The expenses are actually pretty easy to track, and by looking back over past financial reports - you can see that the cost of doing business for GW hasn't increased that much...no where near the 7% "just to stay on the baseline."

FY2012 had expenses (revenue, less operating profit) of £111.9 million. FY2011 was £107.9 million. That would be a change in expenses year over year of 3.7%. Going back a few years, you can see that while inflation does impact everything - most of GW's expenses are not tied to it.

FY2010 - £110.4 million
FY2009 - £116.7 million
FY2008 - £107.8 million
FY2007 - £111.3 million
FY2006 - £111 million
FY2005 - £122.3 million
FY2004 - £131.9 million
FY2003 - £111.6 million
FY2002 - £95.1 million
FY2001 - £83.2 million
FY2000 - £71.3 million
FY1999 - £59.8 million
FY1998 - £53.2 million

Within the reports you can find a variety of reasons for the costs (opening new stores, closing old stores, moving factories to China, moving factories back from China, building warehouses in Maryland, moving them to Tennessee...). You can also find more detailed breakdowns regarding how much is actually spent on the manufacture and design of products versus all the other junk - if you don't feel like digging it up, the manufacture costs are down around 2% of GW's expenses.

Zweischneid wrote:One of the blatantly most stupids argument in this discussion is the constantly recurring *they increased prices by 10% (or whatever) but only increased profits by 6%* so their sales went down*

If you weren't wrong about everything ever, you might realise that this has nothing to do with profit. Trying to fall back on inflation and other excuses is further evidence that you have no idea what you're talking about.

The problem is that GW sold X units this year, while they sold X+Y units last year. Selling less units is bad because the value of the product is highly dependant on sales volumes - both so that you personally can field a whole army and not just a unit, and so you have someone to play against. By selling less armies, GW devalues their own product.

AlexHolker wrote:

Zweischneid wrote:One of the blatantly most stupids argument in this discussion is the constantly recurring *they increased prices by 10% (or whatever) but only increased profits by 6%* so their sales went down*

If you weren't wrong about everything ever, you might realise that this has nothing to do with profit. Trying to fall back on inflation and other excuses is further evidence that you have no idea what you're talking about.

The problem is that GW sold X units this year, while they sold X+Y units last year. Selling less units is bad because the value of the product is highly dependant on sales volumes - both so that you personally can field a whole army and not just a unit, and so you have someone to play against. By selling less armies, GW devalues their own product.

http://www.guardian.co.uk/business/2012/jun/04/inflation-economics
I don't know if you noticed, but no one in the west really has any more any more
Given that inflation in the UK has been hovering at 5-5.5% a 6% average really isn't so bad. And that's distorted by a few very expensive things, rather than the more popular boxes that haven't increased so much.

Trasvi wrote:? Its not assumptions and conjecture. Admittedly there are a lot of unknowns, but there are a lot of knowns as well. Its simple arithmetic.
If revenue = volume * price, and price increases but revenue stays the same, that means volume is falling. This seems to be the situation for the company as a whole.

I'm sorry, but you just can't make those assumptions without sales numbers.
Revenue = volume * price is only valid if you are taking like for like. Unfortunately this is never true in the real world due to changes is sales profile, exchange rates etc. As I said you cannot make these inferences from a consolidated income statement. There is no evidence that sales are falling. The only statement is that sales volume is increasing. However, as I said we don't know WHAT sales volume is increasing, what the margins are on what is selling more and what the value is.

Palindrome wrote:
There is no specific reference as it needs to be inferred. Basically GWs revenues have been very stable for years, and they grew slightly last year, however in that time the retail price of their products have increased significantly year on year, I think it works out to around an average 7% annual increase. If GW was selling the same or more each year then its revenues would increase in step with their price increases. This hasn't happened and the only real conclusion that can be drawn is that their sales are declining at around the same rate as their price increases. Granted you can't get a truely accurate picture from such limited data but the trend is clear.

Again, you cannot infer anything from it. Yes, the price of some products increased, but not all of them (the majority did not increase this year) and without knowing what sold you cannot say that sales are falling. If a company that sell 100 products increased one by 1000% but keeps the rest the same, but only has a 10% increase in revenue it dose not mean that they are selling less. Without sales data and context the numbers are meaningless for working out if sales are up or down. You don't know if the 7% increase is in line with stable or falling sales, or an increase in sales of lines with no price increase and a fall in sales of lines that have gone up in price.

That might be a reasonable argument for this years results, but do you think it's still reasonable to apply that reasoning to the last 6 or 7 years?

I think the aggregation of price increases leaves no doubt that unit sales volume has probably fallen in half since the end of LOTR.

And I'm not sure you're being completely honest with yourself when you talk about the price increases being of such a minority of products. The large price increases are on things like starter boxes, battleforces, and regiment/squad boxes. The things which most likely make up the majority of their sales if people are getting into the game.

And if the customers are not getting into the game, but shifting more and more to being "craft hobbyists" that never play the games, that's just as bad for the network effect. If more and more people are buying stuff that didn't go up in price and less and less people are buying codecies, army books, starters, battleforces or squad boxes, that still has a negative effect on the local player base.

I want GW to turn things around so that there is no doubt that sales volume of all types of purchases are going up. But the numbers just aren't there without also assuming that less and less people are buying the things that went up in price-- which are the purchases you'd have to make if you are into playing the game.

It's entirely possible that people are buying the stuff that didn't go up as much in droves, but that doesn't help a given local gaming community with maintaining good numbers of players at all.

AlexHolker wrote:

The problem is that GW sold X units this year, while they sold X+Y units last year. Selling less units is bad because the value of the product is highly dependant on sales volumes - both so that you personally can field a whole army and not just a unit, and so you have someone to play against. By selling less armies, GW devalues their own product.

I am not denying the importance of sales.

I am denying the logic of people concluding that sales went down because price increases > profit increases (hence the false assumption forwarded several times that the difference is mostly or entirely explained by lower sales).

Sales volume for GW went UP(!). Says so right there in the report. So no devaluation of their product on this account.


Automatically Appended Next Post:

Testify wrote:
I don't know if you noticed, but no one in the west really has any more any more
Given that inflation in the UK has been hovering at 5-5.5% a 6% average really isn't so bad. And that's distorted by a few very expensive things, rather than the more popular boxes that haven't increased so much.

The point wasn't mainly about inflation. The point was that many things - investments, new staff, expansion and (yes, among other things and in combination with other factors) inflation - can and likely do explain the difference between price increases and profit increases, which people have simply equated with a drop in sales.

As I wrote in my original post, I didn't even deny that there was possibly a drop in sales over the longer time period (i.e. over and beyond last year, when sales bumped up). Just that people should consider that not everything except GW prices and GW profits is perfectly invariable (especially if you look at things over several years).

Have their legal costs from the CH case and their various appointments in the IP and legal department started to show up yet? Or are they still to insignificant to warrant mention? No talk of 'fortress walls' this year, or do they save that for another time?

Steve steveson wrote:

Again, you cannot infer anything from it. Yes, the price of some products increased, but not all of them (the majority did not increase this year) and without knowing what sold you cannot say that sales are falling. If a company that sell 100 products increased one by 1000% but keeps the rest the same, but only has a 10% increase in revenue it dose not mean that they are selling less. Without sales data and context the numbers are meaningless for working out if sales are up or down. You don't know if the 7% increase is in line with stable or falling sales, or an increase in sales of lines with no price increase and a fall in sales of lines that have gone up in price.

A good number of products did increase this year, check out the first page of this post with price alterations:
http://www.dakkadakka.com/dakkaforum/posts/list/0/451127.page

Halfway down the page, 17 pages (with about 30 items each) of price increases, which I would say is not inconsiderable. Some of them went up by a very small amount (as little as a few $), but for the majority it was a lot more, I believe someone quoted above that it was around 12% on average. It was also what could be termed as 'core' products, battle forces, units of infantry such as the Cadian boxset, things like that.

The contents of that kind of thread are the same as every year that the 'rumour' about price rises gets posted, paraphrased with extracts (some quoted directly!) below:

Stage 1 - the disbelief: "It's not real!" "Mountain of salt!" "I call shenanigans!" "I can't believe they would raise prices again!" "I live in Australia! Please no!"
Stage 2 - the realisation, and rejection: "I can't believe the prices have gone up again!" "So glad I already collected my army.. " "Well that's my other project on hold" "Can anyone give me any info on Infinity?" "Lucky I don't live in Australia!"
Stage 3 - The justification: "It's the rate of inflation, gas is more expensive too" "How many people here genuinely need more stuff?" "This is still much cheaper than my other hobby, paragliding", "Use ebay and discount sellers" "Everything else is more expensive in Australia too"

We will have exactly the same thing again next May/June, around and around we go.. Does seem to help the other sections of the forum get a surge in interest though..

Zweischneid wrote:Sales volume for GW went UP(!). Says so right there in the report. So no devaluation of their product on this account.

Yes, it also says that they sold 2 million pots of paint in two months time (about 1.5 million in a single month). That isn't actually a good indication of a healthy market. If half (or a third or a quarter...) of the units sold were made up by a one time event you can and should discount that as being relevant.

If, for example during regular sales the average price is £20.00 (looks to be a good number figuring books, troops and various elite unit prices) then in order to get to the £131 million this year they would need to move 6,500,000 units. Now, if you add 2 million units of their cheapest item which were effectively mandatory sales to a lot of customers (distributors and retailers) because you discontinued the previous items - that would look like a 33% increase in sales volume.

It is fake though. Not only is it a one time bump, but it also isn't representative of the actual product line nor the actual market. Now, they can put it in the report without fear of fraud charges. Sales volumes for the year would be up. However, it is either done with a wink and a nod - or the various management people aren't actually looking at the source of the numbers and are getting excited about a 33% increase in sales.

frozenwastes wrote:That might be a reasonable argument for this years results, but do you think it's still reasonable to apply that reasoning to the last 6 or 7 years?
Stuff...

Pacific wrote:
A good number of products did increase this year, check out the first page of this post with price alterations:
http://www.dakkadakka.com/dakkaforum/posts/list/0/451127.page
More Stuff...

Ok, lets make this as clear as I can. I'm not saying I agree with GW's price rises, or disagree with them. Or that sales are going up or down. What I'm saying is two things:

1) You cannot infer sales data from the P&L
2) GW say in the report sales are up (both volume and profit). What that is from, possibly just paint, but without further information we just don't know (although I'm not sure how much difference the paint made. On a one month basis it would be huge, but would it be over the year? Yes, a whole load had to be purchased at once, but did that mean that in the other months sales were down as the stores had plenty of stock and were not re-ordering? I don't see allot of gamers going out and replacing still useful paint just because it has a different name)

Those are the facts. Lots of people are saying that sales are not up. I asked for a source for this information. Conjecture from the revenue on the P&L is not a fact, and I have explained why. If someone can provide some source that says sales are down I would like to see it. As people say increasing revenue at the cost of sales is a risky thing to do, but I don't see any evidence either way.

If they had cheaper products their volume might go up and profit might go down due to costs. They have chosen to sell an increasingly smaller amount of more expensive products. It has worked for them. It helps with costs to boot.

Everyone works this way, and it seems to work for them so really the naysayers seem a bit off with this. To those who think its a 'gimmick' this year like paint or whatnot fail to realize they might have a few smart people in their company who will devise a 'gimmick' every year.

Steve steveson wrote:Conjecture from the revenue on the P&L is not a fact, and I have explained why. If someone can provide some source that says sales are down I would like to see it. As people say increasing revenue at the cost of sales is a risky thing to do, but I don't see any evidence either way.

Other than various inferences which have been stated in this thread...

How about something like this:

http://www.icv2.com/articles/news/23501.html

Warmachine has overtaken Warhammer Fantasy as the #2 best selling product line for non-collectible miniature games.

PP actually held number 2 and 3 a few times - http://www.icv2.com/articles/news/15716.html

WHFB has actually been as low as #5 more than once - http://www.icv2.com/articles/news/14724.html

While you could probably find reasons to dismiss the various sources - it remains that GW is loosing volume and market share. If what I am hearing is correct, by early next spring - GW will actually loose its #1 seat as well (both a combination of more other games as well as the increasing popularity of certain other games). If you read through the various articles on ICV2 regarding GW (other than just the ones I linked) you will see a lot of ups and downs in the reporting...but more down than up.

H.B.M.C. wrote:Is it any surprise that mattyrm's first post is to immediately go on the attack against the nebulous "haters"? I see people discussing financial results, not "haters".

You dont see very well then. Have you actually read the thread? Ill just go back a few posts.. here's one

"I would love to see a poll of how many people that love GW also like Micheal Bay and eating paint chips!"

Yeah that's discussing financial results.

Basically HBMC, you and Phantom Viper and your oppo's just love to give me gak on the rare occasions I post in these threads simply because you don't like being reminded how infantile your position is, that your kicking and screaming and your long list of Jervis sigs and your bizarre habit of taking everything faceless companies do "personally" is truly ridiculous for a grown man. I haven't bought anything off GW for about 2 years, I still don't own the 6th ed book, and I own less than 3000 points of toy soldiers. But you and your little posse who like to slap each other on the back while you give people like me or Kan, or even young kids who are passionate about the hobby reams of gak because they disagree with you are in the wrong and you know it.

You like to throw insults around and bully people but play the hurt feelings card when anyone responds in kind, and the reason I don't like you is because I don't like bully boys, and I don't like entitled dorks that make us all look bad when our girlfriends occasionally peek over our shoulders while we post and go "feth me, is that guy a brilliant satirist or is he 9 years old?!"

As I've said many times before, I find it laughable that grown men take the hobby so seriously, and incessantly complain as if this gak is actually important, as a result I find you and your mates laughable, and I like to point it out to you so you might actually understand that its people like you who give blokes who paint minis a bad name.

Don't buy GW. But don't gob off about the company constantly, and act personally offended when they release products, its getting boring.

Lets have some perspective eh? Jervis is a bloke who works for a big company, he's not a registered sex offender.

Howard A Treesong wrote:Have their legal costs from the CH case and their various appointments in the IP and legal department started to show up yet? Or are they still to insignificant to warrant mention? No talk of 'fortress walls' this year, or do they save that for another time?

It didn't show up, which means it was expensed, which means that GW doesn't think it's likely that they'll win.


Automatically Appended Next Post:

Zweischneid wrote:I am denying the logic of people concluding that sales went down because price increases > profit increases

Keeping up the strawman? No one is arguing that.

reds8n wrote:You will get to meet all the people who do the important things and talk to them about their
jobs. [b]You will also get, if such is your desire, a foaming pint of Bugman’s best in our famous bar.

I was last at WH world about two years ago, and all they sold was dog gak lager like Fosters and Carling, they didnt have a single real ale or stout on.

I thought it would be smart to get a local brewer to make them some ale and call it Bugmans best.. maybe they got around to it?

Anyone been lately?

Steve steveson wrote:

frozenwastes wrote:That might be a reasonable argument for this years results, but do you think it's still reasonable to apply that reasoning to the last 6 or 7 years?
Stuff...

Pacific wrote:
A good number of products did increase this year, check out the first page of this post with price alterations:
http://www.dakkadakka.com/dakkaforum/posts/list/0/451127.page
More Stuff...

Ok, lets make this as clear as I can. I'm not saying I agree with GW's price rises, or disagree with them..

I was responding specifically to this comment, not about the rest of it.

Yes, the price of some products increased, but not all of them (the majority did not increase this year) and without knowing what sold you cannot say that sales are falling. If a company that sell 100 products increased one by 1000% but keeps the rest the same, but only has a 10% increase in revenue it dose not mean that they are selling less.

So just concerning the range of items that went up in price, which isn't admittedly central to the discussion.

As you say it's difficult to speculate on what the other figures can mean, specifically regarding sales volume. I have to be honest though, normally if 'sales' had increased for the general range (other than the new paints, which was a focal point of the announcement) you have to think that they would probably have mentioned that.

Steve steveson wrote:1) You cannot infer sales data from the P&L

Err...yes you can.

Steve steveson wrote:Lots of people are saying that sales are not up. I asked for a source for this information. Conjecture from the revenue on the P&L is not a fact, and I have explained why. If someone can provide some source that says sales are down I would like to see it. As people say increasing revenue at the cost of sales is a risky thing to do, but I don't see any evidence either way.

There is nothing wrong with infering it, people have to do that all the time with Income Statements. As someone who spent nearly a decade doing this gak in UK retail, I'm happy that the assumptions made by others are broadly fair, and GW has basically stood still again. The fact that they didn't supply an equivalent 52 week comparative in their release is further indicative of this, but they can get away with it because their major shareholders are big institutions who probably skim read the short release and file the full pack without even opening it.

Someone mentioned they seemed to be doing "ok" for a retailer, whilst true, there is no "retailer market", there is a "miniatures/wargames market" and as far as what we can pick up from others in the market, GW have under-performed the market on sales (and given they have a store chain that will eat around 30-40% of their margin, they've probably under-performed the established market on profits), when you hold all the advantages there's no excuse for not substantially out-performing the market.

skyth wrote:

Keeping up the strawman? No one is arguing that.

/shrug

If noone is arguing that and I simple misread sentences such as the one below, than it would indeed by a non-issue and noone would have cause to disagree with me.

If GW was selling the same or more each year then its revenues would increase in step with their price increases. This hasn't happened and the only real conclusion that can be drawn is that their sales are declining at around the same rate as their price increases.

Steve steveson wrote:
Those are the facts. Lots of people are saying that sales are not up. I asked for a source for this information. Conjecture from the revenue on the P&L is not a fact, and I have explained why. If someone can provide some source that says sales are down I would like to see it. As people say increasing revenue at the cost of sales is a risky thing to do, but I don't see any evidence either way.

Previously you said you didn't require pics. But I don't think anyone except company insiders has the kind of proof you want?
It appears that they did have a good year this year. I'm not super confident saying that this year sales volumes decreased. However, I think it is very possible to make broadly correct statements based upon the P+L statement. Particularly in past years, when profits increased, but revenue was flat, and it was obvious that their profitability only increased through severe (and unsustainable) cost cutting. This year, it's intuitive that seeing as GW raised prices considerably on 'starter' products (battleforces, codices, etc) and their primary market is new customers who require these products, that the marginally increased revenue on miniatures does not reflect the price increase at constant volume. Not proof exactly... but worth consideration, no?

Baragash wrote:

Steve steveson wrote:1) You cannot infer sales data from the P&L

Err...yes you can.

Err... no you can't. Without access to sales data you have no idea if the revenue came from lots of small items or a few big items.

Steve steveson wrote:Lots of people are saying that sales are not up. I asked for a source for this information. Conjecture from the revenue on the P&L is not a fact, and I have explained why. If someone can provide some source that says sales are down I would like to see it. As people say increasing revenue at the cost of sales is a risky thing to do, but I don't see any evidence either way.

Baragash wrote:
There is nothing wrong with infering it, people have to do that all the time with Income Statements. As someone who spent nearly a decade doing this gak in UK retail, I'm happy that the assumptions made by others are broadly fair, and GW has basically stood still again. The fact that they didn't supply an equivalent 52 week comparative in their release is further indicative of this, but they can get away with it because their major shareholders are big institutions who probably skim read the short release and file the full pack without even opening it.

Someone mentioned they seemed to be doing "ok" for a retailer, whilst true, there is no "retailer market", there is a "miniatures/wargames market" and as far as what we can pick up from others in the market, GW have under-performed the market on sales (and given they have a store chain that will eat around 30-40% of their margin, they've probably under-performed the established market on profits), when you hold all the advantages there's no excuse for not substantially out-performing the market.

As someone who has been "doing this gak" for nearly a decade in UK and international wholesale, I do know what I'm talking about too. I agree that they seem to have broadly stood still. What I am arguing against is the people screaming the sky is falling, who every year tell us that GW's losing sales left right and center. I see no evidence for this, but would like to see it if it exists. The only evidence is that sales revenue is up and volume is up. We don't know WHAT cause this. I suspect that they have not provided any further details on sales because they are not as good as the financials seem, and would put a dampener on the headline figurers, and that possibly core sales ARE down. Whether this is down to falling sales propped up by one off stuff that will never happen again, or ongoing solid sales we just don't know.

On the "which market is it in" front, you could argue due to its retail presence and customer profile it is not in the wargames market. I don't see many of the other wargames as a major competitor at this time. Looking at the teen entertainment market would probably be just as valid a comparison.

Trasvi wrote:
Previously you said you didn't require pics. But I don't think anyone except company insiders has the kind of proof you want?
It appears that they did have a good year this year. I'm not super confident saying that this year sales volumes decreased. However, I think it is very possible to make broadly correct statements based upon the P+L statement. Particularly in past years, when profits increased, but revenue was flat, and it was obvious that their profitability only increased through severe (and unsustainable) cost cutting. This year, it's intuitive that seeing as GW raised prices considerably on 'starter' products (battleforces, codices, etc) and their primary market is new customers who require these products, that the marginally increased revenue on miniatures does not reflect the price increase at constant volume. Not proof exactly... but worth consideration, no?

Don't get me wrong, it may well be correct. Personally I am glad to see that they seem to have reached a point of stopping cost cutting and see what seemed in the past to be an attempt to magic up profit growth to now seem to be a sensible re-structure of the company, cutting waste etc.

I do agree that what seems to be the prime market has had items increased in price. If I was looking at them professionally all of the talk of the paint sales would ring alarm bells and I would want to know more. They may well reach the point where sales start to dip too much (and probably will if prices keep going up at what is probably an unsustainable rate), but as it stands I don't see it as a major problem.

Zweischneid wrote:

skyth wrote:

Keeping up the strawman? No one is arguing that.

/shrug

If noone is arguing that and I simple misread sentences such as the one below, than it would indeed by a non-issue and noone would have cause to disagree with me.

If GW was selling the same or more each year then its revenues would increase in step with their price increases. This hasn't happened and the only real conclusion that can be drawn is that their sales are declining at around the same rate as their price increases.

There is a huge difference between revenue and profit. That's where the issue is.

Sean_OBrien wrote:
Other than various inferences which have been stated in this thread...

How about something like this:

http://www.icv2.com/articles/news/23501.html

Warmachine has overtaken Warhammer Fantasy as the #2 best selling product line for non-collectible miniature games.

While you could probably find reasons to dismiss the various sources - it remains that GW is loosing volume and market share. If what I am hearing is correct, by early next spring - GW will actually loose its #1 seat as well (both a combination of more other games as well as the increasing popularity of certain other games). If you read through the various articles on ICV2 regarding GW (other than just the ones I linked) you will see a lot of ups and downs in the reporting...but more down than up.

It is fairly clear that GW is losing ground to other miniature companies. The icv2 article is interesting. I wonder where warmachine and hordes would rank if they were taken as a group, as they occupy the second and fourth spots? Unfortunately, icv2 does not have access to GWs own sales numbers, which may be substantial as GW runs stores.

mattyrm wrote:

reds8n wrote:You will get to meet all the people who do the important things and talk to them about their
jobs. [b]You will also get, if such is your desire, a foaming pint of Bugman’s best in our famous bar.

I was last at WH world about two years ago, and all they sold was dog gak lager like Fosters and Carling, they didnt have a single real ale or stout on.

I thought it would be smart to get a local brewer to make them some ale and call it Bugmans best.. maybe they got around to it?

Anyone been lately?

I thought that that piss water lager that you nearly blew your brains out with was their bugmans beer?

Any way decent beer is better from the bottle rather than stewing in casks for months after the first camra has a snifter.

Cider for the memory loss god!

notprop wrote:

mattyrm wrote:

reds8n wrote:You will get to meet all the people who do the important things and talk to them about their
jobs. [b]You will also get, if such is your desire, a foaming pint of Bugman’s best in our famous bar.

I was last at WH world about two years ago, and all they sold was dog gak lager like Fosters and Carling, they didnt have a single real ale or stout on.

I thought it would be smart to get a local brewer to make them some ale and call it Bugmans best.. maybe they got around to it?

Anyone been lately?

I thought that that piss water lager that you nearly blew your brains out with was their bugmans beer?

Any way decent beer is better from the bottle rather than stewing in casks for months after the first camra has a snifter.

Cider for the memory loss god!

Now we're on to a propper subject. Bugmans is rather nice, and comes in bottles as well as on draft. The problem with it is the price. True GW pricing

Personally I think draft is better, as long as you go somewhere with a half way decent turnover.

Nah it was Kronenbourg mate, a quid a pint cos It was out of date, hence I drank as many as possible and then fell asleep.

I mean, don't get me wrong Ill happily drink lager, I just prefer bitter, stout, real ale or almost any description.

I don't actually think I dislike anything.. ciders alright as well, I think id even drink meths through a sock if I was a hobo.

Hulksmash wrote:I can like a product without liking business practices. I'm just saying.....

Which means I don't buy the products. If you don't like the business practices, maybe you shouldn't justify them by continuing to purchase the company's products. There's a whole world of fantasy wargaming beyond Games Workshop and it isn't very difficult to find a satisfactory harbor.

Sean_OBrien wrote:

Zweischneid wrote:Sales volume for GW went UP(!). Says so right there in the report. So no devaluation of their product on this account.

Yes, it also says that they sold 2 million pots of paint in two months time (about 1.5 million in a single month). That isn't actually a good indication of a healthy market. If half (or a third or a quarter...) of the units sold were made up by a one time event you can and should discount that as being relevant.

Sure it's a "one-time event" but companies tend to have "one-time events" every year. For example in GW's case in 2009 there was Space Hulk, 2010 there was Fantasy 8th edition etc. Next financial year will include release of 40k 6th edition, Hobbit miniatures line etc. Which again are "one-time events" in exact same sense that they can't do same every year. But they will probably do something else.

Oh Weeble1000, you're adorable!

I'll spend my money how I choose as you do. GW isn't running sweat shops or pursuing illegal business practices. They've always provided excellent customer service on items I purchased from their retailers without issue. They are a luxury good I treat as a luxury good.

Sidenote: I'm not big on fantasy miniatures. If I was there are several outlets outside of GW modelwise I would probably pursue but I just can't get into fantasy games at this point, be it GW or others.

Sean_OBrien wrote:
PP actually held number 2 and 3 a few times - http://www.icv2.com/articles/news/15716.html

WHFB has actually been as low as #5 more than once - http://www.icv2.com/articles/news/14724.html

While you could probably find reasons to dismiss the various sources - it remains that GW is loosing volume and market share. If what I am hearing is correct, by early next spring - GW will actually loose its #1 seat as well (both a combination of more other games as well as the increasing popularity of certain other games). If you read through the various articles on ICV2 regarding GW (other than just the ones I linked) you will see a lot of ups and downs in the reporting...but more down than up.

However, those charts seem to show that WHFB was down to 5th in 2008/2009, and back to 3rd in 2012. I'm not sure how that shows GW is "losing sales and market share"?

It is well known that WHFB has been in decline for some time. When I started the hobby in early 2009, most of my local/country scene was WHFB with some 40k and rest were whatever. Then 5th edition 40k began to kick in and loads of WHFB players switched to 40k and 8th edition WHFB did little to turn the tide. I am actually pretty sure that during 5th edition, 40k has been more popular than ever (by large margin).

I don't think there were 2 million copies of Space Hulk or for that matter any other single product class sold.

The 2 million deals with the claim of an increased volume of sales...other things will have less impact on volume and minimal impact on the actual revenue. If you look at Space Hulk for example, it was a FY2010 item. Sold out in a week or so IIRC. Revenue from FY2009 to FY2010 went up by an astounding 800,000 pounds. That flash in the pan, wasn't even enough to singe arm hairs - granted it was likely enough to keep them from posting a drop in sales for the year (second half FY2010 had lower sales than second half FY2009).

LotR and the upcoming Hobbit isn't a one time event - it will likely be a bubble, just due to the market and history being a good indicator of things to come. New editions and new codices - new models to go with them are not one time events either. You do have surges - but it isn't anywhere comparable to what would happen if they were to completely cancel a line and replace it with a new line of products.

I thought the prices in Bugman's bar were very good when I was there a bit over a year ago. The food and drink was priced equivalent to Wetherspoons and it was pretty tasty too.

Interestingly, the change in marketing (namely closed lips until two weeks before launch) appears not have hurt them in the slightest. Can't say that it helped, either, but clearly these financials are of a healthy, mature (i.e. growth plateued) company.

No doubt these results bolster the corporate philosphy of eschewing tournaments, the internet, etc. Despite the rage, the sales are still pretty good.

Hulksmash wrote:Oh Weeble1000, you're adorable!

I'll spend my money how I choose as you do. GW isn't running sweat shops or pursuing illegal business practices. They've always provided excellent customer service on items I purchased from their retailers without issue. They are a luxury good I treat as a luxury good.

Sidenote: I'm not big on fantasy miniatures. If I was there are several outlets outside of GW modelwise I would probably pursue but I just can't get into fantasy games at this point, be it GW or others.

That's unnecessarily belittling. If I don't like the way the company operates, I won't purchase the products, which is, like, the same thing that you are saying. It's almost as if both of our opinions about this are perfectly acceptable. The belittling is rather unproductive.

If one has a problem with a company, a perfectly legitimate reaction is to deny said company one's custom. Personally, I think Games Workshop's policies are incredibly detrimental, particularly with regard to its overblown and aggressive intellectual property litigation (and threat of litigation). If you don't feel the same, so be it. The point was simply that if you feel you have a legitimate concern, you should think about whether that concern trumps your desire for the product. In my case it does.

I will add that with regard to "pursuing illegal business practices," Games Workshop has done so in the past, and several of its current business practices border on, and may indeed firmly cross, the line if legality. I find that completely unacceptable, regardless of the quality of the company's customer service.

However, this line of discussion is rather off topic, so if you would like to continue it, I think a new thread would be the best way to proceed.

Statesman wrote:Interestingly, the change in marketing (namely closed lips until two weeks before launch) appears not have hurt them in the slightest. Can't say that it helped, either, but clearly these financials are of a healthy, mature (i.e. growth plateued) company.

No doubt these results bolster the corporate philosphy of eschewing tournaments, the internet, etc. Despite the rage, the sales are still pretty good.

Actually it has. A couple articles on ICV2 are editorials by store owners regarding the practice. Several have stopped carrying GW products as a result - or greatly cut back on them.

One of the more recent ones was the paint line switch. Although there were rumors going about for a while before hand that something was up - there was no official notification sent to independent retailers till 2 weeks prior to the release. This forced them to have to react much more quickly than you would normally want to with that (what to do with old paint, do you try to stock pile old paint, should you carry new paint, should you switch to a different brand instead, which brand to switch to...) not to mention the capital outlay for those who did in fact decide to go with the program. Not to mention it coincided with another largish release from GW in the form of the Tomb Kings.

With every other company - retailers get heads up regarding new products well in advance (even if they don't get the exact day right - they know it is coming).

About the last part in the OP...

Does anyone care about a new Hobbit range?

They say it will be surprising.

Not to me. I hate the LotR line.

I'd rather see some plastic ork mega-nobz.

Sean_OBrien wrote:I don't think there were 2 million copies of Space Hulk or for that matter any other single product class sold.

No, but in terms of revenue generated it was probably same class to paint change. Last time GW posted numbers which were better than what some expected, it was explained with Dark Eldar release. "OK, they released Dark Eldar, huge release with lots of new miniatures, it should be expected they sold a lot".

DeffDred wrote:About the last part in the OP...

Does anyone care about a new Hobbit range?

They say it will be surprising.

Not to me. I hate the LotR line.

I'd rather see some plastic ork mega-nobz.

Largely - no, that is why LotR was a bubble. There was significant interest in it while the movies were out - then it fell off sharply. The Hobbit will likely be the same. Those who are serious gamers who are interested in Tolkien miniatures have had several options for a very long time (think Mithril has had a general license for them since the late 1980s or early 1990s). You will likely have some people pick it up in passing because with the surge in movie goers who will come in, other games are often pushed aside to accommodate them (in the false hope of keeping them). All the noise should be over and done with though by late 2015 or 2016 though, and then things will go back to normal (and GW will likely drop the line around that time to avoid the licensing fees).


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Backfire wrote:

Sean_OBrien wrote:I don't think there were 2 million copies of Space Hulk or for that matter any other single product class sold.

No, but in terms of revenue generated it was probably same class to paint change. Last time GW posted numbers which were better than what some expected, it was explained with Dark Eldar release. "OK, they released Dark Eldar, huge release with lots of new miniatures, it should be expected they sold a lot".

What? Dark Eldar probably did bump sales - but FY2011 was a dog of a year. Lost revenue over FY2010 (which was also a dog of a year and lost revenue at constant currency over FY2009...which was a dog of a year).

Also, as I mentioned - the paint isn't related to revenue - rather sales volume. Revenue wise it would be likely 4 million pounds worth of sales (not astonishing...but significant). Revenue wise - Space Hulk would have needed to sell upwards of 60,000 copies at full retail to match that (which it might have - but that would have meant that that was a horrendously bad first half year).

Some interesting quotes:

The Citadel Finecast resin range launched last year has seen both quality and efficiency improvements throughout the year and we expect further improvements as we continue to refine this new manufacturing process.

Good to see a perfect product getting better, with more improvements expected

At Games Workshop we have two performance related pay schemes, both of which have paid out this year. The first is the profit share scheme which is designed to share part of the profits generated in an exceptional year with the staff who made that performance possible.(...) In the current year, the volume growth we have delivered has ensured the core business performed ahead of expectations and the payout is £475 per member of staff.

Do you know any GW staff who received a £475 bonus? If not, who received that money?

Currently 98% of our Hobby centres have a trained manager and over half have a named successor ready to be deployed. We believe that this will help to ensure that our sales businesses are better able to respond to under-performance and deliver consistently high levels of customer service for our Hobbyists.

So half the GW stores have a named successor for their manager to increase motivation? Seems like they liked the Dark Eldar Codex and now use Pain markers to improve staff effectiveness Explains the aggressive sales strategies by the staff.

Kroothawk wrote:

Currently 98% of our Hobby centres have a trained manager and over half have a named successor ready to be deployed. We believe that this will help to ensure that our sales businesses are better able to respond to under-performance and deliver consistently high levels of customer service for our Hobbyists.

So half the GW stores have a named successor for their manager to increase motivation? Seems like they liked the Dark Eldar Codex and now use Pain markers to improve staff effectiveness Explains the aggressive sales strategies by the staff.

GW needs to learn that constantly changing managers destroys communities and as a result, hurts sales.

So pretty much all stores have trained a new manager and half of these stores have a successor to the current manager lined up. So they fully expect to lose half their current store managers in the near future? They can't all be promoted to Nottingham so I guess they are going elsewhere. Not great staff retention there.

In Germany GW does one or two store manager recruitment days per year, so there must be a constantly high demand for replacements. No wonder if you know the salaries and compulsory overtime for store managers and GW's high sales expectations that are rarely met.

Sean_OBrien wrote:
How about something like this:

http://www.icv2.com/articles/news/23501.html

Warmachine has overtaken Warhammer Fantasy as the #2 best selling product line for non-collectible miniature games.

PP actually held number 2 and 3 a few times - http://www.icv2.com/articles/news/15716.html

WHFB has actually been as low as #5 more than once - http://www.icv2.com/articles/news/14724.html

ICV2 numbers are only a partial picture. They only reflect Alliance/Diamond Distribution's sales numbers for North America. They do not include GW's own store numbers or online sales for North America, let alone, the rest of the world. A PP employee told me that PP's total global sales were equal to 25% of GW's North American sales back in 2011 or about $12,000,000. To put in perspective, Privateer Press sales is only 6% of GW's total global sales.

silent25 wrote:A PP employee told me that PP's total global sales were equal to 25% of GW's North American sales back in 2011 or about $12,000,000. To put in perspective, Privateer Press sales is only 6% of GW's total global sales.

I'll take that at face value (not sure - have no information in that regard) but look a bit closer just at what you have there.

Privateer press has no significant direct sales presence (their web store - but I would be willing to bet it accounts for a small fraction of sales). Most of their sales will be through a wholesale scheme. Fairly common is 40% discount. That kicks things up to $20,000,000. After that - you have to consider the entry level costs per person. While the two army starter set for both companies cost roughly the same - the person who bought the Warmachinie boxed set actually has two playable armies. To make a GW set playable in normal games - you would need to spend a good bit more money. While many people do purchase the various books for Warmachine - those also are not essential (since figures come with cards that have the important stuff on them). So, even discounting other items - the Warmachine is $50 cheaper to get someone started (or $25...if they only go in for one Codex at last years prices).

So - if you were to consider that the $20,000,000 would be used simply on new players buying starter sets (and the required items to be playable in general games) for a GW customer - it could bring in 160,000 whereas the PP comparable will get 200,000 new people playing. Of course it isn't that simple - things never are. However, that same story generally holds up as you make it more complicated. While PP is still only bringing in a small portion of the revenue which GW is - their sales are growing the customer base by a larger percentage. Places like the UK - this will largely seem like a mythical concept, but where GW products are primarily moved through independent stores - when Warhammer or 40K players see more people getting more stuff for their money, it tends to erode GW's hold on the market.

Good bit off topic I guess - but it goes to the point of GW sales falling and the reasoning why.

Interesting Mr OBrien but longer this thread goes on the more we get back to the old adage that Statistics can be used to prove anything.

Cartainly in 87.9% of cases.

I suspect a 12.1% chance you might be wrong there Notprop!

I suppose the unarguable point here is that there is now more than 1 major player in the industry, a situation that has changed from ten years ago.

Kroothawk wrote:In Germany GW does one or two store manager recruitment days per year, so there must be a constantly high demand for replacements. No wonder if you know the salaries and compulsory overtime for store managers and GW's high sales expectations that are rarely met.

Many years ago when I was a GW staffer, there used to be a kind of '6 month' barrier for the staff generally, and if they passed through that then they might well go on to work at the stores for years. I won't say they were a bad employer, because they weren't (certainly compared to some companies I have worked for!), and the discounts in particular were mental. There was a certain amount of corporate BS you had to go through (a lot of it cringe-worthy), but again that's the same again for most bigger companies these days.

But, I was only ever at the lower end of things. I did talk to people, and some visits from 'dignitaries' helped to convince me there was a serious yes-men culture at the company, even back then. The end of the 'LoTR' bubble was not a nice thing to behold, especially when as far as the higher-ups were concerned there was no reason that the product lines shouldn't have been selling just as well.

I think generally the least critical thinking staff members (and this includes management) who are prepared to just swallow whatever they are fed last longest, but it becomes unbearable for most people and they leave after 6-12 months. The wage (like many retail jobs) isn't really enough if you have to support yourself, and there is only so much 'hobby love' can do to compensate for that.

Sean_OBrien wrote:

Statesman wrote:Interestingly, the change in marketing (namely closed lips until two weeks before launch) appears not have hurt them in the slightest. Can't say that it helped, either, but clearly these financials are of a healthy, mature (i.e. growth plateued) company.

No doubt these results bolster the corporate philosphy of eschewing tournaments, the internet, etc. Despite the rage, the sales are still pretty good.

Actually it has. A couple articles on ICV2 are editorials by store owners regarding the practice. Several have stopped carrying GW products as a result - or greatly cut back on them.

One of the more recent ones was the paint line switch. Although there were rumors going about for a while before hand that something was up - there was no official notification sent to independent retailers till 2 weeks prior to the release. This forced them to have to react much more quickly than you would normally want to with that (what to do with old paint, do you try to stock pile old paint, should you carry new paint, should you switch to a different brand instead, which brand to switch to...) not to mention the capital outlay for those who did in fact decide to go with the program. Not to mention it coincided with another largish release from GW in the form of the Tomb Kings.

With every other company - retailers get heads up regarding new products well in advance (even if they don't get the exact day right - they know it is coming).

Certainly, anecdotally, I've read tons complaining about GW. And yet...the numbers haven't decline. They're doing fine. All the thunder and lightning...and they're still about where they were. Odd.

spaceelf wrote:
It is fairly clear that GW is losing ground to other miniature companies. The icv2 article is interesting. I wonder where warmachine and hordes would rank if they were taken as a group, as they occupy the second and fourth spots? Unfortunately, icv2 does not have access to GWs own sales numbers, which may be substantial as GW runs stores.

Considering the sales GW does from its stores in the UK alone it is most likely more than substantial. Without this data the entire article is fairly useless.

Statesman wrote:Certainly, anecdotally, I've read tons complaining about GW. And yet...the numbers haven't decline. They're doing fine. All the thunder and lightning...and they're still about where they were. Odd.

Point is that for years, revenue growth is less than average price hike, so they sell 5-10% less products each year, meaning shrinking consumer base. At the same time for years, a major shareholder (Kirby) decides that shareholders get more money than total profits, so constantly draining the company for personal profit. This is a process that takes some time to reach a critical treshhold, but it eventually will reach it, as an extreme yes-man-company like GW has no control loops to stop that process.

Kroothawk wrote:

Statesman wrote:Certainly, anecdotally, I've read tons complaining about GW. And yet...the numbers haven't decline. They're doing fine. All the thunder and lightning...and they're still about where they were. Odd.

Point is that for years, revenue growth is less than average price hike, so they sell 5-10% less products each year, meaning shrinking consumer base. At the same time for years, a major shareholder (Kirby) decides that shareholders get more money than total profits, so constantly draining the company for personal profit. This is a process that takes some time to reach a critical treshhold, but it eventually will reach it, as an extreme yes-man-company like GW has no control loops to stop that process.

Interesting theory, but wasn't the average price hike 3% this year? It looks like revenue growth was more than that, at slightly higher than 6%.

spaceelf wrote:

Kroothawk wrote:

Currently 98% of our Hobby centres have a trained manager and over half have a named successor ready to be deployed. We believe that this will help to ensure that our sales businesses are better able to respond to under-performance and deliver consistently high levels of customer service for our Hobbyists.

So half the GW stores have a named successor for their manager to increase motivation? Seems like they liked the Dark Eldar Codex and now use Pain markers to improve staff effectiveness Explains the aggressive sales strategies by the staff.

GW needs to learn that constantly changing managers destroys communities and as a result, hurts sales.

A successor doesn't necessarily mean anything more than they have a back up plan if someone leaves. Its very common in most industries. Some shops may be a one man operation, but some have 2 employs and if you have 2 people, you have a successor.


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Kroothawk wrote:

Statesman wrote:Certainly, anecdotally, I've read tons complaining about GW. And yet...the numbers haven't decline. They're doing fine. All the thunder and lightning...and they're still about where they were. Odd.

Point is that for years, revenue growth is less than average price hike, so they sell 5-10% less products each year, meaning shrinking consumer base. At the same time for years, a major shareholder (Kirby) decides that shareholders get more money than total profits, so constantly draining the company for personal profit. This is a process that takes some time to reach a critical treshhold, but it eventually will reach it, as an extreme yes-man-company like GW has no control loops to stop that process.

Just curious, where do you get that they have a 5-10% drop in quantity sold? I just don't see that part. Its it in the MDA or a foot note? I know they bumped up the prices but I just don't see that the price increase resulted in less quantity this year. If that were true, there would be little to no growth this year - instead it looks like growth exceeded the price increases. The only thing, I saw of value was there change in revenue recognition on their royalties which if I recall was in note 10 and they recognized some of these royalties faster or over a shorter period. I will take another look at the statements to gauge the quantity piece but I just don't recall seeing that as the case. I could be wrong though as I am viewing the statements on my phone.


Automatically Appended Next Post:

Sean_OBrien wrote:

silent25 wrote:A PP employee told me that PP's total global sales were equal to 25% of GW's North American sales back in 2011 or about $12,000,000. To put in perspective, Privateer Press sales is only 6% of GW's total global sales.

I'll take that at face value (not sure - have no information in that regard) but look a bit closer just at what you have there.

Privateer press has no significant direct sales presence (their web store - but I would be willing to bet it accounts for a small fraction of sales). Most of their sales will be through a wholesale scheme. Fairly common is 40% discount. That kicks things up to $20,000,000. After that - you have to consider the entry level costs per person. While the two army starter set for both companies cost roughly the same - the person who bought the Warmachinie boxed set actually has two playable armies. To make a GW set playable in normal games - you would need to spend a good bit more money. While many people do purchase the various books for Warmachine - those also are not essential (since figures come with cards that have the important stuff on them). So, even discounting other items - the Warmachine is $50 cheaper to get someone started (or $25...if they only go in for one Codex at last years prices).

So - if you were to consider that the $20,000,000 would be used simply on new players buying starter sets (and the required items to be playable in general games) for a GW customer - it could bring in 160,000 whereas the PP comparable will get 200,000 new people playing. Of course it isn't that simple - things never are. However, that same story generally holds up as you make it more complicated. While PP is still only bringing in a small portion of the revenue which GW is - their sales are growing the customer base by a larger percentage. Places like the UK - this will largely seem like a mythical concept, but where GW products are primarily moved through independent stores - when Warhammer or 40K players see more people getting more stuff for their money, it tends to erode GW's hold on the market.

Good bit off topic I guess - but it goes to the point of GW sales falling and the reasoning why.

I fail to follow you on this, are you saying that GW doesn't have a wholesale or distribution system for their product? I'm not concerned with their Web presence as the lack of a Web presence isn't the fault of GW. That means PP needs to up their game. I thought they have a Web store, has that changed? You're comparing apples to oranges when you start discussing the two games as they are both very different. PP has a different model to their game and one its truly a skirmish game while the other is a larger battle. Neither game its better than the other, GW has take a different approach in that their game requires more models as a result you have to buy more. I think we should stay on topic and just discuss GW and their statements.

Sean_OBrien wrote:

silent25 wrote:A PP employee told me that PP's total global sales were equal to 25% of GW's North American sales back in 2011 or about $12,000,000. To put in perspective, Privateer Press sales is only 6% of GW's total global sales.

I'll take that at face value (not sure - have no information in that regard) but look a bit closer just at what you have there.

Privateer press has no significant direct sales presence (their web store - but I would be willing to bet it accounts for a small fraction of sales). Most of their sales will be through a wholesale scheme. Fairly common is 40% discount. That kicks things up to $20,000,000. After that - you have to consider the entry level costs per person. While the two army starter set for both companies cost roughly the same - the person who bought the Warmachinie boxed set actually has two playable armies. To make a GW set playable in normal games - you would need to spend a good bit more money. While many people do purchase the various books for Warmachine - those also are not essential (since figures come with cards that have the important stuff on them). So, even discounting other items - the Warmachine is $50 cheaper to get someone started (or $25...if they only go in for one Codex at last years prices).

Except that "actual value" of $20,000,000 applies both ways. GW doesn't make all it's revenue through direct sales either. You inflate PP's numbers, you inflate GW's numbers with the same logic. It's silly to try to argue that they are "actually bigger" because they aren't. PP doesn't have $8,000,000 more on hand to use. I'm pretty sure they wish they did though. That money is what retailers make on the sale of PP product.

Yes, PP does have a better entry level, but that also hurts their growth. You only need the starter set to build a competitive army. What need do you have to buy more? PP released both the war wagons and colossi, and the response is they aren't that powerful, so no real need to buy it. PP has spent considerable resources to make these models, but will not see a major return because not all players will buy it. It doesn't matter if you have a large player base if they don't spend money on your new products.

As much as we hate GW's imbalance and rule imperfections, it causes players to react to new rules and armies that unbalance things. Some people quit, others buy stuff in response. At my FLGS, one of the employees openly jokes about how he loves Matt Ward. Yes his fluff is atrocious and army books are as balanced as a one legged stool, but guess what. All his stuff sells. Grey Knights were an insane seller at the store and almost everyone who plays 40k has one.

Ketara wrote:

Adam LongWalker wrote:@Ketra

Perhaps you did not read fully the idiosyncrasies of the financial report, like some of us did.

I wasn't commenting on the 'idiosyncrasies of the financial report', rather the idiosyncrasies of a certain subsect of my fellow poster here on Dakka, and the bizarely pessimistic type of post which they promulgate.
I named no names, if you choose to identify and affiliate yourself with them, that's entirely your affair.

Okay. I now understand on where you are coming from. Thought it was about the report itself.

Edited: I made a previous comment and now I can not fine the data to back it up which is why it is removed. If I find it I'll re-post.

I think my favorite thing about how despite declining unit sales,, they've managed to increase revenue and profit with price hikes and thus stick around as a profitable company potentially for years to come is that it develops an excellent aftermarket.

I'm talking about bitz and accessory sellers like Maxmini.eu, Kromlech, etc.,.

GW's cancelling of the bitz service and their price increases have made for the perfect storm for other smaller guys to come in with small casting runs of great accessories at great prices.

In the 1990s when I started with 40k, the competition sucked. Other games would pop up and fizzle out. Those who made miniatures that might work with 40k made less than stellar ones (anyone remember Enigma from Quebec in Canada?).

The development of the internet combined with GW's price increases has created the market space for exactly what I'm looking for. Some of them are even starting to produce their own complete miniatures. Or they happen to make an accessory for every part of a miniature that you could theoretically use to build complete miniatures that look really awesome.

The more that I think of it, I want GW to continue on it's current path for a bit longer, despite it being frustrating for those looking for opponents for 40k and even more so, WFB.

They should keep raising prices to allow more and more miniature gaming companies into the market place. Dystopian Wars, Infinity, Privateer, etc., probably wouldn't be as successful without the customer base of frustrated and ex-GW customers.

I want more choice and more manufacturers. GW needs to keep raising their prices, slashing costs as they can and eeking out reasonable profit with relatively flat revenue while other companies pick up their market share.

Kirby and Wells can retire rich, the average price a miniature customer will pay can be pushed up and the market can be opened up to more and more competition. The only people that will be frustrated by this are those who think GW is making products for adults when they're actually targeting teens and those who think they're actually about selling games when it's really all about driving miniature sales.

Nice observation from Warseer:

Trasvi wrote:In the annual financial report lottery, Northern Europe and Scandinavia ended up in Europe, with attending 5M revenue and 1.5M profit. (They've previously been part of Europe, UK, and Asia)...

Now waiting for next years report, when Germany will be part of UK

@frozen wastes.... Yep, fully agree, have had the same discussion a number of times with old time gamers. As some one else pointed out " Thanks GW, you have pushed me to look at other games!"

The aftermarket is indeed good, and assuming the whole chapterhouse thing sets some presidents for people to work within it can only get better. As a friend of mine jokes are Mantic actually a secret arm of GW? Like the reverse of forgeworld, so they can still cash in on the cheap gamer? (not suggesting they are, just a joke)

I lived through the gamming crash which was the 90's where good solid companies made the mistake of taking their eye off the prize which is unfortunatly "Make Money" and I am glad GW still do that which fuel both after market 3rd party sales and a steady stream of ex GW players who provide income to other gamming companies letting them start up and keep in business!

Would I rather return to the good old days of 3 Rhino's for £10, sure I would, would that keep GW in business and inadvertantly supporting so many otger businesses, nope!

frozenwastes wrote:In the 1990s when I started with 40k, the competition sucked. Other games would pop up and fizzle out. Those who made miniatures that might work with 40k made less than stellar ones (anyone remember Enigma from Quebec in Canada?).

The development of the internet combined with GW's price increases has created the market space for exactly what I'm looking for. Some of them are even starting to produce their own complete miniatures. Or they happen to make an accessory for every part of a miniature that you could theoretically use to build complete miniatures that look really awesome.

The more that I think of it, I want GW to continue on it's current path for a bit longer, despite it being frustrating for those looking for opponents for 40k and even more so, WFB.

They should keep raising prices to allow more and more miniature gaming companies into the market place. Dystopian Wars, Infinity, Privateer, etc., probably wouldn't be as successful without the customer base of frustrated and ex-GW customers.

These comments got me to thinking...perhaps the question isn't about the increase or decrease of GW sales, rather, the increase/decrease of the total market. While GW sales have been fairly stable, there has been an increase in the number of players (CB, PP, Mantic, etc.) which means, in general, the total market size has increased. It's an interesting question (to me at least) to consider % market share and how GW policies/practices may be limiting their growth opportunities and reducing their market share.

AJC

Druidic wrote:@frozen wastes.... Yep, fully agree, have had the same discussion a number of times with old time gamers. As some one else pointed out " Thanks GW, you have pushed me to look at other games!"

The aftermarket is indeed good, and assuming the whole chapterhouse thing sets some presidents for people to work within it can only get better. As a friend of mine jokes are Mantic actually a secret arm of GW? Like the reverse of forgeworld, so they can still cash in on the cheap gamer? (not suggesting they are, just a joke)

Even if GW totally and completely wins against Chapterhouse, getting the judge to rule in their favour in everything they claim, all it will do is transform the 3rd party accessory makers into ones that simply get smarter about how they describe and sell their product in terms of copyright law and likeness to GW imagery.

Mantic might have started out as the lower quality budget alternative, but their products are improving drastically. I think their prices will stay substantially lower than GW's, but their quality will continue to increase. Check out these conversions that someone made to use Mantic stuff for 40k:

http://www.gowarhead.com/p/hammering-warpath.html

AJCarrington wrote:
These comments got me to thinking...perhaps the question isn't about the increase or decrease of GW sales, rather, the increase/decrease of the total market. While GW sales have been fairly stable, there has been an increase in the number of players (CB, PP, Mantic, etc.) which means, in general, the total market size has increased. It's an interesting question (to me at least) to consider % market share and how GW policies/practices may be limiting their growth opportunities and reducing their market share.

AJC

GW has had the stance that life time gamers weren't worth pursuing in terms of customer retention. They want teenagers to come it, try the demo sales process, buy stuff from a year or two and if they leave then, a new teenager will take their place. Ex-employees working above the store level have confirmed GW's expected customer lifespan as being around 18 months to 2 years.

But what about those who were recruited by the demo sales process who would be life time gamers? They too might fire GW as a supplier within a few years (though many stick around longer), but they are also more likely to be serious about their hobby, use third party bitz sites, find out about other games like Warmachine/Hordes/Flames of War and become part of the larger gaming market rather than just remain GW's customer.

I'd be pretty confident in saying that a large majority of both Privateer and Battlefront's customer base were also at one time GW's customers (or perhaps still are). I definitely think GW's practices limit their market share, even as they continue to create and expand it.

People might be contesting that this year's results show a continued decline in unit sales (and if you count each pot of paint as a unit sold, they'd be right, but irrelevant), but is anyone really contesting that the price increases of core products has gone up dramatically (doubling in some cases) over the last 7 years? And correspondingly revenue has stayed relatively flat, but increased a bit. GW has either lost customers or their existing customers are buying less, or (most likely) some combination of the above.

Those customers they have lost (or now share with competitors) who are predisposed to being lifetime hobbyists aren't going to go disappear. Thanks to the internet, there is also a cross pollination starting between fantasy, sci-fi and historical miniature gaming. Gaming conventions are getting record attendance levels and the internet is allowing manufacturers to communicate directly with their customers in a way not previously possible. Now a talented sculptor in Eastern Europe can sell miniatures and accessories to anyone in the world without the need for any traditional distribution and retailer support. Be they bitz sellers adding aftermarket parts for 40k or historical miniatures like those sold by Oddzial Osmy.

It's probably more likely than ever before that a GW customer will have the opportunity to spend part of their hobby budget on non-GW accessories, and that if they ever decided that GW's offerings are not for them, that they'll find a place to land rather than quitting the hobby.

Maybe GW will one day figure out how to go after the large life long gamer market they helped create, but currently don't target. If they can do that alongside their demo sales process targeting new teenage customers, I think they'll see an uncontested return to growth in core units sold.

I think it begins with a total rethink of their flagship product from a perspective of designing a complete customer experience rather than the organically grown customer experience that has resulted from codex and edition redesigns being staggered. A majority of GW's customers never play their games-- while Jervis has called them "craft hobbyists" and assumed they don't play because they don't want to, perhaps there is room for sales expansion if they can get those people (and lapsed life long gamer customers) to reevaluate that decision with a designed from the ground up 40k product?

I didn't say GW had to loose to chapterhouse, just that resolutions will finally set out some guidelines and clear some things up!

notprop wrote:Interesting Mr OBrien but longer this thread goes on the more we get back to the old adage that Statistics can be used to prove anything.

Cartainly in 87.9% of cases.

84% of the statistics presented in Internet discussions are completely made up.

Druidic wrote:I didn't say GW had to loose to chapterhouse, just that resolutions will finally set out some guidelines and clear some things up!

Definitely. It'll probably end up in the middle between GW completely winning and the 3rd party accessory market getting leaner and more deliberate about avoiding lawsuits (possibly by making sure to develop their own miniature lines that their parts are compatible with and being more wary of likeness and trademarks) and the other extreme of GW losing the case and the flood gates opening as people realize GW's IP isn't as protectable as they'd like.

Either way, as long as GW sticks around with their flat-to-moderately rising revenue, the better it is for life long gamers in terms of other companies bringing new and interesting products to market for them to enjoy. And I'm not just talking about bitz manufacturers, but complete alternatives like Privateer's products and Battlefront's.

frozenwastes wrote:
Mantic might have started out as the lower quality budget alternative, but their products are improving drastically. I think their prices will stay substantially lower than GW's, but their quality will continue to increase. Check out these conversions that someone made to use Mantic stuff for 40k:

http://www.gowarhead.com/p/hammering-warpath.html

Those are possibly the coolest examples of Mantic models I have ever seen. They need to stick those on their website pronto.

Pacific wrote:Those are possibly the coolest examples of Mantic models I have ever seen. They need to stick those on their website pronto.

I don't know if Mantic would want to be that blatant in saying 'Use us for GW games!'

pretre wrote:

Pacific wrote:Those are possibly the coolest examples of Mantic models I have ever seen. They need to stick those on their website pronto.

I don't know if Mantic would want to be that blatant in saying 'Use us for GW games!'

Sure they would, Mantic is very cool and pragmatic about using their models for other companies games, and using other models in KoW & Warpath.

And in fact - some shots of that army were on the Mantic blog just yesterday.

Oh. Wacky. Fair enough then.

Schmapdi wrote:

pretre wrote:

Pacific wrote:Those are possibly the coolest examples of Mantic models I have ever seen. They need to stick those on their website pronto.

I don't know if Mantic would want to be that blatant in saying 'Use us for GW games!'

Sure they would, Mantic is very cool and pragmatic about using their models for other companies games, and using other models in KoW & Warpath.

And in fact - some shots of that army were on the Mantic blog just yesterday.

In all likelihood mantic models are used more for 40k and fantasy than for mantics games. They're probably aware of that too.

frozenwastes wrote:GW has had the stance that life time gamers weren't worth pursuing in terms of customer retention. They want teenagers to come it, try the demo sales process, buy stuff from a year or two and if they leave then, a new teenager will take their place. Ex-employees working above the store level have confirmed GW's expected customer lifespan as being around 18 months to 2 years.

I definitely get the targeted approach (not agreeing with it, but understanding it). It's just interesting (from a business perspective) as one could argue that their model is effectively increasing the market size, but they are not necessarily reaping the benefits of the larger market. At the end of the day, their business, their call.

AJC

pretre wrote:Oh. Wacky. Fair enough then.

One of the characteristics of a smaller game company trying to muscle in on the big boys on the block is that you have to try and offer concessions and give more than your market-place opponents do, and I think this is just an example of that. It will be interesting to see if (or when?) this changes if Mantic ever start to get big, and therefore bigger in their boots.

Pacific wrote:

pretre wrote:Oh. Wacky. Fair enough then.

One of the characteristics of a smaller game company trying to muscle in on the big boys on the block is that you have to try and offer concessions and give more than your market-place opponents do, and I think this is just an example of that. It will be interesting to see if (or when?) this changes if Mantic ever start to get big, and therefore bigger in their boots.

I think the answer is obvious, most companies (people for that matter) do what they can get away with. Mantic would sell $1000 plastic individual models if they could, as would most people on here.

Just look at battlefront, while not quite GW they are certainly starting to show GW like characteristics; dictated discount levels and their own hobby publication (WI has increased its FoW pressence by quite a bit and FoW boxsets are subscription gifts and not the diaramas that you used to get).

Along with the acquisition of GF9 they are also positioning themselves as a one stop shop hobby company.

That's true to an extent. Although, making a WW2 game you are always going to be open to competition from rivals, which will temper your ability to put massive mark-ups on the products. With the Plastic Soldier Company stuff for instance being so much cheaper (and of comparable quality), Battlefront have now had to release resin/plastic kits of popular tank lines, which apparently will be cheaper than the previous metal minis. Contrast with another company which switched from metal -> resin and obviously didn't have to make a similar concession..

I know a lot of people were worried when Wargames Illustrated was taken on by Battlefront, but to be honest there hasn't been that much of a change. The magazine is still well written, with some really good articles, tutorials, things like that. They even still advertise from rival companies. Overall and quality wise I would probably say that its comparable to White Dwarf pre issue 310 or so, when the latter magazine nose-dived in terms of journalistic content - you can certainly put your feet up with it in the evening and spend a couple of hours reading it, and I think the official scale marks it at about 2 weeks-worth of toilet reading time..

Iazarian wrote:I think the answer is obvious, most companies (people for that matter) do what they can get away with. Mantic would sell $1000 plastic individual models if they could, as would most people on here.

Which is why we are lucky that we live in free market economy I guess! GW's business decisions of late have been typical of a company that has held almost a monopoly over an entire industry - gradual updates, not really pushing development of anything forward, and overly inflated prices are all indicators of this.The wargaming market has never had such a variety of high quality products, and for every price rise, rest-of-world embargo and product quality issue, it all allows those other companies to move into the sci-fi/fantasy wargaming market, which had previously been dominated almost entirely by GW since the early 90's.

You have a really freaky avatar by the way Iazarian, it's horrible!

Looks like a 6M increase in profits?

spaceelf wrote:

Kroothawk wrote:

Currently 98% of our Hobby centres have a trained manager and over half have a named successor ready to be deployed. We believe that this will help to ensure that our sales businesses are better able to respond to under-performance and deliver consistently high levels of customer service for our Hobbyists.

So half the GW stores have a named successor for their manager to increase motivation? Seems like they liked the Dark Eldar Codex and now use Pain markers to improve staff effectiveness Explains the aggressive sales strategies by the staff.

GW needs to learn that constantly changing managers destroys communities and as a result, hurts sales.

Yup, especially when the new manager is a total zealous asshat that doesnt realize he only has to see his bosses a handful a times a year and is working for slightly better then minimum wage.

Some interesting information about GW's sales turned up recently. This is from Trasvi and Shelfunit via Warseer:

Trasvi wrote:Reading through some documents on the GW vs CHS legal debate, I came across this:
http://ia700405.us.archive.org/18/items/gov.uscourts.ilnd.250791/gov.uscourts.ilnd.250791.208.32.pdf
pg 202.
Some legal discussion of GW's financial data.
On a quick glance, it seems to say that 40k accounts for 50% of GW's sales. Possibly more to come

shelfunit wrote:Very interesting - 50.6% in 2009/2010. What seems odd (or maybe the answerer of the questions was not complete in his answers) is that they build their figures based on an "assumed trade discount of 35%" does that mean their total turnover is assumed to be sold at 35% lower than the published figures? Even the sales they get through their own stores?

EDIT: And the "page 202" refers to the document page 202, not the PDF page 202, so on the PDF go to pg 215/244.

EDIT 2: Got the bit where they "gross up" the numbers to eliminate the effect of trade discounts on the final figures.. (PDF pg219)

EDIT 3 - And on PDF pg 224 they explicitly state that "units" in sales terms "from our perspective, it means nothing"



Showing that even they think reporting an increase is unit sales is a waste of time.

 Kroothawk wrote:
Some interesting quotes:

Currently 98% of our Hobby centres have a trained manager and over half have a named successor ready to be deployed. We believe that this will help to ensure that our sales businesses are better able to respond to under-performance and deliver consistently high levels of customer service for our Hobbyists.

So half the GW stores have a named successor for their manager to increase motivation? Seems like they liked the Dark Eldar Codex and now use Pain markers to improve staff effectiveness Explains the aggressive sales strategies by the staff.

Seems like a great place to work!