Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

Kroothawk wrote:

Wolfstan wrote:

boyd wrote:I'm just a bit confused on how the salary for Kirby is calculated:

He gets

860,854 for ???? I would assume this is his salary?
382,601 for dividends
462,000 in pay - would this be a bonus or the sale of stock options what is this really

You're throwing out numbers that don't necessarily say much.

Again:
His pay is 462.000 GBP (15% more than last year BTW).
He already agreed to a dividend of 45p per share for this year, giving him another 860,854 GBP. He proposed another 28p per share, giving him another 382,601 GBP.
This gives him a total of 1.7m company money.

Gotcha - I don't think you should count dividends as employee compensation. I know in the US its not GAAP when we look at executive compensation. We look at ESOPs, Bonuses, and Fringe Benefits (if they have a Company owned boat or aircraft). That is what we use to determine their true compensation because dividends are investments they make.

keezus wrote:Combining these two yields an overall decrease of 25.9% in volumes - as clearly, decreased sales aren't making up the difference in price. More worrisome is that, during this same period, 40k standard army size increased from 1700 to 1850 (10%). Fantasy standard army size increased from 2000 to 2500 (20%). This means that for the same product sold, we're getting fewer armies out of the mix. Add on top of this, stealth price raises in terms of repacks and recut kits (I used a conservative stealth increase of 5% over 5 years - considering the new codexes have every decreasing points values!) - Assuming that buying trends of retained customers stayed the same - this would represent a loss in customer base of 38%.

These numbers actually ring pretty true anecdotally. When I think about my local gaming community, I would say that we've gone from 12 regular 40k players with a whole lot more 'casual'/'ancillary' players to maybe 8 or 9 regulars and a much more sparse 'casual' crowd. This includes player turnover, as plenty of people, including myself, have largely left the hobby but new people join.

What fascinates me reading the CEO comments is the complete disconnect between the perception of GW as a niche market with an inelastic demand base and the policy of 'churn and burn'; recruiting new people, selling a large entry package, and then letting them drop from the market.

@infinite array:Oh. Didn't know they were developing that. Hmmm, I just may have to look into that...

darkPrince010 wrote:... ...

On a slight side note, does anyone else know of a battle game similar to 40K in scope? I knoe KoW is competing with WHFB, but Infinity isn't quite the same scale as 40K, and I haven't heard of anything similar. Just curious if 40K is getting the same competition system-wise as WHFB is.

I assume you mean a 28mm "big skirmish" game with about eight to 12 units a side, containing one to 20-ish models per unit. Also, SF, including small numbers of vehicles, and presumably 28mm so you can continue to use your 40K figures.

I know there are plenty of systems around, which personally I haven't played.

Jim Wallman's Starship Marines and Starship Soldier are probably worth a look. http://www.jimwallman.org.uk/wargame/

Free Wargames Rules lists a whole bunch of stuff -- you'll have to sift out the big skirmish sets. http://www.freewargamesrules.co.uk/sci-fi.html

There are various paid for systems available too.

Dead Systems
AT-43 may be worth a look. With a bit of adaptation it will accommodate larger units.
Starship Troopers got good reviews.

There is heaps of stuff out there. Check the thread here... http://www.dakkadakka.com/dakkaforum/posts/list/369662.page

Isn't Dust Tactics (aka AT-43 IMPROVED) in the same scale and size?

darkPrince010 wrote:Based on these figures of (I'm assuming based off of the current thread) decline, does anyone more buisness-minded here know how much longer they can maintain this descent before it will start to impact the company? Like a ballpark of 5 or 10 or 20 or 50 years or whatever?

Let's just say, the major leech announced that he will leave in the not too distant future (the host is close to be sucked dry )

keezus wrote:

Kilkrazy wrote:Instead, there will come a point where the price increase by GW becomes counter productive. For example, they increase prices by 10% but sell 11% fewer models, and revenue decreases as well as unit sales.

Uh... aren't they already at this point? The fact that they raised prices 3% (aggregate) AND had decreased revenue from sales of 3%.

That's how I interpret the numbers as well: Price increases didn't compensate for lower sales for several years now.

boyd wrote:Gotcha - I don't think you should count dividends as employee compensation. I know in the US its not GAAP when we look at executive compensation. We look at ESOPs, Bonuses, and Fringe Benefits (if they have a Company owned boat or aircraft). That is what we use to determine their true compensation because dividends are investments they make.

Kirby is not investing, he is drawing money out of the company real fast. And he personally made the decisions (in contrast to being an outsider just benefiting) to draw this money out for his own benefit and the obvious disadvantage of the company left behind in shambles.

Revenue has been fairly level for several years. That doesn't seem to indicate the critical price point has been passed.

Personally I think they may have gone past it this year. If so, we could expect to see an acceleration of decline in next year's report. I mean an actual drop in revenues.

Unless Finecast saves them, of course, or perhaps a magnificent recovery of the world economy (if that is a factor.)

Kilkrazy wrote:Revenue has been fairly level for several years. That doesn't seem to indicate the critical price point has been passed.

Look at the table you made in the other thread, with the 2010 column showing the revenue in 2010 prices:



Revenue losses in the years: 2003, 2005, 2006, 2007, 2008 and now 2011 (with minor rises in 2009 and 2010).
I think that is quite convincing. The current revenue is below the level of 2001 for Christ's sake!! Tell me again of a growing business!

This table is for overall revenue and not monies derived from sales right? If that is the case then aren't the revenue increases in 2009, 2010 due to GW's aggressive reductions in their overhead, literally taking a chainsaw to their own legs?

keezus wrote:This table is for overall revenue and not monies derived from sales right? If that is the case then aren't the revenue increases in 2009, 2010 due to GW's aggressive reductions in their overhead, literally taking a chainsaw to their own legs?

Those would be operating expenses, and thus a change in profits, not revenue.

keezus wrote:This table is for overall revenue and not monies derived from sales right? If that is the case then aren't the revenue increases in 2009, 2010 due to GW's aggressive reductions in their overhead, literally taking a chainsaw to their own legs?

It is for gross revenue corrected for currency variation by GW and converted to 2010 £ values for inflation by me.

Reductions in overhead, etc, would show up in profit figures.

We are interested in revenue because when we see the prices going up faster than inflation, and the inflation corrected revenues being static, it shows that unit sales are falling. In other words, fewer boxes shifted at higher prices.

@Kroothawk, I think we are talking past each other slightly.

I am looking at the figures from the perspective of my business degree. To me, a fall in sales caused by exceeding the market clearing price would show up as a reduction in revenues. The variation of revenues over the past five years (including 2011, not shown) is actually rather small and anyway, the trend of the past three years seems upwards. Therefore I do not see evidence that rising prices are driving down revenues, though I believe they are driving down unit sales.

If the price rises continue it will reach a point where not only unit sales but also revenues are pushed down.

I still don't understand.
If the revenue goes down like in 2003, 2005, 2006, 2007, 2008 and now 2011 (by 4m, 21m, 28m, 9m, 4m and 7m GBP respectively) , that is not REALLY going down, but if it goes up 2m and 3m GBP in between that is a massive trend? And that current revenue is lower than in any year since 2001 is not a sign that price rises of 50-150% since 2001 are not generating growing revenue?

I did not claim a massive trend. I said that revenues had been broadly level for the past five years, which is true. The gap between the top and bottom is about 5%. The variation from average is at most 2.5%. There isn't any discernable trend because the figures go up and down.

I see no point comparing revenues at the height of the LoTR boom with today, because there is an obvious distortion in the figures.

Based on the evidence in my hands, price rises have been faster in the past five years than in the first half of the decade.

To the extent that we can compare things, revenues now are about the same as just before the LoTR boom.

Kilkrazy wrote:

keezus wrote:This table is for overall revenue and not monies derived from sales right? If that is the case then aren't the revenue increases in 2009, 2010 due to GW's aggressive reductions in their overhead, literally taking a chainsaw to their own legs?

It is for gross revenue corrected for currency variation by GW and converted to 2010 £ values for inflation by me.

Not sure where you're getting your inflation figures but this may help if you want to find inflation figures at least for the US. Its not perfect as they are a MNC but it would help. I would suggest using TIPS Inflation Indexed for 10 maturities (FN12). http://www.federalreserve.gov/releases/h15/data.htm

Kroothawk wrote:

boyd wrote:Gotcha - I don't think you should count dividends as employee compensation. I know in the US its not GAAP when we look at executive compensation. We look at ESOPs, Bonuses, and Fringe Benefits (if they have a Company owned boat or aircraft). That is what we use to determine their true compensation because dividends are investments they make.

Kirby is not investing, he is drawing money out of the company real fast. And he personally made the decisions (in contrast to being an outsider just benefiting) to draw this money out for his own benefit and the obvious disadvantage of the company left behind in shambles.

Its still an investment as he owns stock in the company. As a large single shareholder he has this ability to call for a dividend. As I've been told there is a large trust that has a significant stake in the Company, did they not vote for it as well? The other significant owners of the Company agreed to the dividends. What projects should they be investing in right now? Do you have some insight as to what they need to reinvest in the Company and do with this money rather than give it back to the shareholders? Their report makes it clear they are satisfied with Finecast even though we all know it has its issues. They seem to be confident that they will have these issues worked out shortly. It looks like they are making a net profit after all their bills are paid and a decent one at that.

If you really want to change things up there, try and get everyone on the board to buy a couple of shares and put together a voting bloc to get someone elected to the Board. Otherwise we can all try and "arm chair" quaterback their decisions and tell everyone how we could run the Company better and for less pay.

boyd wrote:
Its still an investment as he owns stock in the company. As a large single shareholder he has this ability to call for a dividend. As I've been told there is a large trust that has a significant stake in the Company, did they not vote for it as well? The other significant owners of the Company agreed to the dividends. What projects should they be investing in right now? Do you have some insight as to what they need to reinvest in the Company and do with this money rather than give it back to the shareholders?

They might say they have spent all the money they need, but you could argue that there are some glaring shortfalls in several areas. I don't want to go into too much detail here, as many of these are worthy (and have had) threads of their own, but in basic terms:

- You said it, Finecast. A company the size of GW should never have let that quality of product hit the shelves. They had known that the release was coming, most likely for years, and should have planned properly to make it right. They might say 97% in terms of quality control, 2+2=5 or whatever, one of the UK's biggest internet retailers (Wayland) said otherwise. They will most likely amend this problem in the future, but the damage has already been done. I would say Finecast could definitely have done with some more $ invested in it.

- Cutbacks were made in the R&D department of the company and staff laid off. A major complaint is the speed of new codex/army book releases, and then lack of balance or rules gripes when they do arrive.

- Regurgitation of old artwork and printed material - a valid complaint of the new O&G book. Yes the new format is nice, but a lot of the fans expected more. I feel the problem here is artwork costs $, partly why the covers of boxes were changed to photoshopped models rather than the imaginative and emotive pieces of artwork they used to be. Make WD a magazine worth reading again (and a gateway to the hobby) by paying journalists to write for it. Something that stopped some time ago.
Which leads me on to..

- The complete denial of the internet, let along digital, age. Where are the marketing strategies, or investment in new forms of distribution using the internet? Look at what Corvus Belli has done with Infinity - rules available for download, a rules wiki and online army builder. I'm not saying that printed mediums should be neglected (and indeed a printed rulebook is available for Infinity) but give the fans a choice for how they access the rules. Pirated scans of the rules will appear on the web regardless, so why not create an option for people to do so legally?
- Continuing from the above (it needs two bullet points!), why not go further? Computer aided tools for playing the game, downloadable beta testing software (ala Mantic), tabletop graphics programs with touch screen interfaces and the like (making use of new smart phone technology). Help integrate the tabletop hobby into modern accessories which people use as part of their daily lives.

- Investment into 3D printing technology. Read around on the internet, it's not that far away and the company should be aiming to stay ahead of the game.

- Branch out with the IP. Look at what Marvel has done in terms of their movie and video game releases. Arguably GW's IP is it's most powerful weapon, one game coming along every couple of years is far lower than they should be aiming for, and as the situation with Marvel proves there is the potential for them to reap great rewards in terms of royalties. If the decline in GW's sales is indicative of a larger trend of the decline in wargaming in general, then it would pay to hedge their bets here and spread their money out.

- Development of new games. Look at board games, Mantic's initial run of Dwarf King's Hold completely sold out its initial run of 100,000. There exists massive potential for cheaper, entry level games, which can be enjoyed by people who have less than $400-$500 and hundreds of spare hours to make and paint an army. The continuing success of Maliflux and Infinity show that the skirmish level game market is alive and well and craving new material. GW should be using it's IP, it's massive gaming experience and production capability to produce stuff that give these upstarts a run for their money. But instead, some of the best games they have ever produced are left to rot in one corner of the website. The one game that was a big success (Space Hulk) doesn't seem to have begun a trend or raised any eyebrows at HQ ("Hang on a minute... ") But again, the cutback in R&D has made expansion into this area difficult. Instead we will just continue to get regurgitations of old rules, published with the same pictures in a slightly different order, and a 5% change in the content every 2 to 3 years. I can see why so many of the older rules developers and writers have left the company, as it must be an extremely stifling environment for anyone who is creative in nature.

But how much of this is going to matter to a man in his 60's, close to retirement, when he can organise a dividend payment (along with pay increase for himself - I'm sure that makes the thousands of laid off GW workers feel better) and receive more than $2 million in the space of 12 months? No, far better to say, "I've done my homework ma, I want to play now" and let the company continue on it's plodding course when it could be breaking new ground.

What your chart tells me is the bubble from LotR was still going into 2006. Outside of that, the company is consistently in the 119-121m range. I don't see growth, but I see it being consistent outside of anomalous factors.

It grew in the 90s but we can't see that because we don't have their own figures going back any farther. Unless a member is a long time investor and has kept his old annual reports and could list them up for us. (It's hard to think of but 12 years ago it would still have been fairly unusual to publish financial reports as PDF documents.)

When I created the chart I used the UK official CPI (Consumer Price Index) inflation figures, largely because GW is a UK company, and does its final accounting in GBP. Also the UK accounts for 40% of the market. I'm aware there are issues with CPI and RPI however you have to take a stance.

keezus wrote:

Kilkrazy wrote:Instead, there will come a point where the price increase by GW becomes counter productive. For example, they increase prices by 10% but sell 11% fewer models, and revenue decreases as well as unit sales.

Uh... aren't they already at this point? The fact that they raised prices 3% (aggregate) AND had decreased revenue from sales of 3%

At the current rate of decline, considering they had 15M GBP profits, they could conceivably hang on for quite some time...

Well, sure- except that this does show that the company shrunk after that 15m GBP of profits. Paying out 19m GBP in dividends does that. If things continue on this trend, then GW is in a lot of trouble. Now, if this year was an anomaly, then it isn't an issue.

I wonder if the 40k 6th edition next year is going to grow the game or sink it. You don't want a new edition coming out when people are already thinking about quitting.

keezus wrote:
YMMV, but in my neck of the woods, 40k is dying a horrible death - on average, from what I can see at the two "flagship" GW's, on vet's night, attendance is down 80% from the heyday in 2005-2006 - these stores used to be rammed full of hobbyists... the last time I passed by the mall store on a Thursday night, there was one guy there playing a staffer, and one guy there playing his buddy. At my two local independant FLGS, 40k is down to 5% and 0% respectively.

Interesting.

Kilkrazy wrote:
It's possible that every customer who decides to avoid GW because of high prices will buy other companies' products. The nightmare scenario for GW is that those people might start to recommend competing products in place of GW. The network effect could go to work for other companies, or even go into reverse.

Privateer Press have had their best year ever. And Malifaux grew like mad. I'm sure that's totally unrelated information...

darkPrince010 wrote:
On a slight side note, does anyone else know of a battle game similar to 40K in scope? I knoe KoW is competing with WHFB, but Infinity isn't quite the same scale as 40K, and I haven't heard of anything similar. Just curious if 40K is getting the same competition system-wise as WHFB is.

Well:

Warmachine/Hordes just released a format that allows for larger games. This equivalent to Apocalypse is actually about the size of a normal 40k game- and added to this, they've just released their first tank-sized minis- it looks like this is the #1 competitor for 40k. The aesthetic of Warmachine is somewhere between science fiction and steam-punk fantasy- which I think competes with 40k much more than it does WFB.

Rackham tried to do a more direct competitor a little while ago in AT-43. The game featured "repaintable prepainted minis" did very well at first (outselling WFB) but Rackham got over-excited about it. When they turned their already successful Confrontation game into a pre-painted monstrosity, fans turned on them hardcore. Rackham never recovered (on a plus note, Coolmini will be releasing old Confrontation figs).

As for other science fiction games, most have kept their scale low- and there are a few in the works that look like they'll have very small scale games as well. Dark Age tends to have fewer than 20 minis per side, as does Infinity and the as-yet unfinished Relic Knight and Sedition Wars games.

Mantic Games will release a game to go with their 40k equivalents line, but that is also an unfinished work. It is likely to be larger scale, however, given Mantic's record.


Oh, and it needs to be shown again:

Kroothawk wrote:

Kilkrazy wrote:Revenue has been fairly level for several years. That doesn't seem to indicate the critical price point has been passed.

Look at the table you made in the other thread, with the 2010 column showing the revenue in 2010 prices:



Revenue losses in the years: 2003, 2005, 2006, 2007, 2008 and now 2011 (with minor rises in 2009 and 2010).
I think that is quite convincing. The current revenue is below the level of 2001 for Christ's sake!! Tell me again of a growing business!

So... holy crap. And yet, all of the professionals I talked to at Gencon told me that wargaming in general was growing. If these things are both true, it means that the hobby is growing and leaving GW behind.

odinsgrandson wrote:Mantic Games will release a game to go with their 40k equivalents line, but that is also an unfinished work. It is likely to be larger scale, however, given Mantic's record.

Unfortunately, they seem content to use resin instead of plastic for core units, thus removing the primary reason why we liked them better than GW.

AlexHolker wrote:

odinsgrandson wrote:Mantic Games will release a game to go with their 40k equivalents line, but that is also an unfinished work. It is likely to be larger scale, however, given Mantic's record.

Unfortunately, they seem content to use resin instead of plastic for core units, thus removing the primary reason why we liked them better than GW.

Why do you say that? Mantic resin is getting to be much cheaper than GW plastic. The new resin Mantic orc boar riders are an astoundingly cheap $35 for 10; compared to $50 for 10 GW plastic. I know the main reason I like Mantic is that they make nice minis at an affordable price. Resin seems to only have enhanced that.

Business illiterate myself.....

Is anyone factoring in the general downturn in the world economy? How is GW doing in the bigger picture? Suffering the same, doing better, worse?

There is no discernable pattern that fits the overall growth and recent slide of the domestic economy, at least none I can see.
The nadir was the second quarter of 2009
sales have not really fallen or risen with the British GDP.

It's just I remember GW getting a slightly random mention on the BBC Website in an article regarding HMV's troubles, so I was wondering if there is any correalation.

Thanks for the input though!

That rings a bell
Could have been with regard to a dip in share prices
That does follow the overall pattern of GDP, except they have not dropped recently as the rate of growth has dropped off.
That maybe to do with the announcements of dividends.

Gyarr.

Not really all that fussed for the financial shape of the company, just as long as they're capable of producing more plastic crack for my consumption!

I seen this.. kirbs got a +20% pay rise.. if he's retiring he probably is just sucking what he can from it.

The beatings will continue until moral improves.

They really set up a good Fred Astare routine with this report. I haven't heard !@#$ all like that in quite some time.


Wish that they would smarten up and do the right thing here. I really liked this game once upon a time.



Too bad huberous had to !@#$ it all up.

Think you may mean hubris
unless it is a portmanteau of hubris + humerous = huberous

Which probably makes sense
The arrogance is certainly a joke imho

Trasvi wrote:

Wells also comments on the 'booming' web store - 150,000 new registrations! - yet the sales from the web store were behind last years.

I've been so traumatised by GW, my mind has blanked out much of the horror. Didn't they make a bunch of everyday stuff Direct Only, forcing gamers to register at in store terminals to buy it? It seems disingenuous to trumpet website success when that was the only way to obtain the products.

GW have stated in previous reports to be unaffected by the global financial downturn. To quote KillKrazy from a previous discussion:

Kilkrazy wrote:

GW themselves say

GW's half year report wrote:As a niche business, Games Workshop, in general terms, neither benefits nor suffers from macro economic factors.

In other words, GW themselves do not ascribe their results to the state of the economy.