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Moved to the other "Let them know you care thread".

AgeOfEgos wrote:


Thanks for the post/explanation. Do you mind going further....and specify a long term strategy that would drive this? I ask---as I know you have more education than most when it comes to financials/economics on the board...and my economic courses were driven out of graduate necessity---not interest

I look at this in the following light;

They have an elastic product
We (The consumers) are going to be more sensitive to price changes now than at any time in GW's history (3rd party alternatives)
Their demand clearly indicates they've passed the line


The only thing I can think of is that they are pricing to drive quality thoughts on consumers (The Porsche of miniatures---it must be because look at that price!)

Or maybe they are just price skimming not thinking that consumers---will actually buy other products?

There the point of max profit isn't all that easy to actually tell. It's similar to the Laffer curve, which argued that by lowering taxes, you would raise revenue. The problem is that everyone assumes that they are on a certain side of the curve (Businesses typically assume that they are on the raise prices, make more profit side of the equation, taxpayers typically assume since they don't want to pay taxes, they must be on the the other side).

Just read a really well put together argument that was linked through FaceBook, he seems to use Dakka too, Anyway well worth a read;

http://theeternalwarriors.com/?p=1194

sourclams wrote:

AgeOfEgos wrote:I'll say it again though---I don't understand how it can be that simple. Micro 101 teaches you that basic concept----so there must be more their departments are looking at. I would hope!

The principle is simple, the means of execution or the alignment between their core strategy and their go-to-market approach and the balance between short term profit and long term sustainability is always much more complex.

There could be any number of assumptions that their analyst team is making that are either perfectly valid or completely erroneous, and could be totally irrelevant depending on whether or not their senior leadership chooses to heed or ignore the recommendations of their house economist (if they even have an economist on the payroll).

This is very true. We can all talk analysis and calc's and elasticity and how it is calculated but all those count for naught if the underlying assumptions made by management are incorrect.

Having sat through many many many budget forecasts (within both manufacturing and service industries) people would be horrified at just how unscientific forecasting is in your typical company. People build in slack as their performance is judged on achieving those numbers - others try to guess that slack and remove it. Senior managers don't like the numbers so mandate a change without speak to the people who did the original forecast. What modelling people use often is based on historic data with just a gut feel percentage increase added on - not a massive amount of market research goes into the budget process.

So, I would say, GW obviously believes that the market can bear more - the marginal increase in revenue (i.e reduced units but increased GP margin) is still positive from each price rise. I still expect to see another large price rise next year - unless customers sto[ buying in sufficient quantities this year. What concerns me (as others have mentioned) is that the number of units sold sort of dictate future purchases - e.g vets bring in new customers, maintaining a large player base so game is self-sustaining etc. I would love to see a unit break down of sales across product line for the last 5 years - trending that would answer so many questions and idicate future plans. People forget that a lot of the numbers for the last 3 to 4 years have been sustained by large increases in Black Library sales - makes me wonder just how much unit sales are down.

Personally, when I look at the balance sheet for last couple of years, I wonder if the company is being prep'ed for a sale - a big focus on costs which seems some what shortsighted (one person store) and a big emphasis on margins/ profit (and revenue) but not on units sold. It does make me wonder when the CEO is such a major %age shareholder - some much to gain from a good sale. I also didn't think the accounts seemed to justify a dividend.

Flashman wrote:

Asherian Command wrote:

notprop wrote:Blimey its the Queen Mum!

MY GOD REALLY! Ask her.... "Can she expell matt ward from Great Britian into Perth Australia?

Diffcult, her being dead and all...

Never underestimate the powers of Zombie Queen Mum - she'll have your spleen out as a little Amuse-bouche after her G&T!

fullheadofhair wrote:

Having sat through many many many budget forecasts (within both manufacturing and service industries) people would be horrified at just how unscientific forecasting is in your typical company. People build in slack as their performance is judged on achieving those numbers - others try to guess that slack and remove it. Senior managers don't like the numbers so mandate a change without speak to the people who did the original forecast. What modelling people use often is based on historic data with just a gut feel percentage increase added on - not a massive amount of market research goes into the budget process.

It is almost like you work where I work!

Overall, well said, and, sadly, most likely quite true...

Just posting this for some perspective this is from GW's 2010 financial PDF in the "Letter from the CEO" section

And finally…
Recently we received a query as to whether something was wrong at Games Workshop. The query was prompted by our decision not to attend a City awards
ceremony where someone had very kindly nominated us for ‘Turnaround of the Year’. As you will see from this set of results, there is nothing wrong at
Games Workshop. It’s simply that we don’t believe we are here to receive awards. We are here to deliver a good return for our owners. And we aim to do
that for a very long time.

I don't think they have the capability anymore at the Corporate Office level to look beyond their spreadsheets to the actual customer needs, just shareholders.

When I looked at the 2010 financial records, I was amused by this quote...

The Company had no goodwill at either year end

At least they acknowledge an issue there

(And yes, I know 'goodwill' has a specific definition in accounting which is what they are speaking of. It's still funny.)

Warboss Gubbinz wrote:Just posting this for some perspective this is from GW's 2010 financial PDF in the "Letter from the CEO" section

And finally…
Recently we received a query as to whether something was wrong at Games Workshop. The query was prompted by our decision not to attend a City awards
ceremony where someone had very kindly nominated us for ‘Turnaround of the Year’. As you will see from this set of results, there is nothing wrong at
Games Workshop. It’s simply that we don’t believe we are here to receive awards. We are here to deliver a good return for our owners. And we aim to do
that for a very long time.

I don't think they have the capability anymore at the Corporate Office level to look beyond their spreadsheets to the actual customer needs, just shareholders.

They're not here to make good models, they're not here to make awesome games, they are here to make money. Sad, but at least they are honest about it.

nectarprime wrote:They're not here to make good models, they're not here to make awesome games, they are here to make money. Sad, but at least they are honest about it.

Their customer relations are abysmal, and it's their customers that ultimately give them this money.

The "they're here to make money" argument is rather meaningless.

Absolutionis wrote:

nectarprime wrote:They're not here to make good models, they're not here to make awesome games, they are here to make money. Sad, but at least they are honest about it.

Their customer relations are abysmal, and it's their customers that ultimately give them this money.

The "they're here to make money" argument is rather meaningless.

Back when I was converting some Chimera's for my Inquisition army, I wrote the American customer service folks a nice e-mail asking if there was anyway to order the decal sheets for SOB's since I didn't want to have to buy boxes more of the girls just for the decals, and their bits catalog had just recently gone away. The customer service guys said they didn't have the bit service anymore, but they did have some decal sheets laying about that I could have. So I gave them my address and described the project I was doing, and they sent me several sheets of sisters of battle decals and a couple of Templar ones too I think. For free.

I love GW's customer service. I have never had a bad experience with it.

-Tabitha

skyth wrote:When I looked at the 2010 financial records, I was amused by this quote...

The Company had no goodwill at either year end

At least they acknowledge an issue there

(And yes, I know 'goodwill' has a specific definition in accounting which is what they are speaking of. It's still funny.)

That tickled me also, how appropriate.

skyth wrote:When I looked at the 2010 financial records, I was amused by this quote...

The Company had no goodwill at either year end

At least they acknowledge an issue there

(And yes, I know 'goodwill' has a specific definition in accounting which is what they are speaking of. It's still funny.)

That's really funny, actually. For the economist dakkites in this thread, a few questions. First, what is the accounting definition of goodwill? Second, several users keep talking about GW being sold at some point in the future. Is that likely? What would that entail on a corporate level? What would that mean for us hobbyists?

Guildsman wrote:

skyth wrote:When I looked at the 2010 financial records, I was amused by this quote...

The Company had no goodwill at either year end

At least they acknowledge an issue there

(And yes, I know 'goodwill' has a specific definition in accounting which is what they are speaking of. It's still funny.)

That's really funny, actually. For the economist dakkites in this thread, a few questions. First, what is the accounting definition of goodwill? Second, several users keep talking about GW being sold at some point in the future. Is that likely? What would that entail on a corporate level? What would that mean for us hobbyists?

shamelessly posted from wiki:

Goodwill in financial matters is the value of an entity over and above the value of its assets. The term was originally used in accounting to express the intangible but quantifiable "prudent value" of an ongoing business beyond its assets, resulting perhaps from the reputation the firm enjoyed with its clients.

The difference between the purchase price and the sum of the fair value of the net assets is by definition the value of the "goodwill" of the purchased company. The acquiring company must recognize goodwill as an asset in its financial statements and present it as a separate line item on the balance sheet, according to the current purchase accounting method. In this sense, goodwill serves as the balancing sum that allows one firm to provide accounting information regarding its purchase of another firm for a price substantially different from its book value. Goodwill can be negative, arising where the net assets at the date of acquisition, fairly valued, exceed the cost of acquisition.

-end wiki-

Because they are publicly traded them being sold does not really mean very much, it should mean that one investment group may just sell its share to another investment company. Beyond that its hard to tell how they operate in their bubble.

Wow, more complicated definition than I expected. But, from reading that, would a company even mention that if they weren't in the market to be sold? So, a sale of the company would just be a changing of Suits at the top?

Guildsman wrote:Wow, more complicated definition than I expected. But, from reading that, would a company even mention that if they weren't in the market to be sold? So, a sale of the company would just be a changing of Suits at the top?

From companies you have purchased - i.e where you have paid more cash than the total book value of assets.

If a company is publically quoted, meaning its shares are traded on the stock exchange, someone can attempt to buy it by buying a controlling interest in the shares. The success of this depends on the willingness of the shareholders to sell their shares to the buyer.

In GW's case, the majority of shares are held by a venture capital group and several of the executives. This means the percentage of the shares generally available in the market is relatively low, so a prospective buy would need to go directly to the venture capitalists to make an offer.

...until you get to a certain controlling in terest, when you can compel the sale of existing shares to yourself. Of course you couldnt get that far just on the publicly avaiable shares in GW.

You always mention goodwill in accounts, as for any company and especially GW your reputation is incredibly important.

Fair disclosure - i work for an audit and accountancy firm, where we literally ARE the goodwill and nothing more - the name is everything here!

I left the hobby some years back and spent $700-800 earlier this year to get back into it with even small armies.

I definitely noticed the price difference from 2003 to 2011.

I even ended up buying 1/3 of the things from online at Maelstrom when I realised the massive parities in prices. Now that GW have made this final change, the 40K hobby is dead to me.

I'll go on to maybe play Warmachine a little more with the few figures I have (35 pt single caster list), but they've ultimately ruined a a hobby I once loved to play and involve myself in.


Also, how does one strike a nail into their own coffin from the inside?

Oh... and because griping at GW is 20% cooler with ponies...

<Rarity> I am not whining, I am complaining! Do you want to hear whining?

Thiiis is whiiiiining! Oooo, this mini is too expeennsive! Im's going brrookee! Can't you make it cheaper? Oh, it's resin and going to cause cancer! Why didn't you clean it first? It's going to leave a mold line, and the FLGS is so far away, WHY DO I HAVE TO SUPPORT IIIIIIIT?! </Rairty>

http://www.youtube.com/watch?v=csPPqdbcVwM

I love how almost every thread results in posters sniping at each other instead of being able to actually have a discussion. The joys of an internet forum board.
Christ on a pogo stick I can see why people prefer Bolter and Chainsword... :/

To be fair bohkari, the last handful of posts about economics have been both calm and well-informed. Sad that those qualities make them rare in this setting.

It always feels like it's just going to be a fleeting break from the trolling. =(
But actually, honest question, does anybody know if this is going to reflect the timings for the hinted Codex updates due for Necrons and Black Templars?? There must be a legitimate reason GW are increasing prices and reducing service...they must be looking to update their inventory and expand. Right...?

I think that it is unlikely that this would affect when the new Necron / Black Templar codecies will be released. I suppose this would only really happen if GW were operating at a loss, which they aren't.

Lord Commissar Bokhari wrote:I love how almost every thread results in posters sniping at each other instead of being able to actually have a discussion. The joys of an internet forum board.
Christ on a pogo stick I can see why people prefer Bolter and Chainsword... :/

...?

Anyway, take up the challenge and accentuate the positive, rather than highlight the negative.

You know, the whole 'mote' and 'beam' thing...

Well I pledge that if I win the lottery I will put half on green and win of course so that I can have the funds to go to Congo and buy about 50 monkeys than fly to Italy and purchase 50 Armani suits then fly to the UK to buy GW and replace the monkeys in suits with my monkeys in suits that will do a better job.

Wolfstan wrote: Stop acting like 14year old boys who've just seen a naked lady, when it comes to rushing to the Forge World stand to buy stuff.

My friend, you are right, and this made me laugh so much I cried a tiny bit