointed it out?
It would seem to me that the store austerity measures are but one straw in the broom fullheadofhair is using to brush off GW; yet it is treated as the alpha and omega of his analysis. Moreover, as before, an edifice is built upon this misunderstanding or misrepresentation that seems disproportionate and, even more unfortunately, distressingly offensive.
No, it isn't a big deal. He made a false claim, I pointed it out. He's gotten all offended over the idea that he suggested something silly, and so we're bickering.
Now, the phrase "it isn't great" is one where meaning is almost entirely dependent on inflection: this being type, we must go to context, and that context would appear to be that this is meant more as "it's good, not great", more then "it's not great, it's barely adequate". Which is to say, that this is a positive evaluation of GW, and I base that on what I think I can equanimously characterize as a fairly strident defense of GW's prospects.
There is a common use for 'isn't great' in coloquial speach. "How did your kid go in his game on the weekend", "He wasn't great" doesn't mean he could have had any possible type of game other than great. It means 'it wasn't a good thing, but we're not going to use words like 'mediocre' or 'terrible' because we're trying to keep it in perspective, and not make too big a deal of it.
The common theme found in all of Sebster's posts is an almost scientific instance that without proper data, we cannot draw conclusions, and also that we do not have adequate information; thus, no conclusions can be drawn.
That is the entirety of my position.
This idea has been applied consistently to those advancing the position that GW's current scheme may be to GW's corporate detriment. The double standard, however, becomes quite obvious on reflection: if we can draw no conclusions, why is the positive evaluate of GW that at least appears to be present in sebster's posts appropriate? If no conclusions at all can be drawn, then to remark that GW's sales position "isn't great" is, as I remarked it seems so long ago, "rather... romantic".
You will note that I have said that I would not recommend GW to anyone, even as a safety stock. Your reading in my post that I have an optimistic position on GW is entirely your own creation.
I certainly have a fairly cynical view towards anyone claiming this is the end of GW without any meaningful evidence, because I have been seeing those claims for twenty years. Perhaps you're reading my cynicism towards the chicken little crowd as being in support of GW. Trust me, if someone came on the board and declared that the latest report showed GW had turned a corner and only had growth and happiness ahead, I'd tell them they were being entirely speculative (and that it'd be fairly irrational speculation to boot).
This is especially pronounced given the extremely binary constraints seemingly being imposed on evaluations by sebster: to wit;
A) there is sufficient information for a full and complete analysis and so conclusions may be drawn, or,
B) there is insufficient information for a full and complete analysis, so no conclusions may be drawn.
No. My position is that everyone should realise that any conclusions drawn are very speculative.
The problem with that is that, while it may be an appropriate standard for formal analysis in the lab when it comes to publication time, it ignores the reality that there are middle grounds, levels of information insufficient for formal analysis, yet enough to impute some useful analysis.
Yes, and people should recognise that they're in those middle grounds (or in this case quite close to the edge of the 'almost no information whatsoever' end of the spectrum).
Here, for example, we do not have No information; we have several years of data gleaned from periodic annual reports. Now,what data we have would seem to support the generally pessimistic view of events. On this point, of course, there can be argument: the problem, as I've noted above, is that the impression being conveyed by sebster's posts is that he has a positive impression of events, but any positions contrary to that will be dismissed for lack of sufficient information for a formal analysis.
Except I don't have an optimistic view, and a close reading reading of my posts would have established that. My instinctive position is to see GW as a long term underperformer, given it's position in a market that's developing away from GW's primary business model of seeling product through GW owned stores in mainstreet locations. To develop this further I'd need to have a very deep look into how those sales perform in locations with and without stores, and see if GW had done any studies into changing or adapting their business model to meet the new market conditions.
But I would emphasise that GW's financial stability is strong, and at the end of the day they've got people buying boxes of plastic for $45 so there's always going to be market there, if GW is willing to adapt. But I would then emphasis even further that my opinion was very, very speculative.
One of the foremost reasons I have remained unconvinced by sebster's points is that to say that we lack information for a formal diagnosis is no dispute of a tentative diagnosis. What we need to do is focus on facts that we have, rather then obsess over the inadequacy of the available data. That said, I do hope that I have avoided offense, and it's my intention not to belabor this point any longer. I have other things to say about points brought up, but the hour has grown far too late for such matters.
I only want people to recognise that we do not have anything close to a full set of information. You do, so we're in agreement.
37325
Post by: Adam LongWalker
I think what is important is that GW did indeed made a profit in the past 6 months.
What is also important is how the came up with this profit.
I believe it comes down to the following:
1. The massive lay offs in the US.
2. Price increases it items.
3. Consumables, such as paint and figure stands and other items that GW sells.
4. Licensing of their IP's , such as the 40K movie.
I also believe that their market share in the hobby is decreasing, due to the pressures of other aspects of the entertainment industry, such as MMORG's and other video games. Board games have been going strong for the past 5 years, and Finally the Global economy. Disposable income is a lot less in 2011 than in 2006.
I've been in the entertainment industry in one form or another for over 33 years. I've done pre and post production work. Even had a few licensing agreements with small companies and independents as well as providing content and consulting for those clients. I use my experience on what I learned and have applied, like others in here in my perspective on this.
I can say with some degree of knowledge of the following.
1. The information given is not the whole aspect of how the company is ran. There is so much that goes behind the scenes in any company that is not posted in the financials or other public documents that they are required to produce.
2. There are a great deal of intelligent people in this site that have a good grasp on what is happening with Games workshop by applying their expertise in the related fields that they are in to come forth with a logical conclusion.
3. Games Workshop will still be a dominate player (IMHO) for years to come. However there is a caveat to this. If you do not listen to the people in your market share, your market share will erode and give other companies a chance to gain the market share that was lost. Perfect Example is Privateer Press. A company that has been gaining in market share of people wanting to play with miniatures for the past two years.
4. Best case Scenario is that Kirby is kicked off of the board directors once and for all and someone else who is competent in what is happening in today's global economy. What works in England does not necessarily works in the US, Canada, Europe and the rest for the world. To me this is the greatest flaw with Games Workshop. They are non flexible in thinking.
Keep up the civil discussion. I enjoy people's perspective on topics such as this.
Edit: had hit the wrong button without cleaning up my spelling errors - Adam
24567
Post by: Kroothawk
If all of you do page long posts and double posts, maybe include a summary at the end of the text wall for better readability
5111
Post by: MikeMcSomething
There's a serious diminishing return on those absurd text walls, you could have summed over 50 of those lines up with "Fullheadofhair you are mischaracterizing my points" since a point-by-point quoted "No this isn't what I said" over and over and over isn't really going to move things forward.
These threads seem to draw out a couple types of people that comprise the bulk of the posting volume:
1) Subject matter experts - for this thread, you see fullhead and sourclams do this (analysis, not record-keeping) for a living, and even sourclams is quick to admit he isn't suited to offer much conjecture even though he's arguably the second-most qualified individual in this particular thread. For the CH thread, it was the various lawyers, etc.
2) People that attempt to match expertise dollar-for-dollar with vehemence and nitpicking, like if you're able to argue with a lawyer for 45 pages that you are awesome or something. You look at people like Kanluwen and Sebster and you see massive point-by-point dissertations wherein upwards of 80% of the content is a quoted sentence from a SME followed by a response that is virtually always of the form "You mischaracterized my point, you're stupid, learn to read, etc"
One of the primary benefits to the forum community (the ability to learn from and share ideas with experts in a given field) is lost or seriously diluted when the bulk of their posts get bogged down in massive nitpicking quote festivals with someone who, at best, is seeking to derive utility from creating a stalemate with someone generally regarded to be better suited to answer our questions or provide insight on a given subject.
22639
Post by: Baragash
As a qualified financial analyst specialising in retail, I don't find a huge amount of merit in sebster's position (prior to the arguing about semantics) TBH.
However, as a result of the text wall wars going on, I also have no interest in taking part in a wider discussion.
28390
Post by: nevertellmetheodds
GW needs to get a decent hollywood movie, (mickey rouke as a space marine ) and stop messing about with there IP **** 'we can't work with anyone else' (they did it with relic?) and get it together. A decent hollywood movie would do wonders for there sales, (at least 1/3 up?) and with the literature and great designs to draw on already they wouldn't have a problem.
116
Post by: Waaagh_Gonads
GW doesn't need a new hollywood movie.... they need to pull their collective fingers out and release codexes/army books/LOTR books at a much faster rate.
8th ed WHFB came out July 2010, still no army book.
BA to DE was 7 or so months
I think there was 1 LOTR book last year.
Remember the start of 3rd ed (I know most of you wont) when there was a 40k codex every 3-4 months. All I ssemed to do was buy miniatures.... which is the who aim of the company, to sell minis.
5256
Post by: NAVARRO
Waaagh_Gonads wrote:GW doesn't need a new hollywood movie.... they need to pull their collective fingers out and release codexes/army books/LOTR books at a much faster rate.
8th ed WHFB came out July 2010, still no army book.
BA to DE was 7 or so months
I think there was 1 LOTR book last year.
Remember the start of 3rd ed (I know most of you wont) when there was a 40k codex every 3-4 months. All I ssemed to do was buy miniatures.... which is the who aim of the company, to sell minis.
Yeah thats a real problem, you dont want tiny timmy to start looking for alternatives in that 7 month window.
6872
Post by: sourclams
My takeaway is that GW is a company that has historically underperformed relative to relevant indices, and that their recent profitability is more to do with cost cutting than it is with actual growth of their core business.
Theoretically, GW product should be price elastic, and anecdotal evidence would suggest that GW prices have outstripped their demand. Especially troubling is the reduction in hours at GW locations, which since they serve as recruitment centers into the GW hobby suggests that demand for their product will further fall as recruitment declines while prices remain high--the implications for volume are negative.
Negative volume at their price threshold and a USD:GBP relationship trending unfavorably suggests that their core gross margin will be under pressure for the foreseeable future--unless they can find more costs to cut or some other way to significantly drive volume at their current price level.
Now, we can pit against that a EUR:GBP trending in their favor, and I honestly have no idea which continent's market share is greater (US or Europe). There's also IP licensing royalties that they should continue to get, but it appears that this hasn't been much of a tail wind for them in the past.
My immediate conclusion is that GW as a company isn't going anywhere for a long time (neither bankruptcy nor any real upside for profitability/growth) and their hobby marketshare in the US should probably shrink; the role of high prices is to incentivize consumers to find substitutes. Thus with no clear qualitative difference between GW or PP, Malifaux, Anima Tactics or Infinity (arguable), the latter should net outperform the former.
Conversely, these true skirmish-level games may serve as the new recruitment grounds for GW games as they don't scale up to the 100+ models per side that GW games comfortably live at. That's a bit far fetched to say with any conviction as the gaming experience is significantly different, but I could see it being a possible interpretation.
From the investment perspective, avoid GW like bubonic plague. They are quite clearly range-bound at worst, and in a slow decay at best. They correlate poorly with other markets and thus are not even a viable short leg in a spread.
3081
Post by: chaplaingrabthar
As a complete idiot with no financial analysis experience whatsoever, I'd just like to say that I think you're all wrong and that GW is in awesome financial health, except when it isn't.
35796
Post by: Gr3y
chaplaingrabthar wrote:As a complete idiot with no financial analysis experience whatsoever, I'd just like to say that I think you're all wrong and that GW is in awesome financial health, except when it isn't.
To expound on this: This report indicates that GW may or may not be doing bad but was, at one point, doing not bad/sort of good. If it continues doing not good/kind of bad it may eventually do more bad, which is bad for GW.
Alternatively it could start doing less bad and do more good which would be good for GW, which is much better than doing bad or even not well.
24020
Post by: vitki
Finally! Somebody explains it simply!
2711
Post by: boyd
Waaagh_Gonads wrote:GW doesn't need a new hollywood movie.... they need to pull their collective fingers out and release codexes/army books/LOTR books at a much faster rate.
8th ed WHFB came out July 2010, still no army book.
BA to DE was 7 or so months
I think there was 1 LOTR book last year.
Remember the start of 3rd ed (I know most of you wont) when there was a 40k codex every 3-4 months. All I ssemed to do was buy miniatures.... which is the who aim of the company, to sell minis.
I believe this is something I said back on one of the first pages that there were no really big releases in 2010. But no there were bugs, dark eldar, and 8th edition. Back in the day (late 90's) they had 4 releases for 40K and 4 Releases for Fantasy and THEN they did 2 releases for non-core games (now referred to as specialist games). Its this crap that gets me.
Sure their minis are better and you're now seeing GW conforming with better production/pricing on their models (if I'm only going to sell 1 captain model, why am I going to make SO MANY of them? case in point, how many Kroxigor do you think a Lizard army needs? Why have them in primary production? They are more of a Batch item and run in batches when there is a need.)
Right now, the majority of the world is in a recession. In the US we have nearly 10% unemployment, the average salary has decreased 10-15%. Like it or not, that does affect the niche industry as GW is a luxury item, not a necessity. This has affected the miniature gaming industry whether they say it does or it doesn't.
Lastly, why is everyone getting their panties in a bunch over GW's financials? There is a lot of data that you can garner (materials, specific labor rates, and other data factors that you can independently look at). Just so you know the financial statements have been audited (in accordance with UK GAAP) and their press releases have been audited as well (PWC). While you may not know exactly what goes into the statements, they were written so that the average investor can review them, and then make a decision as to whether they want to invest in the company or take their money elsewhere. The auditor is the subject matter expert (SME) and it is their job to make sure they give you key facts to make your decisions and disclose all required information. I am a financial statement auditor and I do this day in day out 50 hours a week for the majority of the year. Don't take someone else's word for why they think GW is being run into the ground, or their sales have been declining for the last 20 years, or whatever. Go to GW's website, look at the investor relations information, and download the report yourself. Read it yourself. The main statements to read are usually in the front of the audit report (I believe GW may have an Management Discussion & Analysis -MD&A- before they get to the audit report but the first thing you will see in the audit report is a letter from the auditor. The letter will explain the statements and if there is anything key left out (scope exceptions - we didn't include subsidiary X as it is a development company or we didn't include our real estate holding company as it would be misleading to show this information, etc). Next there is a balance sheet - this gives you a basic snap shot of what the company owns and their financial position on that day and are usually comparative for 2- 3 years. The information you want to look for on this statement is their cash, their receivables, their debt, and any other odd liabilities they may have. Next is the income statement, this you're going to want to see a trend here to compare - so look at the revenue sources and compare these to each other, then look at the cost of sales (you really want to make sure these are comparative as they SHOULD NOT CHANGE YEAR OVER YEAR otherwise the average investor will ask why are we absorbing all of the variable costs related to production? Next you want to see what kind of admin charges they have. Review these and look into the MD&A for their explanation as to why these are changing year to year. Next flip to the statement of cash flows. This will tell you where the Company is getting their money. Whether they are making money from operations, putting money into investments (building a new production plant, etc), or if they are getting into new loans or paying loans off. These statements should tell you exactly what GW is doing and you can gauge it for yourself and make an informed decision on your own instead of relying on speculation from someone else who heard the information first hand from a red shirt who heard it from a black shirt who has a friend in upper management who heard it from the Accounting Department.
Sorry for the wall of text, in summary read the financial statements yourself and don't rely on someone else's opinion on a forum.
36641
Post by: Hans Chung-Otterson
For those of you who are interested in this topic, and don't know already:
40k Radio has put out an extremely excellent show discussing this report.
31210
Post by: manoknok
Just my 2pence.
I think you'll find them doing more re-release products. Like Space Hulk last year. The game system is already there. All the need is some new models (and thick card as they heavily advertised). That is a cheaper way to release 'new' product.
I think you'll find that - if 'they' are right in saying skirmish games are more popular - you'll see Necromunda and Mordeheim being redone perhaps after a revamp of Man 'o War (they have boats in the new rulebook -but I may be deliriuous).
I am sure GW are aware of the others companys growth and seeing that they had similar products in the past...
If they were smart they would tie all this in together. So you could start a small skirmish game for kids by buying necromunda and it develops into 40k battles as you buy more models. Same with Mordehiem/Man 0 War you buy a gang or boat...build skirmishes till you have a 'war' where you by you have bought lots of product and are fighting WFB.
If I had the money I would buy GW shares...it has a huge amount of products in its past all of which can be rehashed in physical games, computer games, audio and real books, and...movies. Though. I think they need to improve their stock of writers.
Saying that...I am not defending GW or its pricing just saying what I'd do.
8052
Post by: Terminus
AesSedai wrote:GW isn't the only dealer in town anymore.
Even though I hear about warmachine and hordes in passing on these boards, it was not until I read the first couple posts in this thread that I checked out their site for the first time. I must say, I liked what I saw. Not quite there yet...but it feels like an honest to goodness alternative. Just a little push...
Out of curiousity, what would that little push be?
GW beats PP on the setting, which many of us stick to due to familiarity more than anything else. PP's setting is full of great characters and is well-written, but in many ways it's "just another fantasy world". That said, it's more engaging than WFB. As far as I'm concerned, it's 40K > PP > WFB.
Then GW has an amazing range of plastics, but PP's metals are for the most part really good, and they are currently rolling out resculpts of many of the older models.
Rules-wise, it's not even close, Warmachine/Hordes beats the pants off GW in every way. Sure, there are some internal balance issues in some books (Cygnar and Skorne in particular have several in-faction lemons), but the factions are very well balanced between each other. The basic ruleset itself is very fun and more involved/interesting/tactical/tournament-ready/whatever than GW (although I've been having a blast with the cooky 8th edition fantasy).
Release schedule also favors PP, with each faction getting updates/new stuff on a regular basis.
Then finally there is the level of community involvement, a marker on which GW doesn't even register. Just take a look at the league campaigns PP runs several times a year, with prize support, a website to track global progress, and even new rules for your models. The few summer campaigns GW had eons ago were amateurish crap by comparison.
So if cost and opponents are not an issue ( GW still has way more players worldwide), what would that "little push" have to be?
8052
Post by: Terminus
sebster wrote:fullheadofhair wrote:Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me.
What? Seriously, what? You're claiming no-one has claimed serious analysis? One post ago, you claimed exactly that, I responded to it, and in your response to that you're now denying you or anyone else has ever claimed You claimed that you'd done that very thing.
I said, "In short, as I've said repeatedly, no-one has attempted the grunt work needed to begin to build an informed opinion of GW's future sustainability."
You responded with, "ummm ... why would they. This is a gaming site not a financial site. Hence why people are picking on elements of the report and not doing a full size analysis. I did it a couple of years ago when bored contracting at Microsoft and I am not going to do it again."
To which I responded with, "Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me."
You're being ridiculous, and you're making yourself look extremely silly. Step back, think long and hard about what argument you're actually trying to make in this thread, and set about trying to make it. Because this thing where you're just saying 'nuh uh' to each point I make is causing you to claim some very silly things, and it's wasting my time and yours. You may well have an interesting argument in you, but the way you've approached this thread has resulted in basically gibberish.
I have read the financials and have done over the last 8-10 years. Just because I don't quote everything in my post doesn't mean I haven't read it, digested it, ruminated and cogitated on it. After 20 years I can read a set of financials to get the gist of what is going on with out formal analysis and just a scrap bit of paper. I think a gist is good enough for a fun discussion despite you attempts to suck the fun out of this thread.
You can ruminate and cogitate for hundred years for all it matters, if you think that you can gain anything other than a vague impression from the Annual Report then you're being ridiculous. It serves as a very broad overview, and as a first reality check on management's claims. Anything else and you really, really need greater depth than what's in the Annual Report.
Based on that reading I tried to speculate reasons/ drivers behind what may be going on. That is what all analysts do because HELLO {raps knuckles on forehead} no-one has the inside info. Everything you read in the newspapers is speculation - unless you have taken the CFO out and gotten him drunk to get the inside scoop.
You... think there's the annual report and everything else is inside information? And you have twenty years experience. Wow.
No, "duh" because it is obvious and this place isn't appropriate to have a full depth discussion about the weaknesses in the balance sheet & multiple business indicators that have come and gone over the years.
Yeah, so when I pointed out that no-one here really has that much of an understanding and that what we're seeing instead is wild speculation... you'd agree. Because that's all I've been trying to say. Somewhere in there this has become such a great affront to your person that you've tried to invent my argument as all kinds of things you can actually against... but the plan fact is that I've not said anything other than that without greater study, this is wild speculation.
No you are reaching to protect your position. Changing their entire retail structure and strategy from a metro to single person store and ripping out a layer of retail management (area managers) is this years PRIMARY element. You simply don't get more primary than that. The warehouse and distribution was last years I believe.
Hang on, so because they're in different financial years they are seperate programs? That's not how business initiatives work. Probably something you'll learn in your 21st year in the industry.
Now you are being dense. There has been a 4% drop in revenue this year v last (from memory).
No, I'm not. It's just a case of you, once again, reinventing your position to say 'nuh uh' to whatever my last sentence was.
We're talking about the long term downward trend in unit sales decline. You stated that you believed GW's cost reduction scheme was responsible. I pointed out this was very unlikely and it would be more practical to look at the growth in second hand sales and the like, you quoted the textbook bizarrely assuming that my issue was with the underlying theory of cost reduction impacting quality or marketing, and I explained that it was because the underlying decline in unit sales began a long time before the cost reduction strategy.
At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.
The decline in sales over the last decade (which took fancy foot work for you to even admit that Mr Literal)
No, that's just plain wrong. I said from the start that it is only one measure, and nowhere near as complete a measure as you were claiming. I explained this to you many times, before the lightbulb finally pinged and you in all your humility agreed by posting 'duh'.
isn't what I am putting down to a one man strategy that started 6months or so ago. For you to think that is just plain weird. It is possible to have two thoughts in a post. Sourclams read the same thing and he got the point - but then he is an analyst not just a management accountant with a finance background.
If you want to claim that the decline in unit sales for this year is due to such, then you'd need to explain why all the other factors that were driving down unit sales in previous years suddenly disappeared, to be replaced by this one factor in this year. Or you'd need to quantify what portion of this year's decline was due to the old factors, and what portion is due to this new factor.
Otherwise you've got incoherent gibberish.
This almost amused me.
Best of luck to you. I can assure you nothing you've posted has come close to even slightly amusing to me. In fact, the whole thing is reminiscent of my undergraduate days, where these clowns would read some article, or skim an annual report, and try to base our entire investment around them. And you'd say, I think we need more information, and then they'd start getting snippy, and you'd keep trying to explain how they need more information...
Remember those days? I mean, they would have been a whole 20 years ago for you, so maybe you don't. But trust me, they were exactly as fun as this thread has been for me.
Other than you, haven't really had anyone disagree to much with my thoughts. Of-course my suggestions could be wrong because they are obviously speculation - but based on what I know until someone can present a better argument or a set of logical alternatives and reasons that fit in with my knowledge of what is going one why would I change my position.
As long as you recognise that they are merely speculation, then you can back to my first post, agree with it and we can forget thisstupid little thing ever happened.
And I would argue that GW is in a death spiral, cutting costs to retain profits against revenue that's dropping ever faster. But I would recognise that your position is a reasonable speculation, and point out that I certainly do not believe GW's position is healthy, and certainly not desirous.
As for sticking to ridiculous positions dare I mention the words "decline over a decade". Management accountant with finance background indeed.
Yeah, I misread 'better part of a decade' as 'decade'. Better go hand in my IMA membership...
You'll note though, that I was man enough to see my error, own up and move on. If you could only do the same then this ridiculous exercise could end
Buzzsaw wrote:Dear Sebster; while I can appreciate the passions this discussion appears to have aroused,
I don't think you get how I work. I've never really been interested in the argument, I figure a more or less reasonable conclusion will be reached as long as everyone involved tries to be as honest and rational as possible.
To the extent that fullheadofhair is failing to do this, and is ending up with some very silly claims as a result, is the extent to which this farce is continuing.
I would put it more as: 'It is not wild speculation to posit that a store going from 80 hours a week to 35 hours a week, concomitant with a reduction from several to a single member of staff, will impact sales; to suppose that it will not impact sales is unreasonable.' Indeed, that would appear to be an entirely unremarkable statement.
No, the issue is that he's claimed the policy as a major cause of the long term decline in unit sales he himself was championing. Which didn't make any sense.
And yet, when we look at the reply, "At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level." This reply is astonishing, as it seems to have almost nothing to do with Full's statement. Yes, the statement that cause can follow effect would be mad, and indeed I do not suppose that Fullheadofhair believes that; but I see little to no support for the interpretation that that is what Fullheadofhair is saying. On the contrary, his statement seems essentially pedestrian, yet the reply would seem to find quarrel with a straw.
You're missing the context in which his claim developed.
I was quoted by sourclams, where I was talking about GW not having a decade long decline in sales (which you later pointed out was not the issue, and I happily retracted). Sourclams responded with a reference to tracking the share price, and fullheadofhair quoted this, to explain that I was wrong and he'd tracked GW's core business and it had been in decline for a decade. He then went on to explain that GW shouldn't just be focussing on cost reduction.
I replied, telling him that no sensible review of the sales decline would start with the cost savings initiative. Now, at this point he could have explained he was only referring to this year's decline in sales, and provided some explanation for why he had previously lurched from a point about a long term decline in unit sales to suddenly talking about the reason behind this year's decline in sales. Instead he made some bizarre assumption that I lacked an undergraduate's knowledge and attempted to enlighten me. I explained the issue was that the initiative began after the downward trend in sales.
At this point fullheadofhair could again have explained he was only attempting to explain this year's decline in sales. Indeed, it would have been on the forefront of his mind if that had ever been his intention. But he didn't. Instead, he dishonestly summarised the argument by pretending the issue was that I thought reducing store hours couldn't impact sales, then said he wasn't responding to the rest of my post because he got bored.
I, once again, explained to fullheadofhair that the problem comes from him attempting to explain the long term trend with a new development. So he called me dense, and then suddenly and for the first time, declared that he was only ever talking about this year's decline. Which makes no sense in the context of it's original thread, and even less sense given his unwillingness to provide that explanation in all his posts after that. It is, basically, a very obvious retcon.
Now, remember at the same time fullheadofhair was continuing to defend unit sales as a single and complete indicator of a company's (until he finally conceded that point by pretending he was never claiming otherwise). And then compare it to how we've talked in this thread, points have been made and good and bad ones acknowledged.
The issue here really is that fullheadofhair hasn't been capable of admitting when he's been wrong. Instead he's reacted to me pointing out his mistakes with abuse and general pettiness. It hasn't helped that his efforts at analysis have been terrible and full of holes, perhaps if he'd only made the one mistake he might have reacted better when I pointed it out?
It would seem to me that the store austerity measures are but one straw in the broom fullheadofhair is using to brush off GW; yet it is treated as the alpha and omega of his analysis. Moreover, as before, an edifice is built upon this misunderstanding or misrepresentation that seems disproportionate and, even more unfortunately, distressingly offensive.
No, it isn't a big deal. He made a false claim, I pointed it out. He's gotten all offended over the idea that he suggested something silly, and so we're bickering.
Now, the phrase "it isn't great" is one where meaning is almost entirely dependent on inflection: this being type, we must go to context, and that context would appear to be that this is meant more as "it's good, not great", more then "it's not great, it's barely adequate". Which is to say, that this is a positive evaluation of GW, and I base that on what I think I can equanimously characterize as a fairly strident defense of GW's prospects.
There is a common use for 'isn't great' in coloquial speach. "How did your kid go in his game on the weekend", "He wasn't great" doesn't mean he could have had any possible type of game other than great. It means 'it wasn't a good thing, but we're not going to use words like 'mediocre' or 'terrible' because we're trying to keep it in perspective, and not make too big a deal of it.
The common theme found in all of Sebster's posts is an almost scientific instance that without proper data, we cannot draw conclusions, and also that we do not have adequate information; thus, no conclusions can be drawn.
That is the entirety of my position.
This idea has been applied consistently to those advancing the position that GW's current scheme may be to GW's corporate detriment. The double standard, however, becomes quite obvious on reflection: if we can draw no conclusions, why is the positive evaluate of GW that at least appears to be present in sebster's posts appropriate? If no conclusions at all can be drawn, then to remark that GW's sales position "isn't great" is, as I remarked it seems so long ago, "rather... romantic".
You will note that I have said that I would not recommend GW to anyone, even as a safety stock. Your reading in my post that I have an optimistic position on GW is entirely your own creation.
I certainly have a fairly cynical view towards anyone claiming this is the end of GW without any meaningful evidence, because I have been seeing those claims for twenty years. Perhaps you're reading my cynicism towards the chicken little crowd as being in support of GW. Trust me, if someone came on the board and declared that the latest report showed GW had turned a corner and only had growth and happiness ahead, I'd tell them they were being entirely speculative (and that it'd be fairly irrational speculation to boot).
This is especially pronounced given the extremely binary constraints seemingly being imposed on evaluations by sebster: to wit;
A) there is sufficient information for a full and complete analysis and so conclusions may be drawn, or,
B) there is insufficient information for a full and complete analysis, so no conclusions may be drawn.
No. My position is that everyone should realise that any conclusions drawn are very speculative.
The problem with that is that, while it may be an appropriate standard for formal analysis in the lab when it comes to publication time, it ignores the reality that there are middle grounds, levels of information insufficient for formal analysis, yet enough to impute some useful analysis.
Yes, and people should recognise that they're in those middle grounds (or in this case quite close to the edge of the 'almost no information whatsoever' end of the spectrum).
Here, for example, we do not have No information; we have several years of data gleaned from periodic annual reports. Now,what data we have would seem to support the generally pessimistic view of events. On this point, of course, there can be argument: the problem, as I've noted above, is that the impression being conveyed by sebster's posts is that he has a positive impression of events, but any positions contrary to that will be dismissed for lack of sufficient information for a formal analysis.
Except I don't have an optimistic view, and a close reading reading of my posts would have established that. My instinctive position is to see GW as a long term underperformer, given it's position in a market that's developing away from GW's primary business model of seeling product through GW owned stores in mainstreet locations. To develop this further I'd need to have a very deep look into how those sales perform in locations with and without stores, and see if GW had done any studies into changing or adapting their business model to meet the new market conditions.
But I would emphasise that GW's financial stability is strong, and at the end of the day they've got people buying boxes of plastic for $45 so there's always going to be market there, if GW is willing to adapt. But I would then emphasis even further that my opinion was very, very speculative.
One of the foremost reasons I have remained unconvinced by sebster's points is that to say that we lack information for a formal diagnosis is no dispute of a tentative diagnosis. What we need to do is focus on facts that we have, rather then obsess over the inadequacy of the available data. That said, I do hope that I have avoided offense, and it's my intention not to belabor this point any longer. I have other things to say about points brought up, but the hour has grown far too late for such matters.
I only want people to recognise that we do not have anything close to a full set of information. You do, so we're in agreement.
This kind of spam is basically trollery. Please refamiliarize yourself with the DakkaDakka rules.
6872
Post by: sourclams
Terminus wrote:sebster wrote:fullheadofhair wrote:Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me.
What? Seriously, what? You're claiming no-one has claimed serious analysis? One post ago, you claimed exactly that, I responded to it, and in your response to that you're now denying you or anyone else has ever claimed You claimed that you'd done that very thing. I said, "In short, as I've said repeatedly, no-one has attempted the grunt work needed to begin to build an informed opinion of GW's future sustainability." You responded with, "ummm ... why would they. This is a gaming site not a financial site. Hence why people are picking on elements of the report and not doing a full size analysis. I did it a couple of years ago when bored contracting at Microsoft and I am not going to do it again." To which I responded with, "Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me." You're being ridiculous, and you're making yourself look extremely silly. Step back, think long and hard about what argument you're actually trying to make in this thread, and set about trying to make it. Because this thing where you're just saying 'nuh uh' to each point I make is causing you to claim some very silly things, and it's wasting my time and yours. You may well have an interesting argument in you, but the way you've approached this thread has resulted in basically gibberish. I have read the financials and have done over the last 8-10 years. Just because I don't quote everything in my post doesn't mean I haven't read it, digested it, ruminated and cogitated on it. After 20 years I can read a set of financials to get the gist of what is going on with out formal analysis and just a scrap bit of paper. I think a gist is good enough for a fun discussion despite you attempts to suck the fun out of this thread.
You can ruminate and cogitate for hundred years for all it matters, if you think that you can gain anything other than a vague impression from the Annual Report then you're being ridiculous. It serves as a very broad overview, and as a first reality check on management's claims. Anything else and you really, really need greater depth than what's in the Annual Report. Based on that reading I tried to speculate reasons/ drivers behind what may be going on. That is what all analysts do because HELLO {raps knuckles on forehead} no-one has the inside info. Everything you read in the newspapers is speculation - unless you have taken the CFO out and gotten him drunk to get the inside scoop.
You... think there's the annual report and everything else is inside information? And you have twenty years experience. Wow. No, "duh" because it is obvious and this place isn't appropriate to have a full depth discussion about the weaknesses in the balance sheet & multiple business indicators that have come and gone over the years.
Yeah, so when I pointed out that no-one here really has that much of an understanding and that what we're seeing instead is wild speculation... you'd agree. Because that's all I've been trying to say. Somewhere in there this has become such a great affront to your person that you've tried to invent my argument as all kinds of things you can actually against... but the plan fact is that I've not said anything other than that without greater study, this is wild speculation. No you are reaching to protect your position. Changing their entire retail structure and strategy from a metro to single person store and ripping out a layer of retail management (area managers) is this years PRIMARY element. You simply don't get more primary than that. The warehouse and distribution was last years I believe.
Hang on, so because they're in different financial years they are seperate programs? That's not how business initiatives work. Probably something you'll learn in your 21st year in the industry. Now you are being dense. There has been a 4% drop in revenue this year v last (from memory).
No, I'm not. It's just a case of you, once again, reinventing your position to say 'nuh uh' to whatever my last sentence was. We're talking about the long term downward trend in unit sales decline. You stated that you believed GW's cost reduction scheme was responsible. I pointed out this was very unlikely and it would be more practical to look at the growth in second hand sales and the like, you quoted the textbook bizarrely assuming that my issue was with the underlying theory of cost reduction impacting quality or marketing, and I explained that it was because the underlying decline in unit sales began a long time before the cost reduction strategy. At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level. The decline in sales over the last decade (which took fancy foot work for you to even admit that Mr Literal)
No, that's just plain wrong. I said from the start that it is only one measure, and nowhere near as complete a measure as you were claiming. I explained this to you many times, before the lightbulb finally pinged and you in all your humility agreed by posting 'duh'. isn't what I am putting down to a one man strategy that started 6months or so ago. For you to think that is just plain weird. It is possible to have two thoughts in a post. Sourclams read the same thing and he got the point - but then he is an analyst not just a management accountant with a finance background.
If you want to claim that the decline in unit sales for this year is due to such, then you'd need to explain why all the other factors that were driving down unit sales in previous years suddenly disappeared, to be replaced by this one factor in this year. Or you'd need to quantify what portion of this year's decline was due to the old factors, and what portion is due to this new factor. Otherwise you've got incoherent gibberish. This almost amused me.
Best of luck to you. I can assure you nothing you've posted has come close to even slightly amusing to me. In fact, the whole thing is reminiscent of my undergraduate days, where these clowns would read some article, or skim an annual report, and try to base our entire investment around them. And you'd say, I think we need more information, and then they'd start getting snippy, and you'd keep trying to explain how they need more information... Remember those days? I mean, they would have been a whole 20 years ago for you, so maybe you don't. But trust me, they were exactly as fun as this thread has been for me. Other than you, haven't really had anyone disagree to much with my thoughts. Of-course my suggestions could be wrong because they are obviously speculation - but based on what I know until someone can present a better argument or a set of logical alternatives and reasons that fit in with my knowledge of what is going one why would I change my position.
As long as you recognise that they are merely speculation, then you can back to my first post, agree with it and we can forget thisstupid little thing ever happened. And I would argue that GW is in a death spiral, cutting costs to retain profits against revenue that's dropping ever faster. But I would recognise that your position is a reasonable speculation, and point out that I certainly do not believe GW's position is healthy, and certainly not desirous. As for sticking to ridiculous positions dare I mention the words "decline over a decade". Management accountant with finance background indeed.
Yeah, I misread 'better part of a decade' as 'decade'. Better go hand in my IMA membership... You'll note though, that I was man enough to see my error, own up and move on. If you could only do the same then this ridiculous exercise could end Buzzsaw wrote:Dear Sebster; while I can appreciate the passions this discussion appears to have aroused,
I don't think you get how I work. I've never really been interested in the argument, I figure a more or less reasonable conclusion will be reached as long as everyone involved tries to be as honest and rational as possible. To the extent that fullheadofhair is failing to do this, and is ending up with some very silly claims as a result, is the extent to which this farce is continuing. I would put it more as: 'It is not wild speculation to posit that a store going from 80 hours a week to 35 hours a week, concomitant with a reduction from several to a single member of staff, will impact sales; to suppose that it will not impact sales is unreasonable.' Indeed, that would appear to be an entirely unremarkable statement.
No, the issue is that he's claimed the policy as a major cause of the long term decline in unit sales he himself was championing. Which didn't make any sense. And yet, when we look at the reply, "At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level." This reply is astonishing, as it seems to have almost nothing to do with Full's statement. Yes, the statement that cause can follow effect would be mad, and indeed I do not suppose that Fullheadofhair believes that; but I see little to no support for the interpretation that that is what Fullheadofhair is saying. On the contrary, his statement seems essentially pedestrian, yet the reply would seem to find quarrel with a straw.
You're missing the context in which his claim developed. I was quoted by sourclams, where I was talking about GW not having a decade long decline in sales (which you later pointed out was not the issue, and I happily retracted). Sourclams responded with a reference to tracking the share price, and fullheadofhair quoted this, to explain that I was wrong and he'd tracked GW's core business and it had been in decline for a decade. He then went on to explain that GW shouldn't just be focussing on cost reduction. I replied, telling him that no sensible review of the sales decline would start with the cost savings initiative. Now, at this point he could have explained he was only referring to this year's decline in sales, and provided some explanation for why he had previously lurched from a point about a long term decline in unit sales to suddenly talking about the reason behind this year's decline in sales. Instead he made some bizarre assumption that I lacked an undergraduate's knowledge and attempted to enlighten me. I explained the issue was that the initiative began after the downward trend in sales. At this point fullheadofhair could again have explained he was only attempting to explain this year's decline in sales. Indeed, it would have been on the forefront of his mind if that had ever been his intention. But he didn't. Instead, he dishonestly summarised the argument by pretending the issue was that I thought reducing store hours couldn't impact sales, then said he wasn't responding to the rest of my post because he got bored. I, once again, explained to fullheadofhair that the problem comes from him attempting to explain the long term trend with a new development. So he called me dense, and then suddenly and for the first time, declared that he was only ever talking about this year's decline. Which makes no sense in the context of it's original thread, and even less sense given his unwillingness to provide that explanation in all his posts after that. It is, basically, a very obvious retcon. Now, remember at the same time fullheadofhair was continuing to defend unit sales as a single and complete indicator of a company's (until he finally conceded that point by pretending he was never claiming otherwise). And then compare it to how we've talked in this thread, points have been made and good and bad ones acknowledged. The issue here really is that fullheadofhair hasn't been capable of admitting when he's been wrong. Instead he's reacted to me pointing out his mistakes with abuse and general pettiness. It hasn't helped that his efforts at analysis have been terrible and full of holes, perhaps if he'd only made the one mistake he might have reacted better when I pointed it out? It would seem to me that the store austerity measures are but one straw in the broom fullheadofhair is using to brush off GW; yet it is treated as the alpha and omega of his analysis. Moreover, as before, an edifice is built upon this misunderstanding or misrepresentation that seems disproportionate and, even more unfortunately, distressingly offensive.
No, it isn't a big deal. He made a false claim, I pointed it out. He's gotten all offended over the idea that he suggested something silly, and so we're bickering. Now, the phrase "it isn't great" is one where meaning is almost entirely dependent on inflection: this being type, we must go to context, and that context would appear to be that this is meant more as "it's good, not great", more then "it's not great, it's barely adequate". Which is to say, that this is a positive evaluation of GW, and I base that on what I think I can equanimously characterize as a fairly strident defense of GW's prospects.
There is a common use for 'isn't great' in coloquial speach. "How did your kid go in his game on the weekend", "He wasn't great" doesn't mean he could have had any possible type of game other than great. It means 'it wasn't a good thing, but we're not going to use words like 'mediocre' or 'terrible' because we're trying to keep it in perspective, and not make too big a deal of it. The common theme found in all of Sebster's posts is an almost scientific instance that without proper data, we cannot draw conclusions, and also that we do not have adequate information; thus, no conclusions can be drawn.
That is the entirety of my position. This idea has been applied consistently to those advancing the position that GW's current scheme may be to GW's corporate detriment. The double standard, however, becomes quite obvious on reflection: if we can draw no conclusions, why is the positive evaluate of GW that at least appears to be present in sebster's posts appropriate? If no conclusions at all can be drawn, then to remark that GW's sales position "isn't great" is, as I remarked it seems so long ago, "rather... romantic".
You will note that I have said that I would not recommend GW to anyone, even as a safety stock. Your reading in my post that I have an optimistic position on GW is entirely your own creation. I certainly have a fairly cynical view towards anyone claiming this is the end of GW without any meaningful evidence, because I have been seeing those claims for twenty years. Perhaps you're reading my cynicism towards the chicken little crowd as being in support of GW. Trust me, if someone came on the board and declared that the latest report showed GW had turned a corner and only had growth and happiness ahead, I'd tell them they were being entirely speculative (and that it'd be fairly irrational speculation to boot). This is especially pronounced given the extremely binary constraints seemingly being imposed on evaluations by sebster: to wit;
A) there is sufficient information for a full and complete analysis and so conclusions may be drawn, or,
B) there is insufficient information for a full and complete analysis, so no conclusions may be drawn.
No. My position is that everyone should realise that any conclusions drawn are very speculative. The problem with that is that, while it may be an appropriate standard for formal analysis in the lab when it comes to publication time, it ignores the reality that there are middle grounds, levels of information insufficient for formal analysis, yet enough to impute some useful analysis.
Yes, and people should recognise that they're in those middle grounds (or in this case quite close to the edge of the 'almost no information whatsoever' end of the spectrum). Here, for example, we do not have No information; we have several years of data gleaned from periodic annual reports. Now,what data we have would seem to support the generally pessimistic view of events. On this point, of course, there can be argument: the problem, as I've noted above, is that the impression being conveyed by sebster's posts is that he has a positive impression of events, but any positions contrary to that will be dismissed for lack of sufficient information for a formal analysis.
Except I don't have an optimistic view, and a close reading reading of my posts would have established that. My instinctive position is to see GW as a long term underperformer, given it's position in a market that's developing away from GW's primary business model of seeling product through GW owned stores in mainstreet locations. To develop this further I'd need to have a very deep look into how those sales perform in locations with and without stores, and see if GW had done any studies into changing or adapting their business model to meet the new market conditions. But I would emphasise that GW's financial stability is strong, and at the end of the day they've got people buying boxes of plastic for $45 so there's always going to be market there, if GW is willing to adapt. But I would then emphasis even further that my opinion was very, very speculative. One of the foremost reasons I have remained unconvinced by sebster's points is that to say that we lack information for a formal diagnosis is no dispute of a tentative diagnosis. What we need to do is focus on facts that we have, rather then obsess over the inadequacy of the available data. That said, I do hope that I have avoided offense, and it's my intention not to belabor this point any longer. I have other things to say about points brought up, but the hour has grown far too late for such matters.
I only want people to recognise that we do not have anything close to a full set of information. You do, so we're in agreement.
I LOLed. After I also didn't read it, of course. Quoting rule breaking doesn't really help. Please refrain from doing so in the future. Thanks! ~Manchu
3806
Post by: Grot 6
+1
Well played.
6932
Post by: kingcaboose
The issue, I read, is dropping sales. I guess they would get the greatest boost from new people into the hobby. My guess at an effective solution would be to advertise and service the customer to get them sucked into the hobby and to stop current gamers from getting disgruntled.
Simple, I guess.
17738
Post by: Briancj
I have but one thing to add to this discussion:
There are no GW stores within 100 miles of me. I live near Boston, Massachusetts, USA. This is one of the most densely populated areas of the US, with a /massive/ collegiate population.
No. Stores.
--B.
299
Post by: Kilkrazy
kingcaboose wrote:The issue, I read, is dropping sales. I guess they would get the greatest boost from new people into the hobby. My guess at an effective solution would be to advertise and service the customer to get them sucked into the hobby and to stop current gamers from getting disgruntled.
Simple, I guess.
GW's strategy for years has been to get new people into the hobby. It doesn't seem to be working.
The Hobbit films will give them a boost.
36641
Post by: Hans Chung-Otterson
Briancj wrote:I have but one thing to add to this discussion:
There are no GW stores within 100 miles of me. I live near Boston, Massachusetts, USA. This is one of the most densely populated areas of the US, with a /massive/ collegiate population.
No. Stores.
--B.
Dude, I'm right there with ya. I live in Portland, OR, where you can't go to the grocery store without bumping into a gamer--by all accounts, personal and otherwise, this town is swarming with geeks.
And yet not one GW here, nor any in the entire STATE (Washington, btw, just north of us, has like fething nine).
123
Post by: Alpharius
Briancj wrote:I have but one thing to add to this discussion:
There are no GW stores within 100 miles of me. I live near Boston, Massachusetts, USA. This is one of the most densely populated areas of the US, with a /massive/ collegiate population.
No. Stores.
--B.
Same here - and I'm in the same boat.. and area!
Plus, in Massachusetts, we've seen a LOT of good FLGS closures too.
The State of the Game in the Bay State is sad indeed...
35352
Post by: prime12357
I mourn for the loss/lack of gaming stores.
20255
Post by: Mangoose99
They definitely need to do more to get new Players and the key in this type of economy is to have a low cost option to get them into the hobby.
Necromunda was Amazing as it was a great introduction to 40K, a re-release of this would be great.
Also with the Hobbit Coming they could do a skirmish based game to coincide with the movie release, as well as a full line and expansion for LOTR.
And for Fantasy Man' O' War would be awesome, a totally different aspect of the game and yet relatively inexpensive to play.
Besides I am sure they still have the Mold lying around. and the ever so "costly" Carboard Terrain.
|
|
