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Games Workshop is still a profitable company. I think the very next thing that we will see cut is sales to distributors and independent stores.

PhantomViper wrote:

Silver_skates wrote:

Their 70% gross margin will continue to produce a sizeable profit regardless of how far revenues fall.

Funny how profits fell even more than revenue then... (profits fell 38% while revenue "only" fell 12%)

Overheads will always be more difficult to reduce (& conversely increase). This is why GW are cutting their staff costs with the one man store. You should see overheads reduced in the next six months meaning that bottom line profits will follow the relationship of revenue whether that is up or down.

 Phobos wrote:
Games Workshop is still a profitable company. I think the very next thing that we will see cut is sales to distributors and independent stores.

I don't know about that, it would all but totally end them in the US.

Wishful thinking here, but LotR/Hobbit goes next. God, please let it go next.

 RatBot wrote:

 Phobos wrote:
Games Workshop is still a profitable company. I think the very next thing that we will see cut is sales to distributors and independent stores.

I don't know about that, it would all but totally end them in the US.

You know, at one point I would have agreed with you. But today, in 2014 I don't think that's the case anymore. 10 years ago I recall several stores in my area that were just absolutely loaded with Games Workshop product. Tables places to play all sorts of stuff. Today there is a Games Workshop store here, and only one other store has more than just a minimal amount of product. I would not be surprised if they could just stop selling games Workshop and not lose any money or customers. People who want to play games Workshop games will simply go to the GW store.

And frankly I think this has been the long term goal all along starting back in 2003 when they banned online sales without a storefront.

I'm not sure what will be cut, but whatever it is, you can bet it will be Great News!

Silver_skates wrote:
I don't understand how a profitable company can be viewed as nearly dead with "the vultures circling". The share price went down because there was no dividend announced and, therefore, no incentive to hang onto shares.

That's one explanation. The other explanation is that share price went down because GW's revenue and profits were down significantly at a time (Christmas shopping season) that should be great for a toy company. And, worse, that decrease in revenue seems to confirm the suspicion that GW's sales volume and market share are declining, growth and long-term planning are nonexistent, and profits are likely to continue to decline.

It will have to perform some soul searching and right the wrongs if profits decrease further but they are still making profits and look to continue to do so.

Making profits is a pretty low standard for success. If I was a potential investor I'd be pretty disappointed if GW settled for making minimal profits when they could be making a lot more money if not for their own bad decisions.

 Phobos wrote:
You know, at one point I would have agreed with you. But today, in 2014 I don't think that's the case anymore. 10 years ago I recall several stores in my area that were just absolutely loaded with Games Workshop product. Tables places to play all sorts of stuff. Today there is a Games Workshop store here, and only one other store has more than just a minimal amount of product. I would not be surprised if they could just stop selling games Workshop and not lose any money or customers. People who want to play games Workshop games will simply go to the GW store.

But the real question here is how many people are still playing GW games. GW may have put a higher percentage of sales of their products into their own retail stores, but what's the total pool of GW sales that they're drawing from?

And frankly I think this has been the long term goal all along starting back in 2003 when they banned online sales without a storefront.

I don't think that was really the reason. Banning online sales makes sense because it protects independent stores from being undercut by online-only stores that can sell at a discount that no physical independent store can afford.

winterdyne wrote:
Warhammer world is a small section on the large HQ campus, which I'm fairly certain GW own outright. The majority of the campus is not open to the public.

But it still takes up space. Closing it would allow GW to lease that space to some other company. So that's lost revenue being thrown away for the sake of operating a gaming space.

The on-site store is reasonably busy too - I use it (as do many others locally) because the parking is free and it's not in the city centre (making it easier to get to). I doubt it runs at a loss.

I'm sure it does make quite a few sales, but that's not what matters. The important question is whether Warhammer World generates new sales that GW wouldn't otherwise get. They aren't making a net profit on those sales if it's just stuff you would buy at your local GW store and the only change is which cash register you pay at.

Hosting of events (such as the FW open day / tournaments) should cover its costs.

Probably not. Remember, we've seen comments from third-party TOs that big events don't make much money and it's a (financially) successful event if you don't lose any money. So GW's own events may or may not be run at a loss, but it's unlikely that they occasional tournament is making enough profit to cover the year-round expenses of having the space at all.

And, again, remember that WOTC already tried this kind of gaming center and abandoned it because it wasn't profitable. I'm very skeptical of the claim that GW has figured out how to make it a profitable business instead of a marketing effort that GW pays to run.

 Phobos wrote:
People who want to play games Workshop games will simply go to the GW store.

.

Yeah, that's not going to work out so well in my hometown where there is enough interest in wargaming that they hold an independent GT every year, but there isn't a GW store in the country within 100 miles. There's a couple in Canada,one 85 and the other 98 miles away, but who the Christ is going to drive almost 100 miles to another country to pay super-inflated prices just to buy GW crap? Also if GW wants to have their own stores be the only place you can buy their stuff, then they probably ought to actually open enough to service all markets, have them open normal(ish) hours, and ensure there's space to play, IE, the opposite of what they're doing.

Reading the tea leaves here... I honestly think GW will go bankrupt in 24 - 36 months. My reasons for this are pretty simple, their product has increased in price too much over the last few years and they have lost too many independent retailers of their products. A shift in consumer demand is all it will take to land the company in receivership.

While they may have enjoyed price elasticity with the hardcore gamers, there's a younger set that depends on funding from parents to afford their product. A common question people ask in retail stores is how much all this stuff costs in the end. If you consider the fact it runs about $1,200 to have a decent army, after you buy the books, the paints, the models, the carrying cases, etc... that's a lot for most people these days for a luxury toy. Word does get around about the costs.

The other thing is channel sales. They have painted themselves into a corner with the reductions in independent stockists, out of the 7 hobby stores in my area that carried GW products 2 years ago, only 1 of them still does. They are actively promoting other games and making sales.

Anyways, in terms of real business, my forecast is for a decline in sales that leads to a reduction of retail stores, followed by a more crippling decline in overall demand for product. Many of the places that helped build the GW brand are making money on other products, and I don't see them switching back. The issues with sales were personal and polarizing for many store owners, who are not the people you want working against you.

Given how GW has been treating independents here in Canada which do move a fair amount of their product (largely due to matching US prices), I can believe GW will try and marginalize independents. As it stands, they quite often fail to send their monthly product deliveries, and they're often below what was ordered. The new release format will likely mean independents won't get their product until the end of the cycle, in an attempt to drive customers to the one GW store in a province of 7 million, or online.

Given their behaviour towards independents, especially successful ones, they seem to view sales through independents almot as a loss; anything that isn't getting them 100% markup is to be avoided, and they hold the misguided assumption people will buy just as much from them if forced to pay full retail.

My local is in West London and when it opened in spring 2013 it had hundreds of kids (and real gamers) packed in everyday, it was hard to even get in on a a saturday . By Christimas the sales had started to fall and they were already getting in new stuff (which wasn't fair due to just children naturaly losing intrest) he has just been replaced again and theres no signs of sales picking up, its the same 5 people again and again. Meanwile GW has opened up 2 more shops within 5 miles (one man stores). Seeing this i think to myself why don't the company just consontrate on 1 shop rather than keep opening little ones and letting them die along with the community? An old member came in recently and i asked why he had not been in of which he replied "opened a new one near my house" which was only 2 miles to the east...so i see all these threads about GW's demise and i think if there close to going bankrupt then why do they continue to open stores and keep failing ones running? Plus all local shops play WFB and LoTR so i doubt there really losing HUGE profits, just not as big as 40k (although on the world level i belive they are).

I think GW will survive, its too much of a big IP to go and the shops at worst case would be brought by another company, before that i think they can either go two ways.

1:The good way...they stop raising prices for the time being, start heavier advertising, start designing better models, better PR and just let people get back into the game again like normal.

2: The more likely option, Kirby sounds like a moron venture capitalist who does not care about the soul of the company, he will cut all the wrong and loved parts of the comany...cutting too far and then losing the fanbase for good untill GW get brought out and the brand is taken over then wound down, then relaunched in a few years wherre then half the gaming population will have too buy new models. Either way i don't see us losing our game, our models (apart from maybe LoTR) anytime soon. But i do think Kirby is bound to make mistakes.

Having watched the review, I'd like to change my vote from Games Day to White Dwarf 2.0.

i voted Games Day. The last GD i went to (2009) was horrible. a couple blisters of SG stuff in white boxes and no room for casual play.

Apparently GD these days is just standing in a line to buy GW products you could get online/in a store anyway.

At this point... I think that Warhammer Visions is going to beat Games Day to the gallows.

I knew only four people that still had White Dwarf subscriptions - and every one of them dropped their subscriptions when they saw what their subscriptions had been turned to....

Let's see... we have folks that have subscribed to a gaming magazine titled White Dwarf.

We are now making two magazines - one is about gaming and titled White Dwarf.

The other isn't a gaming magazine, and isn't titled White Dwarf.

Now, which one do you think that the remaining subscription time should go towards?

The Auld Grump, friends, gamers, countrymen....
I come not to praise Warhammer Visions but to bury him...
Which is Great News, because he has bloated and begun to stink....

I would say Games Day. I do not think that GW has the humility to put down something they just released. It would look like they had made a poor decision and that would compromise their infallibility.

 MajorStoffer wrote:
Given how GW has been treating independents here in Canada which do move a fair amount of their product (largely due to matching US prices), I can believe GW will try and marginalize independents. As it stands, they quite often fail to send their monthly product deliveries, and they're often below what was ordered. The new release format will likely mean independents won't get their product until the end of the cycle, in an attempt to drive customers to the one GW store in a province of 7 million, or online.

Given their behaviour towards independents, especially successful ones, they seem to view sales through independents almot as a loss; anything that isn't getting them 100% markup is to be avoided, and they hold the misguided assumption people will buy just as much from them if forced to pay full retail.

You're in Quebec? We should meet up for a game!

I think the next thing to be cut will be free store entry. Just imagine the amount of $$$ GW is losing when they let people walk into their stores and view their works of art for free. In future, all GW stores will charge an entry fee.

 Shadow Captain Edithae wrote:
I think the next thing to be cut will be free store entry. Just imagine the amount of $$$ GW is losing when they let people walk into their stores and view their works of art for free. In future, all GW stores will charge an entry fee.

Apply to GW that's a golden Idea!

 Jehan-reznor wrote:

 Shadow Captain Edithae wrote:
I think the next thing to be cut will be free store entry. Just imagine the amount of $$$ GW is losing when they let people walk into their stores and view their works of art for free. In future, all GW stores will charge an entry fee.

Apply to GW that's a golden Idea!

Nar, gettin' in is free....

Gettin' out again, that's gonna cost ya, mate.....

But ter keep ya entertained in the meanwhiles, 'ere's a bloke in a red shirt to follow you around, just to... encourage a due expenditure of the ready, eh?

And Ned 'ere? 'E thinks that 'e can sing....

Sadly for you, me pigeon, 'e's wrong....

The Auld Grump