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LONDON (SHARECAST) - Model and war game retailer Games Workshop expects profits this year will come in some £5m ahead of market forecasts as cost cutting benefits and royalty income come through strongly.

In a statement, Games Workshop, which is best known for selling the Warhammer range, said pre-tax profits in the year to 30 May 2010 are likely to be "materially ahead" of current market expectations even though sales in the first half of the year to 29 November 2009 declined slightly in constant currency terms. Trading in December was satisfactory, it added, while gross margins improved.

The outlook for royalties receivable in the current year also remains good, although not as significant as in the year to 31 May 2009, it added.

linky.

Hmm.. " royalty income come through strongly. " . No surprise with regards to this, I guess we can expect more of this...
...which would lead, one would imagine, to (further) stringent protection of the GW IP. They'd best be careful with the Hobbit stuff I guess.

Can't wait for GW to send the Tolkien estate a C&D.

This does suggest there wont be any need for a price hike though...

Just Dave wrote:This does suggest there wont be any need for a price hike though...

I spewed my water out all over the computer screen, that was so funny!

GG

Hmm.. " royalty income come through strongly. " . No surprise with regards to this, I guess we can expect more of this...
...which would lead, one would imagine, to (further) stringent protection of the GW IP. They'd best be careful with the Hobbit stuff I guess.

How do you reach that conclusion? Royalty income is described as payments you receive for the use of your property, that are based in some way on the number of units sold. Dawn of War II, Warhammer Online, Blood Bowl are royalty income for GW, and I know 2 of those 3 have been moderately successful*, hence they "come through strongly". How do you link that with future "further stringent protection of the GW IP"?

*There is also a 40k MMO, Dawn of War II expansion and the Space Marine action/RPG that are in the works that developers paid GW to use the IP, so may count as royalty income as well.

NELS1031 wrote:

...which would lead, one would imagine, to (further) stringent protection of the GW IP.

How do you reach that conclusion?

GW only seems to have two responses to anything if the last few years are an indicator... send out C&D letters to fansites to "protect" their IP and "adjust" prices upwards to account for identical/lower/higher expected profits.

NELS1031 wrote:

Hmm.. " royalty income come through strongly. " . No surprise with regards to this, I guess we can expect more of this...
...which would lead, one would imagine, to (further) stringent protection of the GW IP. They'd best be careful with the Hobbit stuff I guess.

How do you reach that conclusion? Royalty income is described as payments you receive for the use of your property, that are based in some way on the number of units sold. Dawn of War II, Warhammer Online, Blood Bowl are royalty income for GW, and I know 2 of those 3 have been moderately successful*, hence they "come through strongly". How do you link that with future "further stringent protection of the GW IP"?

*There is also a 40k MMO, Dawn of War II expansion and the Space Marine action/RPG that are in the works that developers paid GW to use the IP, so may count as royalty income as well.

He can make that conclusion because GW only gets royalties from official uses of there IP...if random fansite is using GW's IP without giving GW a dime...then GW doesn't get any royalties. So if your not paying for the IP...then you get a C&D

It was enough to make share prices jump; sold my stock for a tidy profit. :-)

Well, that is certainly good news as it means more hobby goodness for us.

ironicsilence wrote:

NELS1031 wrote:

Hmm.. " royalty income come through strongly. " . No surprise with regards to this, I guess we can expect more of this...
...which would lead, one would imagine, to (further) stringent protection of the GW IP. They'd best be careful with the Hobbit stuff I guess.

How do you reach that conclusion? Royalty income is described as payments you receive for the use of your property, that are based in some way on the number of units sold. Dawn of War II, Warhammer Online, Blood Bowl are royalty income for GW, and I know 2 of those 3 have been moderately successful*, hence they "come through strongly". How do you link that with future "further stringent protection of the GW IP"?

*There is also a 40k MMO, Dawn of War II expansion and the Space Marine action/RPG that are in the works that developers paid GW to use the IP, so may count as royalty income as well.

He can make that conclusion because GW only gets royalties from official uses of there IP...if random fansite is using GW's IP without giving GW a dime...then GW doesn't get any royalties. So if your not paying for the IP...then you get a C&D

I would like to know how much it costs GW to pay the lawyers for that C&D order. No wunder they increase prices all the time.

ironicsilence wrote:

NELS1031 wrote:

Hmm.. " royalty income come through strongly. " . No surprise with regards to this, I guess we can expect more of this...
...which would lead, one would imagine, to (further) stringent protection of the GW IP. They'd best be careful with the Hobbit stuff I guess.

How do you reach that conclusion? Royalty income is described as payments you receive for the use of your property, that are based in some way on the number of units sold. Dawn of War II, Warhammer Online, Blood Bowl are royalty income for GW, and I know 2 of those 3 have been moderately successful*, hence they "come through strongly". How do you link that with future "further stringent protection of the GW IP"?

*There is also a 40k MMO, Dawn of War II expansion and the Space Marine action/RPG that are in the works that developers paid GW to use the IP, so may count as royalty income as well.

He can make that conclusion because GW only gets royalties from official uses of there IP...if random fansite is using GW's IP without giving GW a dime...then GW doesn't get any royalties. So if your not paying for the IP...then you get a C&D

If random fansite is leeching bandwidth(which DOES cost money), posting free downloads that take away from the GW's "official" downloads, and claiming to be the 'official XXXX game headquarters"--then you get a C&D.

Has nothing to do with paying for the IP. It has to do with violating the conditions that GW has set forth in using its IP for an unofficial fansite.

I too would guess that Royalty Income = [Income from FFG Games] + [Income from Dawn of War vid game] + [Income from Blood Bowl vid game] + [Income from Warhammer Online] + [etc]


FFG Games = Chaos in the Old World, Rogue Trader RPG, Warhammer Invasion LCG, pre-sales on WHFB RPG etc.

The fact that they cut costs and didn't lower prices but rather kept the money as profit pretty much proves that their "price rise due to rising costs" is mostly just an excuse to kick customers in the face. They easily had it in their power to deal with high costs, but they just left it until they could increase profits dramatically twice, instead of just tackling problems in order not to lose money.

The first being price rises, because I'm sure they don't raise them the exact amount that materials increased in price for, but rather add a bit extra to it as profit. The second being cost-cutting like moving out of malls and into cheaper places. The GW I go to moved out of a VERY popular/expensive-rent mall downtown in Toronto and into a cheaper real estate type area that I would call "uptown", as well as not being in a mall. They are doing the same with a nearby-ish GW too, moving out of a mall and a few blocks away into a regular store. This frees them from high-rent mall situations, and in the long run incrases profits (rent doesnt cut into the revenue as much).

Hey Russ, on that line of thinking, do you have any idea how Fantasy Flight are doing, as a company. Has Dark Heresy et al. been a boon or a burden to their bottom line?

ssREV wrote:The fact that they cut costs and didn't lower prices but rather kept the money as profit pretty much proves that their "price rise due to rising costs" is mostly just an excuse to kick customers in the face.

Oh please! Like GW has ever needed an excuse to kick their customers in the face.

NELS1031 wrote:
How do you link that with future "further stringent protection of the GW IP"?

IP protections generally comes part-and-parcel with IP transactions.

agnosto wrote:It was enough to make share prices jump; sold my stock for a tidy profit. :-)

Should have waited for the dividends (which are likely to be paid this year)
And the announcement that they had secured the rights for the mini game for 'The Hobbit'... cue next share price bubble.

Clearly good news for shareholders. However, I see nothing in that statement that indicates that 40k, WFB and LotR are gaining customers instead of continuing to lose them.

Increasing efficiency is good to one extent in that if protects the business financially, but if the result of that financial "efficiency" is actually the delaying of rules updates and axing FAQ support because no one is employed with the time to do those jobs any more, then its yet another kick in the teeth for the remaining fans of the games.

Whatever the results, GW will always increase prices, the only question is by how much and how often.

I think it's interesting to watch the growing importance of royalties to the bottom line. As long as these remain a steady (and rising) cash cow, the miniatures side of things really doesn't have to do that well except to get more new players (as they will always generate more money than veterans). And as the spin-off things (roleplay games, MMO's, etc) also do that too, it's a win-win for GW. Assuming the planned 40K MMO games do appear, I can see GW's revenues from royalties to grow to a big part of their annual statement.

Waaagh_Gonads wrote:

agnosto wrote:It was enough to make share prices jump; sold my stock for a tidy profit. :-)

Should have waited for the dividends (which are likely to be paid this year)
And the announcement that they had secured the rights for the mini game for 'The Hobbit'... cue next share price bubble.

Can't bet on that since they haven't paid since what, 2007? And I get skittish when a company starts "streamlining" to pad their profit report.

I'll just invest more in tech or cash out and buy some figs.

I like my little stock, Himax (HIMX); it's been fluctuating wildly lately due to some stock restructuring (becoming dual-listed) but they always pay a dividend, .28 cents per share last year even during the global downturn.
Heck even citibank paid me .01 cents a share last January when they were broke; nah, GW not paying a dividend when they are making a "profit" is not a safe bet to me.

H.B.M.C. wrote:Hey Russ, on that line of thinking, do you have any idea how Fantasy Flight are doing, as a company. Has Dark Heresy et al. been a boon or a burden to their bottom line?

I don't have any special info, but I think it's too early to tell. FFG has really only been punching out new GW IP stuff (Invasion, Chaos in the Old World, Horus Heresy Board Game, the new RPG content) in 2009.

In the board game world, I'd say their other games like Battlestar, TI, War of the Ring, Arkham Horror, Descent are bigger hits than the GW stuff. Don't get me wrong, Chaos in the Old World is a GREAT game, I just don't think it has the mass board gamer appeal as some other titles. In fact the buzz about Runewars is much louder than it is for Horus Heresy.

Still, the GW fan base is large, and just because communities like BGG aren't all drooling over the upcoming $100 Horus Heresy game doesn't mean it won't sell like hotcakes to GW fans.

Now all that said, on the RPG front games like Dark Heresy and WHFB RPG are getting a lot of buzz, so those may really be doing well for FFG sales wise.

I think 2010 will tell the story. If this time next year we're talking about still more new GW games coming from FFG, then they are selling well. If FFG is pushing all new or different IP and GW products are on the back burner, well....

Here's something people might find interesting:

http://www.behaviorgap.com/

..but can America cope... !?

Games Workshop Group PLC

("Games Workshop" or the "Group")




MANAGEMENT CHANGES - NORTH AMERICA







Games Workshop North America




Games Workshop's business in North America, which includes 86 Hobby centres in the USA and Canada, a large trade business and the Memphis manufacturing and distribution facility, is the Group's largest operation after the UK and Continental Europe




The Board of Games Workshop believes that the future potential of the Games Workshop Hobby in North America is considerable. To help exploit this, once the formalities are complete, Tom Kirby, the Group's Executive Chairman, will relocate to the Group's North American headquarters in Baltimore, Maryland for a period of 18-24 months. This will bring a renewed and increased focus on this business.




Tom will be back in the UK for approximately one week each month to deal with Group matters and to stay close to the Chief Executive and CFO. He will remain Executive Chairman of Games Workshop Group PLC.

BEWARE, my American friends!

The Great Satan now walks amoungst you!

Expect bodies drained of blood and cash to start appearing on the streets of Baltimore any time soon!

notprop wrote:BEWARE, my American friends!

The Great Satan now walks amoungst you!

Expect bodies drained of blood and cash to start appearing on the streets of Baltimore any time soon!

Hang on, aren't our American friends 'The Great Satan(s)' HOLY CRAP! there is somebody worse?!

Will the downsize expected cover the added expenses of Mr Kirby flying over and back plus housing and other allowances? More at 9PM Dakkanews!

M.

Seriously you are not expecting Mr Kirby to pay all those expenses from his salary no?

The traveling will be accounted for as expenses.
I'm pretty sure 'efficiency savings' will see Kirby rewarded though.

Hopefully Tommy visits my local store so I can meet him and thank him for ending the US bitz service and saved me from spending a ton of cash to convert some CSM Demon Princes that would have been unusable when the new codex came out.

And thank him again for the delays in the release of the Plastic Demon Prince that has saved me even more money because I'm now no longer interested in the model and the money that I had set aside to get 4 has been redirected to non-GW Hobby projects.

What's Maryland/Baltimore like anyway ?

Howlingmoon wrote:Hopefully Tommy visits my local store so I can meet him and thank him for ending the US bitz service and saved me from spending a ton of cash to convert some CSM Demon Princes that would have been unusable when the new codex came out.

And thank him again for the delays in the release of the Plastic Demon Prince that has saved me even more money because I'm now no longer interested in the model and the money that I had set aside to get 4 has been redirected to non-GW Hobby projects.

Amen, brother.

Davor wrote:

I would like to know how much it costs GW to pay the lawyers for that C&D order. No wunder they increase prices all the time.

They don't use Lawyers silly they use Inquisitors. It is a witch hunt after all...