If you're the kind of gawker who sees esoteric things like increased market share, sales, and customer satisfaction as good news, you may be disappointed. If, instead, you prefer news of a dividend regardless of profits and the successful defense of 1/4 of your pigs behind your moat at thr cost of more pigs than you own, you'll likely be happy.
If you're the kind of gawker who sees esoteric things like increased market share, sales, and customer satisfaction as good news, you may be disappointed. If, instead, you prefer news of a dividend regardless of profits and the successful defense of 1/4 of your pigs behind your moat at thr cost of more pigs than you own, you'll likely be happy.
ha. GW can't even afford a dividend any more it seems. Didn't they choose not to pay one out last time, prompting the share price crash?
Azreal13 wrote: It's out on Thursday, there's an investor's calendar on the site.
...and it should be in the Word Press Uploads folder a day or two ahead of time (in case you want a sneak peak to dump stocks because GW still hasn't learned how to use an htaccess file...). Wonder, would shorting a stock based off from something like that be considered insider trading...
Sean_OBrien wrote: ...and it should be in the Word Press Uploads folder a day or two ahead of time (in case you want a sneak peak to dump stocks because GW still hasn't learned how to use an htaccess file...). Wonder, would shorting a stock based off from something like that be considered insider trading...
I don't believe it would be. If somebody associated with GW found out about this security hole from someone inside GW, then it would be insider trading, but not if you're just some guy on the internet who acted on publicly available information that wasn't supposed to be publicly available.
Shadow Captain Edithae wrote:
ha. GW can't even afford a dividend any more it seems. Didn't they choose not to pay one out last time, prompting the share price crash?
They cut it quite a bit but they still paid one. Paid one larger than their earnings for the same period.
The waiting is killing me. I have my spreadsheet made with the 14/13 sales figures in it already, just need some 15 goodness to make a chart. Everybody likes charts, right?
Torga_DW wrote: The waiting is killing me. I have my spreadsheet made with the 14/13 sales figures in it already, just need some 15 goodness to make a chart. Everybody likes charts, right?
It might be a good idea when the next report gets posted to start a new thread and just link this one in the first post so folks get some perspective (as well as not wasting the analysis done already in the past 20 pages).
6% loss in sales. Not the end of the world, but that's still quite big. And it's ONLY for a 6 month period.
"Sales
Sales fell by 6.6% to £56.5 million. The net exchange rate impact of the stronger pound was £2.1
million and, on a constant currency basis, sales were down by 1.7%. We now report our sales by
channel; our own stores: ‘Retail’; our trading partners: ‘Trade’; and our online shop: ‘Mail Order’.
"
It's not that bad.
If there IS profit, that's enough to call it "well enough".
What i also see is that december (the month of the biggest sales) is not included in the period.
Commercially a company that breaks even is good enough.
The main problem really is that there are shareholders, they want profit growth instead of profit. That whole economic model is slowly coming to an end, GW cannot do anything about that, but still has to bear the consequences of it.
Best thing might be for shares to drop a lot, then buy all the shares and remove themselves from the stock market alltogether.
There was a lot to win in the stock market in the last few decades, but since the crisis the companies outside the stock market did better and could more easily focus on continuity instead of profit growth.
As for GW in the near future: the hail mary pass WHFB will be interesting indeed :-)
Well, we now know that, beyond a shadow of a doubt, Mr. Roundtree is a Kirby stooge. "Strong weekly releases and low-cost one man retail outlets are designed to drive growth"? You're losing more money now that you've adopted that policy, you even admit your own retail sector saw the largest decline, especially outside the UK! Meanwhile, your oft-abused independent stockists only saw a small decline.
I also like the "Our biggest challenge moving forwards will be to find enough managers at all levels of the business who can drive sales and understand our culture,"
Uh, no. Maybe lack of any market research and alienation of core customer base might be a slightly larger challenge, or the consistent loss of sales through their own retail sector, especially compared to other avenues, and lack of ability to generate new customers. It's going to take more than good salesmen in your retail outlets, about 1/3 of your business, to address fundamental business problems.
Well, at least I wasn't dissapointed, I'd say this report is "broadly in line with our expectations."
RoninXiC wrote: 6% loss in sales. Not the end of the world, but that's still quite big. And it's ONLY for a 6 month period.
It's not that clear-cut because they're comparing 2/2 of 2014 with 2/2 of 2013, so there's a 6 month gap. Sales might already be in line with the gap months, which were already accounted for in the 9% drop in the last full year report. Hopefully.
The highlight I took from this report is that online sales are still essentially constant despite them sinking 4.5 mil in the new website.
lord_blackfang wrote: The highlight I took from this report is that online sales are still essentially constant despite them sinking 4.5 mil in the new website.
And we know that's being supported by "all-limited-all-the-time" behaviour, so I wouldn't classify that as a good news story or even an average news story.
Shadow Captain Edithae wrote:
ha. GW can't even afford a dividend any more it seems. Didn't they choose not to pay one out last time, prompting the share price crash?
They cut it quite a bit but they still paid one. Paid one larger than their earnings for the same period.
They didn't (unusually for them) pay dividend year ago when they had a big drop in sales in the first half-year. They declared 36p per share dividend after last Financial year report, with earnings of 36.1p per share over that year.
Re: this new report, it's not very good because the first half of FY 13-14 was supposed to be anomalously bad, and this report is actually slightly worse. So Kirby's joy of "getting the company back on track" in previous report was premature.
OTOH, at this rate, company is not going under anytime soon either.
Basic earnings per share 14.5p
Dividend per share declared in the period 36p
Hey shareholders, your company made 14.5p for each share, here have more than double that (don't ask where this came from or why we are not investing anything).
MajorStoffer wrote: Well, we now know that, beyond a shadow of a doubt, Mr. Roundtree is a Kirby stooge. "Strong weekly releases and low-cost one man retail outlets are designed to drive growth"? You're losing more money now that you've adopted that policy, you even admit your own retail sector saw the largest decline, especially outside the UK! Meanwhile, your oft-abused independent stockists only saw a small decline.
Rountree has been CEO for only 2 weeks, no? But that said, the statement could have been straight from Kirby's pen. Though in fairness it's little surprise as all corporate types sound pretty much the same.
Basic earnings per share 14.5p
Dividend per share declared in the period 36p
Hey shareholders, your company made 14.5p for each share, here have more than double that (don't ask where this came from or why we are not investing anything).
That's actually dividends paid out from last years earnings: they did not declare dividends at all during 2013-14 FY.
Page 6 Earnings per share June was down to 14.5 Pence per share, down from either 25pps and 36.1pps
It's properly compared to same period in last FY: in this case:
14.5p per share 2014
17.7p per share 2013
25.6p per share 2012
...not real positive development even if the profit's still good.
IF I had shares in GW, I would not be pleased with this drop in shares performance, and likely sell shares to bail myself off the sinking ship. It is practically a 50% decrease since 2012, well 45% but sill a chunky decrease in 2 yrs based on how many shares one has invested in a company that refuses to change to fix it's own situation for the better by staying with what is now been shown to be failing them.
Is it too simplistic to say GW was a great company when it concentrated, from the very top down, on making great models and great rules, because all that passion and energy positively oozed out of their shops and website, but ever since the focus moved to profitability and dividends and the like, it has been downhill all the way?
Kilkrazy wrote: GW nearly always pay a dividend. They have been known to take on debt to pay a dividend.
Well, dividends are what most investors are after. Growth and rising share prices are nice, but it's the annual cash what most investors expect to get out of their invested money. In that sense, supporting the dividend is keeping the investors happy and preventing stock price plummet.
Of course just focusing on stability and dividends is a bit poor business. Most big long-term companies have always been at least somewhat opportunistic and looking for new ways to expand. In that sense, GW's 'business as usual' -style doesn't look too good, especially when the miniatures hobby has been expanding without them, lately.
Looks pretty much steady - sales are down in their own stores, but they closed a net 4 of them, and fewer sales at warhammer world during the rebuild. sales elsewhere are stable.
This report is pretty consistent with what a lot of people have been saying- GW will continue to lose net profit as their goods outpace cost expectations and the amount they can squeeze out of their shrinking player base lessens as that population becomes fed up with continuous extra (and often pointless) purchase needs. WHFB priced itself out of the market a while ago; what's the point of buying the pretty new Wood Elf Eternal Guard when you're going to have to put them in blocks of 30+ to make them worth fielding? You won't even get to see all those finicky details on the kits! Now that WHFB is purportedly down to 8% of the total profit, all of their chips are in 40k and licensing (generally of 40k).
They're spreading 40k out trying to induce more sales in ways that IMO customers aren't interested in. Make armies require multiple $50 codices, invalidate armies with each new rules release and *then* speed up the release cycle of those books. Force superheavies and other big units into the game in the guise of "open gaming," further devaluing people's armies (that $40 box of Space Marines is doing less and less on the field now...other than being blown up instantly by Knights).
40k is a very popular tabletop game (the most popular, to be fair), but GW is strangling their golden goose to get the eggs they want. I think it's just going to lead to a continually shrinking player base and the company is going to eventually find itself behind other players like Privateer Press. Maybe that's where they want to be- selling boutique-cost kits in high quantities for over-bloated games. But I don't think their position is at all inviable.
brendan wrote: What's nice about these things is that everyone can drum up whatever narrative they want to fit the report.
Everyone can come up with whatever narrative that they wan't, doesn't change the fact that GW continues to loose sales, profits and customers in an otherwise growing market.
I especially like this part:
. Our current initiatives of ever better weekly
new product releases, the low cost one man stores in retail and the stockist programme in trade, are
designed to lead to growth.
Funny how GW has done nothing but shrinking ever since those initiatives were implemented!
MWHistorian wrote: No embarrassing preamble? Shame. Just the gradual decline as predicted.
I don't how they could have topped such memorable quotes like "Our crops will wither, our children will die piteous deaths and the sun will be swept from the sky. But is it true?"
What are we looking at release wise for GW so far?
The leftover sales of 7th that didn't make the cut for the annual report, one of those campaign books/sets, the Space Wolf book, Ork book, GK book, DE book and BA book? On the fantasy side, I guess a bunch of End Times stuff, though I keep up less on that side so someone else can fill in.
That's a not an insignificant amount of new releases, and from some decently popular factions (three marine books).
I'm no businessologist, but that's not a good thing if revenue is still down despite a ramping up of releases.
Blacksails wrote: What are we looking at release wise for GW so far?
The leftover sales of 7th that didn't make the cut for the annual report, one of those campaign books/sets, the Space Wolf book, Ork book, GK book, DE book and BA book? On the fantasy side, I guess a bunch of End Times stuff, though I keep up less on that side so someone else can fill in.
That's a not an insignificant amount of new releases, and from some decently popular factions (three marine books).
I'm no businessologist, but that's not a good thing if revenue is still down despite a ramping up of releases.
Arguably because of the inflated prices GW now sells everything at no amount of new releases will up sale. I never see people starting new armies because of new releases like they did back in pre-2012. More and more people are just buying the bear minimum to keep their armies current
I remember when I started in 5th how people rushed to start new space wolf, blood angels, and dark eldar armies when this new books and models can out.
By the time 5th ed Grey knights came out you still saw the rush of new armies, but not as crazy as it was.
Now with prices at their highest I almost never see veteran player start a new army because of a new army book.
Blacksails wrote: What are we looking at release wise for GW so far?.
Roughly these are the releases you are looking at in comparison.
June - Nov 2013
(Tau with the immensely popular Riptide a month before the period starts)
Jun - Codex Eldar with Wraithknight
Jul - WH40KApoc with Khornemower and Necron Super-lith
Aug - Fantasy Lizardmen
Sep - Space Marines with Centurions
Okt - Fantasy Dark Elves
Nov - Fantasy Dark Elves
June - Nov 2014 (don't fit the "monthly" as neatly, but about this)
(Tail end of 7th Edition, released late in May)
Jun - Orks with Gorkanaut
Jul - Stormclaw & Space Wolves
Aug - Grey Knights & Nagash
Sep - Space Hulk
Okt - Dark Eldar
Nov - Glottkin / Leviathan
Not really surprised. I wonder how the pro-GW people will spin this.
See, this is what it's going to be. They aren't going to go bankrupt anytime soon, but if they lose 6% sales every 6 months, how long before they're spending more money than they're making?
Baragash wrote: Fall in magazine sales......Visions must be heading towards life support then.
That would assume it wasn't stillborn to begin with.
Automatically Appended Next Post:
H.B.M.C. wrote: Guess it's time for that Hail Mary pass with the new Warhammer, hey?
Clearly, the lather/rinse/repeat 7th edition 40k early cash grab didn't do the trick so they have to do something new (besides... you know... addressing the actual problems).
The main problem really is that there are shareholders, they want profit growth instead of profit. That whole economic model is slowly coming to an end, GW cannot do anything about that, but still has to bear the consequences of it.
The shareholders who matter (namely Kirby and Friends on the board of directors) just want dividends and short term gain to cash out before they retire. They're not apparently interested in the long term health of the company, IP, and community.
See, this is what it's going to be. They aren't going to go bankrupt anytime soon, but if they lose 6% sales every 6 months, how long before they're spending more money than they're making?
Continuous annualized 6% sales declines would basically cut the company in half in 12 years.
What sticks out to me is that currency is driving about a 4% bogey (only down slightly less than 2% in local currency terms). The US$ is monstrously stronger so that shift is understandable, but it really speaks to the geography of GW's sales if they're that reliant on the NA market.
Page 6 Earnings per share June was down to 14.5 Pence per share, down from either 25pps and 36.1pps
It's properly compared to same period in last FY: in this case:
14.5p per share 2014
17.7p per share 2013
25.6p per share 2012
...not real positive development even if the profit's still good.
Bah! Kirby said that only isn't positive if you measure growth by things like money. If the lord of the moat and master of yet to be stolen pigs says so, it must be true.
I see the new web site didn't earn them a penny. Sales inline with prior year
Retail down by 9.7, due to restructuring. Trade up, but not by the same amount.
So instead of buying from elsewhere, people chose to walk away from the game
Can one of the mods reading this (or the OP) change the thread title to show that the NEW report for 1/2015 is on page 21? It looks like the separate thread for the new report was locked so it might be a good idea for those wishing to see the new info to know where to look in the somewhat lengthy thread.
I realize it is likely that it's been in every report but I just noticed they breakdown sales based on the venue. Indy store sales (including book sellers for magazines and such) are around 40% of the total and roughly almost double that of the online store. I would have thought it was actually a bit more (around 50-60%). I wonder if that percentage has changed over the past few years that they've been on a steady and slow decline. I'd suspect that more folks unhappy with GW and their changes/ideas/priorities would stop buying at FLGS where there is an alternative within arm's reach (namely the other games the stores likely stock) rather than the exclusively single minded venues of their own stores and their website.
Rountree via the report wrote:For this reason, the principal risks and uncertainties for the balance of the year lie in the ability of the sales channel managers to deliver sales growth and for the product and supply chain to maintain gross margin.
OMG. They still think their retail and trade sales people are going to close enough business to return the company to growth. While they intentionally reduce their store hours, cut staff and make trade sales terms more stringent (like the banning of all online sales in Australia).
GW will continue their slow slide into irrelevancy with falling sales year over year all the while blaming their retail employees:
During the six months to 30 November 2014, we closed a net four stores (12 opened and 16 closed). We need to improve the rate of recruitment of competent new store managers on a consistent basis.
There couldn't be issues with the product or their pricing strategy could there? No... it's the lack of competent new store managers who just can't push the plastic hard enough to meet the sales goals.
With so much stuff going 'direct-only' it renders their stores useless. I've not been in a GW store in years. Last I did I was told what I wanted wasn't available and I'd have to mail order (and pay postage) or order in store and come back. As I didn't live in that area, they got no sale.
Automatically Appended Next Post: Also they don't really give any incentive to manage their stores. They've cut all the middle management so there's little prospect of promotion. And they aren't really managers because you don't 'manage' anyone. You run a one man shop. You don't get valuable management experience because you don't have any staff. It's on a hiding to nothing managing a GW store, you just get hideous sales targets thrown at you and sacked when you can't meet them.
Also they don't really give any incentive to manage their stores. They've cut all the middle management so there's little prospect of promotion. And they aren't really managers because you don't 'manage' anyone. You run a one man shop. You don't get valuable management experience because you don't have any staff. It's on a hiding to nothing managing a GW store, you just get hideous sales targets thrown at you and sacked when you can't meet them.
Come on Howard, that sounds like a dream job to me!
It appears GWs base operating cost is 51.7MM. They show basically flat revenue if you buy the cooked number and 6% drop in revenue is you go off raw numbers. What is more concerning to me is that they lost 12% in profit, even with "Our current initiatives of ever better weekly new product releases, the low cost one man stores in retail and the stockist programme in trade" which have been well in effect for that last 6 months. This shows no signs of changing.
If you go by the revenue numbers and project a continued 6% loss in revenue, this time next year they will operating in the red. 56.5MM to 53.11MM to 49.9MM, takes 51.7MM to operate. It can probably go another 6 months if variable costs tracks closely, which is doesn't appear to based on the numbers.
They are also comparing half year to half year, which means to me the prior 6 months are worse as they should be in the report as well.
Flattening is another term for laying off more people.
Prospects section basically says their going to beat their store managers in order to drive sales. They are basically blaming poor sales numbers on having gak managers.
It appears GWs base operating cost is 51.7MM. They show basically flat revenue if you buy the cooked number and 6% drop in revenue is you go off raw numbers. What is more concerning to me is that they lost 12% in profit, even with "Our current initiatives of ever better weekly new product releases, the low cost one man stores in retail and the stockist programme in trade" which have been well in effect for that last 6 months. This shows no signs of changing.
If you go by the revenue numbers and project a continued 6% loss in revenue, this time next year they will operating in the red. 56.5MM to 53.11MM to 49.9MM, takes 51.7MM to operate. It can probably go another 6 months if variable costs tracks closely, which is doesn't appear to based on the numbers.
They are also comparing half year to half year, which means to me the prior 6 months are worse as they should be in the report as well.
Flattening is another term for laying off more people.
Prospects section basically says their going to beat their store managers in order to drive sales. They are basically blaming poor sales numbers on having gak managers.
alphaecho wrote: A question for those who follow markets and trading:
What do major investors tend to do when it looks like a company is tottering at the top of a slippery slope?
Is it:
1. Use their stake to try and persuade management to take a better course of action
or
2. Get out before it gets any worse?
Company is so small in the grand scheme of things, most will get bail out in a slow manner. If someone gets a big enough share, they may try to sell the company, but I doubt any of them care enough to try to save the company.
brendan wrote: What's nice about these things is that everyone can drum up whatever narrative they want to fit the report.
Yes... wild tales of fancy and dime-store predictions from their fan-base that have ultimately been proven quite spot-on year over year over year for at least the past 3-4 years.
Actually.... I think by 'Drum up Narrative' you mean 'A lot of people who know the market and product intimately noting policy changes and their impact on sales and making very informed predictions that have been nearly uniformly correct'?
Cmon guys, go 4-5 years back, GW is exactly in the position the 'haters' were predicting it to be in... nearly to the letter. At a certain point it is not biased opinion anymore, merely rational observation of clear data and Stats student could project from.
Seriously, the whole idea that GW isn't failing on objective levels at this point is a bit ludicrous... I can understand a discussion of whether or not they can recover or what the severity of the problem is, but I can no longer understand debating whether there is a problem...
brendan wrote: What's nice about these things is that everyone can drum up whatever narrative they want to fit the report.
Yes... wild tales of fancy and dime-store predictions from their fan-base that have ultimately been proven quite spot-on year over year over year for at least the past 3-4 years.
Actually.... I think by 'Drum up Narrative' you mean 'A lot of people who know the market and product intimately noting policy changes and their impact on sales and making very informed predictions that have been nearly uniformly correct'?
Cmon guys, go 4-5 years back, GW is exactly in the position the 'haters' were predicting it to be in... nearly to the letter. At a certain point it is not biased opinion anymore, merely rational observation of clear data and Stats student could project from.
Seriously, the whole idea that GW isn't failing on objective levels at this point is a bit ludicrous... I can understand a discussion of whether or not they can recover or what the severity of the problem is, but I can no longer understand debating whether there is a problem...
Nah couldn't be, GW is fine just it's the economy or just a group of haters. After all there's no competition since no other game is a large scale 28mm sci fi grimdark wargame with an Imperium, Space Marines, Tyranids and Eldar, so nothing can compare to 40k.
It appears GWs base operating cost is 51.7MM. They show basically flat revenue if you buy the cooked number and 6% drop in revenue is you go off raw numbers. What is more concerning to me is that they lost 12% in profit, even with "Our current initiatives of ever better weekly new product releases, the low cost one man stores in retail and the stockist programme in trade" which have been well in effect for that last 6 months. This shows no signs of changing.
If you go by the revenue numbers and project a continued 6% loss in revenue, this time next year they will operating in the red. 56.5MM to 53.11MM to 49.9MM, takes 51.7MM to operate. It can probably go another 6 months if variable costs tracks closely, which is doesn't appear to based on the numbers.
They are also comparing half year to half year, which means to me the prior 6 months are worse as they should be in the report as well.
Flattening is another term for laying off more people.
Prospects section basically says their going to beat their store managers in order to drive sales. They are basically blaming poor sales numbers on having gak managers.
Wow if that's true, then things may be really dire.
To show the decline in pre-eminence of GW from a not-hater standpoint, look at the Dakka forum menu. I would not know exactly how many of these forums and sub-forums did not exist 4-5 years ago, but it is a lot.
The gaming space is growing rapidly while GW reports falling sales and either side-lining or off-lining of major product lines (if even 1/4 of the WFB rumors prove true).
alphaecho wrote: A question for those who follow markets and trading:
What do major investors tend to do when it looks like a company is tottering at the top of a slippery slope?
Is it:
1. Use their stake to try and persuade management to take a better course of action
or
2. Get out before it gets any worse?
Company is so small in the grand scheme of things, most will get bail out in a slow manner. If someone gets a big enough share, they may try to sell the company, but I doubt any of them care enough to try to save the company.
It depends on how much risk is built into the portfolio. Some will hold their shares for short-term dividend profit but they'll have to weigh that against the inevitable down pressure on the stock price due to GW being a less profitable company. Recall that a year ago we saw one major institutional investor divest themselves of their ownership which caused shifting I'm majority shareholders and a drop in share price. Shares closed at 500p but futures looks to be trading fairly heavily downward; we'll see in the morning.
Well, with their stupid pricing strategies and awful treatment of their front line staff, I can't say I am sorry to see this happen.
I hope their decline is a lesson for others, but I think it is clear that they just want to blame the shop staff for what are clearly strategic failures.
SilverDevilfish wrote: Waiting for the inevitable post of "that graph" with the predictable "Yeah GW is doing fine, look at the shares, look at the cyclesssssss".
SilverDevilfish wrote: Waiting for the inevitable post of "that graph" with the predictable "Yeah GW is doing fine, look at the shares, look at the cyclesssssss".
As predictable as this post...
Here we go again.
I'm sorry would you rather I have posted it with a meme generated image?
BOLS has the article up, and of course there's the typical "Show me other companies financials, it could be the entire industry that's struggling" and "People have been saying GW is failing for 10 years now, they'll be saying it for 10 more" type of comments already.
brendan wrote: What's nice about these things is that everyone can drum up whatever narrative they want to fit the report.
I'm assuming this was directed at me. Would you like to bring forth your own reasons why GW is experiencing report-on-report profit drops?
I thought it was a good analysis. It's kind of obvious, really. These consecutive reports all add up to a story that tells of a company that is loosing (or has already lost?) its grip on its target market. Constantly bloating prices while releasing products that are unnecessary (the stripping content out of codices to sell equally priced sub-codices and digital DLC is the most obvious example - 100%+ tax to play certain popular lists you still want to play). All the while alienating its customer/fan-base by withdrawing any sort of community/organized play or support. Not to mention the blatant threat of IP infringement lawsuits that soured its reputation and perception of any 'good will,' against fan-sites and 3rd party 'bits' shops (culminating in the epic slap-in-the-face that was the Chapterhouse lawsuit, when someone actually stood up to their bullying). Since the lawsuit, we've seen a 'backlash' of sorts by GW to convert or drop all nebulous or non-copyright-able IP...a 'baring of the gates' or 'boarding up the windows' of sorts. Some of these knee-jerk decisions almost seem like they are punishing their fan-base..."See? See what you made us do?" All of these things coupled with a profit growth driven corporate mindset that has been scrambling to reduce overhead and cut the chaff, while placating their shareholders with dividends...despite the fact that they didn't earn enough profit to justify them.
I'm sure there is a lot more to it to that, but connecting the dots that are there for us to actually see, gets us in the ballpark of what is actually going on.
Fango wrote: Since the lawsuit, we've seen a 'backlash' of sorts by GW to convert or drop all nebulous or non-copyright-able IP...a 'baring of the gates' or 'boarding up the windows' of sorts. Some of these knee-jerk decisions almost seem like they are punishing their fan-base..."See? See what you made us do?"
I believe if you want to use the parlance of the CEO responsible for this decline, they're installing punji sticks in now penetrable moat to protect their pigs from theft. Nevermind the fact that those sticks will likely impale the pigs that stray to close to the water and eventually kill off most of the herd...
I think many people see posters here and elsewhere saying that GW is failing and confuse it with us wanting GW to fail.
To be honest, in it's current form, GW doesn't deserve to succeed. But many of us would prefer it to change to a company that did deserve success, and for it to continue and to make great products we'd like to buy.
I'm not angry or gleeful at this sort of news, and I guess most of us here aren't, except in the way that we get a bit excited at an interesting bit of gossip. Most of us are probably reading and posting about this with a sort of glum, frustrated indifference.
GW made money two ways, selling product, 56.5MM, and selling IP(royalties), 0.7MM, for to total revenue of 57.2MM from June 1, 2014 to November 30, 2014. Over the same period last year, June 1, 2013 to December 1, 2013, they made 60.5MM selling product and 1.0MM selling IP for a total of 61.5MM in profit. 61.5MM to 57.2MM is 7.0% drop in revenue. They sold it as 6.6% because they didn't include IP sales, which dropped 32%.
GW shows a 6.6% drop in revenue and then shows a operating expenses of 17.5MM variable and 33.5MM base for a total of 51MM in 6 months in 2014. For the same time period last year, they show a variable cost of 17.2MM and base cost of 36.7MM for a total of 53.8MM. This shows that even though they produced less product, their variable costs went up by 2%, 17.2MM to 17.5MM. It also shows that they whacked 3.2MM in cost by laying off people to cut base cost. Total cost dropped 5.3%.
Profit is sales (revenue) minus cost. In 2014, they show total revenue of 57.2MM with a cost of 51MM for a profit of 6.2MM. In 2013 the numbers were 61.5MM revenue, 53.8MM cost and 7.7MM profit. 7.7MM profit dropping to 6.2MM shows a drop of 18.8% drop in profit, which is a BIG number.
Assuming base cost is held flat at 33.5MM and variable cost is flat at 17.5MM, even though it shows to be trending up, it costs GW 51MM per 6 months to stay open and make product. If we go with a conservative 6% drop in revenue, you get the following:
57.2MM June to Dec 2014
53.8MM Dec 2014 to June 2015
50.5MM June 2015 to Dec 2015, flat or 0.5MM in the hole
47.5MM Dec 2015 to June 2016, 3.5MM in the hole
I think very, very few people want GW to fail (well, perhaps the CEO of Privateer Press, but that's it ) The rest of us are the true fans of the company, who remember the company GW once was, and how it used to be a company by wargamers, for wargamers, rather than the corporate, uncaring giant.
Rising profits and growth would have been an emancipation of the modern corporate ethos, a reward for some of the policies that have proven most unpopular over recent years.
Perhaps this dent in sales and profitability (which is actually quite frightening considering the ferocious rate of new releases in the past year) might make some of the head-honchos take notice, and perhaps do more to win customers over. And ultimately, make better products at a more reasonable price.
At least, that's the plan. Blaming poor quality of managers would seem to show that we are a few more reports away from that for the time being however.
Da Boss wrote: I think many people see posters here and elsewhere saying that GW is failing and confuse it with us wanting GW to fail.
To be honest, in it's current form, GW doesn't deserve to succeed. But many of us would prefer it to change to a company that did deserve success, and for it to continue and to make great products we'd like to buy.
I'm not angry or gleeful at this sort of news, and I guess most of us here aren't, except in the way that we get a bit excited at an interesting bit of gossip. Most of us are probably reading and posting about this with a sort of glum, frustrated indifference.
This. I couldn't have said it better myself
I love the IP, I love the stories and the models...the games, not quite as much...and the rest of it really bums me out. The current state of the company actually makes me a little sad.
Its a bit like having that friend or relative that keeps making bad life choices...you really wish you could slap them, or shake them violently and tell them to get their gak sorted out...
alphaecho wrote: A question for those who follow markets and trading:
What do major investors tend to do when it looks like a company is tottering at the top of a slippery slope?
Is it:
1. Use their stake to try and persuade management to take a better course of action
or
2. Get out before it gets any worse?
They'll drop GW like a live grenade. GW's major stockholders aren't big names who care about GW in particular, they're investment management companies. When they notice GW is showing weakness they're not going to try to nurse it back to health, they're going to send it to the butchers.
This issue is the closed culture that is allergic to new ideas and convinced that it is right.
It's quite disgraceful that they want to pin the blame on their shop managers. But unfortunately all too common when it's the policies from the top that are at fault. Oh well. Better buy that Mamuk I wanted sooner rather than later.
Always would be. They've got quite a bit in cash reserves and assets from what I recall and their profit is in steady decline. If the decline is ongoing then they'll start making a loss in the next year or so, and then it'll eat up their cash reserves. Unless they make a sudden loss from something, say like a radical huge re-release of a core product which completely flops, then they won't have a serious blow that will kill them suddenly. They will just contract slowly.
It'll be interesting to see at what point they stop paying dividends, because the board of directors is greedy and self interested, and they're probably frightened not to because wider shareholder confidence is such that last time they didn't pay out the stock dropped quite a bit immediately.
By the time GW get to the point of being bought out, only the IP will be left, I think Kirby and gang will run the company to ruin first. The sad thing is, I very much suspect they have destroyed a lot of their history by disposing of older moulds that might prove very popular if they were in different hands. Someone buying them out would get what exactly? The rights to drawing of Space Marines? They've demonstrated a very weak grasp on their IP.
Howard A Treesong wrote: Unless they make a sudden loss from something, say like a radical huge re-release of a core product which completely flops
Completely random, hypothetical example, I'm sure
Oh let me guess!
Spoiler:
The Hobbit and Lord of the Rings SBG?
Joking aside, that actually would make my day. The Tolkien IP appeals to me so much more than Warhammer, to the point that I've gone BACK to the SBG after a 5 year dalliance with 5th Ed Raven Guard Space Marines.
What people often forget is the GW core model business is actually worse than portrayed just looking at the overall numbers across the last 5yrs.
BL and FW have continued to grow - BL is selling more titles than I ever recall in the 20+ yrs I have been playing with GW stuff. FW must be growing to be big enough to release its own rule sets.
Also, we must strip out the impact Space Hulk and the new 40k edition for this comparison - now we dont have those figures but GW surely does. I bet on a like for like basis the drop in sales for the core model business is down significantly more than 7%.
Automatically Appended Next Post: With regard to the commentors and the 'sky is falling' - this continuing drop since the introduction to the one man store and a move away from the high traffic mall stores was relative easy to predict.
Reduce traffic, less gaming, less hobby interaction, less hours open will reduce the number of new people coming into the hobby. That is just common sense. To maintain growth in revenue (as opposed to maintain cuts to the cost base) you need more customers over the longer term rather than raising prices on existing ones that drop off and aren't replaced because of your retail strategy.
It is really basic retail, basic analysis and common sense. I fail to understand why GW is in this position.
BL and FW have continued to grow - BL is selling more titles than I ever recall in the 20+ yrs I have been playing with GW stuff.
Launching? Yes. Selling? Much harder to say.
FW must be growing to be big enough to release its own rule sets.
I don't really call 30K a separate ruleset. One could say they're a bit more involved than your typical Imperial Armour book, but not massively - they've featured new lists with unique units and rules for a long time, and that's all the HH books really do.
Also, we must strip out the impact Space Hulk and the new 40k edition for this comparison - now we dont have those figures but GW surely does. I bet on a like for like basis the drop in sales for the core model business is down significantly more than 7%.
The new 40K launched the weekend before the last financial year closed, so all the launch weekend sales have already been excluded, so I'd doubt that 7th has made much of an impact on this report than any other currently available ruleset has on any other (certainly not to distort it sufficiently to adjust for it.) Space Hulk? Maybe, but you'd need to compare SH's numbers with something deemed a "typical" months releases and then account for the difference, something we don't have the information to do with any accuracy. Besides, a one-box release is a semi regular fixture of GW's release schedule, so it isn't such an anomaly to need to be extensively corrected for, unless it sold stupidly, indecently well, which it fairly obviously didn't.
warboss wrote: Can one of the mods reading this (or the OP) change the thread title to show that the NEW report for 1/2015 is on page 21? It looks like the separate thread for the new report was locked so it might be a good idea for those wishing to see the new info to know where to look in the somewhat lengthy thread.
BL and FW have continued to grow - BL is selling more titles than I ever recall in the 20+ yrs I have been playing with GW stuff.
Launching? Yes. Selling? Much harder to say.
FW must be growing to be big enough to release its own rule sets.
I don't really call 30K a separate ruleset. One could say they're a bit more involved than your typical Imperial Armour book, but not massively - they've featured new lists with unique units and rules for a long time, and that's all the HH books really do.
Also, we must strip out the impact Space Hulk and the new 40k edition for this comparison - now we dont have those figures but GW surely does. I bet on a like for like basis the drop in sales for the core model business is down significantly more than 7%.
The new 40K launched the weekend before the last financial year closed, so all the launch weekend sales have already been excluded, so I'd doubt that 7th has made much of an impact on this report than any other currently available ruleset has on any other (certainly not to distort it sufficiently to adjust for it.) Space Hulk? Maybe, but you'd need to compare SH's numbers with something deemed a "typical" months releases and then account for the difference, something we don't have the information to do with any accuracy. Besides, a one-box release is a semi regular fixture of GW's release schedule, so it isn't such an anomaly to need to be extensively corrected for, unless it sold stupidly, indecently well, which it fairly obviously didn't.
The 40k release would have bled significantly into these results - thats rule books and new armies or new units to deal with new meta. With regard to SH, if if just 100k sales at $120 is $1.2M - in the comaprison period there wasn't a box sale with the prior one being that ship game in 2012 i think.
I know we don't have any of these numbers but the point I am making is if you compare the top level numbers between this report and its equiv in 2013 the results for the core plastic model business are probably worse that the 7%, all things being equal. I don't think that is a controversial or difficult leap to make.
alphaecho wrote: A question for those who follow markets and trading:
What do major investors tend to do when it looks like a company is tottering at the top of a slippery slope?
Is it:
1. Use their stake to try and persuade management to take a better course of action
or
2. Get out before it gets any worse?
Neither.
#1 is a waste of time, especially for a "small" public company that nobody outside the wargaming world cares about one way or the other. 100% of my non-wargaming friends have never even heard of GW (and 98% haven't heard of Warhammer, and 95% can't believe any adult in their right mind paints miniatures and plays war games).
#2 is just going with the trend, meaning at the very best you minimize your losses because you're doing the same thin as other people.
In order to make money in equities, you need to do two things: be right, and be different from the crowd. It isn't good enough to buy or sell when everyone else is doing that because all you're doing is buying or selling with the good or bad news built into the price. The way to make real money on the stock market is to buy when everyone else is selling, AND correctly forecast that the share price will rise; or, sell when other people are buying, correctly forecasting that the hare prices will fall when others think it will rise.
As a good example, one could be very wealthy today, had they invested in Netflix a few years ago, when everyone thought it would disappear into irrelevance, and sell the equity when it exceeded HBO in membership.
GWC is probably such a tiny part of any sophisticated investor's portfolio that it's barely a rounding error. The investor will simply have to decide whether it's better to hold (as this is not a god time to sell) or if there is other risky stuff they want to toss some money at. In the long run, is this a Netflix, or Redbox?
Who knows, but GW is not going anywhere as long as thy remain profitable and has cash. Will they change, desiring greater relevancy and market share? Again, who knows. It seems they are content to do less work and make less money.
Which is where I am in my own life -- I want more time for family and hobby rather than more income
I love the IP, I love the stories and the models...the games, not quite as much...and the rest of it really bums me out. The current state of the company actually makes me a little sad.
Yup. As a mashup of Tolkien and Moorcock* among others, it's not a bad sandpit to play in. Just gimme some sort of sane army-building price to use with the rules of my choice.
*I'll bet Mike loves that. "I'll give you the Chaos star if you never mention us on the same page! No wait - same book!"
BL and FW have continued to grow - BL is selling more titles than I ever recall in the 20+ yrs I have been playing with GW stuff.
Launching? Yes. Selling? Much harder to say.
FW must be growing to be big enough to release its own rule sets.
I don't really call 30K a separate ruleset. One could say they're a bit more involved than your typical Imperial Armour book, but not massively - they've featured new lists with unique units and rules for a long time, and that's all the HH books really do.
Also, we must strip out the impact Space Hulk and the new 40k edition for this comparison - now we dont have those figures but GW surely does. I bet on a like for like basis the drop in sales for the core model business is down significantly more than 7%.
The new 40K launched the weekend before the last financial year closed, so all the launch weekend sales have already been excluded, so I'd doubt that 7th has made much of an impact on this report than any other currently available ruleset has on any other (certainly not to distort it sufficiently to adjust for it.) Space Hulk? Maybe, but you'd need to compare SH's numbers with something deemed a "typical" months releases and then account for the difference, something we don't have the information to do with any accuracy. Besides, a one-box release is a semi regular fixture of GW's release schedule, so it isn't such an anomaly to need to be extensively corrected for, unless it sold stupidly, indecently well, which it fairly obviously didn't.
The 40k release would have bled significantly into these results - thats rule books and new armies or new units to deal with new meta. With regard to SH, if if just 100k sales at $120 is $1.2M - in the comaprison period there wasn't a box sale with the prior one being that ship game in 2012 i think.
I know we don't have any of these numbers but the point I am making is if you compare the top level numbers between this report and its equiv in 2013 the results for the core plastic model business are probably worse that the 7%, all things being equal. I don't think that is a controversial or difficult leap to make.
No, I think it's a perfectly reasonable leap, but it's still a leap. You can't legislate for the things that weren't sold. Did that hypothetical $1.2m for Space Hulk boost sales by $1.2m? Almost certainly not, because some people will have purchased it on top of whatever they would have purchased already, but many others may well have purchased it instead of, meaning the revenue GW gained from those people was essentially flat.
You make a good point about possible run on sales from the new edition bleeding over, I'd not really considered this because it isn't really how I play/collect my armies, but if this is usually a reliable way of GW refreshing their revenue, it hasn't worked, I'd still be more inclined to think it is just one of the reasons that motivate people to buy new stuff on a day to day basis alongside a bunch of other micro and macro factors, and would essentially get lost in the shuffle.
For those who are looking to see into the future on the year end report, there is also this little bit at the tail end of the report:
Capital expenditure contracted for at the balance sheet date but not yet incurred is £3,302,000 (2013: £606,000). The committed spend includes the renovation of our visitor centre in Nottingham, tooling and machinery spend and web store improvements.
Even if they managed to pull off an astounding second half of the year, they have a £3.3 million hole to climb out of.
There retail store sales fell almost 10%. Trade sales fell over 5%. The webstore, all fancy and new with more direct only items than ever before (barring when they actually had bits) was flat (or a bit down if you prefer to look at real numbers as opposed to constant currency comparisons...).
New management...same as the old management. Actually, sounds a bit like an echo. Must be from how far up Kirby's butt he must be.
Blacksails wrote: What are we looking at release wise for GW so far?
The leftover sales of 7th that didn't make the cut for the annual report, one of those campaign books/sets, the Space Wolf book, Ork book, GK book, DE book and BA book? On the fantasy side, I guess a bunch of End Times stuff, though I keep up less on that side so someone else can fill in.
That's a not an insignificant amount of new releases, and from some decently popular factions (three marine books).
I'm no businessologist, but that's not a good thing if revenue is still down despite a ramping up of releases.
That's the way I see it as well.
Sales are actually down only a bit, allowing for currency fluctuation, but GW have had to work very hard indeed to keep it that way.
What sticks out to me is that currency is driving about a 4% bogey (only down slightly less than 2% in local currency terms). The US$ is monstrously stronger so that shift is understandable, but it really speaks to the geography of GW's sales if they're that reliant on the NA market.
Retail
This channel showed growth in the UK offset by declines in North America and Continental Europe...
Trade
This channel showed growth in North America, Australia and the UK, offset by larger declines in non - strategic accounts and magazine sales. The net effect was a decline of 5.1%...
So, sales at their stores in NA are down even though they are selling stuff in stronger dollars and receiving stronger dollars. If the dollar were weaker and sales quantities were the same they would have received less money and sales would have been down even more, correct? Pound was stronger against the dollar in the first half of the year, but has been dropping by considerable amounts since July ($1.71 to $1.55 on Jan 1).
Trade (other stores) sales in are up in NA, Aus and UK, but declines in magazine sales and non-strategic accounts drove sales to a net 5.1% loss? Seems like there must not have been much profit in trade if declines in these two items knocked sales well into negative territory. Anyone have any idea what "non-strategic accounts" are? Can't imagine that magazine sales make up a significant percentage of trade sales, so what are these "non-strategic accounts" that appear to be so significant?
With the currency, you have the one hand (GW's) where if they sell an item for $50 in the US, they only get £30.86 as opposed to £31.25 in return.
Would not be surprised to see the return of the annual price increase this spring as well. The preceding years that they skipped it on, it was stealth - hidden in the exchange rates. The exchange rates have turned the other direction...GW corporate types are likely to see the solution to be increased prices.
Sean_OBrien wrote: With the currency, you have the one hand (GW's) where if they sell an item for $50 in the US, they only get £30.86 as opposed to £31.25 in return.
Would not be surprised to see the return of the annual price increase this spring as well. The preceding years that they skipped it on, it was stealth - hidden in the exchange rates. The exchange rates have turned the other direction...GW corporate types are likely to see the solution to be increased prices.
And my solution to their solution will be MOAR EBAY.
Seriously, are they really not worried about passing their price elasticity? Or whatever the breaking point is called...
You cant ask for quality Store operators for what they pay and the requirements that change every 6 months. The tourette like guides lines they receive. Years and years ago training was months long and candidates were put up in hotels and had class room instruction. The they shifted to another and another tactic. Then it was a two week course then one week, hell last I heard it inst even a week long currently.
Attitude or not how the hell is any one expected to turn the current model of business into anything like the shops used to make when they are hand cuffed and hamstrung at every corner? Shorter hours less tables, no staff to give any one customer an sort of real attention, let us not forget the axing of any thing remotely resembling prize support or even the occasional discount or perk. You used to get free figs with a WD subscriptions. Then you were "allowed" to buy a WD fig with a sub now you can just buy it. Smaller shops that can house less inventory so the customer is FORCED to order on line that then encourages them to just order from home anyway. Piratically every thing that used to be "good" about going to the GW shop is gone. Yes there are still Great people running some of those shop to be sure but few and far in between when taking the shops as a whole. Why not make the shop a giant red box/ vending machine style and get it over with? But I am digressing way too much.
If the money was not slight of handed enough, or the blame placed on the retail chain enough. Guess what? All the US shop are about to have surveillance cameras placed inside the shops! I wonder where they will be pointed. The front door? The stock wall or the register and the One employee!? I wonder what all that will cost and how that will be cleverly disguised or other wise omitted in the next report. The hits just keep on coming.
Sean_OBrien wrote: With the currency, you have the one hand (GW's) where if they sell an item for $50 in the US, they only get £30.86 as opposed to £31.25 in return.
Would not be surprised to see the return of the annual price increase this spring as well. The preceding years that they skipped it on, it was stealth - hidden in the exchange rates. The exchange rates have turned the other direction...GW corporate types are likely to see the solution to be increased prices.
And my solution to their solution will be MOAR EBAY.
Seriously, are they really not worried about passing their price elasticity? Or whatever the breaking point is called...
GW doesn't believe they have one...they are luxury goods...like Rolex and Ferrari...people will pay whatever they charge...and they are immune to recessions and what not...
GW doesn't believe they have one...they are luxury goods...like Rolex and Ferrari...people will pay whatever they charge...and they are immune to recessions and what not...
I think someone already mentioned it in some discussion but GW management think they are selling a Veblen good when in reality they are only selling expensive toys.
it amazes me that a game and universe so prevalent in the UK is handled so badly by the company that owns it, 40k is EVERYWHERE, you cant go anywhere in nearly any walk of life without meeting someone who does warhammer or used to do it, it almost like this underground cult.
Ferrum_Sanguinis wrote: For comparison, how is PP doing financially right now? Do we have info on that?
Given they're a privately held company, nothing concrete. They pretty uniformly state that business is booming every time they're asked though.
Corvus belli have spent the past 5 years growing between 25 and 75% each year. That is about all the numbers I am aware of from GWs competition but we can clearly see many of them experiencing growth. ICV2 has stated that the wider hobby (TCG and boardgames including) has more than doubled since 08 and is still going strong. Within Australia I can say we are seeing FLGS thrive while GW sales have fallen to as little as 12-15% of the largest.
We don't have the numbers for their competition but everything we do have points to this being a golden age of gaming where everyone is growing except GW.
Ferrum_Sanguinis wrote: For comparison, how is PP doing financially right now? Do we have info on that?
Given they're a privately held company, nothing concrete. They pretty uniformly state that business is booming every time they're asked though.
Corvus belli have spent the past 5 years growing between 25 and 75% each year. That is about all the numbers I am aware of from GWs competition but we can clearly see many of them experiencing growth. ICV2 has stated that the wider hobby (TCG and boardgames including) has more than doubled since 08 and is still going strong. Within Australia I can say we are seeing FLGS thrive while GW sales have fallen to as little as 12-15% of the largest.
We don't have the numbers for their competition but everything we do have points to this being a golden age of gaming where everyone is growing except GW.
"Fantasy Flight Games has enjoyed tremendous growth over the last 10 years,” said Christian T. Petersen, CEO and founder of Fantasy Flight Games. " according to the CEO in the recent merger press release.
Ferrum_Sanguinis wrote: For comparison, how is PP doing financially right now? Do we have info on that?
Given they're a privately held company, nothing concrete. They pretty uniformly state that business is booming every time they're asked though.
Well, of course what company is ever going to say anything else? The best way to gauge their performance is to go and ask FLGS owners. Another way to tell is to look at product placement. The best-selling products will be placed in the areas of highest visibility, and as you enter the store. The worst selling products are tucked away in the back. In my area, a lot of people play PP games, but the PP sales are not spectacular. It's a company everyone loves to love, but they're more in love with the idea of a GW alternative than actually anything PP does or makes -- or at least, if they do love PP, they sure don't throw much money at it.
Formosa wrote:it amazes me that a game and universe so prevalent in the UK is handled so badly by the company that owns it, 40k is EVERYWHERE, you cant go anywhere in nearly any walk of life without meeting someone who does warhammer or used to do it, it almost like this underground cult.
Remarkable. In my area, people who aren't into video games, wargaming, or hobby (and haven't been for at least part of their lives), have never even heard of 40k or WHFB (or WMH, Malifaux, Infinity, etc.). However, *everyone* has heard of Warcraft
Shadow Captain Edithae wrote:Hah. A Ferrari would be a safer investment.
Well, you can't really compare a Ferrarri with GW stock, but you could compare a Ferrari with GW models. BNIB GW models actually retain their values better than low-mileage Ferraris Which is really just to say that Ferrarris are a horrible investment hahaha.
Shadow Captain Edithae wrote:
Sean_OBrien wrote: With the currency, you have the one hand (GW's) where if they sell an item for $50 in the US, they only get £30.86 as opposed to £31.25 in return.
Would not be surprised to see the return of the annual price increase this spring as well. The preceding years that they skipped it on, it was stealth - hidden in the exchange rates. The exchange rates have turned the other direction...GW corporate types are likely to see the solution to be increased prices.
And my solution to their solution will be MOAR EBAY.
Seriously, are they really not worried about passing their price elasticity? Or whatever the breaking point is called...
Close, but not quite PED (price elatisticty of demand) is a measure of how responsive demand is to the price of goods (you can make Coca-Cola cheaper, but at a certain point, people will only buy so much pop). The coefficient typically varies from one part of the demand curve to the other.
The term you're looking for is the equilibrium price -- if you draw a supply curve and a demand curve (one shows how price impacts supply, the other how price impacts demand), this is the point at which the two curves intersect, and it's the most profitable point to sell your product.
In reality, a company always knows what its own supply curve looks like, but it's impossible to know exactly what the demand curve for a product like 40k is, because you can't go back in time and try a different price under identical conditions. So, they need to do a guessing game to optimize their profit.
In my opinion, if GW could increase net profits by lowering prices, they would do so. However, also in my opinion, if they could maintain profits **or even lose a little** by reducing both price and quantity, they would do this. The thinking is that, if $50 is the best we can do, let's not do any more work than we have to, to make that $50. If we can do 25% less work and make $48 of profit, well, let's do that instead.
I think gamers are offended that GW treats their pocketbooks in the same way that OPEC does. I'm not sure why this offends people, as most other businesses do the same thing -- whether it's Apple, Microsoft, KFC, your cable provider, cell phone provider, the post office, or taxi company. I mean, these companies don't want to be your friend... they want to maximize the amount of money they can get from you
Ferrum_Sanguinis wrote: For comparison, how is PP doing financially right now? Do we have info on that?
Given they're a privately held company, nothing concrete. They pretty uniformly state that business is booming every time they're asked though.
Corvus belli have spent the past 5 years growing between 25 and 75% each year. That is about all the numbers I am aware of from GWs competition but we can clearly see many of them experiencing growth. ICV2 has stated that the wider hobby (TCG and boardgames including) has more than doubled since 08 and is still going strong. Within Australia I can say we are seeing FLGS thrive while GW sales have fallen to as little as 12-15% of the largest.
We don't have the numbers for their competition but everything we do have points to this being a golden age of gaming where everyone is growing except GW.
I own 3 versions of Infinity rules now, and painted a good deal of models, but I've never played a single game because nobody seems to play it here or have much interest >.<
In my neck of the woods, we have several FLGS and non-gaming hobby stores that have closed in the last couple of decades, with a smaller number that have opened up in their place. Many of the gaming stores make a huge chunk of their money on TCGs (specifically, MtG) and some of them have branched out to other types of collectibles. Comics have declined a lot in recent years (I say this based on store prominence, and the fact that there are fewer stores that stock comics at all now). I can say with certainty that if 40k and MtG were to both disappear, all the FLGS in our area would go out of business; if one of them were to disappear, it would make life a lot harder for them.
Ferrum_Sanguinis wrote: For comparison, how is PP doing financially right now? Do we have info on that?
Given they're a privately held company, nothing concrete. They pretty uniformly state that business is booming every time they're asked though.
Well, of course what company is ever going to say anything else? The best way to gauge their performance is to go and ask FLGS owners. Another way to tell is to look at product placement. The best-selling products will be placed in the areas of highest visibility, and as you enter the store. The worst selling products are tucked away in the back. In my area, a lot of people play PP games, but the PP sales are not spectacular. It's a company everyone loves to love, but they're more in love with the idea of a GW alternative than actually anything PP does or makes -- or at least, if they do love PP, they sure don't throw much money at it.
I too can only speak from personal experience: When I first started 40k back in late 2010.early 2011, only I and one other friend knew about PP and treated them as a big joke, basically 40k wannabes with with we saw as bad models (we mostly saw the Hordes line). When the LA battlebunker was still open there was a group of ten guys we used to play with who likewise, held a similar opinion of PP (it was the first time I heard someone mention "page 5")
Now flash forward to now and those of my friends that still play tabletop games have switched to Warmachine, were they sing its praises compared to 40k. A couple years ago around a few months after he LA battlebunker had become a one man store I walked into a FLGS and found the same ground of ten guys from earlier. Every single one of them had switched to Warmachine (or Hordes) and had nothing but good things to saw about it compared to 40k...
In reality, a company always knows what its own supply curve looks like, but it's impossible to know exactly what the demand curve for a product like 40k is, because you can't go back in time and try a different price under identical conditions. So, they need to do a guessing game to optimize their profit.
In my opinion, if GW could increase net profits by lowering prices, they would do so. However, also in my opinion, if they could maintain profits **or even lose a little** by reducing both price and quantity, they would do this. The thinking is that, if $50 is the best we can do, let's not do any more work than we have to, to make that $50. If we can do 25% less work and make $48 of profit, well, let's do that instead.
That is a theory that is often floated - but doesn't actually have much evidence to back it up (in terms of that actually being GW's master plan).
If you go back and look at the expenses over time - they haven't changed much in recent years. Since expenses are the only real measure of "work" being done - they are doing the same amount of work, just getting less out of it. Since 2006, they have had bills to pay to the amount of £110 million +/- £3 million each year.
They also demonstrate an almost irrational desire to do more work (cutting off independent stockists from many items, opening retail stores only to have to shut them down a year or two later, relocating manufacturing and distribution centers...several times, multiple incarnations of a failing magazine, several website redesigns, lawsuits, lack of market research...).
No, GW tilts at windmills. Quite often, their customers are the giants.
warboss wrote: Clearly, the lather/rinse/repeat 7th edition 40k early cash grab didn't do the trick so they have to do something new (besides... you know... addressing the actual problems).
What problems?
Don't'cha know warboss that when it comes to GW:
WayneTheGame wrote: Nah couldn't be, GW is fine just it's the economy or just a group of haters. After all there's no competition since no other game is a large scale 28mm sci fi grimdark wargame with an Imperium, Space Marines, Tyranids and Eldar, so nothing can compare to 40k.
I think gamers are offended that GW treats their pocketbooks in the same way that OPEC does. I'm not sure why this offends people, as most other businesses do the same thing -- whether it's Apple, Microsoft, KFC, your cable provider, cell phone provider, the post office, or taxi company. I mean, these companies don't want to be your friend... they want to maximize the amount of money they can get from you
You know how most companies respond to growth in their competition? Leveraging their market position to maintain dominance...
OPEC is a perfect example of it. High oil prices makes oil sands and shale economically viable. How does OPEC respond? By slashing the price of oil to the point where it isn't nearly as viable for the competition. Considering the real production costs GW has compared to the retail price they sell at - it would be quite feasible for them to make their competition no longer viable, strictly from an economic stand point.
I'm just wondering if and when GW finally decides to ask consumers what they want (and if not directly then by finally doing market research or surveys) will it be too little too late.
Fango wrote: Since the lawsuit, we've seen a 'backlash' of sorts by GW to convert or drop all nebulous or non-copyright-able IP...a 'baring of the gates' or 'boarding up the windows' of sorts. Some of these knee-jerk decisions almost seem like they are punishing their fan-base..."See? See what you made us do?".
I call this the "Be careful what you wish for!" principle. Many times we've wanted GW to do something or for them to be jolted into action by some event, only for them to take the less consumer friendly road. Yes, they stopped doing the thing we wanted them to stop doing, but the replacement isn't better.
Sean_OBrien wrote: You know how most companies respond to growth in their competition? Leveraging their market position to maintain dominance...
This has been a consistent failure of GW for some number of years. Given how they use their license (everything from computer games to RPGs) it is astonishing how they have not used these avenues of attack (so to speak) to further enhance their own gains.
Where were the Dawn of War related releases when those games were coming out? Why wasn't there a Heroes of Kronus box with unique miniatures (accompanied by rules in WD) for the heroes in that game? What about DoW II? Why no cross-promotion with FFG for the RPG's? It can only help them to do so. The Ultramarine movie, as terrible as it turned out, got nothing. There was no miniature release to go with it. FFG did more with that release, putting out a brief 3-4 page set of rules for a relic and a few other things related to the movie, and it was free.
The problem lies in the fact that GW sees their licensed products not as an opportunity to spread their influence and brand but as something to sit back and collect money from. How else do you explain the scattershot way they recently gave out the 40K license to any two-bit mobile developer? A lot of money in licensing fees for no effort.
If they'd put it even a modicum of effort to leverage these outside releases over the past decade things could be very different.
I find myself wishing that one of the major investment talking heads, one that the investment managers would see, would do a bit on GW's lackluster performance. Something like "Dear Fund Managers, your representatives on GW's board are either clueless, careless, or complicit."
BairdEC wrote: I find myself wishing that one of the major investment talking heads, one that the investment managers would see, would do a bit on GW's lackluster performance. Something like "Dear Fund Managers, your representatives on GW's board are either clueless, careless, or complicit."
Sadly, I doubt that will ever happen.
It'd be great to see someone go all Olive Garden on GW.
BairdEC wrote: I find myself wishing that one of the major investment talking heads, one that the investment managers would see, would do a bit on GW's lackluster performance. Something like "Dear Fund Managers, your representatives on GW's board are either clueless, careless, or complicit."
Sadly, I doubt that will ever happen.
It'd be great to see someone go all Olive Garden on GW.
BairdEC wrote: I find myself wishing that one of the major investment talking heads, one that the investment managers would see, would do a bit on GW's lackluster performance. Something like "Dear Fund Managers, your representatives on GW's board are either clueless, careless, or complicit."
Sadly, I doubt that will ever happen.
It'd be great to see someone go all Olive Garden on GW.
Isn't Olive Garden still hurting bad?
I just mean an outside investor come out with a HUGE report on the many, many failings of GW. (as was done to Olive Garden last year)
I think gamers are offended that GW treats their pocketbooks in the same way that OPEC does. I'm not sure why this offends people, as most other businesses do the same thing -- whether it's Apple, Microsoft, KFC, your cable provider, cell phone provider, the post office, or taxi company. I mean, these companies don't want to be your friend... they want to maximize the amount of money they can get from you
You know how most companies respond to growth in their competition? Leveraging their market position to maintain dominance...
OPEC is a perfect example of it. High oil prices makes oil sands and shale economically viable. How does OPEC respond? By slashing the price of oil to the point where it isn't nearly as viable for the competition. Considering the real production costs GW has compared to the retail price they sell at - it would be quite feasible for them to make their competition no longer viable, strictly from an economic stand point.
OPEC doesn't control the price of oil, only the supply produced by its member nations. Global oil production is at an all time high, not because of OPEC production, but because of US (shale oil) and Canadian (oil sands) supplies. Neither country is a member nation.
Currently, OPEC must decide whether to *maintain* production, or to constrain supply to reduce it. The practical problem of supply constraint is that nations like Kuwait and Saudi Arabia have 95% and 80% of their GDP in oil (if I recall correctly, these are the latest figures; Saudi used to be 90%+). By constraining their supply, they reduce both short AND medium term profits, as the US and Canada won't reduce its production. In fact, if anything, North American production is poised to increase.
Concurrently, there is an unexpectedly weak demand for oil, globally -- something that's out of the control of OPEC as well. So, OPEC has made the decision to milk the golden goose now, because a crapload of money now is still a crapload of money, even if it is a smaller crapload.
At some point, in the not unforeseeable future, the global demand for oil will drop. That's a fact, as gasoline automobiles are continually becoming more energy efficient, and vehicles powered by or augmented by means other than fossil fuels are a reality, and will only get better.
In reality, a company always knows what its own supply curve looks like, but it's impossible to know exactly what the demand curve for a product like 40k is, because you can't go back in time and try a different price under identical conditions. So, they need to do a guessing game to optimize their profit.
In my opinion, if GW could increase net profits by lowering prices, they would do so. However, also in my opinion, if they could maintain profits **or even lose a little** by reducing both price and quantity, they would do this. The thinking is that, if $50 is the best we can do, let's not do any more work than we have to, to make that $50. If we can do 25% less work and make $48 of profit, well, let's do that instead.
That is a theory that is often floated - but doesn't actually have much evidence to back it up (in terms of that actually being GW's master plan).
If you go back and look at the expenses over time - they haven't changed much in recent years. Since expenses are the only real measure of "work" being done - they are doing the same amount of work, just getting less out of it. Since 2006, they have had bills to pay to the amount of £110 million +/- £3 million each year.
They also demonstrate an almost irrational desire to do more work (cutting off independent stockists from many items, opening retail stores only to have to shut them down a year or two later, relocating manufacturing and distribution centers...several times, multiple incarnations of a failing magazine, several website redesigns, lawsuits, lack of market research...).
No, GW tilts at windmills. Quite often, their customers are the giants.
Expenses aren't really a good metric of work done. If I get paid $200,000 this year, and get paid $400,000 next year, did I do more or less work? All it means is, the company paid me more.
I don't quite see it the same way as you regarding the web-only items. If they were core items, I'd agree. However, they are all discontinued items, and metal/finecast that GW doesn't particularly want to make more of (I don't know if they ever do, once they run out, to be frank -- some items seem to have been out of stock for.. ever). From the store's perspective, they aren't willing to stock a range of these (because let's be honest, most ofthese models sell very poorly), and if they aren't willing to take the risk stocking them, why should they have the reward of being able to mark them up and sell them as they need them?
Besides, stores can order them -- it's just at a very small discount from MSRP, which just doesn't work for most stores. I have one store that will order in the web-only items, but they won't discount it at all for me (and the other stuff, they sell at 20%+ discount from MSRP).
Ferrum_Sanguinis wrote: For comparison, how is PP doing financially right now? Do we have info on that?
Given they're a privately held company, nothing concrete. They pretty uniformly state that business is booming every time they're asked though.
Well, of course what company is ever going to say anything else? The best way to gauge their performance is to go and ask FLGS owners. Another way to tell is to look at product placement. The best-selling products will be placed in the areas of highest visibility, and as you enter the store. The worst selling products are tucked away in the back. In my area, a lot of people play PP games, but the PP sales are not spectacular. It's a company everyone loves to love, but they're more in love with the idea of a GW alternative than actually anything PP does or makes -- or at least, if they do love PP, they sure don't throw much money at it.
I too can only speak from personal experience: When I first started 40k back in late 2010.early 2011, only I and one other friend knew about PP and treated them as a big joke, basically 40k wannabes with with we saw as bad models (we mostly saw the Hordes line). When the LA battlebunker was still open there was a group of ten guys we used to play with who likewise, held a similar opinion of PP (it was the first time I heard someone mention "page 5")
Now flash forward to now and those of my friends that still play tabletop games have switched to Warmachine, were they sing its praises compared to 40k. A couple years ago around a few months after he LA battlebunker had become a one man store I walked into a FLGS and found the same ground of ten guys from earlier. Every single one of them had switched to Warmachine (or Hordes) and had nothing but good things to saw about it compared to 40k...
Same here, a lot of people take WMH seriously and play it. But, they spend almost no money at the game! I don't think my stores could keep on running, if PP were their headliner. People buy a few models, most are painted in a minimal way to play the game, and then play at the store for countless weekends with their $200 of stuff. When their faction has an exciting new release, they might buy a whole new model that costs $30 or $50.
In contrast, the 40k faithful come and buy carloads of GW stuff, and that doesn't just mean GW sales, it means a lot of hobby supply sales too.
I'm not trying to dish on WMH. It's a cool skirmish (or slightly bigger than skirmish) game, that has easy model transport requirements and plays decently on a smaller table. I'm just saying, it's not really designed to help independents do what's most important for them -- make money. One of my store managers told me that they make more money off of WMH players who camp out at the store selling them candy and pop while they play than they do on anything game related.
BairdEC wrote: I find myself wishing that one of the major investment talking heads, one that the investment managers would see, would do a bit on GW's lackluster performance. Something like "Dear Fund Managers, your representatives on GW's board are either clueless, careless, or complicit."
Sadly, I doubt that will ever happen.
It'd be great to see someone go all Olive Garden on GW.
Isn't Olive Garden still hurting bad?
I just mean an outside investor come out with a HUGE report on the many, many failings of GW. (as was done to Olive Garden last year)
The real question is, do they have any power at the board level. Shareholders and analysts are pretty much powerless to control the destiny of a company, unless they control a board seat, and the company needs/wants money.
Change happens quickly when those factors are in play.
Gonna have to remember to check the GW vs PP numbers for last year at the flgs this weekend. Last I knew GW still sold more despite PP game nights having double plus of the turn out.
Myself, I've been GW clean for about 4 months now, and see no predicable future where I return.
I used to live in a 40k rich area. 4 stores in the metro area that sold and played GW stuff. The community thrived and built upon itself. It was easy to ignore pricing and other GW problems simply because the community reinforced itself and made the problem worth dealing with. It was a gilded palace of GW.
Then I had to move out of the palace, into the country side. Suddenly the problems aren't that small anymore. I live in a major city, and the only store that carries and plays GW stuff is the corporate store. All of the independent retailers have long ago washed their hands of it. All of the 'peasants' outside are in full revolt, and playing Warmachine, or X-wing, or other games.
With no one to play with, and utterly no hope of getting anyone interested in the hobby (I have to pay HOW MUCH TO PLAY??!?!), I've quit.
My point: The more of your customer base leaves, the faster the remaining ones will exit. The land is falling into the sea faster and faster, and I simply don't see how this company can make the very difficult decisions that would mend its relationships with the community and its retail partners. I don't see how it can reduce the barriers to entry and re-invigorate its playerbase.
I've sold all my 40k stuff many years ago and sold all my Fantasy stuff except for my Orks and Goblins.. I'll keep them for a few more years since it's my first army and I just love the little buggers.
Regardless... I just don't see me coming back to Fantasy or 40k. The rules are expensive (100€ for the new rulebook and the armyboko.. what the hell?) and just not that great.
I will not buy any GW products for full price, probably not even with a 33% discount.
A thing that would help GW? Be honest and tell us that you've been wrong on some occacions. No need to strip down, but ADMIT SOME MISTAKES and you've done soooo many.
sourclams wrote: To show the decline in pre-eminence of GW from a not-hater standpoint, look at the Dakka forum menu. I would not know exactly how many of these forums and sub-forums did not exist 4-5 years ago, but it is a lot.
The gaming space is growing rapidly while GW reports falling sales and either side-lining or off-lining of major product lines (if even 1/4 of the WFB rumors prove true).
Forgive me going back a few pages in the conversation for this, which nicely fits this post thematically, but I was curious as to the point made here. From January 18th, 2010 (just shy of 5 years ago):
The "main" GW forums seem unchanged. Warmachine has changed from a single forum to a 4 forum category. Infinity, and the official forums of Gangflight and On the Lamb have been added as have sub-forums for Malifaux, FFG, Mantic, and WizKids. Most of the descriptions seem to have drifted from being very GW-centric to being generic. AT-43 really seems like the only thing that has disappeared.
So, GW hasn't really lost major ground from what they had before (and in the big scheme, GW is still the dominant player in this market for a bit longer anyway), but other things are popping up and most of the things that were around before are growing. Seems to be a fitting metaphor for the past 5 years, even if a terribly unscientific one.
Fantasy Flights just released Imperial Assault, which is a Star Wars skirmish game. The game is $100 which gives you tons of scenarios, 34 models and everything you need to play the game. It has both a campaign mode and a skirmish mode, allowing for pick-up games as well as multi-session games. They have 7 additional models scheduled for release in the near future with prices from $20 to $10.
What is also interesting about this is that Fantasy Flights already has an agreement with GW to use their IP, though I don't think they could compete with GW in miniatures. This specific game, Descent version 3 for all intensive purposes, could have been just as easily branded for 40K and gotten really good intro game setup. GW could make the models, same models available for full scale 40K, and FF could do the rules for the skirmish level game.
As Star Wars is a bigger property and think Disney is less of pain in the ass, it doesn't really surprise me that FF went this direction, but GW could have gotten on this boat much earlier.
Barfolomew wrote: Fantasy Flights just released Imperial Assault, which is a Star Wars skirmish game. The game is $100 which gives you tons of scenarios, 34 models and everything you need to play the game. It has both a campaign mode and a skirmish mode, allowing for pick-up games as well as multi-session games. They have 7 additional models scheduled for release in the near future with prices from $20 to $10.
What is also interesting about this is that Fantasy Flights already has an agreement with GW to use their IP, though I don't think they could compete with GW in miniatures. This specific game, Descent version 3 for all intensive purposes, could have been just as easily branded for 40K and gotten really good intro game setup. GW could make the models, same models available for full scale 40K, and FF could do the rules for the skirmish level game.
As Star Wars is a bigger property and think Disney is less of pain in the ass, it doesn't really surprise me that FF went this direction, but GW could have gotten on this boat much earlier.
Ooh, that sounds interesting. Was there a thread on here about it? Might have to have a look.
GW doesn't believe they have one...they are luxury goods...like Rolex and Ferrari...people will pay whatever they charge...and they are immune to recessions and what not...
You just have to look at the secondary market to see how blatantly invalid that comparison/GW's belief is. Secondhand 40k models, even table top quality, sell for less than NiB wholesale, unassembled models. Even commission models often sell at a discount from what the commissioner originally paid.
Stuff like luxury cars and fine jewelry is often a store of wealth in that it is collectible and there is demand for age-d product. GW models in practice are more like mid-level vehicles that can generally command a decent price on release but rapidly depreciate and are often junked after about 10 years of life.
Recent luxury cars/jewelry/watches all sell well below retail prices on the second hand market too, unless they were super limited production runs now not available new
so pretty much the same as GW
where luxury cars etc begin to make money is when enough of the originals have worn out and nostalgia is making people desire them again
again the GW stuff that does make good money is the old hard to get hold of metal stuff
They do not make any kind of on-hands analysis. They have some sort of simple algorithm to calculate 'probability of bankrupcy'. It does not appear to be very good. I bet nobody on Macroaxis has ever heard of Games Workshop.
Famously, year ago they predicted that Sony will go bankrupt on 79% probability.
I don't think anyone is taking the prediction of bankruptcy particularly seriously, although if the current trend continues, they'll be trading at, or close to, a loss in that time frame.
What you can take from that site though, is that they're applying that same metric to all share prices, therefore all of the companies that aren't showing a 70% chance of bankruptcy can probably be considered a better prospect than GW. I willing to bet that's quite a few.
I fail to see how nobody knowing who Games Workshop are is relevant though? It is, as you say, a simple algorithm, why would familiarity with the brand make any difference?
Backfire wrote: They do not make any kind of on-hands analysis. They have some sort of simple algorithm to calculate 'probability of bankrupcy'. It does not appear to be very good. I bet nobody on Macroaxis has ever heard of Games Workshop.
Famously, year ago they predicted that Sony will go bankrupt on 79% probability.
Reading skills failure on your part then. From the website in question (emphasis mine):
The score is used to predict probability of a firm or a fund going into bankruptcy or experiencing financial distress within next 24 months.
Sony, did/is in fact experience(ing) financial distress. Math is a wonderful thing, sure mathematical analysis is not 100% accurate; however it's quite a bit more accurate than, "it's not so because I say it isn't ."
I found the other tabs on the site interesting as well; in particular the volatility index and other indicators used by the site are based upon tried and true analysis and are the same tools used by large, institutional investors.
Overall the information on the site is useful and I have used it upon occasion to help make decisions on stock purchases that I've made, one in particular (Himax Tech) made me a pretty penny.
Same here, a lot of people take WMH seriously and play it. But, they spend almost no money at the game! I don't think my stores could keep on running, if PP were their headliner. People buy a few models, most are painted in a minimal way to play the game, and then play at the store for countless weekends with their $200 of stuff. When their faction has an exciting new release, they might buy a whole new model that costs $30 or $50.
In contrast, the 40k faithful come and buy carloads of GW stuff, and that doesn't just mean GW sales, it means a lot of hobby supply sales too.
I'm not trying to dish on WMH. It's a cool skirmish (or slightly bigger than skirmish) game, that has easy model transport requirements and plays decently on a smaller table. I'm just saying, it's not really designed to help independents do what's most important for them -- make money. One of my store managers told me that they make more money off of WMH players who camp out at the store selling them candy and pop while they play than they do on anything game related.
I think this is a relic of thinking from GW's former period of market dominance.
Why should PP be aiming for a constant churn of the entirety of the WM/H players' hobby dollars? The players bought the product PP was selling them when they bought the rules and an army to play with. Anything further is gravy, and PP supports getting that gravy by releasing additional things for each army periodically, but they're all optional. But the thing is, each one of those players, depending on the local customary points level, has bought a few hundred dollars worth of PP product, and in exchange got everything they need to play with the option of occasionally buying more stuff to freshen things up.
PP's continuing sale model isn't to constantly change required fundamentals for each army on a periodic basis to force artificial 'required' purchase churn! In fact, that lack thereof is part of their continuing sale model, combined with engaging with their player base, releasing only new things that excite players and continuing structured play support. When you buy a WM/H army, you can be done if you want. The MK2 rules have been out for about 5 years now - we haven't seen MK3-5 in that time as we would have with GW. No one's basic troops have been changed to require new purchases, and now changes have been made to make past releases crap. A Warmachine/Hordes army is a relatively stable investment of your hobby dollars.
Also, PP doesn't have a store chain to support, so they're not looking to support stores except in as much as keeping the FLGS healthy means keeping a vector for sales and organized play healthy. BUT! Next time you go to the store and it's WM/H night, ask what other games they play and what other stuff they buy from the store. I bet they'll surprise you, because the PP sales model isn't predicated on mugging the player for every single hobby dollar in their wallet, plus a few bucks more. It's based around ease of entry, stable investment, and continuing quality of experience. The players aren't constantly buying more WM/H because they don't *have* to, but they occasionally buy more because the *want* to. And because there's no pressure to constantly buy for the same thing you already bought, it's easier to keep veterans around...which provides the good word of mouth and opportunity of play required to draw in the new players who will spend those couple of hundred dollars on their army. (This also makes it easier for vets to justify dropping a few hundred on a new army, if they decide they want one.)
And it's the same with a lot of other wargames other than GW's stuff. There's no constant sales churn, because that's a GW Hobby(tm) thing! Other wargames let you buy an army and move on to another army or even other games! It's allowed! It's okay, because you've already bought the product! The FLGS shouldn't be pouting that the WM/H players don't buy more WM/H stuff...they've sold them that! They should be looking at what else they're buying, or trying to get them to buy other things - wargames or not. (Because they have the free hobby cash to buy *other* things, see?) They should also be utilizing those WM/H players to entice new players to join in and buy their couple hundred bucks' worth of stuff from the FLGS.
That's why we're seeing a rise in so many other games as people move away from GW - because the other games don't try to constantly keep selling you the same thing you've already bought like GW does. Which allows you to play more than one game, because once you have the buy in for one game, you can be done and move on (perhaps with smaller optional purchases later.)
Basically, the outmoded thinking here is the "one store, one wargame" thinking, or even the "one gamer, one wargame" mode of thought. That's the GW model, and GW is losing their grip on the market...because that model is confining and pretty poor treatment of the customer.
Same here, a lot of people take WMH seriously and play it. But, they spend almost no money at the game! I don't think my stores could keep on running, if PP were their headliner. People buy a few models, most are painted in a minimal way to play the game, and then play at the store for countless weekends with their $200 of stuff. When their faction has an exciting new release, they might buy a whole new model that costs $30 or $50.
In contrast, the 40k faithful come and buy carloads of GW stuff, and that doesn't just mean GW sales, it means a lot of hobby supply sales too.
I'm not trying to dish on WMH. It's a cool skirmish (or slightly bigger than skirmish) game, that has easy model transport requirements and plays decently on a smaller table. I'm just saying, it's not really designed to help independents do what's most important for them -- make money. One of my store managers told me that they make more money off of WMH players who camp out at the store selling them candy and pop while they play than they do on anything game related.
I think this is a relic of thinking from GW's former period of market dominance.
Why should PP be aiming for a constant churn of the entirety of the WM/H players' hobby dollars? The players bought the product PP was selling them when they bought the rules and an army to play with. Anything further is gravy, and PP supports getting that gravy by releasing additional things for each army periodically, but they're all optional. But the thing is, each one of those players, depending on the local customary points level, has bought a few hundred dollars worth of PP product, and in exchange got everything they need to play with the option of occasionally buying more stuff to freshen things up.
PP's continuing sale model isn't to constantly change required fundamentals for each army on a periodic basis to force artificial 'required' purchase churn! In fact, that lack thereof is part of their continuing sale model, combined with engaging with their player base, releasing only new things that excite players and continuing structured play support. When you buy a WM/H army, you can be done if you want. The MK2 rules have been out for about 5 years now - we haven't seen MK3-5 in that time as we would have with GW. No one's basic troops have been changed to require new purchases, and now changes have been made to make past releases crap. A Warmachine/Hordes army is a relatively stable investment of your hobby dollars.
Also, PP doesn't have a store chain to support, so they're not looking to support stores except in as much as keeping the FLGS healthy means keeping a vector for sales and organized play healthy. BUT! Next time you go to the store and it's WM/H night, ask what other games they play and what other stuff they buy from the store. I bet they'll surprise you, because the PP sales model isn't predicated on mugging the player for every single hobby dollar in their wallet, plus a few bucks more. It's based around ease of entry, stable investment, and continuing quality of experience. The players aren't constantly buying more WM/H because they don't *have* to, but they occasionally buy more because the *want* to. And because there's no pressure to constantly buy for the same thing you already bought, it's easier to keep veterans around...which provides the good word of mouth and opportunity of play required to draw in the new players who will spend those couple of hundred dollars on their army. (This also makes it easier for vets to justify dropping a few hundred on a new army, if they decide they want one.)
And it's the same with a lot of other wargames other than GW's stuff. There's no constant sales churn, because that's a GW Hobby(tm) thing! Other wargames let you buy an army and move on to another army or even other games! It's allowed! It's okay, because you've already bought the product! The FLGS shouldn't be pouting that the WM/H players don't buy more WM/H stuff...they've sold them that! They should be looking at what else they're buying, or trying to get them to buy other things - wargames or not. (Because they have the free hobby cash to buy *other* things, see?) They should also be utilizing those WM/H players to entice new players to join in and buy their couple hundred bucks' worth of stuff from the FLGS.
That's why we're seeing a rise in so many other games as people move away from GW - because the other games don't try to constantly keep selling you the same thing you've already bought like GW does. Which allows you to play more than one game, because once you have the buy in for one game, you can be done and move on (perhaps with smaller optional purchases later.)
Basically, the outmoded thinking here is the "one store, one wargame" thinking, or even the "one gamer, one wargame" mode of thought. That's the GW model, and GW is losing their grip on the market...because that model is confining and pretty poor treatment of the customer.
All of this doesn't take into account the store selling it which was the point. GW makes up a large portion of store sales that generally carry it. It's not outmoded. Even Mikhaila states it's still 15% of his total business.
It's not worth carrying the product of a lot of games if people aren't constantly purchasing them. They sit on the shelves and gather dust. Especially when people move onto a new game. In other words while it's good for wargaming that people branch out to games that don't have a constant churn like GW it's not as good for the FLGS.
That said unless something happens I don't think GW has 5 years left in them. Which will make me sad since it's the game I grew up with and I have met a lot of great friends through it. But even I've drastically reduced my purchases and have picked up stuff for other games that I might not get to play. And none of those purchases were through an FLGS outside of tournament entry fees.
And all this tells me is that water is wet ; in other news games workshop prints rulebooks for how to play a tabletop game...
This is simply a symptom of games workshops inability to capitalize on any gains it makes towards improvement as a company and in its franchises. They continue to make rookie level mistakes that has left potentially millions of dolla (us) lying around. No support for third party ip generates products, no marketing campaigns to get people playing their games, no drive towards selling their products in public places.
Marines would fly off the fething shelves if they were at walmart or other major retailers of toys and games. They used to do this in fact as I distinctly recall seeing lotr box sets on sale in chapters/indigo and some other places, where was a push for this?
They have made small improvements sure but no commitment always the safe bet products like paint and black library books.
For all their being waist deep in 3rd party videogames they certainly never stop and stare at the blunders of that industry. The publishers and big name developers need to keep pumping out safe bets or they hang you high. It's treasonous to ask them about risk taking Lear they upset their reportcards, their investors, and their boxes goods masters.
Imo I think that is the problem with gw our upper management is run by people with no idea what their products look like/are let alone could tell you how to assemble a model or play a game. They have no love or understanding of the business they are in and instead pull from what they know.
All of this doesn't take into account the store selling it which was the point. GW makes up a large portion of store sales that generally carry it. It's not outmoded. Even Mikhaila states it's still 15% of his total business.
It's not worth carrying the product of a lot of games if people aren't constantly purchasing them. They sit on the shelves and gather dust. Especially when people move onto a new game. In other words while it's good for wargaming that people branch out to games that don't have a constant churn like GW it's not as good for the FLGS.
That said unless something happens I don't think GW has 5 years left in them. Which will make me sad since it's the game I grew up with and I have met a lot of great friends through it. But even I've drastically reduced my purchases and have picked up stuff for other games that I might not get to play. And none of those purchases were through an FLGS outside of tournament entry fees.
Why is the store trying to sell a product to people who have already bought it? That's exactly the outmoded thought I was talking about. Typically, stores sell product to people who don't own it!
I think part of the problem is that the constant churn of GW was easy-mode for a FLGS (not GW's trade relations, of course, those are nightmarish.) The idea was, stock a lot of this one or two ranges, hook the customer once, and he'll always keep buying it. Like miniature wargaming is a consumable product! IT'S NOT! Game miniatures are durable goods! They can last for years and decades! The only reason 40K and Fantasy constantly sold to the same customer over and over is because GW made an artificial treadmill out of their game rules to keep the customer buying the same product over and over with minor variations. "Oh no! They nerfed plasmaguns! But they were so good last edition, all my squads had at least one! But now they suck and meltaguns are way better! Better go buy a few more boxes!"
The FLGS is going to have to adapt to a new paradigm of selling wargames to customers who don't have them yet. The vets will make occasionaly extra purchases for variety or because a new release has caught their eye...but you can't predicate a business on selling the same damn product to the same group of customers over and over and over. (See also: GW's last few reports.) The FLGS is going to have to shake off the easy-mode thought style and adapt to stocking a little bit of a lot of games instead of a lot of a few games. Because you have to sell to people who don't already own, now. The players of non-GW games are not the target market for those games, because they already have them! The target market for a game is people who don't already own it! Additional sells to buy-ins are gravy!
It goes back to miniatures and well written rules sets being durable goods. No furniture store is going to expect a guy who bought a couch last month to come in and buy another couch this month. Once he has his living room set, you count him done because he is gone for years. You can't take constant churn from "hooked addicts" for granted anymore, because GW's games are pretty much the only ones who use that paradigm - and it's chocking them out of the market.
Same here, a lot of people take WMH seriously and play it. But, they spend almost no money at the game! I don't think my stores could keep on running, if PP were their headliner. People buy a few models, most are painted in a minimal way to play the game, and then play at the store for countless weekends with their $200 of stuff. When their faction has an exciting new release, they might buy a whole new model that costs $30 or $50.
In contrast, the 40k faithful come and buy carloads of GW stuff, and that doesn't just mean GW sales, it means a lot of hobby supply sales too.
I'm not trying to dish on WMH. It's a cool skirmish (or slightly bigger than skirmish) game, that has easy model transport requirements and plays decently on a smaller table. I'm just saying, it's not really designed to help independents do what's most important for them -- make money. One of my store managers told me that they make more money off of WMH players who camp out at the store selling them candy and pop while they play than they do on anything game related.
I think this is a relic of thinking from GW's former period of market dominance.
Why should PP be aiming for a constant churn of the entirety of the WM/H players' hobby dollars? The players bought the product PP was selling them when they bought the rules and an army to play with. Anything further is gravy, and PP supports getting that gravy by releasing additional things for each army periodically, but they're all optional. But the thing is, each one of those players, depending on the local customary points level, has bought a few hundred dollars worth of PP product, and in exchange got everything they need to play with the option of occasionally buying more stuff to freshen things up.
PP's continuing sale model isn't to constantly change required fundamentals for each army on a periodic basis to force artificial 'required' purchase churn! In fact, that lack thereof is part of their continuing sale model, combined with engaging with their player base, releasing only new things that excite players and continuing structured play support. When you buy a WM/H army, you can be done if you want. The MK2 rules have been out for about 5 years now - we haven't seen MK3-5 in that time as we would have with GW. No one's basic troops have been changed to require new purchases, and now changes have been made to make past releases crap. A Warmachine/Hordes army is a relatively stable investment of your hobby dollars.
Also, PP doesn't have a store chain to support, so they're not looking to support stores except in as much as keeping the FLGS healthy means keeping a vector for sales and organized play healthy. BUT! Next time you go to the store and it's WM/H night, ask what other games they play and what other stuff they buy from the store. I bet they'll surprise you, because the PP sales model isn't predicated on mugging the player for every single hobby dollar in their wallet, plus a few bucks more. It's based around ease of entry, stable investment, and continuing quality of experience. The players aren't constantly buying more WM/H because they don't *have* to, but they occasionally buy more because the *want* to. And because there's no pressure to constantly buy for the same thing you already bought, it's easier to keep veterans around...which provides the good word of mouth and opportunity of play required to draw in the new players who will spend those couple of hundred dollars on their army. (This also makes it easier for vets to justify dropping a few hundred on a new army, if they decide they want one.)
And it's the same with a lot of other wargames other than GW's stuff. There's no constant sales churn, because that's a GW Hobby(tm) thing! Other wargames let you buy an army and move on to another army or even other games! It's allowed! It's okay, because you've already bought the product! The FLGS shouldn't be pouting that the WM/H players don't buy more WM/H stuff...they've sold them that! They should be looking at what else they're buying, or trying to get them to buy other things - wargames or not. (Because they have the free hobby cash to buy *other* things, see?) They should also be utilizing those WM/H players to entice new players to join in and buy their couple hundred bucks' worth of stuff from the FLGS.
That's why we're seeing a rise in so many other games as people move away from GW - because the other games don't try to constantly keep selling you the same thing you've already bought like GW does. Which allows you to play more than one game, because once you have the buy in for one game, you can be done and move on (perhaps with smaller optional purchases later.)
Basically, the outmoded thinking here is the "one store, one wargame" thinking, or even the "one gamer, one wargame" mode of thought. That's the GW model, and GW is losing their grip on the market...because that model is confining and pretty poor treatment of the customer.
All of this doesn't take into account the store selling it which was the point. GW makes up a large portion of store sales that generally carry it. It's not outmoded. Even Mikhaila states it's still 15% of his total business.
It's not worth carrying the product of a lot of games if people aren't constantly purchasing them. They sit on the shelves and gather dust. Especially when people move onto a new game. In other words while it's good for wargaming that people branch out to games that don't have a constant churn like GW it's not as good for the FLGS.
That said unless something happens I don't think GW has 5 years left in them. Which will make me sad since it's the game I grew up with and I have met a lot of great friends through it. But even I've drastically reduced my purchases and have picked up stuff for other games that I might not get to play. And none of those purchases were through an FLGS outside of tournament entry fees.
Yes, this is exactly my point.
@Psychopomp -- I'm not saying that what PP does is bad for customers (gamers). I'm saying that it's bad for local, independent stores. In the PP model, there are two problems for local stores:
1) the customers come and sit around taking up space without buying more product
2) the store stocks stuff that eventually is outdated and doesn't sell
That might not directly be your problem as a gamer, but it's indirectly your problem, if those stores shut down and you have nowhere to meet/play. In contrast, the GW model pushes product to players, generating constant revenue for the store -- until the customer gets fed up and quits the game. But, at least, the customers that are interested in GW "must" keep spending money. Just like with MtG, you "must" keep buying stuff if you play.
It's a more profitable model for the independent store, is all I'm saying. Which is why in every store that carries both PP and Warhammer, I see Warhammer taking the premium display space.
Backfire wrote: They do not make any kind of on-hands analysis. They have some sort of simple algorithm to calculate 'probability of bankrupcy'. It does not appear to be very good. I bet nobody on Macroaxis has ever heard of Games Workshop.
Famously, year ago they predicted that Sony will go bankrupt on 79% probability.
Reading skills failure on your part then. From the website in question (emphasis mine):
The score is used to predict probability of a firm or a fund going into bankruptcy or experiencing financial distress within next 24 months.
Sony, did/is in fact experience(ing) financial distress.
No, they are not. 'Financial distress' as I and most people understand it, means that you can't meet your financial liabilities. Sure enough, Sony is not doing exactly great, but they have big reserves and huge cash flow. They may be forced to lay off people (already have), maybe sell off some poorly performing division, but there is very little risk for the whole corporation coming down.
Note that Sony's stock is higher than it was when said prediction was made: although the stock has come down big time from the top years ago, it has been relatively stable of late, which means that Sony's problems have already been priced in to the stock. Markets clearly do not believe Sony is going under anytime soon (ditto for GW). Markets nearly always outperform individual analysts, to say nothing about some mechanical algorithm.
Backfire wrote: They do not make any kind of on-hands analysis. They have some sort of simple algorithm to calculate 'probability of bankrupcy'. It does not appear to be very good. I bet nobody on Macroaxis has ever heard of Games Workshop.
Famously, year ago they predicted that Sony will go bankrupt on 79% probability.
Reading skills failure on your part then. From the website in question (emphasis mine):
The score is used to predict probability of a firm or a fund going into bankruptcy or experiencing financial distress within next 24 months.
Sony, did/is in fact experience(ing) financial distress.
No, they are not. 'Financial distress' as I and most people understand it, means that you can't meet your financial liabilities. Sure enough, Sony is not doing exactly great, but they have big reserves and huge cash flow. They may be forced to lay off people (already have), maybe sell off some poorly performing division, but there is very little risk for the whole corporation coming down.
Note that Sony's stock is higher than it was when said prediction was made: although the stock has come down big time from the top years ago, it has been relatively stable of late, which means that Sony's problems have already been priced in to the stock. Markets clearly do not believe Sony is going under anytime soon (ditto for GW). Markets nearly always outperform individual analysts, to say nothing about some mechanical algorithm.
ROFLMAO. I missed the initial beck-and-forth on this.
So funny, Sony in financial distress. . Sony is market capped at $20+ billion, has a reasonable amount of cash and equivalents versus short term debts, and perhaps more importantly is a source of national pride for the Japanese. It's as likely to become insolvent as Samsung or General Motors. As proven, countries will come to the aid of national, ionic companies that are important to that country's financial strength, if push comes to shove.
Azreal13 wrote: I'm sorry, but how does requiring a multi-billion government bail out not count as "financial distress?"
I mean, I wouldn't say "Oh sure, my heart just stopped and the only chance I've got of surviving is a transplant, but otherwise I'm fine" would I?
Because cynical calous business reasons. If they KNOW they will receive a bailout, feth it take some serious risks. Same reason some companies will flagrantly break the law, apologize & pay the fines. If I make $100 billion manipulating toxic mortgages & the fed fines me $50 billion that's nothing. People will look and say "ohhh he got fined HARD $50 billion is a lot" meanwhile I'll just sit here counting the $50billion in profits I still kept.
Azreal13 wrote: I'm sorry, but how does requiring a multi-billion government bail out not count as "financial distress?"
I mean, I wouldn't say "Oh sure, my heart just stopped and the only chance I've got of surviving is a transplant, but otherwise I'm fine" would I?
I never said that Sony needed a bailout though >.< They have plenty of cash. I was just making a point that Sony (just as Toyota, Honda, etc.) is an important company to the Japanese, and they will support it if the company needs help (whether by buying product, loaning money, etc.). Neither did I imply (or mean to imply) that Samsung was in any kind of distress (they're obviousy not).
Anyhow, financial distress means being unable to pay your creditors. This is clearly not the case for Sony. It's also clearly not the case for Games Workshop, as they have cash, are profitable, and continue to pay dividends. There's a huge difference between shrinking marketshare and/or declining business and financial distress, and insolvency.
Azreal13 wrote: I'm sorry, but how does requiring a multi-billion government bail out not count as "financial distress?"
I mean, I wouldn't say "Oh sure, my heart just stopped and the only chance I've got of surviving is a transplant, but otherwise I'm fine" would I?
Because cynical calous business reasons. If they KNOW they will receive a bailout, feth it take some serious risks. Same reason some companies will flagrantly break the law, apologize & pay the fines. If I make $100 billion manipulating toxic mortgages & the fed fines me $50 billion that's nothing. People will look and say "ohhh he got fined HARD $50 billion is a lot" meanwhile I'll just sit here counting the $50billion in profits I still kept.
Yeah, this was the case with the ***hole bankers. What I can't believe is...
They got away with it, and everyone else paid for it.
Backfire wrote: They do not make any kind of on-hands analysis. They have some sort of simple algorithm to calculate 'probability of bankrupcy'. It does not appear to be very good. I bet nobody on Macroaxis has ever heard of Games Workshop.
Famously, year ago they predicted that Sony will go bankrupt on 79% probability.
Reading skills failure on your part then. From the website in question (emphasis mine):
The score is used to predict probability of a firm or a fund going into bankruptcy or experiencing financial distress within next 24 months.
Sony, did/is in fact experience(ing) financial distress.
No, they are not. 'Financial distress' as I and most people understand it, means that you can't meet your financial liabilities. Sure enough, Sony is not doing exactly great, but they have big reserves and huge cash flow. They may be forced to lay off people (already have), maybe sell off some poorly performing division, but there is very little risk for the whole corporation coming down.
Note that Sony's stock is higher than it was when said prediction was made: although the stock has come down big time from the top years ago, it has been relatively stable of late, which means that Sony's problems have already been priced in to the stock. Markets clearly do not believe Sony is going under anytime soon (ditto for GW). Markets nearly always outperform individual analysts, to say nothing about some mechanical algorithm.
So, unable to make payroll, maintain positions and cutting traditional bonuses (Japanese business practice which, the amount of which is included in the employee's annual compensation unlike most Western countries) doesn't mean they are experiencing distress? Interesting. Normally, being unable to meet financial obligations means there's some distress.
No one believes Sony is going out of business or shuttering sections of their business, but you can't hemorrhage billions and be considered to be in financial good health.
Meanwhile, in the real world, Sony has had declining liquidity for years, has posted losses for three out of the four last years, and has informed investors of a projected loss of $2.14bn at the end of the current financial year (31 March).
Financial distress does not mean that a company is unable to pay its creditors. Being unable to pay your creditors means you're bankrupt.
Azreal13 wrote: I'm sorry, but how does requiring a multi-billion government bail out not count as "financial distress?"
I mean, I wouldn't say "Oh sure, my heart just stopped and the only chance I've got of surviving is a transplant, but otherwise I'm fine" would I?
I never said that Sony needed a bailout though >.< They have plenty of cash. I was just making a point that Sony (just as Toyota, Honda, etc.) is an important company to the Japanese, and they will support it if the company needs help (whether by buying product, loaning money, etc.). Neither did I imply (or mean to imply) that Samsung was in any kind of distress (they're obviousy not).
No, but you did mention GM in your post. The point I was making is that not being allowed to go bust by your govt doesn't preclude you getting into financial distress. Getting into financial distress doesn't mean you'll go bankrupt.
Besides, all this to and fro is WRT Sony entering financial distress sometime in the next two years (I believe?) on a prediction made one year ago, with a greater than one in five chance of it not happening?
Anyhow, financial distress means being unable to pay your creditors. This is clearly not the case for Sony. It's also clearly not the case for Games Workshop, as they have cash, are profitable, and continue to pay dividends. There's a huge difference between shrinking marketshare and/or declining business and financial distress, and insolvency.
GW are paying dividends at a rate perhaps higher than they should, have less cash than they did, and assuming linear progression, aren't very far from ceasing to make a profit. There may be a difference between shrinking market share and the other items, but it would be foolish to say that they're not related. It would also be foolish to say that shrinking market share can't very quickly lead to the other issues.
Azreal13 wrote: I'm sorry, but how does requiring a multi-billion government bail out not count as "financial distress?"
I mean, I wouldn't say "Oh sure, my heart just stopped and the only chance I've got of surviving is a transplant, but otherwise I'm fine" would I?
I never said that Sony needed a bailout though >.< They have plenty of cash. I was just making a point that Sony (just as Toyota, Honda, etc.) is an important company to the Japanese, and they will support it if the company needs help (whether by buying product, loaning money, etc.). Neither did I imply (or mean to imply) that Samsung was in any kind of distress (they're obviousy not).
No, but you did mention GM in your post. The point I was making is that not being allowed to go bust by your govt doesn't preclude you getting into financial distress. Getting into financial distress doesn't mean you'll go bankrupt.
Besides, all this to and fro is WRT Sony entering financial distress sometime in the next two years (I believe?) on a prediction made one year ago, with a greater than one in five chance of it not happening?
Anyhow, financial distress means being unable to pay your creditors. This is clearly not the case for Sony. It's also clearly not the case for Games Workshop, as they have cash, are profitable, and continue to pay dividends. There's a huge difference between shrinking marketshare and/or declining business and financial distress, and insolvency.
GW are paying dividends at a rate perhaps higher than they should, have less cash than they did, and assuming linear progression, aren't very far from ceasing to make a profit. There may be a difference between shrinking market share and the other items, but it would be foolish to say that they're not related. It would also be foolish to say that shrinking market share can't very quickly lead to the other issues.
Maybe GW hubris is so high, they think they're too big to fail.
I can't wait for the tell all book, economic analysis and pulp novel "too big too fail: plastic space man edition" that will be released following the supposed death of GW.
Automatically Appended Next Post: Written by Matt Ward of course.
Thud wrote: Meanwhile, in the real world, Sony has had declining liquidity for years, has posted losses for three out of the four last years, and has informed investors of a projected loss of $2.14bn at the end of the current financial year (31 March).
Financial distress does not mean that a company is unable to pay its creditors. Being unable to pay your creditors means you're bankrupt.
You're wrong about the definition of financial distress and bankruptcy. I'm not trying to split hairs, but in the world of investments, definitions are important, and financial distress and bankruptcy just don't mean what you say. in lay terms financial distress is when a company can't pay its bills, and bankruptcy occurs is when a company's assets are divested to fulfill those obligations, per a court order sought by said creditors. Anotehr important term is bankruptcy protection (also known as Chapter 11 in the USA), which occurs when a company seeks court assistance to reorganize its debts under existing management.
Most often when a large company -- or small company -- can't pay its bills, its creditors say, "let's work it out", because when a company goes through bankruptcy proceedings, creditors get pennies on the dollar owed; in the other instance, at least, you have a liability that is worth a lot on paper, that may just take longer to repay.
As defined by InvestorWords:
Financial Distress - Definition
Tight cash situation in which a business, household, or individual cannot pay the owed amounts on the due date. If prolonged, this situation can force the owing entity into bankruptcy or forced liquidation. It is compounded by the fact that banks and other financial institutions refuse to lend to those in serious distress. When a firm is under financial distress, the situation frequently sharply reduces its market value, suppliers of goods and services usually insist on COD terms, and large customer may cancel their orders in anticipation of not getting deliveries on time.
A proceeding in a federal court in which an insolvent debtor's assets are liquidated and the debtor is relieved of further liability. Chapter 7 of the Bankruptcy Reform Act deals with liquidation, while Chapter 11 deals with reorganization.
Fango wrote: Since the lawsuit, we've seen a 'backlash' of sorts by GW to convert or drop all nebulous or non-copyright-able IP...a 'baring of the gates' or 'boarding up the windows' of sorts. Some of these knee-jerk decisions almost seem like they are punishing their fan-base..."See? See what you made us do?".
I call this the "Be careful what you wish for!" principle. Many times we've wanted GW to do something or for them to be jolted into action by some event, only for them to take the less consumer friendly road. Yes, they stopped doing the thing we wanted them to stop doing, but the replacement isn't better.
Sean_OBrien wrote: You know how most companies respond to growth in their competition? Leveraging their market position to maintain dominance...
This has been a consistent failure of GW for some number of years. Given how they use their license (everything from computer games to RPGs) it is astonishing how they have not used these avenues of attack (so to speak) to further enhance their own gains.
Where were the Dawn of War related releases when those games were coming out? Why wasn't there a Heroes of Kronus box with unique miniatures (accompanied by rules in WD) for the heroes in that game? What about DoW II? Why no cross-promotion with FFG for the RPG's? It can only help them to do so. The Ultramarine movie, as terrible as it turned out, got nothing. There was no miniature release to go with it. FFG did more with that release, putting out a brief 3-4 page set of rules for a relic and a few other things related to the movie, and it was free.
The problem lies in the fact that GW sees their licensed products not as an opportunity to spread their influence and brand but as something to sit back and collect money from. How else do you explain the scattershot way they recently gave out the 40K license to any two-bit mobile developer? A lot of money in licensing fees for no effort.
If they'd put it even a modicum of effort to leverage these outside releases over the past decade things could be very different.
Perfectly said there, my son loved Dawn of War and wanted Blood Ravens. When I told him I could paint the colours but there is no codex or book as he would understand he lost interest really fast in it. I could never understand why GW would not capitalize on it.
Only thing I could think of is GW didn't create Blood Ravens so couldn't use them. Maybe it's a good thing, it would have been really expensive buying all those Blood Ravens minis if they were available.
DEFINITION OF 'FINANCIAL DISTRESS'
A condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. The chance of financial distress increases when a firm has high fixed costs, illiquid assets, or revenues that are sensitive to economic downturns.
DEFINITION OF 'BANKRUPTCY'
A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.
Also, in the quote you provided for bankruptcy, it refers to an "insolvent debtor." What's that then? Glad you asked. It's someone who is unable to meet debt obligations. In other words; can't pay your creditors.
You're confusing a company being bankrupt and the ensuing bankruptcy proceedings which deal with said company's remaining assets and creditors.
If a company fails to pay its debts, it's bankrupt. If it finds a way around that (e.g., creditors saying "let's work it out," or more commonly taking on a longer term loan which it can (or hopes it can) handle to pay off immediate debts it otherwise would not be able to pay) it isn't failing to pay its debts. Quite the opposite, in fact.
DEFINITION OF 'FINANCIAL DISTRESS'
A condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. The chance of financial distress increases when a firm has high fixed costs, illiquid assets, or revenues that are sensitive to economic downturns.
Trailing Twelve Months (TTM) ended in Sep. 2014:
Total Assets was $144,928 Mil.
Total Current Assets was $40,516 Mil.
Total Current Liabilities was $45,232 Mil. Retained Earnings was $7,733 Mil.
Pretax Income was -837.369456285 + 669.949609506 + -1135.87062732 + 867.668664218 = $-436 Mil. Interest Expense was -56.2900683915 + -62.8240036291 + -1740.63904632 + -2307.08486372 = $-4,167 Mil.
Revenue was 17700.7084897 + 17733.2605677 + 18235.7729138 + 23321.2739223 = $76,991 Mil.
Market Capitalization (Today) was $24,088 Mil.
Total Liabilities was $123,641 Mil.
I don't know what else to call it when your liabilities exceed your assets......They're eating through their savings at a prodigious rate (sound like another company we know?)
DEFINITION OF 'FINANCIAL DISTRESS'
A condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. The chance of financial distress increases when a firm has high fixed costs, illiquid assets, or revenues that are sensitive to economic downturns.
Trailing Twelve Months (TTM) ended in Sep. 2014:
Total Assets was $144,928 Mil.
Total Current Assets was $40,516 Mil.
Total Current Liabilities was $45,232 Mil. Retained Earnings was $7,733 Mil.
Pretax Income was -837.369456285 + 669.949609506 + -1135.87062732 + 867.668664218 = $-436 Mil. Interest Expense was -56.2900683915 + -62.8240036291 + -1740.63904632 + -2307.08486372 = $-4,167 Mil.
Revenue was 17700.7084897 + 17733.2605677 + 18235.7729138 + 23321.2739223 = $76,991 Mil.
Market Capitalization (Today) was $24,088 Mil.
Total Liabilities was $123,641 Mil.
I don't know what else to call it when your liabilities exceed your assets......They're eating through their savings at a prodigious rate (sound like another company we know?)
*I changed the text color above to call out what I'm referencing below in my statement.
According to their audited financial results, their Net Assets (Total Assets - Total Liabilities) = 49,765. That would indicate their assets exceed their liabilities. In fact, their current assets exceed their current liabilities by almost double (aka current ratio aka liquidity ratio). This would indicate GW is very liquid because it has the ability to pay its obligations. In addition, it also has the ability to pay its commitments noted in Note 12 which are not identified in the financial statements. Refer to the balance sheet on page 5 and footnote 12 on page of the mid year financial statements.
Also, when did they acquire debt? I think I missed the memo and didn't see it as a subsequent event in their financial statements. I'm referencing this per your interest Expense calculation above. Interest expense should be broken out as a separate item on their P&L and its not listed. Its broken out so you can get a true picture of operations ie - EBITDA. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. This provides the reader with a "true" sense of earnings from operations as the other expenses are not directly related to operations (interest is derived from debt, income taxes are based on earnings not operations, depreciation and amortization are based on capitalized assets in which cash may have been spent several years ago and in the current year are non-cash expenses). In addition, I don't see any LT debt or capital leases on the Company's Balance Sheet. How are they paying $4.2MM in interest charges?
When I look at the Company's health, I generally like to look at their statement of cash flows because it gives me a sense of what is happening with the Company. It shows what they are spending their money on and reconciles the change in cash between the periods (on an annual basis). GW is still a healthy company because they have the cash reserves and cash flow to maintain status quo. I'd like to see them take more action and I do participate in elections the Company's elections though I don't have enough skin in the game to matter when compared to the rest of the Investors. If you want to see GW change, buy their stock and create a block of investors and demand change. The only way anyone on this board can make it happen is by working within their system. Buy their shares and threaten a takeover, be that activist investor they don't like. Management won't take you seriously until you're sitting across the table from them and have support from their investors.
DEFINITION OF 'FINANCIAL DISTRESS' A condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. The chance of financial distress increases when a firm has high fixed costs, illiquid assets, or revenues that are sensitive to economic downturns.
DEFINITION OF 'BANKRUPTCY' A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.
Also, in the quote you provided for bankruptcy, it refers to an "insolvent debtor." What's that then? Glad you asked. It's someone who is unable to meet debt obligations. In other words; can't pay your creditors.
You're confusing a company being bankrupt and the ensuing bankruptcy proceedings which deal with said company's remaining assets and creditors.
If a company fails to pay its debts, it's bankrupt. If it finds a way around that (e.g., creditors saying "let's work it out," or more commonly taking on a longer term loan which it can (or hopes it can) handle to pay off immediate debts it otherwise would not be able to pay) it isn't failing to pay its debts. Quite the opposite, in fact.
You've really made my point for me. A bankrupt company is an insolvent debtor. A company in financial distress is not at that point yet.
I've worked at or with many companies that can't pay its debts. You know what happens? A creditor, even the government tax branch calls, and says, "Pay up". The company says, "We can't. We'll try our best, though, and here's a little bit for now." The creditor grumbles, and eventually escalates from collections to legal proceedings. Through that whole process? That company is in "financial distress". They're not bankrupt.
A company isn't even bankrupt if it successfully files for bankruptcy protection under Chapter 11, and is approved for reorganization of its debts. In this case, the company most certainly can't pay its debts (that's why they're "reorganized"), but it's still not bankrupt. When Chapter 11 fails, and an agreement isn't accepted between creditors and the debtor, the company's assets are liquidated. This is a bankrupt company.
You said:
Thud wrote:Financial distress does not mean that a company is unable to pay its creditors. Being unable to pay your creditors means you're bankrupt.
According to their audited financial results, their Net Assets (Total Assets - Total Liabilities) = 49,765. That would indicate their assets exceed their liabilities. In fact, their current assets exceed their current liabilities by almost double (aka current ratio aka liquidity ratio). This would indicate GW is very liquid because it has the ability to pay its obligations. In addition, it also has the ability to pay its commitments noted in Note 12 which are not identified in the financial statements. Refer to the balance sheet on page 5 and footnote 12 on page of the mid year financial statements.
Also, when did they acquire debt? I think I missed the memo and didn't see it as a subsequent event in their financial statements. I'm referencing this per your interest Expense calculation above. Interest expense should be broken out as a separate item on their P&L and its not listed. Its broken out so you can get a true picture of operations ie - EBITDA. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. This provides the reader with a "true" sense of earnings from operations as the other expenses are not directly related to operations (interest is derived from debt, income taxes are based on earnings not operations, depreciation and amortization are based on capitalized assets in which cash may have been spent several years ago and in the current year are non-cash expenses). In addition, I don't see any LT debt or capital leases on the Company's Balance Sheet. How are they paying $4.2MM in interest charges?
When I look at the Company's health, I generally like to look at their statement of cash flows because it gives me a sense of what is happening with the Company. It shows what they are spending their money on and reconciles the change in cash between the periods (on an annual basis). GW is still a healthy company because they have the cash reserves and cash flow to maintain status quo. I'd like to see them take more action and I do participate in elections the Company's elections though I don't have enough skin in the game to matter when compared to the rest of the Investors. If you want to see GW change, buy their stock and create a block of investors and demand change. The only way anyone on this board can make it happen is by working within their system. Buy their shares and threaten a takeover, be that activist investor they don't like. Management won't take you seriously until you're sitting across the table from them and have support from their investors.
This is the most articulate post on the subject in as many pages of the thread as I've read. Statement of cash flows is the most important aspect of a company's short term health, and clearly, there is no distress in Games Workshop. Whether they grow or shrink, the company is healthy enough to keep on ticking for a very long time. Their cash flows and cash reserves aren't anything to get super duper excited about, but I'll bet the farm that many companies in the industry would be very happy to trade positions.
People keep saying, "will GW die with a bang or a whimper?", when more likely, they'll just likely shrink or grow, since it's a company that is obviously willing to cut costs. It won't really die at all, until there's another dominant scifi/fantasy wargaming company, and for that to happen, as long as local gaming stores are relevant, some company would have to have a better revenue model than any of GW's current competitors.
Bronzefists42 wrote: I can't wait for the tell all book, economic analysis and pulp novel "too big too fail: plastic space man edition" that will be released following the supposed death of GW.
Automatically Appended Next Post: Written by Matt Ward of course.
There's something like that out already, written by robin dews in 2007 for his mba management project. Seems harder to find online now, but it was a good read and explained what was going on pretty clearly.
Automatically Appended Next Post:
H.B.M.C. wrote: You're not going to get through to him unless you...
1. Put.
2. It.
2. In.
4. List.
5. Form.
And yeah. Two 2's!
you didn't put in a number 6.... how am i supposed to roll on it now?
DEFINITION OF 'FINANCIAL DISTRESS'
A condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. The chance of financial distress increases when a firm has high fixed costs, illiquid assets, or revenues that are sensitive to economic downturns.
Trailing Twelve Months (TTM) ended in Sep. 2014:
Total Assets was $144,928 Mil.
Total Current Assets was $40,516 Mil.
Total Current Liabilities was $45,232 Mil. Retained Earnings was $7,733 Mil.
Pretax Income was -837.369456285 + 669.949609506 + -1135.87062732 + 867.668664218 = $-436 Mil. Interest Expense was -56.2900683915 + -62.8240036291 + -1740.63904632 + -2307.08486372 = $-4,167 Mil.
Revenue was 17700.7084897 + 17733.2605677 + 18235.7729138 + 23321.2739223 = $76,991 Mil.
Market Capitalization (Today) was $24,088 Mil.
Total Liabilities was $123,641 Mil.
I don't know what else to call it when your liabilities exceed your assets......They're eating through their savings at a prodigious rate (sound like another company we know?)
*I changed the text color above to call out what I'm referencing below in my statement.
According to their audited financial results, their Net Assets (Total Assets - Total Liabilities) = 49,765. That would indicate their assets exceed their liabilities. In fact, their current assets exceed their current liabilities by almost double (aka current ratio aka liquidity ratio). This would indicate GW is very liquid because it has the ability to pay its obligations. In addition, it also has the ability to pay its commitments noted in Note 12 which are not identified in the financial statements. Refer to the balance sheet on page 5 and footnote 12 on page of the mid year financial statements.
Also, when did they acquire debt? I think I missed the memo and didn't see it as a subsequent event in their financial statements. I'm referencing this per your interest Expense calculation above. Interest expense should be broken out as a separate item on their P&L and its not listed. Its broken out so you can get a true picture of operations ie - EBITDA. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. This provides the reader with a "true" sense of earnings from operations as the other expenses are not directly related to operations (interest is derived from debt, income taxes are based on earnings not operations, depreciation and amortization are based on capitalized assets in which cash may have been spent several years ago and in the current year are non-cash expenses). In addition, I don't see any LT debt or capital leases on the Company's Balance Sheet. How are they paying $4.2MM in interest charges?
When I look at the Company's health, I generally like to look at their statement of cash flows because it gives me a sense of what is happening with the Company. It shows what they are spending their money on and reconciles the change in cash between the periods (on an annual basis). GW is still a healthy company because they have the cash reserves and cash flow to maintain status quo. I'd like to see them take more action and I do participate in elections the Company's elections though I don't have enough skin in the game to matter when compared to the rest of the Investors. If you want to see GW change, buy their stock and create a block of investors and demand change. The only way anyone on this board can make it happen is by working within their system. Buy their shares and threaten a takeover, be that activist investor they don't like. Management won't take you seriously until you're sitting across the table from them and have support from their investors.
Umm. The info I quoted was for Sony as it was being argued that Sony was/is not in financial distress; apparently, by your statement, they are not regardless of the CFO's statement that they are hemorrhaging cash ($1.2billion abouts).
Anywho, since it's topical and all, let's examine GW using your definition of health.
Games Workshop Group PLC's EBITDA per share for the six months ended in Nov. 2014 was £0.37. Its EBITDA per share for the trailing twelve months (TTM) ended in Nov. 2014 was £0.70. During the past 12 months, the average EBITDA per Share Growth Rate of Games Workshop Group PLC was -32.50% per year. During the past 3 years, the average EBITDA per Share Growth Rate was -4.40% per year. During the past 5 years, the average EBITDA per Share Growth Rate was -2.00% per year. During the past 10 years, the average EBITDA per Share Growth Rate was 8.10% per year.
So, is -32.50% in the past year healthy? According to EBITDA, GW has been in a slide for the past 5+ years which appears to be accelerating.
One thing that I look at in a retail stock is the inventory to revenue ratio.
Games Workshop Group PLC's inventory to revenue ratio for the quarter that ended in Nov. 2014 increased from May. 2014 (0.14) to May. 2014 (0.15)
An increase in inventory to revenue ratio from one quarter to the next indicates that one of the following is happening:
1. investment in inventory is growing more rapidly than revenue
2. revenue are dropping
No matter which situation is causing the problem, an increase in the inventory to revenue ratio may signal an oncoming cash flow problem.
Is GW going to implode tomorrow? No, not even close. They're making money, albeit less than before, and turning over inventory, albeit less than before. From an examination of the numbers it looks almost like a controlled slide down. The financials are in great shape and the books look good but the company is a couple of more bad halfs from being faced with a decision to cut dividends or buy product to sell.
Talys wrote: Just like with MtG, you "must" keep buying stuff if you play.
It depends on what you play. If you play Limited, absolutely - when you enter a tournament you buy your deck on the day. If you play Standard, cards rotate out after ~1.5 years. But for a number of major formats - like Vintage, Modern, Commander - cards never rotate out.
@Psychopomp -- I'm not saying that what PP does is bad for customers (gamers). I'm saying that it's bad for local, independent stores. In the PP model, there are two problems for local stores:
1) the customers come and sit around taking up space without buying more product
2) the store stocks stuff that eventually is outdated and doesn't sell
That might not directly be your problem as a gamer, but it's indirectly your problem, if those stores shut down and you have nowhere to meet/play. In contrast, the GW model pushes product to players, generating constant revenue for the store -- until the customer gets fed up and quits the game. But, at least, the customers that are interested in GW "must" keep spending money. Just like with MtG, you "must" keep buying stuff if you play.
It's a more profitable model for the independent store, is all I'm saying. Which is why in every store that carries both PP and Warhammer, I see Warhammer taking the premium display space.
Okay, this is still old GW-style thinking.
First, number 2: The lack of churn means it will take a much longer time for that product to become outdated, if ever. And with historicals, it never will.
Now, number 1:
GW product sells constantly with almost no effort beyond stocking and being a curator for the merchandise because GW is modelling their strategy to keeping up their own retail chain, which sells their crap exclusively. GW needs it to work like that to support their stores - which are actually competition for the independent FLGS. That's what the GW treadmill is all about.
PP and almost every other wargame manufacturer out there focuses on producing a stable product with lasting quality of experience over time. They make a product people want, and they make it so that people keep playing it. So the customers buy, and then - assuming playing space - they come to the store to play there. They get people into the store. Once the players / prospective customers are in the store, IT IS THE STORE MANAGER'S JOB TO SELL THEM STUFF, NOT THE MANUFACTURER'S.
In the example given with the regular WM/H crowd and the dusty WM/H product in stock, what has the store done to sell the product? Have they run leagues? Because they can download the rules packet from PP's website free of charge. They can even order a prize packet for the season leagues or even a starter league. Same thing with tournaments - download the rules, maybe order the prize packet. Have they run demos than advertised them to people other than the regular players (ie, the people who have already bought the game)? Have they told people to come to the usual WM/H night and check out the game? Have they asked any of the regulars for ideas? Have they done anything but stock the product and wait for the same people to keep buying the same game over and over and over? Because only GW product sells like that, because GW's release strategy forces you to subscribe to their games, not buy them. Other wargames sell like other games, where you buy in and can be done. It requires effort on the part of the store, because the manufacturer of these other games aren't tailoring them to support an entire chain of stores supported by artificial product churn.
That's the new paradigm for wargaming in stores. Stock starter sets and common upgrades, and drum up your own damned sales, because the companies making them are focused on production, not retailing...which is good, because it means there won't be a PP store opening in your neighborhood to steal your gamers! Luckily, PP and other companies, by focusing on solid product and game support give retailers plenty of tools for drumming up their own damned sales, but it does require a little effort on the stores' part.
Because Kirby and Co. want to be? The more I read these reports, the more I feel like they're just drumming up new excuses until they've finally bled the well dry. Just sitting here, biding their time as they collect the drainage, leaving a dry husk of a company and swooping out like oil barons when it dies.
So, who do we have to blame for the downfall of our beloved company? I know that Kirby and his cronies are the ones that are driving it into the ground, but who put him in power? Who originally went public with the company? Kirby is just doing what greedy worms do. Who should I direct my ire towards, really?
First, number 2: The lack of churn means it will take a much longer time for that product to become outdated, if ever. And with historicals, it never will.
Now, number 1:
GW product sells constantly with almost no effort beyond stocking and being a curator for the merchandise because GW is modelling their strategy to keeping up their own retail chain, which sells their crap exclusively. GW needs it to work like that to support their stores - which are actually competition for the independent FLGS. That's what the GW treadmill is all about.
PP and almost every other wargame manufacturer out there focuses on producing a stable product with lasting quality of experience over time. They make a product people want, and they make it so that people keep playing it. So the customers buy, and then - assuming playing space - they come to the store to play there. They get people into the store. Once the players / prospective customers are in the store, IT IS THE STORE MANAGER'S JOB TO SELL THEM STUFF, NOT THE MANUFACTURER'S.
In the example given with the regular WM/H crowd and the dusty WM/H product in stock, what has the store done to sell the product? Have they run leagues? Because they can download the rules packet from PP's website free of charge. They can even order a prize packet for the season leagues or even a starter league. Same thing with tournaments - download the rules, maybe order the prize packet. Have they run demos than advertised them to people other than the regular players (ie, the people who have already bought the game)? Have they told people to come to the usual WM/H night and check out the game? Have they asked any of the regulars for ideas? Have they done anything but stock the product and wait for the same people to keep buying the same game over and over and over? Because only GW product sells like that, because GW's release strategy forces you to subscribe to their games, not buy them. Other wargames sell like other games, where you buy in and can be done. It requires effort on the part of the store, because the manufacturer of these other games aren't tailoring them to support an entire chain of stores supported by artificial product churn.
That's the new paradigm for wargaming in stores. Stock starter sets and common upgrades, and drum up your own damned sales, because the companies making them are focused on production, not retailing...which is good, because it means there won't be a PP store opening in your neighborhood to steal your gamers! Luckily, PP and other companies, by focusing on solid product and game support give retailers plenty of tools for drumming up their own damned sales, but it does require a little effort on the stores' part.
Sure thing, call it what you will. If those stores would just ratchet up Lumia, Windows Phone would outsell iPhone! This is terrible logic. If you want to shout: IT IS NOT SOLEY THE INDIVIDUAL STORE'S RESPONSIBILITY TO DRUM UP SALES!!
It is the manufacturer's responsibility to create hype, and create churn. Stores are staffed by low wage earners who aren't the best sales people in the universe. If they were, they'd work for pharmaceutical companies, make six figure salaries, and have company cars and expense accounts. The only person in the store that makes a lot of money is the store owner.
When Microsoft writes Halo, is it Best Buy's job to walk up to everyone and say, "BUY HALO! HALO IS GOOD!"? How about when Xbox One or PS4 are released? Who's job is it to promote it? Who puts up the TV ads? It's squarely on the manufacturer to create hype, because they have the budget to do so. Little wee stores have enough problems, like paying rent, dealing with theft, and making ends meet.
The fact is (and it really is a fact in my area if nowhere else), the WMH crowd buys a lot less stuff (including hobby supplies) per player than the 40k crowd, and the XWing player buys even less. The infinity player, and malifaux players buy little bits of stuff too. That's why when you walk into a store, the front 1/4 of the store is all GW stuff. It sells. Among other things, one problem with WMH being "stable" or whatever you want to call it, there is really nothing left to buy for people who have all their gaming pieces for two or three factions. The new releases are so sparse, in comparison.
If the new paradigm of wargaming stores is what you purport it to be, local stores are doomed.
By the way, you're wrong about untis being outdated. On Boxing Day, nobody bought a Hordes starter box with metal models (old box) marked down to $45. Nobody bought a Trollbloods Scattergunner, with metal models, marked down to $25. Store owner offered them to me for five bucks less than that the next week, but I couldn't bring myself to pull the trigger, because they'd sit in the box for another 10 years before I finally gave them away. There were tons (and I mean *tons*) of PP metal blisters marked down way below half price that people passed on. Yet, at the end of it all, every single playable 40k model (well-discounted) was sold. I'm talking, every drop pod, every Rhino, predator, Hydra, troops of every faction, box sets, Tyrants, stormravens, and even most of the factioned terminators. The only stuff left was junk that has no value other than for modelling, and terrain/fortification, which never sells well.
Automatically Appended Next Post:
puma713 wrote: So, who do we have to blame for the downfall of our beloved company? I know that Kirby and his cronies are the ones that are driving it into the ground, but who put him in power? Who originally went public with the company? Kirby is just doing what greedy worms do. Who should I direct my ire towards, really?
I do believe that GW becoming a public company was bad for both the players and the game (but probably great, financially, for the founders).
How else do you explain the scattershot way they recently gave out the 40K license to any two-bit mobile developer? A lot of money in licensing fees for no effort.
Actually, the most recent release on the App Store is Horus Heresy: Drop Assault. The GW and Warhammer 40k placards are stamped at the bottom of the screen, but the trademarked title and logos are Horus Heresy. It makes me wonder if Black Library is getting into licensing as well.
I haven't played much of it, but it seems Clash-of-Clans-esque. You choose between Loyalist vs. Traitor to play out the scenario on Istvaan III. Once you chose a faction, then you get to choose between one of four chapters. I'm playing as the white/green Death Guard.
Of course, it has the trend of all new App games that you download for free - wait to build/recruit, or spend money for "machine spirit" tokens that speed everything up.
The key change happened when the LOTR boom popped and GW's revenue tanked. When that happened, they actually did the right thing in terms of restructuring. They cut unnecessary staff and reorganized things to return to profitability.
It's what happened next that was the problem. There was a change in business model that grew out of the restructuring. They became addicted to the margins and earnings per share that massive cost cuts and price hikes brought them. If you look at the historical earnings per share, the period after the restructuring is even higher than the height of the LOTR boom. For a brief period, GW really was the efficient cash generation machine Kirby bragged about in the last report.
The new approach to the business was to go for reduced sales volume at higher prices. This allows GW to sell less product at a higher price, but then save money on manufacturing, distributing and selling the product (as it simply costs less to make less and ship fewer boxes).
The problem is that it's the only play in their playbook now. All they have is "fire people to save money and raise prices!" And there is no plan to return to growth. Outside of the mind-boggling renovation of the "visitor centre" GW only reinvests in their own business to save money and not to grow their volume.
In fact, they are investing in actively reducing their volume by switching their stores to have less staff and be open less hours. Those in the know have reported it works out to about a 40% reduction in sales for a store when it switches from fully staffed to a single employee location. But if it saves them more than 40% in staff costs and rental costs (moving to a smaller location) then they think it's worth spending the money on the transition.
The problem is that less open hours and intentionally selling less product to less people is that recruitment is down. Which means there's less word of mouth. Less people telling their friends about the hobby and inviting them to come down on Saturday to check it out. Less people showing curious friends and family their painted miniatures. Less of everything.
And wargaming is fundamentally a social hobby. So when you have a reduction in the number of participants you can have a local area fail to maintain a critical mass and all the local talk, excitement and buzz fades away. Less organized gaming and painting events. Less talk about who's going to buy the latest new army. Less of everything.
During GW's greatest era of growth from a UK importer of games like D&D into an international miniatures company, GW concentrated on getting their games into as many hands as possible. When LOTR came out, they wanted as many people as possible to know about their games. They even commissioned a marketing magazine by the DiAgostini media group called Battle Games in Middle Earth. Yes, they actually paid a third party company to do actual marketing for them in the form of a promotional magazine available at news agents, grocery stores and the like (incidentally Disney has hired this same company to make a Star Wars magazine to hype the new movie coming out).
Now they no longer prioritize getting their product into as many hands as possible. They actually welcome declining volume because they can use the cost savings to make their margins look good and to justify paying out cash reserves as dividends. They are happy to sell less product at a higher price and save on costs.
This report though, shows a failure to keep costs going down. Revenue is down, but costs are slightly up. That's not good. It shows that the revenue is falling faster than their ability to cut jobs, close stores and save on lower volumes of production. They just finished another round of restructuring with massive layoffs in the administration side of things that was supposed to save them money going forward.
As an aside, there is also something contradictory about injection moulded plastic and their intentional reduction of sales volume. Injection moulded plastic requires a high up front cost in terms of design and tooling for the mould but has an incredibly low cost per sprue you pump out. So it's a manufacturing process that gives you the best results when you mass produce. Doing premium pricing and intentionally reducing volume by cutting staff and hours means you'll sell fewer sprues. So you have the way GW makes the stuff geared towards mass production and the way they sell it to be geared towards premium products sold in fewer numbers at higher prices. Their high price, low volume approach is actively denying them the advantages that their manufacturing process should be providing them.
And all of this doesn't even deal with a potential mismatch with the desires of the market. GW believes they have discovered a niche group of customers that are primarily collectors who see their miniatures as "jewel like objects of magic and wonder" (as Kirby put it in a previous report). Emails from their investor relations department confirm that they really don't think solid game play is a priority for their customers. They don't seem to think it's about the games, but is actually about the collection of miniatures. And Kirby even bragged about market research being unnecessary in this niche. It's entirely possible that there are weaknesses in their product experience that no one at GW is willing to address. That elements of the complete package approach GW offers isn't really what the market wants and that their chosen niche may not be sufficiently large to justify catering just to them and ignoring those who have other priorities.
At this point GW shouldn't be blaming their own staff and saying that "continuing to grow" is going to depend on their sales managers ability to sell. They should be talking about what plan they have to stop the shrinking revenue and volume. What plan they have to return to growth. The thing is though, such a plan doesn't seem to exist. They seem oddly proud of their failing cash machine that isn't keeping the earnings per share up high enough to sustain the dividends of the last while.
The scariest prospect for GW is the possibility that Kirby and friends are right. That they made the right move by abandoning volume and growth and going after premium pricing and cutting costs. That GW really did hit their peak and nothing could have been done differently and all that's left is to manage the decline into irrelevancy in the larger market. That there's some sort of demographic or cultural shift that makes their products less appealing to the young that is their traditional target market so they have nothing left but to jack up prices and try to squeeze as much cash out of their brands before they shrink even further.
frozenwastes wrote: .....
The scariest prospect for GW is the possibility that Kirby and friends are right. That they made the right move by abandoning volume and growth and going after premium pricing and cutting costs. That GW really did hit their peak and nothing could have been done differently and all that's left is to manage the decline into irrelevancy in the larger market. That there's some sort of demographic or cultural shift that makes their products less appealing to the young that is their traditional target market so they have nothing left but to jack up prices and try to squeeze as much cash out of their brands before they shrink even further.
I agree with the above, but what is scariest to me is that they have no way of knowing because they don't care about market research. Kirby sits in front of his computer once a year and writes a page or two of barking mad and that's their source of market information. "Nothing left to do but jack up prices" seems to have been their number one plan, and their fallback plan. How can a business grow when they don't know what made them successful in the first place?
edit: i always like to trot out that quote from kirby's 2006 preamble, where he talks about how the business revolves around ocd males. It was and still is the perfect indicator of the fundamental flaws in his perception of their business. There are ocd people in the world (usually male) and some of them like buying miniatures. From a company that used to have a diverse range of games. Its a serious case of: well, ****.
Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.
It's funny, because for nostalgic reasons, I always say I love metal models. However, all it takes is for me to work with a large one, to turn around and hate them all over again.
As an example, for Christmas, my wife gave me a large metal GW model made from yesteryear (a dragon). It's going to take me ten hours just to *assemble* it. A whole tube of milliput, probably, and God only knows how many sanding sticks and wire brushes (to clean out my files) it's going to take.
Other than fit and ease of material, GW MPP is very nice because there are many gearing options, and I am addicted to the bits. The surface is also ideal for painting. Plus, the subassemblies are often far more complex than metal or resin models (look at Nagash or Treeman), allowing more realistic models than an extruded piece of metal (where everything behind an object, like a tabard, is just solid). With either resin or metal, it's not possible to have web-like piece where you can see through, for example, the floor of a vehicle, or chains on a tabbard, for the model component behind/beneath.
Anyhow, TLDR -- I would pay (significantly) more for good, injection molded plastic, over either resin or metal models, even though I perceive metal as more valuable.
First, number 2: The lack of churn means it will take a much longer time for that product to become outdated, if ever. And with historicals, it never will.
Now, number 1:
GW product sells constantly with almost no effort beyond stocking and being a curator for the merchandise because GW is modelling their strategy to keeping up their own retail chain, which sells their crap exclusively. GW needs it to work like that to support their stores - which are actually competition for the independent FLGS. That's what the GW treadmill is all about.
PP and almost every other wargame manufacturer out there focuses on producing a stable product with lasting quality of experience over time. They make a product people want, and they make it so that people keep playing it. So the customers buy, and then - assuming playing space - they come to the store to play there. They get people into the store. Once the players / prospective customers are in the store, IT IS THE STORE MANAGER'S JOB TO SELL THEM STUFF, NOT THE MANUFACTURER'S.
In the example given with the regular WM/H crowd and the dusty WM/H product in stock, what has the store done to sell the product? Have they run leagues? Because they can download the rules packet from PP's website free of charge. They can even order a prize packet for the season leagues or even a starter league. Same thing with tournaments - download the rules, maybe order the prize packet. Have they run demos than advertised them to people other than the regular players (ie, the people who have already bought the game)? Have they told people to come to the usual WM/H night and check out the game? Have they asked any of the regulars for ideas? Have they done anything but stock the product and wait for the same people to keep buying the same game over and over and over? Because only GW product sells like that, because GW's release strategy forces you to subscribe to their games, not buy them. Other wargames sell like other games, where you buy in and can be done. It requires effort on the part of the store, because the manufacturer of these other games aren't tailoring them to support an entire chain of stores supported by artificial product churn.
That's the new paradigm for wargaming in stores. Stock starter sets and common upgrades, and drum up your own damned sales, because the companies making them are focused on production, not retailing...which is good, because it means there won't be a PP store opening in your neighborhood to steal your gamers! Luckily, PP and other companies, by focusing on solid product and game support give retailers plenty of tools for drumming up their own damned sales, but it does require a little effort on the stores' part.
Sure thing, call it what you will. If those stores would just ratchet up Lumia, Windows Phone would outsell iPhone! This is terrible logic. If you want to shout: IT IS NOT SOLEY THE INDIVIDUAL STORE'S RESPONSIBILITY TO DRUM UP SALES!!
It is the manufacturer's responsibility to create hype, and create churn. Stores are staffed by low wage earners who aren't the best sales people in the universe. If they were, they'd work for pharmaceutical companies, make six figure salaries, and have company cars and expense accounts. The only person in the store that makes a lot of money is the store owner.
When Microsoft writes Halo, is it Best Buy's job to walk up to everyone and say, "BUY HALO! HALO IS GOOD!"? How about when Xbox One or PS4 are released? Who's job is it to promote it? Who puts up the TV ads? It's squarely on the manufacturer to create hype, because they have the budget to do so. Little wee stores have enough problems, like paying rent, dealing with theft, and making ends meet.
The fact is (and it really is a fact in my area if nowhere else), the WMH crowd buys a lot less stuff (including hobby supplies) per player than the 40k crowd, and the XWing player buys even less. The infinity player, and malifaux players buy little bits of stuff too. That's why when you walk into a store, the front 1/4 of the store is all GW stuff. It sells. Among other things, one problem with WMH being "stable" or whatever you want to call it, there is really nothing left to buy for people who have all their gaming pieces for two or three factions. The new releases are so sparse, in comparison.
If the new paradigm of wargaming stores is what you purport it to be, local stores are doomed.
By the way, you're wrong about untis being outdated. On Boxing Day, nobody bought a Hordes starter box with metal models (old box) marked down to $45. Nobody bought a Trollbloods Scattergunner, with metal models, marked down to $25. Store owner offered them to me for five bucks less than that the next week, but I couldn't bring myself to pull the trigger, because they'd sit in the box for another 10 years before I finally gave them away. There were tons (and I mean *tons*) of PP metal blisters marked down way below half price that people passed on. Yet, at the end of it all, every single playable 40k model (well-discounted) was sold. I'm talking, every drop pod, every Rhino, predator, Hydra, troops of every faction, box sets, Tyrants, stormravens, and even most of the factioned terminators. The only stuff left was junk that has no value other than for modelling, and terrain/fortification, which never sells well.
Automatically Appended Next Post:
puma713 wrote: So, who do we have to blame for the downfall of our beloved company? I know that Kirby and his cronies are the ones that are driving it into the ground, but who put him in power? Who originally went public with the company? Kirby is just doing what greedy worms do. Who should I direct my ire towards, really?
I do believe that GW becoming a public company was bad for both the players and the game (but probably great, financially, for the founders).
And what you're not getting as the WM/H, Malifaux and X-Wing player is usually the same person. So, while they're not being forced to buy stuff by artificial meta churn like GW's crap, they're putting their money in the store just the same. Just this year I bought into WMH, Infinity, X-wing and now Maliefaux. Yeah, not a dollar went to GW, but it did go to the FLGS all the same.
frozenwastes wrote: The key change happened when the LOTR boom popped and GW's revenue tanked. When that happened, they actually did the right thing in terms of restructuring. They cut unnecessary staff and reorganized things to return to profitability.
It's what happened next that was the problem. There was a change in business model that grew out of the restructuring. They became addicted to the margins and earnings per share that massive cost cuts and price hikes brought them. If you look at the historical earnings per share, the period after the restructuring is even higher than the height of the LOTR boom. For a brief period, GW really was the efficient cash generation machine Kirby bragged about in the last report.
The new approach to the business was to go for reduced sales volume at higher prices. This allows GW to sell less product at a higher price, but then save money on manufacturing, distributing and selling the product (as it simply costs less to make less and ship fewer boxes).
The problem is that it's the only play in their playbook now. All they have is "fire people to save money and raise prices!" And there is no plan to return to growth. Outside of the mind-boggling renovation of the "visitor centre" GW only reinvests in their own business to save money and not to grow their volume.
In fact, they are investing in actively reducing their volume by switching their stores to have less staff and be open less hours. Those in the know have reported it works out to about a 40% reduction in sales for a store when it switches from fully staffed to a single employee location. But if it saves them more than 40% in staff costs and rental costs (moving to a smaller location) then they think it's worth spending the money on the transition.
Spoiler:
The problem is that less open hours and intentionally selling less product to less people is that recruitment is down. Which means there's less word of mouth. Less people telling their friends about the hobby and inviting them to come down on Saturday to check it out. Less people showing curious friends and family their painted miniatures. Less of everything.
And wargaming is fundamentally a social hobby. So when you have a reduction in the number of participants you can have a local area fail to maintain a critical mass and all the local talk, excitement and buzz fades away. Less organized gaming and painting events. Less talk about who's going to buy the latest new army. Less of everything.
During GW's greatest era of growth from a UK importer of games like D&D into an international miniatures company, GW concentrated on getting their games into as many hands as possible. When LOTR came out, they wanted as many people as possible to know about their games. They even commissioned a marketing magazine by the DiAgostini media group called Battle Games in Middle Earth. Yes, they actually paid a third party company to do actual marketing for them in the form of a promotional magazine available at news agents, grocery stores and the like (incidentally Disney has hired this same company to make a Star Wars magazine to hype the new movie coming out).
Now they no longer prioritize getting their product into as many hands as possible. They actually welcome declining volume because they can use the cost savings to make their margins look good and to justify paying out cash reserves as dividends. They are happy to sell less product at a higher price and save on costs.
This report though, shows a failure to keep costs going down. Revenue is down, but costs are slightly up. That's not good. It shows that the revenue is falling faster than their ability to cut jobs, close stores and save on lower volumes of production. They just finished another round of restructuring with massive layoffs in the administration side of things that was supposed to save them money going forward.
As an aside, there is also something contradictory about injection moulded plastic and their intentional reduction of sales volume. Injection moulded plastic requires a high up front cost in terms of design and tooling for the mould but has an incredibly low cost per sprue you pump out. So it's a manufacturing process that gives you the best results when you mass produce. Doing premium pricing and intentionally reducing volume by cutting staff and hours means you'll sell fewer sprues. So you have the way GW makes the stuff geared towards mass production and the way they sell it to be geared towards premium products sold in fewer numbers at higher prices. Their high price, low volume approach is actively denying them the advantages that their manufacturing process should be providing them.
And all of this doesn't even deal with a potential mismatch with the desires of the market. GW believes they have discovered a niche group of customers that are primarily collectors who see their miniatures as "jewel like objects of magic and wonder" (as Kirby put it in a previous report). Emails from their investor relations department confirm that they really don't think solid game play is a priority for their customers. They don't seem to think it's about the games, but is actually about the collection of miniatures. And Kirby even bragged about market research being unnecessary in this niche. It's entirely possible that there are weaknesses in their product experience that no one at GW is willing to address. That elements of the complete package approach GW offers isn't really what the market wants and that their chosen niche may not be sufficiently large to justify catering just to them and ignoring those who have other priorities.
At this point GW shouldn't be blaming their own staff and saying that "continuing to grow" is going to depend on their sales managers ability to sell. They should be talking about what plan they have to stop the shrinking revenue and volume. What plan they have to return to growth. The thing is though, such a plan doesn't seem to exist. They seem oddly proud of their failing cash machine that isn't keeping the earnings per share up high enough to sustain the dividends of the last while.
The scariest prospect for GW is the possibility that Kirby and friends are right. That they made the right move by abandoning volume and growth and going after premium pricing and cutting costs. That GW really did hit their peak and nothing could have been done differently and all that's left is to manage the decline into irrelevancy in the larger market. That there's some sort of demographic or cultural shift that makes their products less appealing to the young that is their traditional target market so they have nothing left but to jack up prices and try to squeeze as much cash out of their brands before they shrink even further.
You make a lot of sense here. In fact, going over their data, it appears that they've very skillfully "managed" their finance data to appear more healthy and well-placed than they really are, all things considered. As I mentioned before; however, when I'm looking at investing in a retail company, I also take a look at their inventory data. What I've found with GW is falling inventories that stay on the shelves for a shorter period of time; this tells me that they're attempting to manage sales volume because of how it would affect their other financial numbers. The result is what we've been seeing; under-anticipated demand (because, well, market research is odious apparently), shortages, missed opportunities and overall a self-fulfilling prophecy of reduced sales volume now due to not having sufficient inventory on hand.
People who think that GW will just reprint or produce more of something and it will sell later are wrong, in my opinion, mainly due to the way in which they interact with their customers. Customers have no opportunity to anticipate new or upcoming releases which would build the desire to purchase something you may have missed on release day. Think about it, you go into the store, try to buy something and are told that it's not in stock and no one knows when or if it will be available again; that's a lost sale. The whole thing is mind-boggling.
And what you're not getting as the WM/H, Malifaux and X-Wing player is usually the same person. So, while they're not being forced to buy stuff by artificial meta churn like GW's crap, they're putting their money in the store just the same. Just this year I bought into WMH, Infinity, X-wing and now Maliefaux. Yeah, not a dollar went to GW, but it did go to the FLGS all the same.
Too right. But the problem with GW is that they're trying to be a FLGS with only two/three products to sell.....the answer is to attempt to make their customers buy more, more often of the same thing.
agnosto wrote: (because, well, market research is odious apparently)
"otiose"
(Much like this post, but I couldn't help myself, is it wrong that that's probably the most memorable "educational" thing that's happened to me in the last 12 months.....)
Talys wrote: Sure thing, call it what you will. If those stores would just ratchet up Lumia, Windows Phone would outsell iPhone! This is terrible logic. If you want to shout: IT IS NOT SOLEY THE INDIVIDUAL STORE'S RESPONSIBILITY TO DRUM UP SALES!!
It is the manufacturer's responsibility to create hype, and create churn. Stores are staffed by low wage earners who aren't the best sales people in the universe. If they were, they'd work for pharmaceutical companies, make six figure salaries, and have company cars and expense accounts. The only person in the store that makes a lot of money is the store owner.
When Microsoft writes Halo, is it Best Buy's job to walk up to everyone and say, "BUY HALO! HALO IS GOOD!"? How about when Xbox One or PS4 are released? Who's job is it to promote it? Who puts up the TV ads? It's squarely on the manufacturer to create hype, because they have the budget to do so. Little wee stores have enough problems, like paying rent, dealing with theft, and making ends meet.
The fact is (and it really is a fact in my area if nowhere else), the WMH crowd buys a lot less stuff (including hobby supplies) per player than the 40k crowd, and the XWing player buys even less. The infinity player, and malifaux players buy little bits of stuff too. That's why when you walk into a store, the front 1/4 of the store is all GW stuff. It sells. Among other things, one problem with WMH being "stable" or whatever you want to call it, there is really nothing left to buy for people who have all their gaming pieces for two or three factions. The new releases are so sparse, in comparison.
More GW paradigm easy-mode thinking. PP has hyped the game. That group is playing, aren't they? They bought it, right? PP made a product, hyped it to these guys, they wanted it, and they bought the product.
Those questions I asked about what the game store is doing to promote sales in my last post are not rhetorical. What is the store doing to sell WM/H to players new and old (but preferably new, so they buy an entire army)?
The downloadable rules sets for leagues and tournaments and the prize packs available with participation patches and actual medals that I mentioned PP makes available? Those are wargaming tools to create hype and interest. That's to get people in the store and playing and other people wanting to play this game where you buy an army and do neat things with it.
Also, as someone else said above: there is no reason the WM/H players can't also be X-Wing, Malifaux, Mantic, and/or Infinity players. Heck, some of them probably are already. Part of the new paradigm is that games that don't keep mugging you for more spending means that you can pick up several. I have. I play the entire list above, but I haven't bought anything GW in over two years, including paints or brushes. It's amazing how much liberty you have to broaden your gaming horizons when you're not pumping everything you can spend on the hobby into keeping yourself in one game you bought years ago. If the WM/H players aren't crossing over games, is the store owner advertising the other games to them and trying to get them to spend more on other stuff? Or is he assuming that WM/H is like GW games, and since these guys are "hooked" the proper course is to wait until they need more for the one game they'll ever play?
Your Halo example is terrible, because it doesn't hold up to comparison with GW product. How does GW promote 40K? Where are the TV ads? No, the GW "hype" isn't hype as you're describing. GW "hype" is artificial: New rulebook says if you want to keep playing the army you've already bought, now you have to buy this, this, and this. The comparison would be like selling you Halo 2 in a store, but then requiring you to buy a subscription every 2 months just to keep playing Halo 2. Not Halo 3 or Halo 4, just if you still want the Halo 2 experience, gimme $65 this month.
Talys wrote: If the new paradigm of wargaming stores is what you purport it to be, local stores are doomed.
No, local stores that keep trying to sell other wargames like they've been selling GW product (ie, set it on the shelf and GW gamers will eventually *need* to come looking for it) will be doomed if their primary trade is in wargames. Someone's thrown Magic out as an example of churn product, and that's true to a point...but there's also the structured play element. I don't play Magic, but I watch my local store owner and as a DCI event location, WotC gives him all sorts of tournaments, weekly drafts, and pre-release events he's supposed to (and does) run. They give him packets telling him what to do, and he works hard at it, and people keep coming and buying more Magic from the same set, the new set, whatever's out. He runs events for new cards, old cards, and mixed. And he's always on the lookout for new players to sell the game to.
But he's still stuck in the GW wargaming rut. The difference is, most of the new(er) wargaming companies provide the same sort of structured play support as WotC (note that GW does not) but they don't hear about it or get instructions from a trade rep (because the store owner might not have a direct with manufacturer trade account for these other games). A store owner has to take the initiative to research the games he has local interest in (which includes researching his local gamers to find out what there's interest in) and go looking for stuff to do to promote it. But after 10+ years of the GW paradigm of "stock it and we'll force them to come, because that how our stores stay afloat", store managers and owners take a while to wrap their head around needing to do things to promote wargames like they do other games they sell.
Talys wrote: By the way, you're wrong about untis being outdated. On Boxing Day, nobody bought a Hordes starter box with metal models (old box) marked down to $45. Nobody bought a Trollbloods Scattergunner, with metal models, marked down to $25. Store owner offered them to me for five bucks less than that the next week, but I couldn't bring myself to pull the trigger, because they'd sit in the box for another 10 years before I finally gave them away. There were tons (and I mean *tons*) of PP metal blisters marked down way below half price that people passed on. Yet, at the end of it all, every single playable 40k model (well-discounted) was sold. I'm talking, every drop pod, every Rhino, predator, Hydra, troops of every faction, box sets, Tyrants, stormravens, and even most of the factioned terminators. The only stuff left was junk that has no value other than for modelling, and terrain/fortification, which never sells well.
First off, the only thing that might be out of date with those metals is there *might* be MK1 cards in the boxes/blisters instead of MK2. Did you know you can tell PP that you got MK1 cards in a product and they'll send you MK2 cards to replace them? Does your store owner know that?
By the rules of WM/H, there's no difference between those metal models and any newer, plastic replacements they *might* have beyond *maybe* new sculpt aesthetics (though many plastic reboxes are the same sculpt transferred to new materials.) There's nothing outdated about them. They are completely usable in modern, MK2 WM/H. Did you know that? Did your store owner? And if he didn't, why wouldn't he? He needs to know, and he needs to be telling everyone about that.
The main thing your example here tells me is that the store owner hasn't done much to actively try and move his WM/H stock for about 3-4 years - except stock it and wait for a customer who already knows what he wants to walk into the store and buy it. He's thinking that its going to sell itself. Next time you go in, why not suggest he bust open two of the metal starter sets, check to see what MK cards are in there, get them replaced if need be, and then ask one of the regulars to show him how to play well enough to run demos? Then he can try demoing it and maybe selling some of the game to people who haven't already bought the game - the fertile, target market. Tell him to call up PP, or email them, and ask them for help/advice in getting new sales drummed up. I bet they'll do what they can for him. They're not GW...they're nice.
The new wargames paradigm is that store owners will have to do a bit of market research and be more proactive than with GW's product. Because GW's product is designed to churn an existing customer until they burn out. This combined with high prices is why the GW stuff was why GW product on sale disappeared. GW is taxing their gamers' dollars so hard just to keep play, they have to take advantage of any price break they can. But those WM/H players have hobby money to spare, because it sounds like most of them are done with their armies. The store owner needs to stop thinking of them as WM/H customers. They've bought in, and they're players. They have armies that have been just fine for years and probably will for years to come. WM/H customers are people who don't own already. It does, indeed, take time to wrap one's head around this, because the standard for the last 10-15 years being that a GW gamer is also a customer, because the won't let you just pay then play, you have to pay to keep playing. No, the WM/H players are potential customers for other games. If he wants their hobby money (which is probably going to non-wargame hobby's at the moment) he needs to try and get them hooked on X-Wing or Deadzone or something else that's different enough from WM/H to be interesting.
By the way, I'm not just lecturing here. I am making real suggestions for your game store owner in these posts. These things been helping mine. It's a slow and ongoing process, but we're shaking him out of GW-thought for wargames...which is good, because his GW sales are steadily declining. I have no problem with you sharing what I'm typing here with him and I wish you would. I want to see wargaming thrive in FLGS after the decline of GW dominance. It's just going to require a little more pro-activity on the parts of stores.
I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.
Conversely, most of the 40K players only play 40K.
OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.
As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.
agnosto wrote: (because, well, market research is odious apparently)
"otiose"
(Much like this post, but I couldn't help myself, is it wrong that that's probably the most memorable "educational" thing that's happened to me in the last 12 months.....)
Sure, he used "otiose" but I still think he means "odious" from the way that they treat the concept.
Saldiven wrote: I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.
Conversely, most of the 40K players only play 40K.
OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.
As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.
It probably got too hard to argue with facts and data.
I see the same trend at my gaming store too. In the last year I've bought into Infinity in a big way, Warmachine and Bolt Action. All of that money has gone to the store and Infinity and Warmachine have really taken off. Picking through the GW shelves you realize how hard it is to stock the majority of the range (particularly fantasy). When the Wood Elf book dropped I went into the store ready to buy several boxes of the Wildwood Rangers and some of the new cavalry - none were available. I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.
As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.
As with all things Internet, he's likely disappeared rather than try and justify things that he's now fairly clearly been shown to be totally wrong on.
Although I personally find that infinitely preferable to the pages and pages of goalpost moving and reality distortion we'd likely have to suffer through if he were still posting!
Saldiven wrote: I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.
Conversely, most of the 40K players only play 40K.
OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.
As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.
It probably got too hard to argue with facts and data.
I see the same trend at my gaming store too. In the last year I've bought into Infinity in a big way, Warmachine and Bolt Action. All of that money has gone to the store and Infinity and Warmachine have really taken off. Picking through the GW shelves you realize how hard it is to stock the majority of the range (particularly fantasy). When the Wood Elf book dropped I went into the store ready to buy several boxes of the Wildwood Rangers and some of the new cavalry - none were available. I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.
That and he probably realized how stupid he sounded by continuing to say things like the financials sucked because goat herders in Lithuania were bullish on Transylvanian wheat or some other nonsense.
This:
I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.
Was my point earlier. The whole, "We're super-exclusive" attitude that GW's developed while actually just failing to properly manage their inventories has resulted in a great deal of lost revenue.
Saldiven wrote: I have to agree with Psychopomp on one thing, at the least. In our area, the majority of WM/H players play several other systems, too. Many of them play Infiniti. There are lots who play either/both Attack Wing or X-wing. In our area where CMON is based, a good number play Dark Age. There's a good sized group of Dropzone Commander players.
Conversely, most of the 40K players only play 40K.
OT: Honestly, I don't feel that anyone who has been paying attention to GW's financial performance over the last 4-5 years is really surprised by this current report.
As a side note, whatever happened to Derekatkinson? He used to be all over threads like this defending GW's financial statements as not being representative of a company making poor choices.
It probably got too hard to argue with facts and data.
I see the same trend at my gaming store too. In the last year I've bought into Infinity in a big way, Warmachine and Bolt Action. All of that money has gone to the store and Infinity and Warmachine have really taken off. Picking through the GW shelves you realize how hard it is to stock the majority of the range (particularly fantasy). When the Wood Elf book dropped I went into the store ready to buy several boxes of the Wildwood Rangers and some of the new cavalry - none were available. I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.
That and he probably realized how stupid he sounded by continuing to say things like the financials sucked because goat herders in Lithuania were bullish on Transylvanian wheat or some other nonsense.
This:
I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.
Was my point earlier. The whole, "We're super-exclusive" attitude that GW's developed while actually just failing to properly manage their inventories has resulted in a great deal of lost revenue.
I feel Games Workshop attitude towards the quality of their rules has also lost them a lot of revenue, at least from players like myself. While the wargaming hobby entails collecting, assembling, painting (and I do enjoy those) at the end of the day, I'm here to play a game. I wouldn't paint models if I didn't play games with them. I love the social aspect of playing with another person face-to-face and the excitement of rolling dice. And while I'm sure there are plenty of veterans who remember poor rules/rules issues from previous editions, the quality of the game has drastically reduced from 5th edition 40k up to now IMHO.
I don't mind spending a lot of money on my hobby, hell I spent 80 dollars on the Infinity rulebook (which is available for free) and that is a lot for just the core rules. The thing is I find good value in the Infinity rulebook because I play the game a lot. GWs rules I do not find much value in for the price they are asking, so I don't buy the books. What happens when I don't buy your rulebooks? I don't play your games and I don't buy your models. If GW really focused on producing a quality ruleset and not handwave away their issues with talk about being "collectables" or "forging the narrative" I would pay the price they are asking. A better ruleset benefits all types from the casuals, to the narrative gamers to the hardcore tournament players and simultaneously all of those players will buy your products.
GW has a massive disconnect from a not so insignificant amount of there consumer base??
Ya dont say
Honestly i wish they would follow through with there we are the best and our models are the best and our rules are the best attitude. and actually make the best product. i wouldn't have issues spending monies on it then.
Psychopomp wrote: Also, as someone else said above: there is no reason the WM/H players can't also be X-Wing, Malifaux, Mantic, and/or Infinity players. Heck, some of them probably are already. Part of the new paradigm is that games that don't keep mugging you for more spending means that you can pick up several. I have. I play the entire list above, but I haven't bought anything GW in over two years, including paints or brushes. It's amazing how much liberty you have to broaden your gaming horizons when you're not pumping everything you can spend on the hobby into keeping yourself in one game you bought years ago. If the WM/H players aren't crossing over games, is the store owner advertising the other games to them and trying to get them to spend more on other stuff? Or is he assuming that WM/H is like GW games, and since these guys are "hooked" the proper course is to wait until they need more for the one game they'll ever play?
Yep, sure. The problem with this line of thinking is that without a product treadmill, people don't necessarily get invested in a new game. It's much easier to get an existing customer to buy more stuff in something that they're invested in, than to get them hooked onto a new game, or to try something different.
Games that keep mugging me for more spending are good. I'm willing to play multiple games that mug me for money; but I'm not really willing to invest in a game that won't continue to mug me for money. WMH slightly mugs me for money, so I slightly toss them money. Infinity... well... I keep buying the rulebooks? I can't believe they're on v3, I've spent about $500 on the game, painted.. 30 figures? And never found someone to play one game with.
Games that don't keep mugging me for money, I might buy, play a while, and then stick on a shelf and forget about.
Your Halo example is terrible, because it doesn't hold up to comparison with GW product. How does GW promote 40K? Where are the TV ads? No, the GW "hype" isn't hype as you're describing. GW "hype" is artificial: New rulebook says if you want to keep playing the army you've already bought, now you have to buy this, this, and this. The comparison would be like selling you Halo 2 in a store, but then requiring you to buy a subscription every 2 months just to keep playing Halo 2. Not Halo 3 or Halo 4, just if you still want the Halo 2 experience, gimme $65 this month.
You seem to think that it's a retailer's responsibility to promote a product. I strongly disagree, because retailers are terrible at this. Having worked with a hundred plus retailers on their businesses, I can say with certainty that all but the largest retailers our lousy marketers, and the largest retailers, which don't exist in the wargaming industry, largely rely on co-op dollars (where the manufacturer participates in the cost of marketing). In the current business model of the vast majority of retailers, the fact is, store staff have much less training than they should and are generally not really great at selling.
GW does a lot more to promote 40k than PP does to promote WMH, simply with presence. There are GW stores and there are GW video games. Anyone who's played video games has heard of space marines, Eldar and Tyranids. Who exactly has heard of Retribution, Menoth, or Cyrix?
No, local stores that keep trying to sell other wargames like they've been selling GW product (ie, set it on the shelf and GW gamers will eventually *need* to come looking for it) will be doomed if their primary trade is in wargames. Someone's thrown Magic out as an example of churn product, and that's true to a point...but there's also the structured play element. I don't play Magic, but I watch my local store owner and as a DCI event location, WotC gives him all sorts of tournaments, weekly drafts, and pre-release events he's supposed to (and does) run. They give him packets telling him what to do, and he works hard at it, and people keep coming and buying more Magic from the same set, the new set, whatever's out. He runs events for new cards, old cards, and mixed. And he's always on the lookout for new players to sell the game to.
But he's still stuck in the GW wargaming rut. The difference is, most of the new(er) wargaming companies provide the same sort of structured play support as WotC (note that GW does not) but they don't hear about it or get instructions from a trade rep (because the store owner might not have a direct with manufacturer trade account for these other games). A store owner has to take the initiative to research the games he has local interest in (which includes researching his local gamers to find out what there's interest in) and go looking for stuff to do to promote it. But after 10+ years of the GW paradigm of "stock it and we'll force them to come, because that how our stores stay afloat", store managers and owners take a while to wrap their head around needing to do things to promote wargames like they do other games they sell.
Your store owner has the same formula as nearly every other store owner. Stick GW stuff in the front, Magic stuff behind the counter. Make money retail on the GW stuff, buy/trade/sell Magic cards.
You're not going to change that by just wishing the stores were better fronts for competitive play. Competitive play brings them jack for revenue, compared to a nice release of a $100 or $150 item that people will buy multiples of.
Occasionally, you get a store that also has a slurpee machine, a fridge, and some chips and candy. They'll make money selling you food as you play.
Every store also has a bunch of staff, 75% of whom will give you **TERRIBLE** advice, in 75% of the games they stock.
First off, the only thing that might be out of date with those metals is there *might* be MK1 cards in the boxes/blisters instead of MK2. Did you know you can tell PP that you got MK1 cards in a product and they'll send you MK2 cards to replace them? Does your store owner know that?
By the rules of WM/H, there's no difference between those metal models and any newer, plastic replacements they *might* have beyond *maybe* new sculpt aesthetics (though many plastic reboxes are the same sculpt transferred to new materials.) There's nothing outdated about them. They are completely usable in modern, MK2 WM/H. Did you know that? Did your store owner? And if he didn't, why wouldn't he? He needs to know, and he needs to be telling everyone about that.
The main thing your example here tells me is that the store owner hasn't done much to actively try and move his WM/H stock for about 3-4 years - except stock it and wait for a customer who already knows what he wants to walk into the store and buy it. He's thinking that its going to sell itself. Next time you go in, why not suggest he bust open two of the metal starter sets, check to see what MK cards are in there, get them replaced if need be, and then ask one of the regulars to show him how to play well enough to run demos? Then he can try demoing it and maybe selling some of the game to people who haven't already bought the game - the fertile, target market. Tell him to call up PP, or email them, and ask them for help/advice in getting new sales drummed up. I bet they'll do what they can for him. They're not GW...they're nice.
The new wargames paradigm is that store owners will have to do a bit of market research and be more proactive than with GW's product. Because GW's product is designed to churn an existing customer until they burn out. This combined with high prices is why the GW stuff was why GW product on sale disappeared. GW is taxing their gamers' dollars so hard just to keep play, they have to take advantage of any price break they can. But those WM/H players have hobby money to spare, because it sounds like most of them are done with their armies. The store owner needs to stop thinking of them as WM/H customers. They've bought in, and they're players. They have armies that have been just fine for years and probably will for years to come. WM/H customers are people who don't own already. It does, indeed, take time to wrap one's head around this, because the standard for the last 10-15 years being that a GW gamer is also a customer, because the won't let you just pay then play, you have to pay to keep playing. No, the WM/H players are potential customers for other games. If he wants their hobby money (which is probably going to non-wargame hobby's at the moment) he needs to try and get them hooked on X-Wing or Deadzone or something else that's different enough from WM/H to be interesting.
By the way, I'm not just lecturing here. I am making real suggestions for your game store owner in these posts. These things been helping mine. It's a slow and ongoing process, but we're shaking him out of GW-thought for wargames...which is good, because his GW sales are steadily declining. I have no problem with you sharing what I'm typing here with him and I wish you would. I want to see wargaming thrive in FLGS after the decline of GW dominance. It's just going to require a little more pro-activity on the parts of stores.
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You may not be lecturing, but you're expecting store owners to be something that they're not. My favorite store stocks millions of dollars worth of hobby stuff (no exaggeration). There are almost every brand of hobby paint, airbrushes, almost every currently supported RPG, comics, just about eery PP model, lots of Mantic and DUST, Battletech, and really, pretty much every game discussed on Dakka. They buy and sell most popular TCGs, and most comics, too, as well as historical and scale models (like Revell). It is simply unreasonable to expect them to know more than a little about each product.
By the way, my local store doesn't need help selling stuff. They stock things, have a lot of stock, and people come and buy things. Partly because they have a lot to look at and choose, partly because the price is good.
Talys wrote: Sure thing, call it what you will. If those stores would just ratchet up Lumia, Windows Phone would outsell iPhone! This is terrible logic. If you want to shout: IT IS NOT SOLEY THE INDIVIDUAL STORE'S RESPONSIBILITY TO DRUM UP SALES!!
It is the manufacturer's responsibility to create hype, and create churn. Stores are staffed by low wage earners who aren't the best sales people in the universe. If they were, they'd work for pharmaceutical companies, make six figure salaries, and have company cars and expense accounts. The only person in the store that makes a lot of money is the store owner.
When Microsoft writes Halo, is it Best Buy's job to walk up to everyone and say, "BUY HALO! HALO IS GOOD!"? How about when Xbox One or PS4 are released? Who's job is it to promote it? Who puts up the TV ads? It's squarely on the manufacturer to create hype, because they have the budget to do so. Little wee stores have enough problems, like paying rent, dealing with theft, and making ends meet.
The fact is (and it really is a fact in my area if nowhere else), the WMH crowd buys a lot less stuff (including hobby supplies) per player than the 40k crowd, and the XWing player buys even less. The infinity player, and malifaux players buy little bits of stuff too. That's why when you walk into a store, the front 1/4 of the store is all GW stuff. It sells. Among other things, one problem with WMH being "stable" or whatever you want to call it, there is really nothing left to buy for people who have all their gaming pieces for two or three factions. The new releases are so sparse, in comparison.
More GW paradigm easy-mode thinking. PP has hyped the game. That group is playing, aren't they? They bought it, right? PP made a product, hyped it to these guys, they wanted it, and they bought the product.
Those questions I asked about what the game store is doing to promote sales in my last post are not rhetorical. What is the store doing to sell WM/H to players new and old (but preferably new, so they buy an entire army)?
The downloadable rules sets for leagues and tournaments and the prize packs available with participation patches and actual medals that I mentioned PP makes available? Those are wargaming tools to create hype and interest. That's to get people in the store and playing and other people wanting to play this game where you buy an army and do neat things with it.
Also, as someone else said above: there is no reason the WM/H players can't also be X-Wing, Malifaux, Mantic, and/or Infinity players. Heck, some of them probably are already. Part of the new paradigm is that games that don't keep mugging you for more spending means that you can pick up several. I have. I play the entire list above, but I haven't bought anything GW in over two years, including paints or brushes. It's amazing how much liberty you have to broaden your gaming horizons when you're not pumping everything you can spend on the hobby into keeping yourself in one game you bought years ago. If the WM/H players aren't crossing over games, is the store owner advertising the other games to them and trying to get them to spend more on other stuff? Or is he assuming that WM/H is like GW games, and since these guys are "hooked" the proper course is to wait until they need more for the one game they'll ever play?
Your Halo example is terrible, because it doesn't hold up to comparison with GW product. How does GW promote 40K? Where are the TV ads? No, the GW "hype" isn't hype as you're describing. GW "hype" is artificial: New rulebook says if you want to keep playing the army you've already bought, now you have to buy this, this, and this. The comparison would be like selling you Halo 2 in a store, but then requiring you to buy a subscription every 2 months just to keep playing Halo 2. Not Halo 3 or Halo 4, just if you still want the Halo 2 experience, gimme $65 this month.
Talys wrote: If the new paradigm of wargaming stores is what you purport it to be, local stores are doomed.
No, local stores that keep trying to sell other wargames like they've been selling GW product (ie, set it on the shelf and GW gamers will eventually *need* to come looking for it) will be doomed if their primary trade is in wargames. Someone's thrown Magic out as an example of churn product, and that's true to a point...but there's also the structured play element. I don't play Magic, but I watch my local store owner and as a DCI event location, WotC gives him all sorts of tournaments, weekly drafts, and pre-release events he's supposed to (and does) run. They give him packets telling him what to do, and he works hard at it, and people keep coming and buying more Magic from the same set, the new set, whatever's out. He runs events for new cards, old cards, and mixed. And he's always on the lookout for new players to sell the game to.
But he's still stuck in the GW wargaming rut. The difference is, most of the new(er) wargaming companies provide the same sort of structured play support as WotC (note that GW does not) but they don't hear about it or get instructions from a trade rep (because the store owner might not have a direct with manufacturer trade account for these other games). A store owner has to take the initiative to research the games he has local interest in (which includes researching his local gamers to find out what there's interest in) and go looking for stuff to do to promote it. But after 10+ years of the GW paradigm of "stock it and we'll force them to come, because that how our stores stay afloat", store managers and owners take a while to wrap their head around needing to do things to promote wargames like they do other games they sell.
Talys wrote: By the way, you're wrong about untis being outdated. On Boxing Day, nobody bought a Hordes starter box with metal models (old box) marked down to $45. Nobody bought a Trollbloods Scattergunner, with metal models, marked down to $25. Store owner offered them to me for five bucks less than that the next week, but I couldn't bring myself to pull the trigger, because they'd sit in the box for another 10 years before I finally gave them away. There were tons (and I mean *tons*) of PP metal blisters marked down way below half price that people passed on. Yet, at the end of it all, every single playable 40k model (well-discounted) was sold. I'm talking, every drop pod, every Rhino, predator, Hydra, troops of every faction, box sets, Tyrants, stormravens, and even most of the factioned terminators. The only stuff left was junk that has no value other than for modelling, and terrain/fortification, which never sells well.
First off, the only thing that might be out of date with those metals is there *might* be MK1 cards in the boxes/blisters instead of MK2. Did you know you can tell PP that you got MK1 cards in a product and they'll send you MK2 cards to replace them? Does your store owner know that?
By the rules of WM/H, there's no difference between those metal models and any newer, plastic replacements they *might* have beyond *maybe* new sculpt aesthetics (though many plastic reboxes are the same sculpt transferred to new materials.) There's nothing outdated about them. They are completely usable in modern, MK2 WM/H. Did you know that? Did your store owner? And if he didn't, why wouldn't he? He needs to know, and he needs to be telling everyone about that.
The main thing your example here tells me is that the store owner hasn't done much to actively try and move his WM/H stock for about 3-4 years - except stock it and wait for a customer who already knows what he wants to walk into the store and buy it. He's thinking that its going to sell itself. Next time you go in, why not suggest he bust open two of the metal starter sets, check to see what MK cards are in there, get them replaced if need be, and then ask one of the regulars to show him how to play well enough to run demos? Then he can try demoing it and maybe selling some of the game to people who haven't already bought the game - the fertile, target market. Tell him to call up PP, or email them, and ask them for help/advice in getting new sales drummed up. I bet they'll do what they can for him. They're not GW...they're nice.
The new wargames paradigm is that store owners will have to do a bit of market research and be more proactive than with GW's product. Because GW's product is designed to churn an existing customer until they burn out. This combined with high prices is why the GW stuff was why GW product on sale disappeared. GW is taxing their gamers' dollars so hard just to keep play, they have to take advantage of any price break they can. But those WM/H players have hobby money to spare, because it sounds like most of them are done with their armies. The store owner needs to stop thinking of them as WM/H customers. They've bought in, and they're players. They have armies that have been just fine for years and probably will for years to come. WM/H customers are people who don't own already. It does, indeed, take time to wrap one's head around this, because the standard for the last 10-15 years being that a GW gamer is also a customer, because the won't let you just pay then play, you have to pay to keep playing. No, the WM/H players are potential customers for other games. If he wants their hobby money (which is probably going to non-wargame hobby's at the moment) he needs to try and get them hooked on X-Wing or Deadzone or something else that's different enough from WM/H to be interesting.
By the way, I'm not just lecturing here. I am making real suggestions for your game store owner in these posts. These things been helping mine. It's a slow and ongoing process, but we're shaking him out of GW-thought for wargames...which is good, because his GW sales are steadily declining. I have no problem with you sharing what I'm typing here with him and I wish you would. I want to see wargaming thrive in FLGS after the decline of GW dominance. It's just going to require a little more pro-activity on the parts of stores.
QFT. This is a very insightful post, and tells it like it is. Store owners (or their paid staff) really need to understand this if they want to make money going forward selling products for the wargaming hobby. Miniatures-based board games are all the rage now as well, just look at the most successful analog games kickstarted in the past three years or so. Look at the popularity and success FFG is enjoying with games like Descent, X-Wing and now the new Imperial Assault. People out there are hungry for this stuff, but you really have to lead the horses to the water....this 'Product will sell itself' mentality you talk about is a thing of the past.
Fango wrote: QFT. This is a very insightful post, and tells it like it is. Store owners (or their paid staff) really need to understand this if they want to make money going forward selling products for the wargaming hobby. Miniatures-based board games are all the rage now as well, just look at the most successful analog games kickstarted in the past three years or so. Look at the popularity and success FFG is enjoying with games like Descent, X-Wing and now the new Imperial Assault. People out there are hungry for this stuff, but you really have to lead the horses to the water....this 'Product will sell itself' mentality you talk about is a thing of the past.
You may wish this to be so, but it isn't
Product **will** sell itself. It just has to be there, and be at the lowest price available, locally or online. For the majority of people, proximity, availability, and price trump expertise. Sure, friendly staff is important, but they don't need to know how Templar every new game that comes out.
They sure can't afford to, on their salary.
You guys want stores where you get to bs with the owner, who is a "true gamer" and is your buddy and font of knowledge. All the stores like this eventually shut down, because somewhere nearby, there is a store where the owner is mostly in the back figuring out inventory, sourcing product, and doing boring stuff like bookkeeping. The front is manned by employees who might be great people, but don't earn enough to play **all** the games coming through. They mostly have some GW collection and play a couple of games, and have dabbled in TCGs, but aren't terribly adept at any of the above.
The store is successful not because it knows about the latest Mantic game, but because it's in a hood location, has good prices, and simply stocks every Mantic game (because that's a lot more efficient than actually learning about each one).
This is analogous to the friendly computer store owner who's driven out of business by Newegg and Best Buy. At the end of the day, price, selection, location, and availability (plus some cheesy flyers) are just more important than the knowledgeable awesome guy that you really respect, because although you'd pay him 5% more because he's your buddy, you won't drive through traffic and pay him 20% more. We live in a world that is increasingly commoditized. Wishing it weren't so won't change things.
Talys wrote:@frozenwastes - nice analysis and history lesson
Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.
The only thing I said about injection moulded plastic was that it is a process geared for mass production while GW's retail model is one based on premium pricing and lowered volumes. I don't see how you could have gotten that I don't like the material out of that. My point is that when you make a mould for a new kit for injection moulded plastic, the next sprue you pump out costs next to nothing. The cost (including staff costs and maintenance) is largely up front and the cost of each sprue is tiny. And the more you make, the lower your total cost per sprue is. It's a technology that gives its greatest benefits when you increase the volume you produce rather than decrease it. GW shouldn't be cranking up the price per miniature and putting less in each box because their manufacturing process gives them the best margins when they increase volume rather than decrease it.
It's a mismatch with their pricing strategy. The plastic itself? Great material. If you want to see what a company can do with it when they embrace the mass production element, look at Victrix. They have to outsource a lot of their process, so their up front cost is even higher. And yet, their regular infantry kits are 48 miniatures for £23 (~$35). And when they have a kit they think people might not buy multiples off, they don't drop the model count, but increase it. Their Greek skirmishers box is 56 miniatures for £30 (~$45). And their new Roman and Carthaginian lines are 60 and 62 figures for £30 (~$45). If you like GW's sculptors better, then there's Perry's plastic offerings. 36 figures (or 12 cavalry) for £20 (~$30).
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One thing about GW's fictional universes is they have a limited right of exclusivity to produce figures for them. The CHS lawsuit shows this wasn't as rock solid as GW thought though. Either way, if they have a virtual monopoly on 40k miniatures, then perhaps they believe they can engage in monopoly pricing. Maybe they truly believe that no one else can make their "jewel like objects of magic and wonder" and that people would never choose to go for some other fictional universe or historicals as a substitute. And if the customer does, then they can just engage in the "no true scotsman" fallacy and declare that person never really was their true target customer.
Torga_DW wrote: I agree with the above, but what is scariest to me is that they have no way of knowing because they don't care about market research. Kirby sits in front of his computer once a year and writes a page or two of barking mad and that's their source of market information. "Nothing left to do but jack up prices" seems to have been their number one plan, and their fallback plan. How can a business grow when they don't know what made them successful in the first place?
My current theory is that GW was largely in the right place at the right time to take advantage of a demographic shift (children of the babyboomers hitting their teenage years in the 90s) and an existing hobby distribution system (RPG, comic book and hobby stores from the late 80s into the 90s) to become an international company. Then they got the LOTR license and outsourced the marketing to DiAgostini and relied on crossover interest from movie goers to make the most money they ever made. Since then they've been floundering. And given their lack of plan to stop shrinking and no lucky demographic shift coming to give them another boost, it looks like their future is to continue on this slow decline. They could reinvest in growth. They could develop a product line that works great in all sales channels and get DiAgostini to market it with a "Battle Games in the Dark Millennium" magazine, but they won't. They only seem to want to reinvest in cost savings and window dressing.
agnosto wrote:People who think that GW will just reprint or produce more of something and it will sell later are wrong, in my opinion, mainly due to the way in which they interact with their customers. Customers have no opportunity to anticipate new or upcoming releases which would build the desire to purchase something you may have missed on release day. Think about it, you go into the store, try to buy something and are told that it's not in stock and no one knows when or if it will be available again; that's a lost sale. The whole thing is mind-boggling.
It's also self reinforcing. If they make less product because previous sales indicate they should be conservative on a particular kit or book and then there's surprise demand and they reprint another batch, the sales they lost from the first batch running out won't necessarily be there. People will have moved on in their desires, perhaps prefering to purchase the release of this week rather than the kit or book they missed from a previous week. Then they have a data point that says that reprinting didn't work and left them with dead stock.
It's one thing to have declining volume and have 80-90% of what you made sell out, but to only make 75% of the demand in the first place is definitely leaving money on the table. I think that's a very interesting thing you've pointed out.
I don't think I misunderstood or even disagreed with what you said about injection molded plastic. I just meant that I am now willing to may *more* for injection molded plastic, especially on large miniatures (which will also be smaller run).
So, even though their setup costs are higher (you're right) there is value beyond being able to pump out larger batches cheaply (my point).
Talys wrote: @frozenwastes - nice analysis and history lesson
Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.
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Clearly you haven't ever assembled a Tau Crisis Suit model.
GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.
By the way, my local store doesn't need help selling stuff. They stock things, have a lot of stock, and people come and buy things. Partly because they have a lot to look at and choose, partly because the price is good.
Except, apparently, WM/H.
If the above is true, then your store is very lucky in that it can just stock merchandise and wait for people to come, like they were a big box store. But I bet they could be doing much better if the retailer actually retailed in addition to being a stockist. That kind of luck's not going to hold out forever. GW is choking itself out, and one of its flailing methods to try and save itself is to start trying harder and harder to divert your store's customers to their online or physical store.
You compared your local store (again) to Best Buy, but they're NOT a big box store - the closest way that comparison is valid is if maybe they're one of the rare large gaming stores. And if that's the case, then they're an outlier (and its even WORSE that they're not promoting their own sales of product with events and demos). Otherwise, they ARE the neighborhood computer store and should be scrambling for every sale they can get, even if sitting around waiting for customers to sell themselves stock is getting them by okay. The best store owners are the sort that know their bookkeeping AND their product, and try to actively encourage or close sales rather than just waiting for the fortune of stock jumping into a customer's hands of its own volition.
ORicK wrote: Commercially a company that breaks even is good enough.
lol - tell that to an investor - it will get you far
Investors buy equities for all sorts of reasons. Buying a stock of a company making a lot of money is actually quite hard to profit from, because everyone else is doing it too, and the profits are built into the stock price.
Ideally, you want to invest in a company that is doing not spectacularly at present, but will do spectacularly in the future. Even better if everyone else thinks it's a lost cause (and they're wrong).
By the way, my local store doesn't need help selling stuff. They stock things, have a lot of stock, and people come and buy things. Partly because they have a lot to look at and choose, partly because the price is good.
Except, apparently, WM/H.
If the above is true, then your store is very lucky in that it can just stock merchandise and wait for people to come, like they were a big box store. But I bet they could be doing much better if the retailer actually retailed in addition to being a stockist. That kind of luck's not going to hold out forever. GW is choking itself out, and one of its flailing methods to try and save itself is to start trying harder and harder to divert your store's customers to their online or physical store.
You compared your local store (again) to Best Buy, but they're NOT a big box store - the closest way that comparison is valid is if maybe they're one of the rare large gaming stores. And if that's the case, then they're an outlier (and its even WORSE that they're not promoting their own sales of product with events and demos). Otherwise, they ARE the neighborhood computer store and should be scrambling for every sale they can get, even if sitting around waiting for customers to sell themselves stock is getting them by okay. The best store owners are the sort that know their bookkeeping AND their product, and try to actively encourage or close sales rather than just waiting for the fortune of stock jumping into a customer's hands of its own volition.
What you're describing just isn't possible because my guy would have to then work 150 hours a week. The store is always staffed with at least 3 or 4 people (other than the owner, who is usually there, but in the office). They are never standing around, and the till always has a line. It's a healthy business. Yes, it is a big store, but it didn't start out that way (it grew over time).
An acquaintance of mine tried to open a store as you describe, and he is an excellent guy, but the store shut down after two years. He was a great gamer, extremely knowledgeable and the nicest guy, but just not the best businessperson, and not focused enough on pricing and availability. Ironically he was a massive PP fan, but that really has nothing to do with the store's success (or lack thereof).
Talys wrote:So, even though their setup costs are higher (you're right) there is value beyond being able to pump out larger batches cheaply (my point).
So you get the benefit of the material and then you still have to figure out what to sell the kit at and how many to make. Big kits, small kit, huge multisprue kit... it doesn't matter. They all still have the same issue-- the average cost per sprue goes down the more you make.
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Kilkrazy wrote: GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.
Pretty much. I remember the first time I opened a higher end Bandai model kit. I didn't know just how bad GW's were until I had experienced a truly great kit. The thing had different coloured plastic on the same sprue so it was easy to tell the parts apart (and to allow for it to be built without painting for those so inclined), it had shapes that just weren't possible on a GW sprue because the mould was multipart in way I don't quite understand. There were even different hardnesses of plastic on the same sprue so the small parts would be more robust. And the engineering of the kit itself was crazy. You had an under-chasis and then put on armour plates and whatnot.
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Talys wrote:Investors buy equities for all sorts of reasons.
Yes, and right now GW is presenting itself as a dividend machine.
Traditionally when companies finish a growth phase and their revenues stabilize, they end up switching to a business model where they figure out the best way to operate, make the most money possible and use that money to buy out the competition, reinvest in R&D, buy back shares or pay dividends. They mature into an established company with a consistent business model that produces consistent results.
GW is acting like they are in that stage. They are peddling themselves to the investors as "an efficient cash generating machine" but it's not working. Look at the inconsistent dividend payments. Inconsistent revenue and falling profit. They are failing at their own stated goal for their company.
It is true that companies don't have to keep growing forever, but when they stop, there are certain things investors expect of them as they transition into a mature and established company. GW never went through that transition. Instead they were growing until the LOTR floor fell out from under them and then they scrambled to cut costs and then started cranking out dividends without a consistent revenue base to support it. And their pay out ratio has not been sustainable. A sustainable dividend and reinvestment policy is another sign of a company that has ended their growth phase and matured into an established, consistent enterprise. GW doesn't have that either.
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Talys wrote:What you're describing just isn't possible because my guy would have to then work 150 hours a week. The store is always staffed with at least 3 or 4 people (other than the owner, who is usually there, but in the office). They are never standing around, and the till always has a line. It's a healthy business. Yes, it is a big store, but it didn't start out that way (it grew over time).
Actually it sounds like they are already doing it. That they have a large active staff that is engaged with the customer and selling the product.
I'm willing to be the store does have things like organized play and whatnot for a variety of their product lines. Do they do Friday Night Magic? Any of FFG's organized play? Board game nights? That sort of thing? I bet they do.
It sounds like the store you describe is already actively retailing their product and not relying on the manufacturer to do the selling for them.
ORicK wrote: Commercially a company that breaks even is good enough.
No, it's not.
If all you are doing is breaking even, one down year means the business closes.
I work for a "not for profit" company, but we still have to operate as far in the black as possible. When the economic downturn hit, we operated fully in the red for almost three years. If we had only been breaking even prior to that, we would have closed shop after the first year. However, since we had significant cash reserves and investments from previous years, we were able to survive to be in business today.
Talys wrote: @frozenwastes - nice analysis and history lesson
Perhaps my only disagreement with you is in the injection molded plastic. The main reason I love GW models above all others (particularly large ones) is that they are injection molded plastic. They are very consistent, easy to work with, and always fit well.
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Clearly you haven't ever assembled a Tau Crisis Suit model.
GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.
GW still hasn't reached the level of quality that the Gundam models had in the 1980's. I remember being able to build fully functioning transforming models back then.
You also have to keep in mind that stores can fail when there's oversaturation of their market. Back in 2011 where i live, there were 4 stores that i knew of stocking gw. The problem was the customer base wasn't large enough for all of them to compete with each other and with gw. In that situation, there simply wasn't enough market to support 4 indies competing with each other no matter what the owners did or how good they were in any respective field (running the business, customer service, etc). And that's before you have to run the gw prices & trade terms minefield which makes it difficult to make an actual profit off carrying their lines. Selling expensive cheap plastic kits that are trying to rival new cars in expenditure is never going to be easy.
Talys wrote:So, even though their setup costs are higher (you're right) there is value beyond being able to pump out larger batches cheaply (my point).
So you get the benefit of the material and then you still have to figure out what to sell the kit at and how many to make. Big kits, small kit, huge multisprue kit... it doesn't matter. They all still have the same issue-- the average cost per sprue goes down the more you make.
And ...
Kilkrazy wrote:
GW by 2009 had got to the level of quality that Frog models reached in the early 1950s. They are now about where Airfix were in the early 1970s. GW plastic kits are a sad joke compared to nearly anyone other company's inside or outside the wargaming world.
Pretty much. I remember the first time I opened a higher end Bandai model kit. I didn't know just how bad GW's were until I had experienced a truly great kit. The thing had different coloured plastic on the same sprue so it was easy to tell the parts apart (and to allow for it to be built without painting for those so inclined), it had shapes that just weren't possible on a GW sprue because the mould was multipart in way I don't quite understand. There were even different hardnesses of plastic on the same sprue so the small parts would be more robust. And the engineering of the kit itself was crazy. You had an under-chasis and then put on armour plates and whatnot.
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Talys wrote:Investors buy equities for all sorts of reasons.
Yes, and right now GW is presenting itself as a dividend machine.
Traditionally when companies finish a growth phase and their revenues stabilize, they end up switching to a business model where they figure out the best way to operate, make the most money possible and use that money to buy out the competition, reinvest in R&D, buy back shares or pay dividends. They mature into an established company with a consistent business model that produces consistent results.
GW is acting like they are in that stage. They are peddling themselves to the investors as "an efficient cash generating machine" but it's not working. Look at the inconsistent dividend payments. Inconsistent revenue and falling profit. They are failing at their own stated goal for their company.
It is true that companies don't have to keep growing forever, but when they stop, there are certain things investors expect of them as they transition into a mature and established company. GW never went through that transition. Instead they were growing until the LOTR floor fell out from under them and then they scrambled to cut costs and then started cranking out dividends without a consistent revenue base to support it. And their pay out ratio has not been sustainable. A sustainable dividend and reinvestment policy is another sign of a company that has ended their growth phase and matured into an established, consistent enterprise. GW doesn't have that either.
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Talys wrote:What you're describing just isn't possible because my guy would have to then work 150 hours a week. The store is always staffed with at least 3 or 4 people (other than the owner, who is usually there, but in the office). They are never standing around, and the till always has a line. It's a healthy business. Yes, it is a big store, but it didn't start out that way (it grew over time).
Actually it sounds like they are already doing it. That they have a large active staff that is engaged with the customer and selling the product.
I'm willing to be the store does have things like organized play and whatnot for a variety of their product lines. Do they do Friday Night Magic? Any of FFG's organized play? Board game nights? That sort of thing? I bet they do.
It sounds like the store you describe is already actively retailing their product and not relying on the manufacturer to do the selling for them.
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If the store he's talking about is my LFGS Meeplemart, then yes they actively promote their products very much so. They're currently the largest online retailer in the world, just having nudged Wayland out in terms of number of products carried. they have a large online presence, days broken up into different miniature ranges for ease of finding people to play, lots of tournaments for miniatures and magic. the list goes on.
Of course the store has designated game nights on a calendar. EVERY store has this. However, unless you count selling grossly overpriced food (no outside food or drink allowed), there is zero staff participation.
In the store, staff mostly help people who are buying gifts who are clueless, and they give terrible advice. Like, they will show a DV and a Warmachines box as viable starter games for a gift, and 9/10 people will choose the DV box because it has more models, templates and dice and is in a bigger box. Nibosy explains the difference in the games at all.
If you ask about WMH (which has reasonable prominence) the most you'll get is, oh Cyrix is really popular, but I don't play it. If you ask about 40k factions you'll end up with an unplayable list. If you ask about airbrushes, you'll end up with a siphon fed thing that could paint a motorcycle. Just
.. Bad advice. And, they'll even come out and say they can't afford to play most of the stuff they sell.
Edit: Case in point, they sold me on the new infinity starter box by telling me it was a great value because it came with 3rd ed rules. Well, it doesn't come with the full rule set; I still had to buy the core rules, and now I have a bunch of duplicate models. Of course, I could return it, but, bah. I chalk it up to honest mistakes rather than any ill intent.
Automatically Appended Next Post: My thought is that people go into a store wanting to spend money. So, the mist important thing for a store to have is product the person might be interested in, at a good price. Obviously, being able to get them there (location) is awfully important too.
I think being nice is important, bit being able to give product advice? I think in this day and age, people research that themselves, largely -- or suffer for it.
Of course the store has designated game nights on a calendar. EVERY store has this. However, unless you count selling grossly overpriced food (no outside food or drink allowed), there is zero staff participation.
In the store, staff mostly help people who are buying gifts who are clueless, and they give terrible advice. Like, they will show a DV and a Warmachines box as viable starter games for a gift, and 9/10 people will choose the DV box because it has more models, templates and dice and is in a bigger box. Nibosy explains the difference in the games at all.
If you ask about WMH (which has reasonable prominence) the most you'll get is, oh Cyrix is really popular, but I don't play it. If you ask about 40k factions you'll end up with an unplayable list. If you ask about airbrushes, you'll end up with a siphon fed thing that could paint a motorcycle. Just
.. Bad advice. And, they'll even come out and say they can't afford to play most of the stuff they sell.
Edit: Case in point, they sold me on the new infinity starter box by telling me it was a great value because it came with 3rd ed rules. Well, it doesn't come with the full rule set; I still had to buy the core rules, and now I have a bunch of duplicate models. Of course, I could return it, but, bah. I chalk it up to honest mistakes rather than any ill intent.
Your store sounds pretty special. I'm glad you're using it as a basis for every other store around.
Also, you didn't have to buy the 3rd edition rules. They're free online.
My store's more like what the others have said. WMH players have several games and the store owners push demo games and leagues to get new players in. We just finished a WMH leage and several people (including new players) bought some stuff to fill in gaps in their lists. (not to mention paints and supplies to finish their armies.)
And one more thing....you actually want a game to continue fleecing you and forcing you to buy stuff instead of buying what you want when you want? I guess customers get the game they deserve.
MWHistorian wrote: Your store sounds pretty special. I'm glad you're using it as a basis for every other store around. Also, you didn't have to buy the 3rd edition rules. They're free online. My store's more like what the others have said. WMH players have several games and the store owners push demo games and leagues to get new players in. We just finished a WMH leage and several people (including new players) bought some stuff to fill in gaps in their lists. (not to mention paints and supplies to finish their armies.)
And one more thing....you actually want a game to continue fleecing you and forcing you to buy stuff instead of buying what you want when you want? I guess customers get the game they deserve.
I don't consider buying something that I want being fleeced. I consider a new miniature something new to enjoy -- model, paint, and play -- not an obligation. When I go to my store, I want something NEW to play with, perhaps because I have a short attention span, and my scattergunners from last year just don't excite me anymore.
When I bought my Xbox, I expected to buy new games for new content. When I play 40k, I expect to buy new models and expansions for content. I expect to pay money for that. When I play Xwing, pretty much, I have no expectation of buying anything for a while. By the way, I paid for the infinity rules because I like a nice copy of it -- the same reason I buy a CSM codex. I don't feel fleeced by either. My point was just that the store staff thought it was in the box set, and it wasn't. There have only been two times I've ever felt fleeced by GW in 30 years: with 7th edition core rules, because it came so close to 6th, and with Codex Imperial Knights because it has 6 pages of rules in a $50 book (and not even much artwork) >.< But I actually wasn't fleeced on Codex IK, because I ended up buying a used one for $25 Ironically, the original buyer simply photocopied it hahaha.
I'm not trying to promote one game over another. If you like xwing and want to play it ad infinitum, and buy one new $100 game a year, all the power to you. I'm just saying that in my stores (plural, every one of 4 that sell GW and PP), GW has better product prominence because people who get hooked on GW spend more money for less effort to the store. Plus, all the really big spenders ($10k+ per year) are GW or historical buffs. There are no huge customers primarily into PP or Mantis or Infinity, because there just isn't enough product to make one faction a collectible -- though PP is getting there... sort of.
I think part of the problem with 40k is that table top wargames become very bloated when you just keep adding more and more stuff to it, the last time 40k was consolidated was 2nd -> 3rd, it's way more cumbersome now than it was in 2nd. If you just keep growing and growing a game without ever consolidating rules then you get the bloated mess we have and it becomes harder to tighten it up if you wanted to do that. Obviously 40k also has the problem that it's badly written.
People largely don't want shifting ground when it comes to a table top wargame. Models take considerable time to assemble and paint and they can be very expensive. People largely also don't want the game to just keep growing in size.
I tend to be of the opinion that GW should have expanded their scope to more side games and product tie ins with their popular IP's rather than doubling down and just releasing something new for 40k every single month. It's just not sustainable.
ClockworkZion wrote: The "customer should continue to buy stuff" business model is the same one MtG is primarily built on.
It's honestly a pretty common business model.
The problem is that with GW it's not so much 'buy more stuff' it's 'buy more stuff you pig fethers!'
MtG at least gives you a reach around when they leave your ass in tatters.
Thats the best analogy I've ever heard. Exalted.
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ClockworkZion wrote: The "customer should continue to buy stuff" business model is the same one MtG is primarily built on.
It's honestly a pretty common business model.
There's quite a big difference between other companies' "you're gonna have to buy one or two things to remain top tier, but you're still in good shape if you want to stay put" and GWs "Oh, so you wanna be even remotely competitive? Well then you're gonna have buy two or more of these $70 giant kits and probably 3 or more boxes of these new units. Oh and thats on top of the overpriced new codex. Will that be cash or credit?"
ClockworkZion wrote: The "customer should continue to buy stuff" business model is the same one MtG is primarily built on.
It's honestly a pretty common business model.
The problem is that with GW it's not so much 'buy more stuff' it's 'buy more stuff you pig fethers!'
MtG at least gives you a reach around when they leave your ass in tatters.
LOL. I like that
In defense of MtG, I spent a solid $8,000+ on the game, but I got much more than that when I sold out several years later. In 2014, I found an old playing deck that I forgot to include (honest mistake!) when I sold all my cards. I got almost a thousand dollars for... six cards in the deck. And that's at half Ebay prices (just sold them at FLGS for whatever they offered).
Ferrum_Sanguinis wrote: There's quite a big difference between other companies' "you're gonna have to buy one or two things to remain top tier, but you're still in good shape if you want to stay put" and GWs "Oh, so you wanna be even remotely competitive? Well then you're gonna have buy two or more of these $70 giant kits and probably 3 or more boxes of these new units. Oh and thats on top of the overpriced new codex. Will that be cash or credit?"
In fairness, though, there are plenty of very stable top tier builds. Wave Serpents, Bikespam, CentStar, Riptides -- to take a few examples -- have all been solid competitors since the models were out, and can't be improved upon buy buying more stuff.
In addition, there have been many models produced that don't need to be purchased at all -- for example, just from the last batch: Blood Angels Tacticals, Assault Terminators, and Librarian. Really, the only reason to buy them is because they're pretty (or you don't own those models). All the Dark Eldar models are pretty much meh (Haemonculous, Wracks, Succubus, Archon, etc.) or easily kit-bashable.
The only model that I've felt "compelled" to include as something that's too good to not have are Imperial Knights. I've bought two, and actually, I almost never play them, because I don't like how they look :\ They are particularly egregious because they are extremely expensive ($150 range), and very good for the point value. And there are awesome FW variants (like Cerastus Knight Castigator) that are really nice on a table (functionally)... but really, really expensive (170 GBP, plus all the shippoing crap, IIRC).
I buy new models from GW mostly because they're cool models (like Scions, Wall of Martyrs, Treeman Ancient) -- and then I look for an excuse to play them.
DEFINITION OF 'FINANCIAL DISTRESS'
A condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. The chance of financial distress increases when a firm has high fixed costs, illiquid assets, or revenues that are sensitive to economic downturns.
Trailing Twelve Months (TTM) ended in Sep. 2014:
Total Assets was $144,928 Mil.
Total Current Assets was $40,516 Mil.
Total Current Liabilities was $45,232 Mil. Retained Earnings was $7,733 Mil.
Pretax Income was -837.369456285 + 669.949609506 + -1135.87062732 + 867.668664218 = $-436 Mil. Interest Expense was -56.2900683915 + -62.8240036291 + -1740.63904632 + -2307.08486372 = $-4,167 Mil.
Revenue was 17700.7084897 + 17733.2605677 + 18235.7729138 + 23321.2739223 = $76,991 Mil.
Market Capitalization (Today) was $24,088 Mil.
Total Liabilities was $123,641 Mil.
I don't know what else to call it when your liabilities exceed your assets......They're eating through their savings at a prodigious rate (sound like another company we know?)
*I changed the text color above to call out what I'm referencing below in my statement.
According to their audited financial results, their Net Assets (Total Assets - Total Liabilities) = 49,765. That would indicate their assets exceed their liabilities. In fact, their current assets exceed their current liabilities by almost double (aka current ratio aka liquidity ratio). This would indicate GW is very liquid because it has the ability to pay its obligations. In addition, it also has the ability to pay its commitments noted in Note 12 which are not identified in the financial statements. Refer to the balance sheet on page 5 and footnote 12 on page of the mid year financial statements.
Also, when did they acquire debt? I think I missed the memo and didn't see it as a subsequent event in their financial statements. I'm referencing this per your interest Expense calculation above. Interest expense should be broken out as a separate item on their P&L and its not listed. Its broken out so you can get a true picture of operations ie - EBITDA. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. This provides the reader with a "true" sense of earnings from operations as the other expenses are not directly related to operations (interest is derived from debt, income taxes are based on earnings not operations, depreciation and amortization are based on capitalized assets in which cash may have been spent several years ago and in the current year are non-cash expenses). In addition, I don't see any LT debt or capital leases on the Company's Balance Sheet. How are they paying $4.2MM in interest charges?
When I look at the Company's health, I generally like to look at their statement of cash flows because it gives me a sense of what is happening with the Company. It shows what they are spending their money on and reconciles the change in cash between the periods (on an annual basis). GW is still a healthy company because they have the cash reserves and cash flow to maintain status quo. I'd like to see them take more action and I do participate in elections the Company's elections though I don't have enough skin in the game to matter when compared to the rest of the Investors. If you want to see GW change, buy their stock and create a block of investors and demand change. The only way anyone on this board can make it happen is by working within their system. Buy their shares and threaten a takeover, be that activist investor they don't like. Management won't take you seriously until you're sitting across the table from them and have support from their investors.
Umm. The info I quoted was for Sony as it was being argued that Sony was/is not in financial distress; apparently, by your statement, they are not regardless of the CFO's statement that they are hemorrhaging cash ($1.2billion abouts).
Anywho, since it's topical and all, let's examine GW using your definition of health.
Games Workshop Group PLC's EBITDA per share for the six months ended in Nov. 2014 was £0.37. Its EBITDA per share for the trailing twelve months (TTM) ended in Nov. 2014 was £0.70. During the past 12 months, the average EBITDA per Share Growth Rate of Games Workshop Group PLC was -32.50% per year. During the past 3 years, the average EBITDA per Share Growth Rate was -4.40% per year. During the past 5 years, the average EBITDA per Share Growth Rate was -2.00% per year. During the past 10 years, the average EBITDA per Share Growth Rate was 8.10% per year.
So, is -32.50% in the past year healthy? According to EBITDA, GW has been in a slide for the past 5+ years which appears to be accelerating.
One thing that I look at in a retail stock is the inventory to revenue ratio.
Games Workshop Group PLC's inventory to revenue ratio for the quarter that ended in Nov. 2014 increased from May. 2014 (0.14) to May. 2014 (0.15)
An increase in inventory to revenue ratio from one quarter to the next indicates that one of the following is happening:
1. investment in inventory is growing more rapidly than revenue
2. revenue are dropping
No matter which situation is causing the problem, an increase in the inventory to revenue ratio may signal an oncoming cash flow problem.
Is GW going to implode tomorrow? No, not even close. They're making money, albeit less than before, and turning over inventory, albeit less than before. From an examination of the numbers it looks almost like a controlled slide down. The financials are in great shape and the books look good but the company is a couple of more bad halfs from being faced with a decision to cut dividends or buy product to sell.
Sorry, when you post another Company's financial information in a thread about GW and then start talking financial distress, you may want to label it as "SONY". I read that and was trying to figure out what you were smoking because none of those numbers jive with the financial statements I was reading. Now that I know they are Sony's, no worries.
I'm an ex-auditor and I've put together Financial Statements for the better part of the last decade. I'm only relaying my thoughts based on my experiences as a public accountant and internal auditor and what has worked for me when I invest my own money. My reference to the Cash Flow Statement was only meant to comment on what I think is important when making investment decisions because I feel that gives the investor a glimpse at how the Company is spending their money. EBITDA is useful when trying to see how well Companies are operating as it shows cash flow and removes non-cash and non-operating expenses. Based on some of the comments in this thread, I'm trying to show you why I am making the statement and my thought process because I'm holding a counter point to the majority opinion.
To address your next comment, I would expect to see GW drop back to where they were several years when they were not riding the Lord of the Rings horse. I would imagine they have to scale back to where they were and still have some fat to trim from shrinking to get back in line with where they should be. In fact, they are back to where they were in 2010 which is about where they were before the Hobbit bubble which may have attracted some new Lord of the Rings players to account for the bump the Company saw during 2011-2013. My expectation would be the Company will move to be in line with their revenue & profit back at that point in time as there were no LotR movies and GW had to really push the game rather than let the movies do their thing. I really think their Company is managed quite well as they continue to operate without debt financing. The Company really supports itself and flushes the cash right back to the owners which is the entire point of any business to begin with. Do I think they could do more? Heck yes. Do I think their management team is running the business into the ground? No. Do I think they are in distress? No - I see they continue to be able to keep their lights on, pay their vendors, pay their employees, and pay their owners without having to finance it.
Based on what I saw with the Smaug model, GW sold some 200 of them in 24 hours. At $500 a pop, that is what $100,000 in revenue in one day? I'd imagine GW wants to continue to court the LotR customer base but they need to figure out how to get them to bite because sales would indicate they have the potential to impact GW's bottom line in a good way. Though, as we all have seen with the limited edition game, if they are not happy, it will sit on the shelves of our LGS.
The growth in inventory can be due to a number of things such as:
1 - A rise in the cost to produce goods (plastic, labor, artists, utilities, etc.)
2 - An increase in the number retail locations. If you have more locations to maintain, you need to make more to put into your lines of distribution. Since GW distributes their own product, it needs to be in the general geographic location as their intended consumer.
3 - An increase in expected demand for a group of products. Since End of Times is in full swing near the cut off period, some of the variance may be due to a specific release (EOT - Elves or the Glott Bros or space marines: red being released in the next couple of weeks). In addition, they may predict they may need additional product due Americans shopping over the Thanksgiving weekend. That would at least address an increase over the last 6 months.
4 - Reviewing the Annual Report, there is a YOY decrease in total inventory due to the fact reduced the raw materials on hand. This would indicate they are more apt to see inventory fluctuate due to increased in raw materials (refer back to item 1).
For the reasons above, I wouldn't anticipate a build up in inventory to equate to a loss of sales.
*Edited* I find it easier to make changes to my post when I see how it will appear when its posted. Also, I took a potty break and saw I had not completed a thought and had an unfinished sentence.
@boyd - this is contrary to the Internet method of analysis, where any of the following indicate that a company is distressed:
- If I don't like the company - If I don't like the company's products - If the company doesn't make me feel valued - If the company is making less money than it did at any point in history - If the company's products are too expensive - If the company's products are too cheap
Just pick any aspect of financial statements that I don't like and it will prove that the company is in imminent threat of insolvency. This will be reinforced by some analyst, somewhere, who thinks so too. In contrast, any company must surely be a "BUY NAO!" if any of the following are true (note that these rules supersede the above):
- If I like the company, nothing else matters. - If I like any of the company's products, nothing else matters. - If the company makes me feel special, nothing else matters.
Even if the company has billions of dollars banked, and is making billions of dollars every quarter, surely it is a doomed company and should just give up now if none of the above three are true. Because after all, if this is so, the world will work the way that I want it to and my sense of influence over the cosmos will be reinforced!
Like Microsoft. Surely, they are a distressed company. RIGHT?? Xbox? Doomed. Surface? Doomed. Phone? Doomed. Windows? Doomed. Office? Doomed! Sony? DOOMED!!!
Why would anyone care if these companies have enough money, revenue, and cashflow, and reliable userbase, to experiment with new things, and to mess things up here and there without significant consequence? Surely these things have nothing to do with a company's well being. It's all about Kickstarter campaigns and bright-eyed, bushy tailed Davids in a world of Goliaths.
Whenever people talk about companies that aren't doing very well, and that they are therefore *terrible* investments that no intelligent person or institution would touch, I like to just cough out... Apple... Netflix.
ClockworkZion wrote: The "customer should continue to buy stuff" business model is the same one MtG is primarily built on.
It's honestly a pretty common business model.
A couple of differences with magic though:
1 - its ready to go right out of the box
2 - the buy-in cost is ridiculously cheap compared to gw (last year i bought 2 of the new starter decks to show/play with a friend, it cost me $50 in total which might buy me a 10-man squad from gw these days, might)
3 - the core rules are pretty stable
4 - the older stuff is often still useful and not underpowered compared to the new stuff (like an older sengir vampire compared to the revised ones)
5 - storage requirements are way smaller
6 - the company doesn't seem to go after it's own customers and indie retailers
The customer should continue to buy stuff is a valid business model, but the market and execution can be very different and not always suitable to that.
ClockworkZion wrote: The "customer should continue to buy stuff" business model is the same one MtG is primarily built on.
It's honestly a pretty common business model.
A couple of differences with magic though: 1 - its ready to go right out of the box 2 - the buy-in cost is ridiculously cheap compared to gw (last year i bought 2 of the new starter decks to show/play with a friend, it cost me $50 in total which might buy me a 10-man squad from gw these days, might) 3 - the core rules are pretty stable 4 - the older stuff is often still useful and not underpowered compared to the new stuff (like an older sengir vampire compared to the revised ones) 5 - storage requirements are way smaller 6 - the company doesn't seem to go after it's own customers and indie retailers
The customer should continue to buy stuff is a valid business model, but the market and execution can be very different and not always suitable to that.
They're similar in that both are cheap to get into, and *ridiculously expensive* to collect if you love them. There's nothing wrong with playing with a starter box.
Sengir vampire is not a great example of a great card though. Try Mox stones, black lotus, diamond valley, dual land, time walk.... Yeah, the cards that allowed you to win the game without your opponent ever getting to even play In every release, there are a few jewels. If you must keep up with the collection, be prepared to pay a *lot* of money.
There are tons of differences between MtG and 40k, and I think MtG is a better business, and a better managed business. Still, their similarities are basically that they encourage their customers to keep spending money. The whole framework is "buy in, buy more". Board games basically are, "Buy in, Play, Buy Next". I think the board game strategy is a losing one, long term (just my opinion) -- because eventually people become less interested in picking up something new, and disenfranchised with or can't find play partners for the old. It also isn't possible to have a high purchase velocity with board games, because they are by nature not really collectible.
WMH is definitely in the buy in/buy more camp, but their escalation to date has been somewhat gentler, and the model count is lower. Make no mistake though, their business model relies on customers to upgrade their armies and buy the new, bigger stuff. From the Borka's to Mountain Kings to Collossals, there are larger and more expensive units than the original game envisioned. At some point, perhaps WMH too will decide that to make more money, they wlll decide to further escalate the units in the game (either bigger models, more models, or both).
Personally, I get more out of 40k because family commitments mean I can't game a ton, but I can still squirrel away hobby time. I like 'em all, though!
ClockworkZion wrote: The "customer should continue to buy stuff" business model is the same one MtG is primarily built on.
It's honestly a pretty common business model.
A couple of differences with magic though:
1 - its ready to go right out of the box
2 - the buy-in cost is ridiculously cheap compared to gw (last year i bought 2 of the new starter decks to show/play with a friend, it cost me $50 in total which might buy me a 10-man squad from gw these days, might)
3 - the core rules are pretty stable
4 - the older stuff is often still useful and not underpowered compared to the new stuff (like an older sengir vampire compared to the revised ones)
5 - storage requirements are way smaller
6 - the company doesn't seem to go after it's own customers and indie retailers
The customer should continue to buy stuff is a valid business model, but the market and execution can be very different and not always suitable to that.
I won't claim it's exactly the same, just that it's not an uncommon business strategy.
And old with 40k doesn't mean bad. A lot of the game is built on old stuff (and sometimes old stuff gets overbuffed).
As for the indie retailers GW has gone after, it's been pretty limited to online retailers only to protect brick and mortar indies who can't compete with stores that are selling world wide at such a deep discount. It was hurting the indies and thus hurt GW hence why they did what they did.
DEFINITION OF 'FINANCIAL DISTRESS'
A condition where a company cannot meet or has difficulty paying off its financial obligations to its creditors. The chance of financial distress increases when a firm has high fixed costs, illiquid assets, or revenues that are sensitive to economic downturns.
Trailing Twelve Months (TTM) ended in Sep. 2014:
Total Assets was $144,928 Mil.
Total Current Assets was $40,516 Mil.
Total Current Liabilities was $45,232 Mil. Retained Earnings was $7,733 Mil.
Pretax Income was -837.369456285 + 669.949609506 + -1135.87062732 + 867.668664218 = $-436 Mil. Interest Expense was -56.2900683915 + -62.8240036291 + -1740.63904632 + -2307.08486372 = $-4,167 Mil.
Revenue was 17700.7084897 + 17733.2605677 + 18235.7729138 + 23321.2739223 = $76,991 Mil.
Market Capitalization (Today) was $24,088 Mil.
Total Liabilities was $123,641 Mil.
I don't know what else to call it when your liabilities exceed your assets......They're eating through their savings at a prodigious rate (sound like another company we know?)
*I changed the text color above to call out what I'm referencing below in my statement.
According to their audited financial results, their Net Assets (Total Assets - Total Liabilities) = 49,765. That would indicate their assets exceed their liabilities. In fact, their current assets exceed their current liabilities by almost double (aka current ratio aka liquidity ratio). This would indicate GW is very liquid because it has the ability to pay its obligations. In addition, it also has the ability to pay its commitments noted in Note 12 which are not identified in the financial statements. Refer to the balance sheet on page 5 and footnote 12 on page of the mid year financial statements.
Also, when did they acquire debt? I think I missed the memo and didn't see it as a subsequent event in their financial statements. I'm referencing this per your interest Expense calculation above. Interest expense should be broken out as a separate item on their P&L and its not listed. Its broken out so you can get a true picture of operations ie - EBITDA. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. This provides the reader with a "true" sense of earnings from operations as the other expenses are not directly related to operations (interest is derived from debt, income taxes are based on earnings not operations, depreciation and amortization are based on capitalized assets in which cash may have been spent several years ago and in the current year are non-cash expenses). In addition, I don't see any LT debt or capital leases on the Company's Balance Sheet. How are they paying $4.2MM in interest charges?
When I look at the Company's health, I generally like to look at their statement of cash flows because it gives me a sense of what is happening with the Company. It shows what they are spending their money on and reconciles the change in cash between the periods (on an annual basis). GW is still a healthy company because they have the cash reserves and cash flow to maintain status quo. I'd like to see them take more action and I do participate in elections the Company's elections though I don't have enough skin in the game to matter when compared to the rest of the Investors. If you want to see GW change, buy their stock and create a block of investors and demand change. The only way anyone on this board can make it happen is by working within their system. Buy their shares and threaten a takeover, be that activist investor they don't like. Management won't take you seriously until you're sitting across the table from them and have support from their investors.
Umm. The info I quoted was for Sony as it was being argued that Sony was/is not in financial distress; apparently, by your statement, they are not regardless of the CFO's statement that they are hemorrhaging cash ($1.2billion abouts).
Anywho, since it's topical and all, let's examine GW using your definition of health.
Games Workshop Group PLC's EBITDA per share for the six months ended in Nov. 2014 was £0.37. Its EBITDA per share for the trailing twelve months (TTM) ended in Nov. 2014 was £0.70. During the past 12 months, the average EBITDA per Share Growth Rate of Games Workshop Group PLC was -32.50% per year. During the past 3 years, the average EBITDA per Share Growth Rate was -4.40% per year. During the past 5 years, the average EBITDA per Share Growth Rate was -2.00% per year. During the past 10 years, the average EBITDA per Share Growth Rate was 8.10% per year.
So, is -32.50% in the past year healthy? According to EBITDA, GW has been in a slide for the past 5+ years which appears to be accelerating.
One thing that I look at in a retail stock is the inventory to revenue ratio.
Games Workshop Group PLC's inventory to revenue ratio for the quarter that ended in Nov. 2014 increased from May. 2014 (0.14) to May. 2014 (0.15)
An increase in inventory to revenue ratio from one quarter to the next indicates that one of the following is happening:
1. investment in inventory is growing more rapidly than revenue
2. revenue are dropping
No matter which situation is causing the problem, an increase in the inventory to revenue ratio may signal an oncoming cash flow problem.
Is GW going to implode tomorrow? No, not even close. They're making money, albeit less than before, and turning over inventory, albeit less than before. From an examination of the numbers it looks almost like a controlled slide down. The financials are in great shape and the books look good but the company is a couple of more bad halfs from being faced with a decision to cut dividends or buy product to sell.
Sorry, when you post another Company's financial information in a thread about GW and then start talking financial distress, you may want to label it as "SONY". I read that and was trying to figure out what you were smoking because none of those numbers jive with the financial statements I was reading. Now that I know they are Sony's, no worries.
I'm an ex-auditor and I've put together Financial Statements for the better part of the last decade. I'm only relaying my thoughts based on my experiences as a public accountant and internal auditor and what has worked for me when I invest my own money. My reference to the Cash Flow Statement was only meant to comment on what I think is important when making investment decisions because I feel that gives the investor a glimpse at how the Company is spending their money. EBITDA is useful when trying to see how well Companies are operating as it shows cash flow and removes non-cash and non-operating expenses. Based on some of the comments in this thread, I'm trying to show you why I am making the statement and my thought process because I'm holding a counter point to the majority opinion.
To address your next comment, I would expect to see GW drop back to where they were several years when they were not riding the Lord of the Rings horse. I would imagine they have to scale back to where they were and still have some fat to trim from shrinking to get back in line with where they should be. In fact, they are back to where they were in 2010 which is about where they were before the Hobbit bubble which may have attracted some new Lord of the Rings players to account for the bump the Company saw during 2011-2013. My expectation would be the Company will move to be in line with their revenue & profit back at that point in time as there were no LotR movies and GW had to really push the game rather than let the movies do their thing. I really think their Company is managed quite well as they continue to operate without debt financing. The Company really supports itself and flushes the cash right back to the owners which is the entire point of any business to begin with. Do I think they could do more? Heck yes. Do I think their management team is running the business into the ground? No. Do I think they are in distress? No - I see they continue to be able to keep their lights on, pay their vendors, pay their employees, and pay their owners without having to finance it.
Based on what I saw with the Smaug model, GW sold some 200 of them in 24 hours. At $500 a pop, that is what $100,000 in revenue in one day? I'd imagine GW wants to continue to court the LotR customer base but they need to figure out how to get them to bite because sales would indicate they have the potential to impact GW's bottom line in a good way. Though, as we all have seen with the limited edition game, if they are not happy, it will sit on the shelves of our LGS.
The growth in inventory can be due to a number of things such as:
1 - A rise in the cost to produce goods (plastic, labor, artists, utilities, etc.)
2 - An increase in the number retail locations. If you have more locations to maintain, you need to make more to put into your lines of distribution. Since GW distributes their own product, it needs to be in the general geographic location as their intended consumer.
3 - An increase in expected demand for a group of products. Since End of Times is in full swing near the cut off period, some of the variance may be due to a specific release (EOT - Elves or the Glott Bros or space marines: red being released in the next couple of weeks). In addition, they may predict they may need additional product due Americans shopping over the Thanksgiving weekend. That would at least address an increase over the last 6 months.
4 - Reviewing the Annual Report, there is a YOY decrease in total inventory due to the fact reduced the raw materials on hand. This would indicate they are more apt to see inventory fluctuate due to increased in raw materials (refer back to item 1).
For the reasons above, I wouldn't anticipate a build up in inventory to equate to a loss of sales.
Sorry for any confusion but as I was responding to another poster about the health of Sony (his point); it was an ongoing conversation from a couple of previous pages.
I dabble in the stock market so do not have nearly the same experience as yourself so I'll defer to your comments and simply provide some additional data for consideration.
1. EBITDA Per Share
Games Workshop Group PLC Annual Data
EBITDA_per_share
May05------May06----------May07-------May08-------May09-------May10--------May11-------May12-------May13-------May14
0.75----------0.47-----------0.28----------0.40---------0.62----------0.85----------0.80----------0.94---------0.96----------0.70
For the reasons above, I wouldn't anticipate a build up in inventory to equate to a loss of sales.
I would though, especially when you take into account an increase in the inventory of finished goods whereas you would be talking about the inventory of raw goods.
Finished goods:
Games Workshop Group PLC's annual finished goods declined from May. 2012 (£7.4 Mil) to May. 2013 (£7.0 Mil) but then increased from May. 2013 (£7.0 Mil) to May. 2014 (£7.6 Mil).
We can see that between 2012 and 2013, the EBITDA per share improved while inventories of finished goods being held declined, indicating product being moved. The between 2013 and 2014 EBITDA declined and inventories of finished goods rose.
Then we have the inventory of raw materials declining as there is less demand for finished product:
Games Workshop Group PLC's annual raw materials declined from May. 2012 (£0.9 Mil) to May. 2013 (£0.5 Mil) and declined from May. 2013 (£0.5 Mil) to May. 2014 (£0.2 Mil).
In full disclosure, I owned a fair amount of GW stock until this time last year when my early-warning system auto-sold my stock when it dropped 20% in one day, precipitating another 5% drop when I bowed out (low-volume, small-cap stocks can be scary easy to influence share price). I am not predicting the end of GW. My point has been, for the past several pages, that it is entirely possible for them to face some tough decisions in the near future if they are unable to pull out of their current slump. Again, they're currently a healthy company with great-looking financials.
As to the Smog comment. $100,000 in one day would be nice for a tiny company but GW has a multi-national presence; one would hope that they could do better, ideally over time because sustained growth is what is needed not selling everything that they're going to sell within a few days' time.
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Talys wrote: @boyd - this is contrary to the Internet method of analysis, where any of the following indicate that a company is distressed:
- If I don't like the company
- If I don't like the company's products
- If the company doesn't make me feel valued
- If the company is making less money than it did at any point in history
- If the company's products are too expensive
- If the company's products are too cheap
Just pick any aspect of financial statements that I don't like and it will prove that the company is in imminent threat of insolvency. This will be reinforced by some analyst, somewhere, who thinks so too. In contrast, any company must surely be a "BUY NAO!" if any of the following are true (note that these rules supersede the above):
- If I like the company, nothing else matters.
- If I like any of the company's products, nothing else matters.
- If the company makes me feel special, nothing else matters.
Even if the company has billions of dollars banked, and is making billions of dollars every quarter, surely it is a doomed company and should just give up now if none of the above three are true. Because after all, if this is so, the world will work the way that I want it to and my sense of influence over the cosmos will be reinforced!
Like Microsoft. Surely, they are a distressed company. RIGHT?? Xbox? Doomed. Surface? Doomed. Phone? Doomed. Windows? Doomed. Office? Doomed! Sony? DOOMED!!!
Why would anyone care if these companies have enough money, revenue, and cashflow, and reliable userbase, to experiment with new things, and to mess things up here and there without significant consequence? Surely these things have nothing to do with a company's well being. It's all about Kickstarter campaigns and bright-eyed, bushy tailed Davids in a world of Goliaths.
Whenever people talk about companies that aren't doing very well, and that they are therefore *terrible* investments that no intelligent person or institution would touch, I like to just cough out... Apple... Netflix.
You're very dogged about this whole thing. This all started over a comment on how they could become financially distressed, not are, could become. You conflated this into a pithy comment about Sony, I showed how the CFO of Sony even said they were distressed and you never responded instead choosing to make passive aggressive comments as above.
FWIW, I've owned GW stock, I buy GW products, in fact I have a full collection of the Knights (I'm a sucker for big, stompy robots). I don't want to see them go away but I'm also not going to pretend that they are the superman of companies and completely bulletproof. They're a small fish in a very big pond sadly being run by some people with egos larger than their bank accounts justify.
The problem with the £100,000 sales of Smaug in a day theory is that GW actually need to sell about £300,000 a day just to break even.
No company can do that by selling three new awesome limited special item kits every day of the year. You need a good baseline range that keeps the company afloat, then the special items are icing on the cake. (To mix metaphors.)
Smaug was the kind of prestige kit that GW can point to and say they do awesome prestige fantasy kits. But actually GW need to sell games with rules, codexes and armies. That is where they appear to be in decline.
@agnosto - of course GW could become distressed. I don't know how you missed the snark, as that specific post was obviously made in jest, although there is a valid point in that just because you don't like a company or it isn't doing as well as it could doesn't mean that it is distressed or likely to become distressed. Also, on the Internet, people have a tendency to confuse, "I wish they would die already" with "They're likely to die soon". On Internet forums and boards like this one, people rarely look at companies dispassionately as investment vehicles.
I don't think that GW is likely to become a distressed company (defined as being unable to meet financial obligations) in the foreseeable future. It has no debt, has cash on hand, its expenses are under control, and management is clearly willing to make cost-saving cuts, sparing no-one.
GW is much more likely to shrink; however, I say to that, "so what?". Its fans will still have a manufacturer, and other hobbyists and gamers will still have other choices. In the same way, frankly, if GW grew 20% every year for 10 years, I'd also say, "so what?". Neither really affects me, unless I'm actually unable to find people to play with, though I'm sure my hobby shop would prefer the latter. Notably, in 25+ years, I have never had a problem finding people to play 40k with.
I also don't believe that GW is so horribly managed as some others think. It is profitable, returns profits to stakeholders, and produces products that there is a market for. I don't personally need to feel listened to or valued any more than I do from Amazon, Microsoft, Apple, or Netflix. I don't feel personally offended by GW, but even if I did, it wouldn't change whether I think it's going to go under any time soon, because lots of companies that o don't think much of stay in business for a very long time.
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Kilkrazy wrote: The problem with the £100,000 sales of Smaug in a day theory is that GW actually need to sell about £300,000 a day just to break even.
No company can do that by selling three new awesome limited special item kits every day of the year. You need a good baseline range that keeps the company afloat, then the special items are icing on the cake. (To mix metaphors.)
Smaug was the kind of prestige kit that GW can point to and say they do awesome prestige fantasy kits. But actually GW need to sell games with rules, codexes and armies. That is where they appear to be in decline.
I believe that the point was that this was one model largely derided as ridiculously expensive, poor value, and unviable -- when actually, it did ok. Not that GW should produce Smaug-like models and nothing else.
His other point was that perhaps there is not so much a decline as we make it out to be, because all we're seeing is the LoTR wave fade (as the movies are done, and the last one was terrible). The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
As for the indie retailers GW has gone after, it's been pretty limited to online retailers only to protect brick and mortar indies who can't compete with stores that are selling world wide at such a deep discount. It was hurting the indies and thus hurt GW hence why they did what they did.
If you go and ignore all the evidence that they do try and undermine the independents (including the brick and mortar onlys) sure. Like turning half their range direct only.
Talys wrote: I believe that the point was that this was one model largely derided as ridiculously expensive, poor value, and unviable -- when actually, it did ok. Not that GW should produce Smaug-like models and nothing else.
They only made 200 globally so far so it's hardly an indication of anything.
The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
Except we'll never get an answer to that question (beyond local level stuff of stores giving anecdotal evidence) so it's not really a useful question to ask.
Talys wrote: The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
Except we'll never get an answer to that question (beyond local level stuff of stores giving anecdotal evidence) so it's not really a useful question to ask.
You work with the data you have, not the data you wish you had.
Talys wrote: The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
Except we'll never get an answer to that question (beyond local level stuff of stores giving anecdotal evidence) so it's not really a useful question to ask.
You work with the data you have, not the data you wish you had.
And if your data is insufficient and you can't obtain sufficient data you move on to more useful questions
Talys wrote: The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
Except we'll never get an answer to that question (beyond local level stuff of stores giving anecdotal evidence) so it's not really a useful question to ask.
You work with the data you have, not the data you wish you had.
And if your data is insufficient and you can't obtain sufficient data you move on to more useful questions
Actually, the data is there if you look at my recent posts. Post LOTR bubble, GW is a current slide per their publicly released numbers (EBITDA per share).
Anyone recall what happened in 2012/2013 for the spike there? 6th edition?
Disclaimer:
Again, I'm not saying that GW is in financial trouble, currently far from it; I'm saying that the data supports concern that they could continue to slide into oblivion if the course is not corrected. There are a number of internal and external factors that will determine how quickly or if at all this occurs but it's interesting to discuss and watch.
Talys wrote: The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
Except we'll never get an answer to that question (beyond local level stuff of stores giving anecdotal evidence) so it's not really a useful question to ask.
You work with the data you have, not the data you wish you had.
And if your data is insufficient and you can't obtain sufficient data you move on to more useful questions
Actually, the data is there if you look at my recent posts. Post LOTR bubble, GW is a current slide per their publicly released numbers (EBITDA per share).
Well we don't know explicitly any numbers for 40k, the numbers I've seen and what you've posted don't suggest any way you can separate the performance of 40k globally from the data we have on GW as a whole.
Talys wrote: The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
Except we'll never get an answer to that question (beyond local level stuff of stores giving anecdotal evidence) so it's not really a useful question to ask.
You work with the data you have, not the data you wish you had.
And if your data is insufficient and you can't obtain sufficient data you move on to more useful questions
Actually, the data is there if you look at my recent posts. Post LOTR bubble, GW is a current slide per their publicly released numbers (EBITDA per share).
Well we don't know explicitly any numbers for 40k, the numbers I've seen and what you've posted don't suggest any way you can separate the performance of 40k globally from the data we have on GW as a whole.
But we do know that it's their strongest product, as evidenced by the amount of support it receives vs the other two (sadly only two other products now).
Yeah we know it's their strongest product and probably has been for many years... still no way to extract it's specific performance from GW as a whole. We know that the 7th ed WHFB rulebook pulled in roughly 37% of what the 5th ed 40k book did over the first 3 years of sale of each one. Given the swings in revenue are more of the order of less than 10%, it's hard to say anything much about 40k specifically in the grand scheme of things.
We do know GW is falling in spite if releasing a lot of 40k stuff over the past couple of years, but even then it's a stretch to specifically say 40k is failing. It says GW's strategy is failing.
Talys wrote: The real question should be, how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR, rather than GW now with GW then.
Except we'll never get an answer to that question (beyond local level stuff of stores giving anecdotal evidence) so it's not really a useful question to ask.
You work with the data you have, not the data you wish you had.
And if your data is insufficient and you can't obtain sufficient data you move on to more useful questions
Actually, the data is there if you look at my recent posts. Post LOTR bubble, GW is a current slide per their publicly released numbers (EBITDA per share).
Well we don't know explicitly any numbers for 40k, the numbers I've seen and what you've posted don't suggest any way you can separate the performance of 40k globally from the data we have on GW as a whole.
Actually, we do have explicit numbers. Andy Jones testified under oath in 2013 that Warhammer 40K accounted for more than 50% of GW's total revenue. This does not include Black Library, Forge World, licenses, White Dwarf, LoTR, Hobbit, Space Hulk, paints, hobby supplies, or anything else GW sells aside from 40K rulebooks and model kits.
So we can at the very least take that as a number as of August 2013. We also have sales volume data for the US disclosed in that same case. We also know the percentage of GW's revenue by region.
So saying that we don't have data on 40K is false.
Secondarily, it is a non-issue. Who cares what GW's 40K related revenue is if the company's total revenue and profit are declining? It would be an absurd coincidence if these drops in revenue/profit were completely unrelated to sales of a product line that makes up by now more than half of the company's total revenue. And even if it was true, again, who really cares. If GW can't stay in business, GW can't make 40K products. As an aside, it seems that at the very least Black Library revenue is going up.
And as for who is playing the game, anecdotal data is more valuable in that respect, because GW's 40K-related unit sales do not necessarily correlate to people playing the game. We have been seeing an increasing number of anecdotal accounts of declining participation in 40K and Fantasy. We have years of objective data from convention registrations and tournament entries that show declines in 40K participation across North America while overall attendance is on the rise and participation rates for WarmaHordes, X-Wing, Infinity, Flames of War, Bolt Action, etc. are increasing.
So it is pretty absurd to claim that there is no data. What one does is examine whatever data is available, both quantitative and qualitative, examine it for patterns, and make inferences. Overall, if you asked a Magic 8-Ball if participation in Warhammer 40K has been in decline, it would come up "Signs point to Yes" every time you shook it.
weeble1000 wrote: So saying that we don't have data on 40K is false.
We have data on 40k... not data that answers the question in question, which was written by Talys "how much has 40k really declined -- comparing 40k numbers from now, to pre-LoTR". A single data point saying 40k is half of total revenue in 2013 and another single data point saying the 5th ed 40k rulebook brought in roughly 2.7 times the revenue of the 7th ed WHFB rulebook is not enough to answer the question of whether 40k has really declined.
Secondarily, it is a non-issue. Who cares what GW's 40K related revenue is if the company's total revenue and profit are declining?
It is relevant in so much as it is interesting to talk about and hypothesise things... which is mostly what we do here because as far as I know none of us actually have a voice in GW's ear.
Also you will note it is not a question I personally asked, I simply stated we have no data to answer it.
And as for who is playing the game, anecdotal data is more valuable in that respect
The problem with anecdotal data is wargaming varies WILDLY from one location to another. Games which are supposedly popular in one area are unheard of in another. My FLGS has several games which I believe (from forums and whatnot) seem to be popular and I ask the owner and he says "oh I don't know anyone who plays it, no one buys it, I just decided to stock it on the off chance a group starts up but it's been sitting there for years gathering dust". The few different locations I've lived in across Australia and the USA had massively different wargaming communities.
The other thing about anecdotal data even within a given area it shifts among different gaming circles. If a game becomes less popular in competition maybe it becomes more popular among casuals. Conventions may feel huge but they represent a tiny subset of the overall community. I'd say internet forums are very much the enthusiast subset of wargamers, so noting a drop in popularity on forums does not necessarily indicate a global decline (as much as forum dwellers would like to believe they are the be all and end all of customers we so often see it's not true, look at how popular the COD video games are despite being hounded on gaming enthusiast forums)..
If you had a LOT of anecdotal data and actually tracked it's locations, demographic and frequency MAYBE you could construct a reasonable argument.
The only people with the means to realistically answer a lot of the questions we ask are GW themselves.
Now, I don't disagree the argument would be on the side of "yes, 40k is probably declining". But revenue hasn't really varied as much as would be required to definitively say that. Maybe it's just WHFB has died, maybe it's just the remnants of the LOTR/Hobbit dying out, I haven't checked but I also think royalties have dropped over the period overall revenue has dropped.
But when you ask the question "how much has 40k really declined?" The answer is "somewhere between not at all, 20% down or slightly up" which is not really a useful answer.
Maybe it's just because I do research for a living but I see too many giant gaping holes between equating GW's overall revenue and/or limited anecdotal data to any useful answer to the question of "how much has 40k really declined?".
AllSeeingSkink wrote: Yeah we know it's their strongest product and probably has been for many years... still no way to extract it's specific performance from GW as a whole. We know that the 7th ed WHFB rulebook pulled in roughly 37% of what the 5th ed 40k book did over the first 3 years of sale of each one. Given the swings in revenue are more of the order of less than 10%, it's hard to say anything much about 40k specifically in the grand scheme of things.
We do know GW is falling in spite if releasing a lot of 40k stuff over the past couple of years, but even then it's a stretch to specifically say 40k is failing. It says GW's strategy is failing.
Right. I forget who it was, but they made a valid point that GW had a large uptick because of LoTR and it's popularity (during the original movies). Since then, this has declined. So, in 2 years, when there are essentially very little LoTR sales if GW performance (as a company) is roughly the same as what it was before LoTR, then one may conclude safely that the company's performance is flat. If it's lower, then we can infer that level of decline, and if it's higher, we can safely say that non-LoTR sales have increased to that degree.
Right now, the numbers are still skewed, because there *are* Hobbit sales, though I'd argue that this is the last half-year where they are really significant. The point is, the comparison should be GW pre LoTR versus GW Post LoTR, because, LoTR was just some short-term, easy money, and post-LoTR boom one would expect the numbers to fade.
Also, it is possible that as someone else put it succinctly, that GW is actually correct, and that this is the best profit maximization scenario for GW. It is not beyond the realm of credulity to think that barring some other game, 40k fatigue and other factors like a desire for smaller games have made it such that what GW is doing is actually the best thing that could be done for GW's shareholders and coffers. In other words, even if rules were airtight, and even if everyone felt that GW loved them, there would still be a chunk of people that would still spend less money on wargames and a chunk of people who simply want to play low model-count games (which isn't GW's thing -- since they define themselves as a miniature company).
It is conceivable that the best way to maximize revenue was to charge the people who really want large model count wargames more money, to make up for the shift.
I would argue that GW should try to have the best of both worlds, and win the low model count market as well as the high model count scifi/fantasy market. I personally don't believe that having a low model count game would steal customers from their high model count and collectible player base. But, what do I know.
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AllSeeingSkink wrote: Now, I don't disagree the argument would be on the side of "yes, 40k is probably declining". But revenue hasn't really varied as much as would be required to definitively say that. Maybe it's just WHFB has died, maybe it's just the remnants of the LOTR/Hobbit dying out, I haven't checked but I also think royalties have dropped over the period overall revenue has dropped.
But when you ask the question "how much has 40k really declined?" The answer is "somewhere between not at all, 20% down or slightly up" which is not really a useful answer.
Maybe it's just because I do research for a living but I see too many giant gaping holes between equating GW's overall revenue and/or limited anecdotal data to any useful answer to the question of "how much has 40k really declined?".
This is the most insighgtful conclusion of this thread
My personal opinion is that 40k has declined a little bit in volume in the last decade. One way to poll this would be to ask many local independents how their 40k sales are (not GW sales), compared to 5, 10, and 15 years past. As AllSeeingSkink put it, checking how many people show up for competitions is not a good measure of the sales success of a product.
As for the indie retailers GW has gone after, it's been pretty limited to online retailers only to protect brick and mortar indies who can't compete with stores that are selling world wide at such a deep discount. It was hurting the indies and thus hurt GW hence why they did what they did.
If you go and ignore all the evidence that they do try and undermine the independents (including the brick and mortar onlys) sure. Like turning half their range direct only.
I won't disagree that GW doesn't support its independent, local stores well. However, it just isn't true that "half their range is direct only".
The only models that are direct-only are the ones that aren't in production, and made of materials that GW doesn't want to sell anymore (finecast and metal). Once they sell out of the web store, they are out of stock, and GW doesn't replenish them (or it doesn't seem like it). How long have Dark Eldar grotesques been sold out? This is actually a useful unit (but finecast).
Please find a currently produced plastic kit that's direct-only.
Also, independent stores CAN buy direct-only items; it's just, they get only a small discount (I read, 10-15%, but I don't know the percentage for a fact). On regular items, they receive a 45% discount from MSRP (this, I can say for sure, at least in US/Canada)..
Talys wrote: I won't disagree that GW doesn't support its independent, local stores well. However, it just isn't true that "half their range is direct only".
The only models that are direct-only are the ones that aren't in production, and made of materials that GW doesn't want to sell anymore (finecast and metal). Once they sell out of the web store, they are out of stock, and GW doesn't replenish them (or it doesn't seem like it). How long have Dark Eldar grotesques been sold out? This is actually a useful unit (but finecast).
Please find a currently produced plastic kit that's direct-only.
Well, some people over at the Warseer forums keep special thread dedicated to the direct-only items. Not being a retailer I can't verify that information, but the list is quite long. Out of it I'd consider minotaurs and boar boys a rather recent pair of kits, and most likely still in production.
Every last one of those kits - all plastic, all still in production - are direct-only. That's on top of the fact that all metal and finecast are also direct-only. And that's only Fantasy, it's barely any better for 40K - ffs, the basic box of Chaos Space Marines, as well as the new plastic Raptors box and the Bikers are direct-only.
AllSeeingSkink wrote: Yeah we know it's their strongest product and probably has been for many years... still no way to extract it's specific performance from GW as a whole. We know that the 7th ed WHFB rulebook pulled in roughly 37% of what the 5th ed 40k book did over the first 3 years of sale of each one. Given the swings in revenue are more of the order of less than 10%, it's hard to say anything much about 40k specifically in the grand scheme of things.
We do know GW is falling in spite if releasing a lot of 40k stuff over the past couple of years, but even then it's a stretch to specifically say 40k is failing. It says GW's strategy is failing.
Right. I forget who it was, but they made a valid point that GW had a large uptick because of LoTR and it's popularity (during the original movies). Since then, this has declined. So, in 2 years, when there are essentially very little LoTR sales if GW performance (as a company) is roughly the same as what it was before LoTR, then one may conclude safely that the company's performance is flat. If it's lower, then we can infer that level of decline, and if it's higher, we can safely say that non-LoTR sales have increased to that degree.
Right now, the numbers are still skewed, because there *are* Hobbit sales, though I'd argue that this is the last half-year where they are really significant. The point is, the comparison should be GW pre LoTR versus GW Post LoTR, because, LoTR was just some short-term, easy money, and post-LoTR boom one would expect the numbers to fade.
Also, it is possible that as someone else put it succinctly, that GW is actually correct, and that this is the best profit maximization scenario for GW. It is not beyond the realm of credulity to think that barring some other game, 40k fatigue and other factors like a desire for smaller games have made it such that what GW is doing is actually the best thing that could be done for GW's shareholders and coffers. In other words, even if rules were airtight, and even if everyone felt that GW loved them, there would still be a chunk of people that would still spend less money on wargames and a chunk of people who simply want to play low model-count games (which isn't GW's thing -- since they define themselves as a miniature company).
It is conceivable that the best way to maximize revenue was to charge the people who really want large model count wargames more money, to make up for the shift.
I would argue that GW should try to have the best of both worlds, and win the low model count market as well as the high model count scifi/fantasy market. I personally don't believe that having a low model count game would steal customers from their high model count and collectible player base. But, what do I know.
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AllSeeingSkink wrote: Now, I don't disagree the argument would be on the side of "yes, 40k is probably declining". But revenue hasn't really varied as much as would be required to definitively say that. Maybe it's just WHFB has died, maybe it's just the remnants of the LOTR/Hobbit dying out, I haven't checked but I also think royalties have dropped over the period overall revenue has dropped.
But when you ask the question "how much has 40k really declined?" The answer is "somewhere between not at all, 20% down or slightly up" which is not really a useful answer.
Maybe it's just because I do research for a living but I see too many giant gaping holes between equating GW's overall revenue and/or limited anecdotal data to any useful answer to the question of "how much has 40k really declined?".
This is the most insighgtful conclusion of this thread
My personal opinion is that 40k has declined a little bit in volume in the last decade. One way to poll this would be to ask many local independents how their 40k sales are (not GW sales), compared to 5, 10, and 15 years past. As AllSeeingSkink put it, checking how many people show up for competitions is not a good measure of the sales success of a product.
As for the indie retailers GW has gone after, it's been pretty limited to online retailers only to protect brick and mortar indies who can't compete with stores that are selling world wide at such a deep discount. It was hurting the indies and thus hurt GW hence why they did what they did.
If you go and ignore all the evidence that they do try and undermine the independents (including the brick and mortar onlys) sure. Like turning half their range direct only.
I won't disagree that GW doesn't support its independent, local stores well. However, it just isn't true that "half their range is direct only".
The only models that are direct-only are the ones that aren't in production, and made of materials that GW doesn't want to sell anymore (finecast and metal). Once they sell out of the web store, they are out of stock, and GW doesn't replenish them (or it doesn't seem like it). How long have Dark Eldar grotesques been sold out? This is actually a useful unit (but finecast).
Please find a currently produced plastic kit that's direct-only.
Also, independent stores CAN buy direct-only items; it's just, they get only a small discount (I read, 10-15%, but I don't know the percentage for a fact). On regular items, they receive a 45% discount from MSRP (this, I can say for sure, at least in US/Canada)..
The Minotaurs and Chimera are plastic and direct only and thats without looking as I went to my local gw last week to buy them only to be told nope cannot direct only.
Every last one of those kits - all plastic, all still in production - are direct-only. That's on top of the fact that all metal and finecast are also direct-only. And that's only Fantasy, it's barely any better for 40K - ffs, the basic box of Chaos Space Marines, as well as the new plastic Raptors box and the Bikers are direct-only.
You're totally off base on this one.
Ok, fair enough. I don't play and only loosely collect Fantasy. I just can't think of any 40k models that I've ever wanted in plastic that my store didn't have or couldn't get.
By the way, my store has tons of Bretonia. Perhaps it's old stock as FB doesn't sell well.
Re: Chaos -- I certain won't argue that with you, but I'm sure I've seen basic Chaos SM on the shelf.
Edit - you are definitely wrong about basic CSM. I happen to be at a MtG tournament, and the store has a new box basic CSM, ordered after boxing day.
They're similar in that both are cheap to get into, and *ridiculously expensive* to collect if you love them. There's nothing wrong with playing with a starter box.
They can both be rediculously expensive, no question about it. But like i said, 2x starters for magic (which each came with 2 boosters) cost me $50. Dark vengeance costs $165 and needs assembly. The buy-in difference is staggering.
Talys wrote: Sengir vampire is not a great example of a great card though. Try Mox stones, black lotus, diamond valley, dual land, time walk.... Yeah, the cards that allowed you to win the game without your opponent ever getting to even play In every release, there are a few jewels. If you must keep up with the collection, be prepared to pay a *lot* of money.
Yeah i know it's not one of the big cards, but i have a sengir/vampire deck and it was the first example that popped into my head regarding an 'old' version card vs it's 'new' version.
Talys wrote: There are tons of differences between MtG and 40k, and I think MtG is a better business, and a better managed business. Still, their similarities are basically that they encourage their customers to keep spending money. The whole framework is "buy in, buy more". Board games basically are, "Buy in, Play, Buy Next". I think the board game strategy is a losing one, long term (just my opinion) -- because eventually people become less interested in picking up something new, and disenfranchised with or can't find play partners for the old. It also isn't possible to have a high purchase velocity with board games, because they are by nature not really collectible.
I agree, the thing is magic is priced at a level where a continual spend is possible. You can buy a cheap booster every week without breaking the bank, and have a chance to get one of the ultra-rare cards. A low chance for sure, but still a chance. I can't open a pot of khorne red paint from gw and find a stormraven inside.
Talys wrote: WMH is definitely in the buy in/buy more camp, but their escalation to date has been somewhat gentler, and the model count is lower. Make no mistake though, their business model relies on customers to upgrade their armies and buy the new, bigger stuff. From the Borka's to Mountain Kings to Collossals, there are larger and more expensive units than the original game envisioned. At some point, perhaps WMH too will decide that to make more money, they wlll decide to further escalate the units in the game (either bigger models, more models, or both).
It's still early days, but yeah i get that feeling too sometimes. The thing is, i think they're more likely to do it 'right'. I doubt that they'll start increasing model count & increasing prices & reboot the core rulebooks cyclically with random changes instead of improvement.
@Torga_DW - I still don't think it's realistic to play MtG by buying $50 of cards and a booster a week, but your point is totally valid in that it is cheaper to get into. There are plenty of very casual players with horrible decks, too. In contrast, not so much in wargaming. The chances of fluking into an ultrarare are so minute if you only occasionally buy a pack here and there that you might as well buy scratch and win lotto tickets.
Incidentally, if someone looks at a DV box and thinks the assembly and painting is a hassle, i would suggest to then that they are probably better off with another game. 40k is vastly better for the person who goes, "sweet, I get 40+ models to put together and paint? What a deal!"
I guess, I'm saying if you view 40 models as 200 hours of entertainment (painting) suddenly, $100 seems super cheap -- that's $0.50 per hour. It's all what you get out of the box right? But in the life of a successful 40k army you need so many models (usually) that if you don't enjoy the process, the"work" to put together MPP will make you hate the system.
In contrast, if you enjoy it, every purchase gives you two ways to have fun.
Every last one of those kits - all plastic, all still in production - are direct-only. That's on top of the fact that all metal and finecast are also direct-only. And that's only Fantasy, it's barely any better for 40K - ffs, the basic box of Chaos Space Marines, as well as the new plastic Raptors box and the Bikers are direct-only.
You're totally off base on this one.
Ok, fair enough. I don't play and only loosely collect Fantasy. I just can't think of any 40k models that I've ever wanted in plastic that my store didn't have or couldn't get.
I'm not really sure if being web only is a measure of whether a kit is direct only? I thought it was, but that list includes a whole pile of kits that are NOT web only.
You can actually sort by web exclusive stuff, I note that in 40k there's Kroot Carnivores, Ravager, Falcon, Hellhound, Basilisk, Deff Rolla Battlewagon. There's also a few kits that come up when you sort by web exclusive but don't have the web exclusive sticker so might be an error, they are Warbikes and Lychguard.
By the way, my store has tons of Bretonia. Perhaps it's old stock as FB doesn't sell well.
Re: Chaos -- I certain won't argue that with you, but I'm sure I've seen basic Chaos SM on the shelf.
Edit - you are definitely wrong about basic CSM. I happen to be at a MtG tournament, and the store has a new box basic CSM, ordered after boxing day.
I don't think that's a good measure, I know my local store often has direct only stuff in stock. For whatever reason they occasionally order a few direct only things to put on the shelves.
Psychopomp wrote: By the way, my local store doesn't need help selling stuff. They stock things, have a lot of stock, and people come and buy things. Partly because they have a lot to look at and choose, partly because the price is good.
By any chance you talking J and J Superstore? It's the only store I can think of where it would have millions in stock or at least 1 million. Man that is a huge gaming store that only sells stuff.
AllSeeingSkink wrote: You can actually sort by web exclusive stuff, I note that in 40k there's Kroot Carnivores, Ravager, Falcon, Hellhound, Basilisk, Deff Rolla Battlewagon. There's also a few kits that come up when you sort by web exclusive but don't have the web exclusive sticker so might be an error, they are Warbikes and Lychguard.
You're probably right, and it's just my mistake. I guess I always just thought it of such, because mostly, the direct-only pieces I want are 40k unique characters, in metal or finecast, which happen to also be (largely) web-only. I suppose all web-only is also direct-only, but some direct-only can be bought at GW stores but not local stores -- and I just haven't run into any like that.
AllSeeingSkink wrote: I don't think that's a good measure, I know my local store often has direct only stuff in stock. For whatever reason they occasionally order a few direct only things to put on the shelves.
Indeed. But this one had a sticker with list and discounted price at 17% off MSRP (the regular, walk-in discount for this store). On wierd stuff they get that's direct-only, the sticker price is the list price. Also, most of the direct only stuff (not everything, but almost everything) that I see in stores is in a plain box with no box art. It will often have a weird (cheap!), inkjet-like photocopy placeholder in the front, and it will be a plain box, with citadel logos and an address label with the SKU. Sometimes, the models that go in the larger boxes will come in a plain brown box, again, with a weird placeholder where there should be box art.
The funny thing is, the first time I saw one of these on a shelf, I thought it was a knockoff/recast
Maybe it's just because I do research for a living but I see too many giant gaping holes between equating GW's overall revenue and/or limited anecdotal data to any useful answer to the question of "how much has 40k really declined?".
I do research for a living as well. And the kind of research that I do tends to break a lot of rules, which would be concerning but for the consistency of results over 25 years of applied methodology.
You just have to appreciate the limitations of your data, which is what you are talking about. That said, what I will say in response is that hand-waiving what data you do have is just as bad as not appreciating the limitations of your data. There's always holes in the data. If there weren't, folks wouldn't get paid good money to draw meaningful interpretations from data.
For example, you don't know what percentage of GW's customers read internet forums. So dismissing data on that basis is inapposite. We do know, for example, that more than 10,000 people signed an online petition regarding GW's business practices. This was a petition primarily marketed on forums like this. You could start using that as a basis for inference, for example. You could draw on research related to the correlation between number of petition signatures and number of like-minded individuals. You could correlate that data with what data you do have regarding GW's unit sales.
I don't know what kind of research you do, but in the kind of research that I do, you have to use scattered fragments of information to work towards building a coherent picture. And context is important. For example, you mentioned that forum users are the 'enthusiast' subset of wargamers. Fine, but this would also suggest that these individuals spend far more than the average customer, meaning that the smaller sample size could have a disproportionate impact on GW's sales.
You also need to appreciate context. How many wargamers do I represent? Statistically speaking, I personally represent a heck of a lot more than one individual. How many lurkers are there for every active poster on DakkaDakka? How many individuals read the forum without ever becoming a registered user? How many individuals do my opinions impact? Am I talking to people in my local community? Am I talking to people who have never looked at an online forum?
Convention and tournament data are also, at the very least, objective data. As a researcher, how do you dismiss that without a proper context? For all you know, 80% of GW's player base in North America could attend tournaments. I just made that number up, but my point is that you can't say, "only 15% of individuals who play Warhammer 40K at least once per month attend a tournament." You can only speculate based on...supposition.
Countering inference with supposition is not terribly productive. I understand the point you were making, and that you weren't countering inference with supposition, per se. Nevertheless, I think my point is equally fair. Just because there are holes in the data doesn't mean you can't use it to make a reasonable inference. In my business, correlation is one factor that increases our confidence in results. When disparate analyses which in themselves are problematic from a research perspective produce similar results, there is something to that.
As I said, if you shook the magic 8-Ball, it would come up "Signs point to Yes" because the data are aligning in a similar direction. The 8-Ball wouldn't give you a standard deviation.
weeble1000 wrote: As a researcher, how do you dismiss that without a proper context?
I don't dismiss it, I accept that I can't draw wild conclusions which would answer a question like "how much has 40k declined?"
If you asked, "do you think 40k has declined?", the answer would be "probably, GW has declined and 40k is a large part of GW, but we lack the data to know for sure".
If you asked, "how much has 40k has declined?", the answer would be "no fething idea, it might have even grown, we simply don't know".
A petition of 10,000 people would be less than 5% of GW's customer base by my rough estimate of GW's current revenue and what I think is a reasonable guess at what your average GW customer would spend. Include people who voted multiple times, include people who aren't currently GW's customers and take in to account most people voting are the enthusiast subset instead of the mainstream consumers and I find that data to be rather meaningless in the context of answering the question that was asked.
Yes, statistically if you grab a group of gamers you consider each one to represent a lot more than 1 individual... but you also have to take in to account the context of the gamers you are sampling and how they actually fit in to the wider gaming community. Limited scope opinion polls tell you less about the overall community and more about the specific people that you asked.
The entire North American market is less than 1 third of GW's revenue. A few less people turning up to a tournament or convention in a couple of cities is not meaningful in the context of answering the question that was asked.
Wargaming ebbs and flows, it varies massively from location to location and even within locations the demographics vary wildly, that makes anecdotal evidence of extremely limited use in answering a question like to what amount (if at all) 40k has declined. GW's revenue over the last few years has been dropping but still by a % low enough to not know which product lines have gone up or down or stayed the same.
We have data, sure, we have no data that actually useful for answering that question. You have failed to convince me otherwise
weeble1000 wrote: As a researcher, how do you dismiss that without a proper context?
I don't dismiss it, I accept that I can't draw wild conclusions which would answer a question like "how much has 40k declined?"
If you asked, "do you think 40k has declined?", the answer would be "probably, GW has declined and 40k is a large part of GW, but we lack the data to know for sure".
If you asked, "how much has 40k has declined?", the answer would be "no fething idea, it might have even grown, we simply don't know".
A petition of 10,000 people would be less than 5% of GW's customer base by my rough estimate of GW's current revenue and what I think is a reasonable guess at what your average GW customer would spend. Include people who voted multiple times, include people who aren't currently GW's customers and take in to account most people voting are the enthusiast subset instead of the mainstream consumers and I find that data to be rather meaningless in the context of answering the question that was asked.
Yes, statistically if you grab a group of gamers you consider each one to represent a lot more than 1 individual... but you also have to take in to account the context of the gamers you are sampling and how they actually fit in to the wider gaming community. Limited scope opinion polls tell you less about the overall community and more about the specific people that you asked.
The entire North American market is less than 1 third of GW's revenue. A few less people turning up to a tournament or convention in a couple of cities is not meaningful in the context of answering the question that was asked.
Wargaming ebbs and flows, it varies massively from location to location and even within locations the demographics vary wildly, that makes anecdotal evidence of extremely limited use in answering a question like to what amount (if at all) 40k has declined. GW's revenue over the last few years has been dropping but still by a % low enough to not know which product lines have gone up or down or stayed the same.
We have data, sure, we have no data that actually useful for answering that question. You have failed to convince me otherwise
But you are not responding with any data more reliable than what I was talking about. Moreover you are applying a 'standard of proof' that is impossible to achieve, and using that unreasonably high standard to undermine reasonable inference.
You infer when you do not know. Entire academic disciplines are based on making reasonable inferences.
We have data that supports a reasonable inference that 40K sales are in decline, and by a not insignificant amount. For example, we know how many limited edition sets of the 6th ed rulebook were sold and how quickly those units sold. We likewise know the number of limited edition sets of the 7th ed rulebook. That data lines up with dropoffs in revenue, dropoffs in stock levels, increasing prices, decreasing event attendance, and the rise of anecdotal accounts of a declining player base in multiple regions and across the breadth of those regions.
I mean, come on, you have events from one end of North America to the other reporting remarkably consistent declines in 40K event attendance. Is there some kind of coast of coast shift away from the 40K tournament scene unrelated to customers generally buying less and playing less? That data can't be easily or even reasonably explained away by localized conditions. Did the grand pooh-bah of 40K in every major US city from New York to LA rage quit the tournament circuit to start a 40K home gaming renaissance?
All of that data points in the same direction. It is reasonable to infer that less people buying Warhammer 40K and less people playing Warhammer 40K results in declining sales of Warhammer 40K products.
To infer otherwise would be unreasonable because A) there is far less data that supports such an inference, and B) you'd have to accept a scenario that largely contradicts the extant available data. Sure, it could be that WHFB is in such extreme decline that it alone accounts for more than five years of consistently declining sales. It could be that GW is selling less paint, fewer Black Library novels, fewer Forge World products....but....
That's right, I remember now, GW appears to be selling more Black Library products, more Forge World products, and increasing licensing revenue. If Black Library is up, Forge World is up, and licensing is up, where is GW losing tens of millions of dollars of revenue other than Warhammer 40K? If we know that GW is losing a portion of valuable, repeat customers based upon objective data, where is the data that shows how GW is making up those losses?
That's how you make an inference. And if you can show me data that contradicts that inference, fine, but all you have done is demonstrate how this bit of data and that bit of data don't come packaged with a mathematical guarantee. That's quite beside the point.
You will never have the data to know "for sure," so why hold that up as a standard when it induces you to discount data that has been correlating nice and consistently for half a decade?
I would say yes, in the sense that it influences how GW will respond. If there were losses in all sections, I would imagine that could be disregarded by the higher echelons as an adverse financial environment, whereas deficits in particular area would indicate there is something 'wrong' with that recipe, and result in the kind of shake up WHFB seems to have on the cards.The speculation/rumours surrounding WHFB seemingly indicates that GW intends to alter what it sees as a losing pony, into a closer cousin of a more profitable 40k.
I have no experience in this field, so before you give what I've said any stock, take a trip to the local coastline, bottle some water, bring it home and put it in a saucepan, evaporate until dry. Apply resultant salt and fish urine residue to the part of your screen that my comment occupies. Repeat as necessary.
I guess it depends how you define large. The first half of this year was worse than the first half of last year. As for product ranges, the rumour said fantasy was selling at 8%. Going by statements from a previous annual report, lord of the rings isn't doing too well. As a guess, i'd say it would sell at or less (probably less) than fantasy. The only other product gw makes is 40k. Proportionately, i would expect 40k to have lost the most sales.
Or: People have access to a greater range of games than ever before and social media/ internet use/kickstarter has made it easier for exposure to these games to happen, coupled with many competitor companies offering free access to rules or rules included with models, that lowers the price barrier to entry and increases impulse purchase chances. Whilst Games a Workshop had made it harder to obtain their product and decreased social media and internet interaction.
Price barrier to entry is the killer as the starters only help if you want those factions.
But you are not responding with any data more reliable than what I was talking about.
I don't need to, I only need to point out that there are gaping massive holes in your data or that your data is vastly too incomplete to draw conclusions, as that was the thrust of my initial point: we can't answer the question "how much has 40k declined?"
I also note that in this exchange you have not attempted to answer that question. Just how much has 40k declined since pre-LOTR days? You can discuss the (limited) data all you want, but all you are proving is that data exists, not that it can be used to answer the question, which was my whole point.
weeble1000 wrote: You infer when you do not know. Entire academic disciplines are based on making reasonable inferences.
Key word there being reasonable. If you can find enough realistic alternate solutions other than the one being hypothesized, I'd say it's not reasonable.
Almost all your data only applies to the enthusiast subset of 40k gamers. Event attendance is down? Only enthusiast gamers go to events. Limited edition sales are down? Mostly it's enthusiast gamers buy limited editions. Tournament attendance is down? The tournament scene is TINY compared to the casual scene. There's lots of complaints on internet forums? Only enthusiast gamers even bother with internet forums. An online petition got 10k signatures? Only enthusiast gamers would have been on the forums to see it.
When all your anecdotal data only falls in to only 1 or 2 demographics and those demographics only make up a tiny proportion of overall gamers any conclusions you draw cannot be considered reliable when considering overall and global trends
You will never have the data to know "for sure," so why hold that up as a standard when it induces you to discount data that has been correlating nice and consistently for half a decade?
Because you not only don't have enough data "to be sure" you don't have enough data to make any reasonable guess that would answer the question "how much has 40k declined". Even if you want to say "well it's probably declined" that still doesn't answer the question that was asked.
I can come up with plenty of possibilities as to why any of your data is too spurious to make any reasonable assumption. Revenue is down? Well we also have reason to believe WHFB is down, if WHFB was 25% of the revenue of 40k around 2007 and 40k is around half of total revenue. If WHFB has halved (or significantly reduced) in popularity in that time, that's enough to account for the less than 2% decline in revenue since 2009. Tournament and event attendance for 40k is down? So what? That could as equally mean a shift in demographics as much as it could mean a decline, it's a long jump between tournament and event attendance and making any assumptions about what the average gamer spends on 40k and how many gamers there still are out there.
It is totally reasonable to think the data we have cannot answer the question "how much has 40k declined since pre LOTR days?".
If you feel otherwise then I think we'll just have to call it a day and agree to disagree because I feel perfectly justified in saying the very limited evidence I've read and that you've presented is insufficient to answer the burning question of quantitatively evaluating 40k's performance over the past 15 years.
Every last one of those kits - all plastic, all still in production - are direct-only. That's on top of the fact that all metal and finecast are also direct-only. And that's only Fantasy, it's barely any better for 40K - ffs, the basic box of Chaos Space Marines, as well as the new plastic Raptors box and the Bikers are direct-only.
You're totally off base on this one.
Ok, fair enough. I don't play and only loosely collect Fantasy. I just can't think of any 40k models that I've ever wanted in plastic that my store didn't have or couldn't get.
I'm not really sure if being web only is a measure of whether a kit is direct only? I thought it was, but that list includes a whole pile of kits that are NOT web only.
You can actually sort by web exclusive stuff, I note that in 40k there's Kroot Carnivores, Ravager, Falcon, Hellhound, Basilisk, Deff Rolla Battlewagon. There's also a few kits that come up when you sort by web exclusive but don't have the web exclusive sticker so might be an error, they are Warbikes and Lychguard.
By the way, my store has tons of Bretonia. Perhaps it's old stock as FB doesn't sell well.
Re: Chaos -- I certain won't argue that with you, but I'm sure I've seen basic Chaos SM on the shelf.
Edit - you are definitely wrong about basic CSM. I happen to be at a MtG tournament, and the store has a new box basic CSM, ordered after boxing day.
I don't think that's a good measure, I know my local store often has direct only stuff in stock. For whatever reason they occasionally order a few direct only things to put on the shelves.
I got that list by going to Element Games, going through each individual army, and noting down all the entries which had "this product is no longer being distributed by Games Workshop" as the reason why it was unavailable. I was mistaken about the CSM though, my fault, I didn't notice the range had been reboxed since the release of the Raptors, and the new boxes are available.
Almost all your data only applies to the enthusiast subset of 40k gamers. Event attendance is down? Only enthusiast gamers go to events. Limited edition sales are down? Mostly it's enthusiast gamers buy limited editions. Tournament attendance is down? The tournament scene is TINY compared to the casual scene. There's lots of complaints on internet forums? Only enthusiast gamers even bother with internet forums. An online petition got 10k signatures? Only enthusiast gamers would have been on the forums to see it.
First, you don't actually know that. So if we are poking holes in inferences, all of these are inferences with massive holes in them. Second, you can absolutely draw reasonable inferences from small, statistically insignificant sample sizes, even though it contradicts a lot of rules regarding statistical analysis.
I regularly conduct research with groups of 20-40 participants and generalize out to populations of entire federal judicial districts with millions of registered jurors. I just ran a research project with less than 20 participants for a case in the Southern District of New York which has over five million residents. I ran a swath of statistical analyses on the resulting data that would have been largely meaningless without intensive qualitative analysis.
In short, listening to what people say is very useful. Did the three Black/African American participants in my research project reliably represent the million+ Black/African Americans residents of the district? From a statistical standpoint, no. Could there have been a slew of different factors that account for their responses from recruitment methodology to the way I greeted the participants? Absolutely.
Does that mean I ignore what those three people have to say? Hell no. Does that mean I don't draw the type of inferences from these data that I use to advise clients in billion dollar litigation? Absolutely not.
Do I think the type of wargamer that posts on internet forums is significantly different from the wargamer that does not? No. Are there differences, sure. Are there meaningful differences, sure. Are there such fundamental differences as to completely disassociate one from the other? I don't think that is reasonable. Most people aren't terribly different, and wargaming is a very small hobby in the grand scheme of things.
On a personal note, I have almost 2,000 posts on DakkaDakka and probably less than 100 posts on non-wargaming forums on the entirety of the internet. I spend an average of 30 minute per day on my mobile device, which is two hours less than the average American. People fit much better when you put them into larger buckets.
I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.
Was my point earlier. The whole, "We're super-exclusive" attitude that GW's developed while actually just failing to properly manage their inventories has resulted in a great deal of lost revenue.
Funny, because when the Wood Elves released my local GW had the same issue of being understocked.
They got allocated four boxes of Wildwood Rangers/Eternal Guard, no Araloths, two Treeman boxes, and three boxes of Sisters of the Thorn/Wild Riders.
Fantasy stuff tends to get understocked, period, here in the US. It's not exclusive to independents.
No offence intended but you still haven't even attempted to answer the question, how much has 40k declined since pre LOTR days? You can talk about how data is useful yet you haven't actually attempted to use it to answer the question.
I won't deny that limited data can be useful. I won't deny that you can draw some educated guesses from limited data. I do it all the time when clients ask me questions I RARELY have all the data necessary to give them a full answer, my answer is usually "well the data looks like this, unfortunately we don't know what's going on fully because of these factors, but based on my experience I think this region here is where you want to try and work in order to improve things". People don't pay me to BS them, giving them definite answers to questions I don't have the data to support in a meaningful way.
You said it yourself:
Did the three Black/African American participants in my research project reliably represent the million+ Black/African Americans residents of the district? From a statistical standpoint, no.
I never said you should ignore what people are saying on forums, I never said you shouldn't take in to account petitions, I never said tournament/event attendance is not significant, I never even said that it's not worth paying attention to enthusiasts...
...what I said... all I said... we can't answer the question "How much has 40k declined since X period in time?" and all those things you suggested are a far cry from answering that question.
Of course all those other things are worth looking at and discussing in their own right (well duh) they simply are too insufficient to answer the burning question of quantitatively evaluating 40k's performance over the past 15 years.
Not sure if it will influence the discussion - but based off the data leaked in the CHS case...
Total sales of the items listed increased (in dollars) 28% from 2004 to 2011. Total average cost for the items which were leaked increased 46% during the same time period.
While many might argue that that doesn't mean anything at all - it is a pretty straight line to draw that if you increase the cost of a product by X and the sales don't also increase by X - then it is highly likely that you are selling fewer of them.
Considering the general split of how GW sells things (online, GW stores, independents) has remained fairly steady, you could even infer the actual units sold...or at least the rate change of units sold per item listed.
It didn't cover everything - but it was a rather large sampling of the 40K catalog. For the things which were covered, it had the important things - to include things like the Codices (a big indicator) and troops choices (another big indicator) and many vehicles (somewhat less of a big indicator...especially since I think there might have been a bit of the Edition rules Tomfoolery going on with them...and they still dropped...).
Granted, the question at hand (pre-LotR to present) isn't quite covered by the data set. It catches the tail end of things there, and doesn't quite come all the way to here. We do know that things really haven't been looking too much better for GW since 2011 (considering 3 consecutive reports of dropping profits...). Also don't have the data before...though, everything else was more or less headed up at the time.
It isn't quite enough to say on its own that 40K has dropped 25-30% in terms of units sold in the last 15 years, not definitively at least. However, it does make the odds of that statement being true better than the odds of that statement being false.
____________________________________
Actually - I should scratch that...or at least amend it. They may not have dropped at all from 2000. They might be dead flat back to the same levels they were at around that time period. Though, if things were going up...and now they are not...that would generally be the point of the discussion as opposed to a specific point to point comparison.
It is interesting to look at however it's hard to say much from it because you have to go through each book and see when it was released. I think it's talking about financial years rather than calendar years. The Imperial Guard codex was new in 2004 FY, As far as I can see (I might have missed it) there are no publications on that list that were actually released in 2011FY. There's also a lot of products that aren't on the list that might skew results if you tried to add them up, but if you look at individual products you have to take in to account varying popularity of armies.
Probably more useful to get out of that data is that 4th ed sold $138k in the first 3 years, 5th sold $148k.
I'm not sure if those numbers are US only or global, but if you divide them by the relative prices of the rulebooks that might give some indication of the drop from 4th to 5th, but that's only a 4 year window from 2005 to 2009 and again it's only looking at the rulebook so you have to ask yourself if rulebook sales alone (and possibly US only?) is an indicator of global trends of 40k as a whole. You'd also need to know whether it's USA or global before you do any normalising and if it's US only you have to remember the US is less than a third of overall revenue.
I asked the staff and they were only allocated a few boxes. Did I run off to the nearest GW store or GW's webstore? Nah, I just bought some more Infinity because it was right there in front of me.
Was my point earlier. The whole, "We're super-exclusive" attitude that GW's developed while actually just failing to properly manage their inventories has resulted in a great deal of lost revenue.
Funny, because when the Wood Elves released my local GW had the same issue of being understocked.
They got allocated four boxes of Wildwood Rangers/Eternal Guard, no Araloths, two Treeman boxes, and three boxes of Sisters of the Thorn/Wild Riders.
Fantasy stuff tends to get understocked, period, here in the US. It's not exclusive to independents.
I think perhaps you thought my point was that independent stockists received less product than GW's own stores which isn't the case. I was inferring that the company is striving to cut costs by managing the amount of unsold inventory in warehouses etc but all they effectively did was ensure that customers who want to buy their product are unable to. Product unavailable = lower sales volume = lower earnings.
Interestingly, to me anyway, my wife works in the international logistics department for a fair!y large international supplier of cell phone parts for about 12 years. I talked to her about the inventory side of things, since that is where her experience is, and she laughed and said it sounds like very poor planning and management of raw and finished goods. It can be a bit of a dance but if you have an idea of who your customers are and what they want, you can manage levels quite well. If you're missing data, you build large cushions in the amount of raw and finished product that you order and prepare for distribution.
My thought/fear is that the folks running GW are too concerned with cutting costs and the result is that they are losing sales volume due to being unable to meet demand. Demand appears to be higher than GW corporate thinks it is and they seem to be misgauging it repeatedly. The primary culprit is their lack of market research and apparent inability to adjust orders for finished product from their manufacturing division to accommodate. Proudly not performing the most rudimentary of market research is a concern here because if you know what your customers want, you're not surprised by demand levels....
I think the problem with the orders is that the boxes are made overseas with quite a long lead time, so even though they have in house plastic production, they can't actually ramp up to meet demand. That coupled with no research presumably leads them to being pessimistic when ordering things.
Yes, but mostly no (BTW - I was the one who actually compiled that chart out of the data - compiled quickly before the list was redacted for those who missed it). That is the rulebook portion of the list. The full list is several pages long (for the GW40K data). All told, there were around 100-150 different 40K items listed in addition to several dozen pages of other sales data. I would need to dig back through to find the original document (hundreds of files with thousands of pages and unfortunately, it doesn't interest me quite enough to do that right now).
And yes, I have already collated the list by release month and prices, fiscal year, price increase dates. It tends to show trends throughout (including the core rules sales that you have noted) where the change in sales do not follow the change in pricing (as I mentioned above...). When you normalize the pricing and compare it that way - the newer releases also drop off faster than the old (indicating that following the release spike, fewer copies are sold in subsequent years).
In terms of the other questions...it is US only. I would say that yes, rulebook sales are a good indicator of popularity. Based off from other information available, I would say that US trends can be extended globally (for 40K...). You also have to remember that the US accounts for about 1/3 of overall revenue but almost 1/2 of 40K revenue (due to WFB and LotR being much less popular in the US than 40K...would need to double check, but IIRC the last time I had calculated it it was around 40-50% of global 40K sales...).
That would be more useful data to have than anything else I've seen, though I imagine it would still be easily skewed by the creeping release cycle.
I would think rulebook sales are a reasonably good indicator as well, I bring it up as a point though because they've always been quite easy to pirate (you can get recasts and whatnot as well, but the rulebook is exceptionally easy to pirate even before the digital editions) and often people keep playing older editions. I don't necessarily think the performance of the 7th ed rulebook would be a good indicator of 40k's overall strength because I imagine a lot of 40k players would not buy it, but 4th to 5th I'd think it's a better measure. But even going back to 2nd edition, I played a lot of 2nd edition but never owned a rulebook, a couple of people in my gaming group owned copies and we just shared.
I wasn't aware the USA was a larger slice of the 40k market, where did you obtain that data? Though it does seem odd to me, if 40k in total is 50% of revenue and the USA is half of the global 40k market then 25% of total revenue would be from 40k in the USA alone, but the USA in total is only about 30%. It would also imply that the lack of popularity of WHFB and LOTR is not a global phenomenon at all and they would have to really rival 40k in a lot of locations... I find it odd then that GW would be so eager to snub WHFB and LOTR when they would have data showing entire regions where it is very popular.
In 2011, 40k was roughly 50% of US sales. The last numbers I have were more recent than that, and put it around 70%. Globally at the time of those numbers, 40k accounted for roughly 50% of total sales. US about 33% of total sales...
So, 70% of 33% is 25% (very roughly...). 25% of the whole, 50% of the 40k slice (at airport right now...so pulling up the exact figures is more difficult).
In terms of WFB and LOTR...they are down around 35% combined globally. LOTR carries royalties. They have been scrambling to figure out how to save WFB. Won't work here, wrong aesthetic. In much of Europe though, WFB is closer to 40k in terms of sales.
And there's an interesting question as to whether and to what degree the robust competitive 40K scene in the US contributed to the relative popularity of 40K in the North American market.
AllSeeingSkink wrote: That would be more useful data to have than anything else I've seen, though I imagine it would still be easily skewed by the creeping release cycle.
I would think rulebook sales are a reasonably good indicator as well, I bring it up as a point though because they've always been quite easy to pirate (you can get recasts and whatnot as well, but the rulebook is exceptionally easy to pirate even before the digital editions) and often people keep playing older editions. I don't necessarily think the performance of the 7th ed rulebook would be a good indicator of 40k's overall strength because I imagine a lot of 40k players would not buy it, but 4th to 5th I'd think it's a better measure. But even going back to 2nd edition, I played a lot of 2nd edition but never owned a rulebook, a couple of people in my gaming group owned copies and we just shared.
I wasn't aware the USA was a larger slice of the 40k market, where did you obtain that data? Though it does seem odd to me, if 40k in total is 50% of revenue and the USA is half of the global 40k market then 25% of total revenue would be from 40k in the USA alone, but the USA in total is only about 30%. It would also imply that the lack of popularity of WHFB and LOTR is not a global phenomenon at all and they would have to really rival 40k in a lot of locations... I find it odd then that GW would be so eager to snub WHFB and LOTR when they would have data showing entire regions where it is very popular.
In addition to the above...
Easy to pirate now, largely equals easy to pirate then. If we were comparing numbers from say...1996 to 2006 - then the difference in rates of pirating would be more significant, however things like torrents have been fairly mature for the duration of the data set. Same applies for the number of people who don't own a book. Granted, the higher price point of the items may have a greater impact on the final decision to borrow a book from friends/family versus purchasing your own copy, but since other data is in the same direction - I am inclined to believe the general percentage of players who buy versus borrow is about the same over time. You would likely see a greater impact on optional rulebook sales though. In the past (4th and earlier) it was quite common for people to own every Codex released - even if they didn't play the army. Opposition research or whatever. As Codex costs increased though, it is likely that fewer people are still doing that - and subsequently reducing the overall sales on those items.
The UK is really the stronghold of WFB players. There it is pretty close to even footing with 40K. Mainland Europe (apparently Germany in particular) is also pretty close. Based on the information I have been able to obtain, Australia and Canada are much closer to the US in terms of WFB versus 40K.
Mainland Europe (apparently Germany in particular) is also pretty close. Based on the information I have been able to obtain, Australia and Canada are much closer to the US in terms of WFB versus 40K.
Prior to 8th edition, yes, you would be right, WHFB had a massive following.
Post 8th edition? Nope. WHFB practically disappeared from the face of the earth.
Talys wrote: My store has told me, anything that isn't web-only exclusive they can order in. I don't know if it's regionally different.
Independents can order the "direct only" items, but don't get full trade discount. I don't recall what they do get, but its significantly worse.
I think I was told a year or so ago that it was somewhere in the 10-20% range (possibly closer to 10%), which means the retailer pretty much can't discount the item if they want to make a profit.
Mainland Europe (apparently Germany in particular) is also pretty close. Based on the information I have been able to obtain, Australia and Canada are much closer to the US in terms of WFB versus 40K.
Prior to 8th edition, yes, you would be right, WHFB had a massive following.
Post 8th edition? Nope. WHFB practically disappeared from the face of the earth.
It said Mainland Europe, not the bottom left corner!
Mainland Europe (apparently Germany in particular) is also pretty close. Based on the information I have been able to obtain, Australia and Canada are much closer to the US in terms of WFB versus 40K.
Prior to 8th edition, yes, you would be right, WHFB had a massive following.
Post 8th edition? Nope. WHFB practically disappeared from the face of the earth.
It said Mainland Europe, not the bottom left corner!
Well, bottom left corner plus my contacts in Belgium, Germany and France all say the same thing as well.
I can't say anything about the rest of the continent, of course.
Interesting that the tenor of the these discussions has gone from a large rush of fingers-in-ears "La-La-La"ing along with "But it's still a profit!" to rather matter of fact on the issue.
Read from pg21 on up, nothing terribly exciting except some folks missing the point of PP games... it's a game first, HHHobby second versus whatever GW is trying to bilk people for. Most PP players don't collect factions, they make two list tournament pairs and only purchase different stuff to either play a new faction or adapt to a meta. Unless they're crazy like me and plan out 8 lists...
And I'm watching the new Fantasy debacle to see if that turns into a real game or just completely annihilates any fanbase. Glad I sold my Bretonnia last year, though.
At the same time, it is still a profit. In fact, impressively, GW made more profit -- £16.3M -- in 2013 on a turnover of £134.6M than they did in 2003 -- £14.5 -- on a turnover of £167.5M (figures adjusted for inflation).
GW's problem is that sales have been broadly static between 2006 and 2013 despite constant rapid price increases and in the past 18 months sales have been declining.
Sales have declined before and perhaps they will recover.
At the same time, it is still a profit. In fact, impressively, GW made more profit -- £16.3M -- in 2013 on a turnover of £134.6M than they did in 2003 -- £14.5 -- on a turnover of £167.5M (figures adjusted for inflation).
GW's problem is that sales have been broadly static between 2006 and 2013 despite constant rapid price increases and in the past 18 months sales have been declining.
Sales have declined before and perhaps they will recover.
Thats the problem with not understanding their customer base. Something (unknowable) happened and sales went up, then something (unknowable) happened and now sales are going down. It's all completely outside their control because they don't know what causes these things in the first place. All they know is that some people are OCD and will buy from them no matter what.
At the same time, it is still a profit. In fact, impressively, GW made more profit -- £16.3M -- in 2013 on a turnover of £134.6M than they did in 2003 -- £14.5 -- on a turnover of £167.5M (figures adjusted for inflation).
GW's problem is that sales have been broadly static between 2006 and 2013 despite constant rapid price increases and in the past 18 months sales have been declining.
Sales have declined before and perhaps they will recover.
But what about the unemployed Cypriot youths?
And minimum wage?!
Sorry... but it looks more like the folks that were really good at denying evidence just aren't posting much, anymore.
I do not think that it is because of the difficulty of denial - it is just that they are starting to realize that when they are wrong they will be mocked for it.
Not sure how, or even if, GW can pull out of their current decline, at least without admitting that their entire sales model is rubbish.
Considering the rumored update to Fantasy and the net loss of brick and mortar stores it looks like GW knows what's wrong and they're trying to fix it.
Assuming the rumors to be true (and they are looking pretty true so far) for WFB I imagine that there will be some vets who will leave (because it's change and anytime change happens you lose customers), and it'll be a little rocky before they start to see new players finally coming in again. That or it'll finally kill that game and they'll double down on 40k freeing themselves of a money sink that is a failing game system.
I think the next financial report, and the coming months, may prove to be interesting with a new CEO in the big chair. I know people want to accuse him of just being Kirby's sock puppet, but I want to see what actually happens with him in charge before I pass any judgement on him. I'm cautiously optimistic that having someone who isn't Kirby in charge may finally help things (since the board is elected by the Shareholders and not Kirby it means that there is a chance that he and Kirby don't march in step about everything) towards a company that is managed in a way that generally makes it look less like it's trying to intentionally burn all it's bridges with the customer base.
At the same time, it is still a profit. In fact, impressively, GW made more profit -- £16.3M -- in 2013 on a turnover of £134.6M than they did in 2003 -- £14.5 -- on a turnover of £167.5M (figures adjusted for inflation).
GW's problem is that sales have been broadly static between 2006 and 2013 despite constant rapid price increases and in the past 18 months sales have been declining.
Sales have declined before and perhaps they will recover.
Don't think I had dropped this chart here (pardon, I haven't up dated it in a couple reports)...
Automatically Appended Next Post: Design costs have been largely flat.
Administrative costs have climbed significantly (and since come down a little...).
COGS largely follow units sold.
Selling and distribution (retail stores, warehousing, shipping and managing independent accounts...) need to be brought under control.
Automatically Appended Next Post: One other tidbit which I had gotten this past year...
Their licensing department now costs them more than it makes...by almost double. Apparently that was a big factor in the rather large glut of "official" games which had been issued in the last couple years. THQ's melt down is actually causing them to have to work, but they don't know how to do their job (previously, the existing license had just been handed down - year after year for nearly a decade).
ClockworkZion wrote: Considering the rumored update to Fantasy and the net loss of brick and mortar stores it looks like GW knows what's wrong and they're trying to fix it.
Looking at the 40k releases of recent, I say they're not trying to fix it. It continues to be a terrible game of either trying to make units better with "the randemz", deleting what doesn't fit, and making everything so boring and vanilla that is can't help to inspire anyone.
ClockworkZion wrote: Considering the rumored update to Fantasy and the net loss of brick and mortar stores it looks like GW knows what's wrong and they're trying to fix it.
Looking at the 40k releases of recent, I say they're not trying to fix it. It continues to be a terrible game of either trying to make units better with "the randemz", deleting what doesn't fit, and making everything so boring and vanilla that is can't help to inspire anyone.
I disagree. I think they're trying to even the playing field out so the game is more fun for everyone involved to play and there are less "you need X to win" units in the new books while closing any holes in their product lines that 3rd party companies can exploit with models designed to fill those holes (the CHS Tervigon for instance).
Yes, it's a kick in the shins for anyone whose codex is getting knocked down a peg, but from what I've been seeing it really feels like the 7th ed codexes have better internal balance and are more balanced with each other than before. Once they're updated I'd be surprised if we didn't eventually see releases like the Tyranids got where the rules and models get stand alone releases that helps update the army without needing a new book (you know, kind of like how the rumors for 7th said would eventually happen and we've seen with the Nids already) every single time and eventually just get added to the next book (along with any updates that need to occur, kind of how the IA books work).
Sorry... but it looks more like the folks that were really good at denying evidence just aren't posting much, anymore.
I do not think that it is because of the difficulty of denial - it is just that they are starting to realize that when they are wrong they will be mocked for it.
Not sure how, or even if, GW can pull out of their current decline, at least without admitting that their entire sales model is rubbish.
Right now their crops have begun to whither.
The Auld Grump
I miss Derek's comments, they were, uhm interesting.
But how long can GW continue on this road, the price increases must hit a wall sometime.
Well the decline in sales show that only the most die-hard fans are still willing to pay those prices.
Or as a certain person said "if you cannot afford it don't play (you peasant!)"
At the same time, it is still a profit. In fact, impressively, GW made more profit -- £16.3M -- in 2013 on a turnover of £134.6M than they did in 2003 -- £14.5 -- on a turnover of £167.5M (figures adjusted for inflation).
GW's problem is that sales have been broadly static between 2006 and 2013 despite constant rapid price increases and in the past 18 months sales have been declining.
Sales have declined before and perhaps they will recover.
Don't think I had dropped this chart here (pardon, I haven't up dated it in a couple reports)...
Automatically Appended Next Post: Design costs have been largely flat.
Administrative costs have climbed significantly (and since come down a little...).
COGS largely follow units sold.
Selling and distribution (retail stores, warehousing, shipping and managing independent accounts...) need to be brought under control.
Automatically Appended Next Post: One other tidbit which I had gotten this past year...
Their licensing department now costs them more than it makes...by almost double. Apparently that was a big factor in the rather large glut of "official" games which had been issued in the last couple years. THQ's melt down is actually causing them to have to work, but they don't know how to do their job (previously, the existing license had just been handed down - year after year for nearly a decade).
LOL, tough cookies Mr. Jones. I'm not surprised though, Andy Jones has his head incredibly far up his .
weeble1000 wrote: LOL, tough cookies Mr. Jones. I'm not surprised though, Andy Jones has his head incredibly far up his .
If it makes you feel any better, apparently he was persona non grata for several months (may still be) in the halls of the Ivory Tower. Apparently Kirby was not at all pleased. Merret was quick to throw them under the bus on it all (as any good lackey is prone to do...). Unfortunately, my primary source for information from that side of their business found a different job...so I have been seeking a new mole.
Back towards the topic. The chart I posted above does a good bit to demonstrate the folly of the GW retail model. Because of their retail chain, the idea of selling fewer items at a higher cost works with some merchandise...in particular, if someone else is doing the selling. Because of the weight of the retail chain though - GW is selling less, but they still have to pay leases, utilities and payroll on that side of the business. Switching to one man shops helps a bit - but not nearly enough.
ClockworkZion wrote: Considering the rumored update to Fantasy and the net loss of brick and mortar stores it looks like GW knows what's wrong and they're trying to fix it.
They certainly have the potential to turn it round with the WHF reboot, but with everything else they've done in the last few years they've ruined it all in the execution (updated 7th Ed, Rules only books, Space Hulk, Dreadfleet, Finecast, White Dwarf).
I'm sure they have some suspicion of what's going wrong but I'm not confident they actually have the expertise to fix it now. Hopefully WHF will be great and I can get on board with it, but I'm sure it'll still have all the same problems as the old one (clunky rules, poor balance, lots of expensive minis, randomness coming out of their eyeballs).
There's a very, very interesting 21-min-ish documentary about LEGO on Netflix or Amazon Video, forget which.
It tells of how LEGO nearly died in the 80s/90s, and how they reversed fortunes by massively reducing the product range, focussing back in on what their core customers really wanted, and returning to growth from that reduced base, all under the tutelage of a new CEO who came in from outside the family that had run the company (and run it into the ground) since its inception.
ClockworkZion wrote: Considering the rumored update to Fantasy and the net loss of brick and mortar stores it looks like GW knows what's wrong and they're trying to fix it.
Assuming the rumors to be true (and they are looking pretty true so far) for WFB I imagine that there will be some vets who will leave (because it's change and anytime change happens you lose customers), and it'll be a little rocky before they start to see new players finally coming in again. That or it'll finally kill that game and they'll double down on 40k freeing themselves of a money sink that is a failing game system.
I think the next financial report, and the coming months, may prove to be interesting with a new CEO in the big chair. I know people want to accuse him of just being Kirby's sock puppet, but I want to see what actually happens with him in charge before I pass any judgement on him. I'm cautiously optimistic that having someone who isn't Kirby in charge may finally help things (since the board is elected by the Shareholders and not Kirby it means that there is a chance that he and Kirby don't march in step about everything) towards a company that is managed in a way that generally makes it look less like it's trying to intentionally burn all it's bridges with the customer base.
I disagree.
The reason why GW is focusing on revamping Fantasy isn't because they've identified it as the source of their economic woes, its because they launched a new edition of 40k just last year and even GW isn't dumb enough to try and launch a new edition of 40k each year to try and generate revenue.
WHFB 8th edition has failed and caused allot of players to jump ship, but so did 40K 6th edition and there is no evidence whatsoever that 7th edition did anything to reverse the flow of players dropping the system, if anything the "anything goes" and nickel and dime DLC mentality of 7th caused even more players to leave.
9th edition has the potential to kickstart that part of the IP back, but for it to do that the game would need not only some pretty amazing rules but GW would need to start communicating with its customers to try and win back some of the good will that they've lost in the past years. Since 9th edition rumours, be they true or false, aren't being explained nor commented on in any capacity by GW, it is pretty safe to say that they still haven't gotten their head around the "talk to your player base" concept.
Add this to the extreme incompetence shown by GW when it comes to developing any new rules for any of their products and the odds that 9th edition will do anything other than completely bury Fantasy once and for all are pretty slim.
Even with a new version of Fantasy, I think GW is sunk. The gaming world is changing quickly and many of the changes fly in the face o what GW wants to do.
The most recent release of D&D 5th is a good example. WotC published a starter box with a small campaign for $15, most of the same rules could be found online for free as well should you choose to look. I have enough information to play a game for and see how I liked the system before setting foot in a store or spending one dime. I also know what the upcoming releases are for the next several months without having to read an unofficial forum somewhere.
GW is probably, thought to be, might be releasing a new version of Fantasy sometime in the next few months, 2nd quarter, sometime soon? The game may change the rules dramatically, but maybe not, might still support current style armies? The only sure way to find out is to read an unofficial forum somewhere or shell out $100 to find out if the game is any good when/if it is finally released.
No thanks, I'll take my money and buy a booster box of MTG or the D&D Adventure's Handbook in March.
In order for GW to correct the problem, they'd have to know what the problem is. I don't think they have a fundamental understanding of what's actually going on with the market and their business. They see sales decline in fantasy, so they think "well, we better do something big!" They didn't realize that it was their own rules and massive buy-in cost that did fantasy in. It's like a doctor prescribing a chemotherapy for a broken leg.
I generally agree that the one critical piece GW generally lacks versus the larger miniatures market is an easy and obvious way to get from 0 to full army.
'Every other game system' you can start with a very small number of models, play a game (granted at varying levels of balance/quality), buy some more models and play a slightly bigger game, etc.
None of the other growing companies have a game structure of both $500+ buy-in to play a standard format and no building blocks to get there.
If GW suits were gamers, they'd probably know this. Which, I guess, is the actual problem.
The reason why GW is focusing on revamping Fantasy isn't because they've identified it as the source of their economic woes, its because they launched a new edition of 40k just last year and even GW isn't dumb enough to try and launch a new edition of 40k each year to try and generate revenue.
I have to disagree with that notion because anyone in the company who can see the budget sheets in the company can see how much is being poured into every release for development and then how little the return is. This isn't rocket surgery.
I think they've known the game is on a downward spiral for some time. I mean 8th dropped July 2010. That's 5 years to watch things get progressively worse a this point and I believe it's been enough to make them rethink how they're approaching the game.
PhantomViper wrote: WHFB 8th edition has failed and caused allot of players to jump ship, but so did 40K 6th edition and there is no evidence whatsoever that 7th edition did anything to reverse the flow of players dropping the system, if anything the "anything goes" and nickel and dime DLC mentality of 7th caused even more players to leave.
People like to say that there are still large hordes of people leaving these days, but frankly I think most of the people who were leaving (and didn't get replaced by new players like what regularly happens in games) were when 6th dropped and the big tournament play largely went away. The only people truly being nickled and dimed are the ones who insist on collecting everything GW ever makes. Everyone else isn't constantly dumping money into the hobby beyond the same occasional updates they were doing before. And the "DLC updates" are 100% optional. They aren't required to play, and only add a different way to play an army if it's something you're interested in playing.
PhantomViper wrote: 9th edition has the potential to kickstart that part of the IP back, but for it to do that the game would need not only some pretty amazing rules but GW would need to start communicating with its customers to try and win back some of the good will that they've lost in the past years. Since 9th edition rumours, be they true or false, aren't being explained nor commented on in any capacity by GW, it is pretty safe to say that they still haven't gotten their head around the "talk to your player base" concept.
The problem isn't the people writing the rules on that end, but the higher ups who seem to think that customers shouldn't be talked to. Maybe having a new CEO will help, I don't know. I want to give the new guy time to see if he's just a Kirby clone or if he has new ideas that may actually change things.
And I agree, it could do a lot to help the game, especially if GW stops pretending we shouldn't be talked to, but at the same time I don't expect GW to even look at saying anything until closer to release of whatever it is. I mean we're roughly 6+ months out last I head and it's possible that if they're going to make something to address us with it won't be for a while.
PhantomViper wrote: Add this to the extreme incompetence shown by GW when it comes to developing any new rules for any of their products and the odds that 9th edition will do anything other than completely bury Fantasy once and for all are pretty slim.
I'm going to agree to disagree on how bad the rules are since I feel the 7th Edition codexes in 40k have finally started to show real internal and external balance and are leading towards a game that is a lot more fair to play than before. And I'm withholding judgement on 9th until I see it because if Pancake edition taught me anything is that rumors don't always pan out like we think.
I have to disagree with that notion because anyone in the company who can see the budget sheets in the company can see how much is being poured into every release for development and then how little the return is. This isn't rocket surgery.
I think they've known the game is on a downward spiral for some time. I mean 8th dropped July 2010. That's 5 years to watch things get progressively worse a this point and I believe it's been enough to make them rethink how they're approaching the game.
Do you have any actual proof of that? Because their latest financial report directly contradicts what you are saying by placing the blame of their falling sales on their store managers, besides, they have literally watched LoTR loose them money for how many years now? And what did they do about that? You are giving GW WAY too much credit. The new edition is simply another attempt to cash in on the edition release cycle AND if the 9th edition rumours regarding "limited edition mania now with even more MtG" are true, its going to bomb spectacularly because they are trying to adopt the limited availability of CCGs into miniature games, just like they did with DLC!
People like to say that there are still large hordes of people leaving these days, but frankly I think most of the people who were leaving (and didn't get replaced by new players like what regularly happens in games) were when 6th dropped and the big tournament play largely went away. The only people truly being nickled and dimed are the ones who insist on collecting everything GW ever makes. Everyone else isn't constantly dumping money into the hobby beyond the same occasional updates they were doing before. And the "DLC updates" are 100% optional. They aren't required to play, and only add a different way to play an army if it's something you're interested in playing.
I said that 6th edition caused a large number of players to leave the game and 7th edition not only didn't bring them back, but judging by the still falling sales numbers, people are still leaving the game, or simply not buying anything, which pretty much amounts to the same thing where GW is concerned.
And the DLC updates are only optional if you wan't to play with a reduced version of your former codex, since the majority of them are comprised of options that used to be on the codex but aren't anymore. So please cut that "it is optional" line, because everyone knows that its a lie in the majority of the cases.
I'm going to agree to disagree on how bad the rules are since I feel the 7th Edition codexes in 40k have finally started to show real internal and external balance and are leading towards a game that is a lot more fair to play than before. And I'm withholding judgement on 9th until I see it because if Pancake edition taught me anything is that rumors don't always pan out like we think.
Disagree all you wan't, but since the company keeps loosing customers it seems like you are in the minority.
The reason why GW is focusing on revamping Fantasy isn't because they've identified it as the source of their economic woes, its because they launched a new edition of 40k just last year and even GW isn't dumb enough to try and launch a new edition of 40k each year to try and generate revenue.
I have to disagree with that notion because anyone in the company who can see the budget sheets in the company can see how much is being poured into every release for development and then how little the return is. This isn't rocket surgery.
None of which tells them why it's failing, which was PhantomViper's point.
I have to disagree with that notion because anyone in the company who can see the budget sheets in the company can see how much is being poured into every release for development and then how little the return is. This isn't rocket surgery.
I think they've known the game is on a downward spiral for some time. I mean 8th dropped July 2010. That's 5 years to watch things get progressively worse a this point and I believe it's been enough to make them rethink how they're approaching the game.
Do you have any actual proof of that? Because their latest financial report directly contradicts what you are saying by placing the blame of their falling sales on their store managers, besides, they have literally watched LoTR loose them money for how many years now? And what did they do about that? You are giving GW WAY too much credit. The new edition is simply another attempt to cash in on the edition release cycle AND if the 9th edition rumours regarding "limited edition mania now with even more MtG" are true, its going to bomb spectacularly because they are trying to adopt the limited availability of CCGs into miniature games, just like they did with DLC!
You do know they're locked into a deal with LotR right? It's not the same thing as fantasy. Plus they can't just run off and remake LotR into something else if they feel it's not working as is anymore.
And personally I think you're putting too much malice into their actions.
People like to say that there are still large hordes of people leaving these days, but frankly I think most of the people who were leaving (and didn't get replaced by new players like what regularly happens in games) were when 6th dropped and the big tournament play largely went away. The only people truly being nickled and dimed are the ones who insist on collecting everything GW ever makes. Everyone else isn't constantly dumping money into the hobby beyond the same occasional updates they were doing before. And the "DLC updates" are 100% optional. They aren't required to play, and only add a different way to play an army if it's something you're interested in playing.
I said that 6th edition caused a large number of players to leave the game and 7th edition not only didn't bring them back, but judging by the still falling sales numbers, people are still leaving the game, or simply not buying anything, which pretty much amounts to the same thing where GW is concerned.
And the DLC updates are only optional if you wan't to play with a reduced version of your former codex, since the majority of them are comprised of options that used to be on the codex but aren't anymore. So please cut that "it is optional" line, because everyone knows that its a lie in the majority of the cases.
Which supplements have added new things to the books right after they were taken away? If you can show me that you might have a point, but so far they've added stuff that didn't exist in those books before.
I'm going to agree to disagree on how bad the rules are since I feel the 7th Edition codexes in 40k have finally started to show real internal and external balance and are leading towards a game that is a lot more fair to play than before. And I'm withholding judgement on 9th until I see it because if Pancake edition taught me anything is that rumors don't always pan out like we think.
Disagree all you wan't, but since the company keeps loosing customers it seems like you are in the minority.
I've mulled if over and yeah I'm not seeing your way on this. The game, in my opinion, is better. Just because people are leaving doesn't mean it's getting worse. You're assuming every person only left the game, or hasn't bought anything because of the quality of the rules, not because they don't play the updated armies, had other reasons to leave, or don't have time to play so didn't purchase anything.
There are dozens of reasons to stop playing a game, and rules are only one of them. And frankly with the way the books are being written right now I don't think it's a reason unless someone got mad about being nerfed.
The reason why GW is focusing on revamping Fantasy isn't because they've identified it as the source of their economic woes, its because they launched a new edition of 40k just last year and even GW isn't dumb enough to try and launch a new edition of 40k each year to try and generate revenue.
I have to disagree with that notion because anyone in the company who can see the budget sheets in the company can see how much is being poured into every release for development and then how little the return is. This isn't rocket surgery.
None of which tells them why it's failing, which was PhantomViper's point.
Just because GW doesn't talk to us, doesn't mean they are completely blind and deaf to the internet.
JohnnyHell wrote: There's a very, very interesting 21-min-ish documentary about LEGO on Netflix or Amazon Video, forget which.
It tells of how LEGO nearly died in the 80s/90s, and how they reversed fortunes by massively reducing the product range, focussing back in on what their core customers really wanted, and returning to growth from that reduced base, all under the tutelage of a new CEO who came in from outside the family that had run the company (and run it into the ground) since its inception.
Gee Dubs should watch it...
The documentary is called Inside: Lego. It's available on Netflix.
And I agree: there might be valuable lessons here for GW.
Just because GW doesn't talk to us, doesn't mean they are completely blind and deaf to the internet
.
The fact that the then Chairman and CEO publicly admitted that they take no notice not good enough for you?
Even if you take that as a tongue in cheek comment, I still defy you to point to where this interaction with 'the Internet' is happening.
I don't expect you mean that they simply monitor Dakka and their ilk, simply because that would be worthless to gauge any sort of feedback. Without a reasonable knowledge of who is answering your questions, you substantially devalue the information you're gaining. For instance, I consider myself a "customer in waiting" ie I have substantially reduced my GW focussed spend, but am prepared to buy/buy again when I feel a purchase is warranted. Therefore, while I may seem quite "anti-GW" to the casual observer, my feedback is probably more useful to GW than someone who has written GW off and posts here purely to vomit anti-GW sentiment everywhere. That's not to mention all the simple, common demographics needed to provide research with a context which aren't easily available via a forum.
I'm also sure you don't mean that online survey from the webstore, something so remarkable that it warranted it's own thread, twice, which is likely a tool for the developers and nothing to do with the sales and/or quality of product on offer.
So, how, exactly, do you suggest, is GW receiving pertinent information over the Internet with a complete lack of evidence that they're making any attempt to do so?
TheKbob wrote:Interesting that the tenor of the these discussions has gone from a large rush of fingers-in-ears "La-La-La"ing along with "But it's still a profit!" to rather matter of fact on the issue.
Read from pg21 on up, nothing terribly exciting except some folks missing the point of PP games... it's a game first, HHHobby second versus whatever GW is trying to bilk people for. Most PP players don't collect factions, they make two list tournament pairs and only purchase different stuff to either play a new faction or adapt to a meta. Unless they're crazy like me and plan out 8 lists...
And I'm watching the new Fantasy debacle to see if that turns into a real game or just completely annihilates any fanbase. Glad I sold my Bretonnia last year, though.
I'm still waiting for runicfin to make an appearance. I remember him stating vehemently that things were on the up for games workshop and that the latest figures would prove it when they were released.
ClockworkZion wrote:Considering the rumored update to Fantasy and the net loss of brick and mortar stores it looks like GW knows what's wrong and they're trying to fix it.
I think it's more likely that they know *something* is wrong, and they'd like to fix it (without changing what they do). Hence fantasy turning to a hyper-exaggerated model of how they've been operating so far. It's not going to work.
ClockworkZion wrote:
You do know they're locked into a deal with LotR right? It's not the same thing as fantasy. Plus they can't just run off and remake LotR into something else if they feel it's not working as is anymore.
And personally I think you're putting too much malice into their actions.
They were killing LotR long before they renewed their contract. I remember at the time people (myself included) wondering why they even chose to renew their contract. I'm still wondering.
Is it malice (greed) or stupidity (greed)? Either way, it's deliberate.
ClockworkZion wrote: Which supplements have added new things to the books right after they were taken away? If you can show me that you might have a point, but so far they've added stuff that didn't exist in those books before.
Just one example? Imperial assassins in 40k.
ClockworkZion wrote: I'm going to agree to disagree on how bad the rules are since I feel the 7th Edition codexes in 40k have finally started to show real internal and external balance and are leading towards a game that is a lot more fair to play than before. And I'm withholding judgement on 9th until I see it because if Pancake edition taught me anything is that rumors don't always pan out like we think.
Well, some people like it and some don't. The numbers seem to suggest there's more of the latter than the former, significantly more. Pancake edition is a perfect example of the problem: people were salivating like hungry dogs over it, and instead got 6th edition and were disappointed.
ClockworkZion wrote: Just because GW doesn't talk to us, doesn't mean they are completely blind and deaf to the internet.
Doesn't mean they're not aware and dismissing it out of hand, either.
Assasins started as a stand alone codex and if you wanted to use them in a non-GK army you were stuck allying things in that you didn't want. The same problem existed in the Inq book too. They went back to their roots and are more easilly available for people who don't want a bunch of other models just to field something that by all rits shouldn't be mixed into a larger army's codex.
ClockworkZion wrote: Assasins started as a stand alone codex and if you wanted to use them in a non-GK army you were stuck allying things in that you didn't want. The same problem existed in the Inq book too. They went back to their roots and are more easilly available for people who don't want a bunch of other models just to field something that by all rits shouldn't be mixed into a larger army's codex.
Regardless, it's still the example of them taking something out of the book that you asked for.
It hardly proves your point of the whole game going to a pay to win format though when it was fixing an actual problem with the Assassins and their inability to work seperately from codexes they didn't belong in.
I think the supplements that have been coming out are pretty crappy. The DE covens book is $50 to turn Grotesques into killing machines with very little on the downside except having to pay $50 for the rules. It just feels like it's getting more and more into the "pay to win" category with things in 40k.
ClockworkZion wrote: It hardly proves your point of the whole game going to a pay to win format though when it was fixing an actual problem with the Assassins and their inability to work separately from codexes they didn't belong in.
You asked for an example, he gave you an example. Looted wagons, another example, scions, etc... We could also take umbrage with the whole Day0 DLC model of supplements that started towards the end of 6th. They could have rolled the Farsight Enclaves info in with the main Tau book but chose to charge people $50 for the privilege to play their army a different way, the same with every army since.
) The rest of us are the true fans of the company, who remember the company 
The best way to gauge their performance is to go and ask 
no. Could there have been a slew of different factors that account for their responses from recruitment methodology to the way I greeted the participants? Absolutely. 
