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Redbeard.
As Baragash pointed out the loss of sales volumes goes back long before the current resession started.(The 'LoTR bubble' masked the start of it somewhat.)

And other companies like Privateer Press and Mantic Games have GROWN thier sales volumes over the last 2 years.

Companies in the same 'niche luxury market' of table top wargaming have increased sales volumes.

I am not saying that cutting costs and attaining short term profit is wrong, obviously.

Its just depending on increasing retail prices to compensate for falling sales volumes is only a short term fix.

And I would like to know what LONG term strategy GW plc is going to use, to return them to a peroid of growth.
(The period of growth Kirby and Wells have been promising since 2006.... )

This is not meant as a personal attack on any one.(Apart from Kirby and co. )

Its just I can not find anything to give me confidence in GW plc LONG term.

I may have missed something.(I am not that attentive according to my wife... )

And if there is some long term strategy I have missed , I would like some one to point it out to me.

Mark Wells said the recession was not a factor affecting GW's sales.

Ok here goes. . . . .

I like Games Workshop, I like their models, I like most of the fluff (certain codex' asside), I like most of the rules, they aren't perfect but then again what is, as it stands while im not 100% happy with every rule in every codex or rulebook I am still able to have a game at my local club or with a mate and enjoy myself win or lose. I love to put kits together and sometimes I even get around to painting them. I would say that I am happy enough with my hobby.

I am however pretty vocal on Dakka when I don't like stuff GW does. At the end of the day I feel that the 'silent majority' are alot like the not so silent me, they enjoy their hobby and while its expensive and not perfect they still have fun and will probably continue playing and spending for as long as they continue to do so.

In response to an earlier post about the UK v the rest of the world well I do sympathize with the southern hemisphere particularly NZ and AUS, but call me selfish I just cant get angry about it, It doesn't affect me personally, I dont mean any offense at all so while it tarnishes my view of GWs senior management it doesnt really alter the opinion of the silent majority anywhere else.

Feel free to call me a fanboy if you dont like my opinion but it is my opinion and I'm expressing it, this is after all a discussion board not a political rally.

Lanrak wrote:Redbeard.
As Baragash pointed out the loss of sales volumes goes back long before the current resession started.(The 'LoTR bubble' masked the start of it somewhat.)

I do not agree with that analysis. I think there have been peaks and dropoffs, and neither have been consistent. The LoTR bubble went away after the movies ended - that was expected. But you'll also note that 2009 sales were much higher than 2008 sales. Taking the long view, 2010 sales are higher than 2006 sales, and if you discount the peak LotR bubble years (2003-2005), they're higher now than at any other point in their existence.

And other companies like Privateer Press and Mantic Games have GROWN thier sales volumes over the last 2 years.

Companies in the same 'niche luxury market' of table top wargaming have increased sales volumes.

These companies aren't publicly traded, are they? Where are you citing their sales figures from? And, where will they be five years from now? I recall a new company in 2005 produced a great new game, Starship Troopers, with rules by Andy Chambers. They increased their sales volume for a couple of years too. Then they crashed and burned.

Its just depending on increasing retail prices to compensate for falling sales volumes is only a short term fix.

And I would like to know what LONG term strategy GW plc is going to use, to return them to a peroid of growth.

My guess is that cutting costs is done to ensure that they stay in business. Businesses need to make a profit. Raising prices is directly tied to increased costs. I seriously doubt they want to raise the prices, but everyone else is also. Mantic and PP both raised their prices too.

I believe that the long-term strategy is going to be the same as it has always been - produce high quality miniatures and a game system that encourages people to buy more of them.

Storm of Chaos may be part of that. I know I saw the new monsters and want to buy some, and I don't even play fantasy. I think it might be the most promising expansion since Apocalypse. On the 40k side, Apocalypse was an ideal expansion - it got people to buy new, big, expensive models. Planetstrike and Cities of Death were both less so, as the models they aimed to sell were terrain, and terrain typically has to sell at a lower margin, and is something most people resist buying. Spearhead was a joke, and had almost 0 model sales associated with it. Storm of Chaos has large cool monsters that it appears are going to be able to work into anyone's Fantasy army.

Kilkrazy wrote:Mark Wells said the recession was not a factor affecting GW's sales.

Do you believe everything he says? I personally know people for whom the recession is affecting their sales. When people sell their armies to make rent, the recession is impacting their sales. When I talk to people at the GW store and they're saying how they're still out of work and their unemployment is running out, the recession is impacting their sales. I'm willing to believe that a lot of their customers are more-or-less price insensitive. But I'm not willing to believe that the recession, going on how many years now, is not taking its toll on toy sales.

I think when the CEO of a PLC makes a statement to accompany the annual financial report you have to assume it is correct to the best of his knowledge. If not, he could be criminally prosecuted for giving false information.

BTW if you adjust GW's revenues for inflation they are below the 2006 level.

Does it occur to you that a CEO of a PLC might be wrong? I cannot fathom how the economy cannot be a factor in their sales. I don't know how bad it is in the UK, but it is having real effects on people over here.

What figures are you using for inflation? And if you can hold inflation against their final results why do you have such a hard time seeing that these same inflationary pressures are impacting their prices?

Redbeard wrote:Does it occur to you that a CEO of a PLC might be wrong? I cannot fathom how the economy cannot be a factor in their sales. I don't know how bad it is in the UK, but it is having real effects on people over here.

What figures are you using for inflation? And if you can hold inflation against their final results why do you have such a hard time seeing that these same inflationary pressures are impacting their prices?

I am just saying that according to their own reports, GW do not think the economy affects their sales. It wouldn't surprise me if he is wrong.

I used UK Consumer Price Index for inflation, since the company is based in the UK.

GW's inflation of plastic costs may have been 100% last year, but plastic only accounts for about 2% of the cost of kits. Conversely, GW's salary inflation was 0% in 2009-10 as they asked the staff to accept zero pay rise. Clearly GW didn't get a 4% to 25% price rise for a range of kits and books from those figures.

Kilkrazy wrote:GW's inflation of plastic costs may have been 100% last year, but plastic only accounts for about 2% of the cost of kits. Conversely, GW's salary inflation was 0% in 2009-10 as they asked the staff to accept zero pay rise. Clearly GW didn't get a 4% to 25% price rise for a range of kits and books from those figures.

I don't follow what you're getting at here. Where do you find the 2% figure? The cost-of-sales number is much higher than that, and salaries and facilities appear to fall under operating expenses, rather than cost of sales.

I like 40k and Fantasy. I like the rules. I like the models. I don't even mind the price.

I think, on the whole, Games Workshop provides very nice figures at a fair price per figure. Privateer Press has figures that I think are ugly, static, and ugly but charge as much or more for each comparable figure.

Sure, it sucks that they raise prices but I think it's not a bad waste of my time or money.

I know Dakka and BoLS and other websites exist but I don't care to visit them very often. I don't care to hear hyperbole, whining from the same people for years on end, or constant complaining about how expensive the game is in Australia.

I just want to look at new armies, make lists, convert and paint figures, play at my local store, and sometimes travel to Adepticon or other events for tournaments where I get some great games in against some beautiful armies.

I would like it if the rules were a little different (I dislike MSU Mech Spam) or if the figures were a little cheaper but looking at the alternatives and I can't find anyone that comes close to providing high quality figures and a playable ruleset. The closest I see is Reaper Warlord and unfortunately few people play that game.

I just wish people would stop thinking PP is any different than GW. They raise prices. They change the rules. They encourage power creep and effectively make older units obsolete. They release crappy figures. Their quality control is not the greatest. On the whole I think they do a lot worse than GW, and this is coming from someone who was a huge PP fanboy for a few years before coming to GW games.

So, I don't know if I'm in the "silent majority" but I play the game with a few friends and we all paint nice armies and have a lot of fun and occasionally go to bigger tournaments. Of the ten or so people I talk to or regularly play none post on Dakka, BoLS, Warseer, or anywhere outside local club message boards.

Id say yes, absolutely I think that there is a silent majority, on this topic and in real life as a whole. Basically, most people cant be arsed moaning like feth all the time.

Are most people anarchists? 99% aren't, but it seems that way when a few thousand of them wreck London and dominate the news for two days, its the same principle.

GW are make a profit. Says is all really.

People that moan and piss and whine make the noise of about 1000 normal chilled out people that don't endlessly fething whinge.

I think that most people are normal sensible people, and act as such. GW sells stuff for us to make a profit, and we kinda like their stuff, so we buy a little, ebay occasionally, like the fluff, sometimes get the odd WD, sometimes read a BL book.. don't spend too much.. maybe what, 10-20 a month?

I think that's a normal person that's in the majority. Not a fanboy who spends stacks, and not a weirdo that spews their hatred via internet on a daily basis about their toy soldier manufacturer.

In a nutshell, normal people get a bit annoyed about some things, but it doesnt hugely altar your hobby or your buying pattern. Freaky deaky fethers that you see nerd-raging on the internet are visibly weird, and in a minority.

At the dakka tourney I socialised with about 25 people, and none of them struck me as being that different from me. Its a hobby, you play it abit, and you enjoy it and it doesn't rule your life, doesnt cost you THAT much, or have the ability to make you go crazy with nerd rage to the point where I read your posts at home and think "holy gak, this guy is a fething lunatic"

lol, i liked your post

Redbeard wrote:

Kilkrazy wrote:GW's inflation of plastic costs may have been 100% last year, but plastic only accounts for about 2% of the cost of kits. Conversely, GW's salary inflation was 0% in 2009-10 as they asked the staff to accept zero pay rise. Clearly GW didn't get a 4% to 25% price rise for a range of kits and books from those figures.

I don't follow what you're getting at here. Where do you find the 2% figure? The cost-of-sales number is much higher than that, and salaries and facilities appear to fall under operating expenses, rather than cost of sales.

It was in one of GW's financial reports.

We can sanity check this by dividing a ton of polystyrene by the weight of a kit, and comparing the prices.

According to the Urethane blog, the European price of general purpose PS was set to rise to 1,299 Euros this spring, that’s $1,865.

http://urethaneblog.typepad.com/my_weblog/2011/02/european-posm-plants-running-at-maximum-rates.html

Let’s say the cost of GP PS is $4,000 per ton delivered to GW’s factory, allowing for distribution, delivery, wastage, etc.

The plastic in a Gargoyles Brood weighs 110 grams. I picked Gargoyles because I have a box of them waiting to be built.

The shop price of the kit is £18, which is £15 after deducting VAT, which is $23.40.

You get just over 9,000 sets of Gargoyles per ton of plastic. The cost of plastic per set is $0.44, which is just over 1.8% of the dollar retail price.

Obviously this is a back of an envelope calculation. Some kits may be heavier, or lighter, for their price. But we're in the ball park.

Kilkrazy wrote:I think when the CEO of a PLC makes a statement to accompany the annual financial report you have to assume it is correct to the best of his knowledge. If not, he

A tad naive. It all depends on what your definition of "correct" is and the slant you place on the numbers you are opining on. In 20 yrs as an accountant and analyst I can tell you for a fact that the preamble/ blurb at the beginning of an annual report can be the biggest work of fantasy you will have ever read - but there will be numbers to support them.

I am reminded of a saying from a senior banker (I think Bank of England) who said, and I paraphrase, "if I relied on a sets of account to make a business decision I would soon bancrupt the bank."

I am further reminded of a saying from the CEO of a marketing company discussing poor performance - "the numbers are correct; there is nothing wrong with the numbers; they just don't show the real picture."

Hi Redbeard.
We may have been talking at cross purpouses somewhat.
I was refering to sales volumes , which is increase in turn over in £M, compared to increase in retail price over inflation.

EG
If you turn over £100m in 2005.
And you turn over £120m in 2010.

You have increased your turn over by 20%.

If however inflation has increased by 10% in the same period of time .
You effective increase in turn over is 10%.

If in the same period of time you have increased prices by 40%. (30 % over the rate of inflation.)

Then you have experianced a 30 % drop in sales volume.And a Gross increse in turn over .

People are buying less, but paying more per product.

I only stated that both Mantic Games and Privateer Press , have had to increase production/invest in larger premises , because they are selling more product.(Increased sales volumes.)
Simply to prove that in a recession people will still by 'non essential ' products if they belive they offer good value for money.

Yes both Mantic and PP increased thier prices on metal models.
Mantic are moving all metal UNITS to Plastic -resin.And Doubleing the quantity in the boxed sets for the SAME price.(Effectivley halving the price!)
As thier plastic resin,(that doesnt melt in the sun, ) is cheaper than the white metal it replaces,Mantic passed on some of the savings on to the customer.
So the increse in price of a Mantic army is a tiny fraction, and still a lot less than the equivelent GW army.

PP games generally use fewer minatures than 40k-WHFB so the price rise is not as dramatic.
Concidering PP offer full game support with regualr updates , maybe thier customers still see PP products as value for money?

You wrote.
'I believe that the long-term strategy is going to be the same as it has always been - produce high quality miniatures and a game system that encourages people to buy more of them.'

Concidering other companies produce high quality minatures , (AoW for example ) at more reasonable prices.
And other companies produce games that deliver great game play with the minumum of fuss for alot less cost.

Doing what GW plc has always done ,in the face of a changing market place, doesnt seem to be that an effective policy to me.

A company that relies heavily on word of mouth to promote sales, an ever decreasing customer base accelerates the rate in which sales volumes drop.

This is where our opinions may vary.

Of course GW does market research on the "silent majority". I am looking at one of my GW store receipts right now. Across the top is my name and my individual customer ID number. Local GW stores are not shy about asking for customer names. They track the sales for customers, just like grocery stores with loyalty cards. Ya'll ever wonder why there was such a big push to get people to sign up for the GW website? It is so they can see the patterns in customer spending. Folks who drop some cash are encouraged to sign up on the website to get access to content, etc. Repeat customers, same thing. Looking at sales over time, they can see when people spend, on what, and how much.... I'm sure this was considered when looking at all the recent changes to GW policies.

Of course there are customers who won't have customer numbers, etc, but these all probably go into one "bin" for tracking purposes. Who knows, GW may even track via credit card numbers (that is on my receipt as well, but with XXXX for the first 12 numbers).

If you have a good relationship with your local GW, ask if you are in the top five big rollers in the store. Its kinda like Vegas. Casinos know exactly who the big spenders are... so does GW. They can track purchases over time, to see how many drop a load on startup then never come back, and those who are consistent over time. Really simple once you have all the data.

Databases are wonderful things!

Edit to add: TL;DR - The silent majority doesn't write letters, doesn't call, etc, but they are still providing feedback to GW. Its just via wallets/data tracking instead of a loud mouth (or pen).

very true, if i ran GW, i would do the exact same thing, data always helps runa business.

Out of the FLGS I regularly go to, maybe a handful of people out of a community of 70 or more regulars actually post on forums regularly. Maybe another dozen have browsed online occasionally, but for the most part... they are simply content with how things go

htj wrote:By silent majority, then may not mean people who don't post online, but rather people who don't write to them and complain.

that is a huge majority, then, because anyone who is involved in any sort of activism can tell you that people will almost never actually do anything to participate in addressing an issue that concerns them, like writing a letter to or visiting their MP. usually, they'll just get on the internet and bitch about it. or maybe post a link to someone else's article to their facebook and think they're changing the world.