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Agree. We'll see a lot more retailers go to the wall before GW. But GW was only just breaking even last year. Even a minimal recession-effect could have a significant impact as they don't have a lot of slack to play with, recent efficiencies notwithstanding.

On the other hand, if the recession is kind to them and they are one of the winners (like Aldi, Morrisons and one or two others) then it could be good for them. Add in the impact that the recession will be good for the attitude of their investors - who will be tolerant of ANY investment that isn't tanking at the moment, and perversely they could come out of this smelling of roses.

Indeed. Share price is a bit up and down, but they are still up from where they were a year ago, at least, they were when I looked yesterday.

However, one wonders how Rackham's fortunes will affect GW. Although much bigger, that a seemingl strong company could bugger themselves so quickly is bound to make investors nervous.

This is perhaps where GW's lack of risk-taking will pay a dividend. They to an extent are coaxing life from an existing, proven (all be it slowly dwindling year on year) demand, rather than chasing a potential new market.

If GW had invested in launching a new game, they could have faced skepticism. But offering extended product ranges for existing games at a cautious rate will be seen in a positive light at the moment I think.

Rackham's problems will have rung alarm bells, but I think the "sophisticated investor" will have seen that R were chasing a somewhat different market than GW. Personally I don't believe they are to the extent they think, but I suspect the investors believe GW's line that "the GW hobby" is somehow different from "the wargaming hobby", because they have a captive audience inhabiting their stores.

Share price has been reasonably steady and has actually performed very well in the last few weeks given the stupid things that have been going on in the market having perked up following Kirby's buy-in in the late summer. No one seems to be seeing any bad news.

My one concrete cause for doubt is the "letting go" of Dave Taylor in the US this week. Clearly he didn't want to go, so I'm wondering if this was a round of redundancies? Pure speculation on my part, and I don't want to cause upset to Mr Taylor by speculating too much about his personal misfortune.

IF (and I reiterate I have no evidence for this) it was a redundancy situation, then this may indicate that US Christmas sales have been going poorly. On the other hand it could indicate no more than that some dimwitted beancounter decided that saving costs in US Community Support would somehow be of long term benefit to the company...

Who knows. It certainly seems Mr Taylor is remaining tight lipped, and that could be for a number of reasons.

It could also be a move by GW (which is arguably sensible, but only sensible) to rely less on 'big names' and instead multi-role the job. Perhaps this is why Dave went, who knows. This is all pure speculation and nothing more! (nor am I trying to imply anything about Dave Taylor).

You raise a good point about Rackham. But also with Wizkids going belly up, it would seem to suggest Pre-Paints are not a terribly good idea overall, as this is what nailed Rackham (or at least a botched switch over from what I've read).

I am glad GW are concentrating on the three main games. It is a shame that Specialists have since fallen by the way side, but the joy here is that the bits and pieces are available to current players, so no one has particularly missed out, unless of course you can't get hold of certain models (Necrons for example!). As I mentioned either above or in another thread, I have a nice feeling again about my hobby, and I am genuinely enjoying Fantasy more than I have in ages.

In the most part this is due to fluff ressurection in the newer Army Books, and the way Chaos is now portrayed. It is arguably even more Chaotic than it once was, with Daemons having some kind of personality beyond 'raaargh gribble'

GW should be fine. The post-LOTR drop was almost certainly worse for them than what we're seeing looking forward. Besides, they already own their own production.

Time to work on Quality, and not really so much on Quantity.

Fall back on Necromunda, Mordhiem, and CIties of Death.

GW, the time is right for the Inquisition Schermish game.

I personally don't see GW tanking at all. you have to look at the fact right now, ya the economy is going to die, it is starting now and it is only going to get worse, so GW could suffer major losses with its model line if they don't find a way to drop prices over time. How ever, with all the new WarHammer products coming out (DoW2, WAR, ect ect) They are going to get a lot of income from just selling the name.

WAR is doing crazy good for a new MMO, DoW2 is expected to be the top selling RTS game with it comes out and now there is news about a new FPS game for the XBox coming, with the rumors or a 40K MMO and what ever els GW has hidden up there selves they will make out like bandits after this is all done, because even if the games tank GW will still get butt loads of crash for letting people use there copyrights.


And with any luck they will take a fall in sales and decide to do things there players are looking for, like updating ALL of the Codex for 5th edition rules as well as relise some form of rule explanation that doesn't include "Flip a coin"

Grot 6 wrote:Time to work on Quality, and not really so much on Quantity.

Fall back on Necromunda, Mordhiem, and CIties of Death.

GW, the time is right for the Inquisition Schermish game.

That's good advice, focus on the games that don't sell a lot of models...

Really though, if GW can, this is a great time to expand their retail store influence. A lot of mom and pop stores going out of business creates a hole that GW can fill. If they can expand during these lean times (even if they go into more debt as a result) they will be better off when the economy has it's upswing.

Ozymandias, King of Kings

@Ozy, GW won't fill failed mom&pop B&M with more B&M - they'll fill that gap with GWMO....

I forsee Christmas 2009 as the recession bites more fully.


Huddled around the oven, the only warm part of the house, with fingerless gloves over chapped hands blistered from the daily grind and extra shift. Turkey is not an option this Christmas, but food will still be on the table. The string trussed lump sillouetted by the ovens glow cooks slowly, surrounded by some mean hard budget vegetables and thin gravy.

At the 'ping' the over door opens and out comes the festive feast. Roast warhound titan, head removed and torso filled with stuffing the once mighty warhound is reduced to a backstop gamers feast. Time to serve, a plasma blastgun is deftly removed before the fork is inserted to steady the carving. Slices of succulent side torso peel down the serving platter; as usual there is a fight over who got more void shield. The one carving tries his best to ignore the plaintiff calls by asking; "Anyone for leg?"

Orlanth you should live in Portugal for the last 6, 7 years... what you guys call recession is just luxury here.
We have been having horrible times for so long that these recession news are like " seen that done that" kind of thing

Well, I'm going to have to keep on 40k army and 2 fantasy armies and sell all my other stuff. I'll most likely keep orks for 40k and for fantasy it will be lizards and ogres for me..

everything else will be on the chopping block.

@Navarro: At least it can't get any worse, right?

I walked into the FLGS last Saturday.

4 guys playing Magic, and a couple little kids playing games. No Warhammer, 40K or mini gaming at all. The local GW store has also been empty.

Personally, here's my take on the bad economy. It's all panic. Unless you have heavily invested in the markets ( and yes yes, I know 401K's are affected too) or are a company affected by credit and stock prices....you aren't being hurt ( for now). Inflation is coming, which will make prices rise. Right now though, I've only noticed some things going up by .50 to a dollar.

So people respond by spending less, which hurts the economy even more, forcing more companies to raise prices and lay people off.

Of course, with all the sales going on, and companies still making a profit, it makes you wonder how much they really do mark up goods. I've heard that even when a GW employee buys with their huge discount, the company still makes money.

Its not all panic, its a real recession now. It will take time to come out of it, but we will if policies are prudent.

Frazzled wrote:Its not all panic, its a real recession now. It will take time to come out of it, but we will if policies are prudent.

Whose policies? The government's or the gaming companies?

Yes.


(and Yakface emailed-he really enjoyed the rice Malf)

The great thing about gaming,(which I often say when my wife starts jabbing me about buying stuff) is that no matter how bad things get, I'll always have those figures and books. Which can be played at any time without any more money being spent.

General Hobbs wrote:I've heard that even when a GW employee buys with their huge discount, the company still makes money.

I really doubt that, it's usually from people who don't look at the whole picture.

GW: OK $10 miniature has $1 of metal.

Fan: OMG! GW makes 900% profit!

GW: Yeah but turning that metal into a miniature requires molds and equipment. AND someone has to operate that equipment AND since we manufacture in the US and UK that person is making an OK wage and probably has benefits too. Call that $2.

Fan: OMG! GW makes 700% profit!

GW: Sure but we also have to pay the sculpters and artists who designed that model, and the writers whose words inspired them and so on and so on, tack on another $1.

Fan: OMG! GW makes 600% profit!

GW: Now we need to pay rent on our headquarters for those sculptors and mold-makers, pay the salaries of the accountants who pay them, salaries for the sales people who sell the models to stores, fuel for the truck... Call it another $1 and that's being conservative.

Fan: OMG! GW makes 500% profit!

GW: Of course the store has to pay for rent, and salaries and so on too. So they got it for less than $10. Now guess how much the store paid for that model wholesale? $5.

Fan: OMG! GW makes... no profit?

GW: Nah, we made about a nickle on that one after all was said and done.

Indeed KK.

If people would bother to look at the freely available Investor Relations page, and looked at Turnover compared to profit, they would see GW do not make the 'millions' that some claim.

Of course, some really are beyond help. I was once told online that GW had clearly massaged the figures to justify their high price tags. Of course they did. I mean, what FTSE listed company tells you the real amount of profit? They all *understate* it. That'll bring in the investors!

Though, considering PP are very much equally priced for individual models, I do wonder how much of that is pure profit to them.

I heard a theory from someone last year that GW 'deliberately' made a loss to avoid business tax on the minimal profit they would have made. It also has the added bonus of whatever profit they made this year looking like a sales revival, which of course it was not.

There's no such thing as figures that aren't massaged, in any organisation.

I'm not sure that PP's overheads are massively different to GW's.

I'd assume PP's overhead is lower, I think they use more freelancers (so no sunk wages and benefits) and they don't have a chain of retail stores to keep going.

But the LGS where you buy it from does. Either way part of your money pays for store electricity and rent. That sculptor idea needs some reworking so you can pass it off as a well thought out argument, I'll be back later.

But the FLGS has revenue streams from other products and even other industries (comics, videos, novels, whatever), the GW store has to support itself solely on GW products.

I've been of the opinion for a long time that GW stores cannot possibly make a profit.

Kid_Kyoto wrote:But the FLGS has revenue streams from other products and even other industries (comics, videos, novels, whatever), the GW store has to support itself solely on GW products.

True and each product in each store pays its share of the rent. GW stores have low and high profit margin items just like any other store. I would guess that superglue and other hobby supplies are among the higher ones and rulebooks, codices and the like amongst the lower ones.

Kid_Kyoto wrote:I've been of the opinion for a long time that GW stores cannot possibly make a profit.

I've believed this for some time, I suspect many GW stores run at a loss. However stock sold in a LGS or over the internet (especially from GW's site) probably helps to make up the difference for GW.

Im this economy I personally will be more inclined to finish painting the models I already own and then proceed to buy more with my limited income as a college student working in jobs that pay a little over minimal wage if that.

If I lose 70% of no money, I still have no money. Credit crunch beating tips from Greebynog!

George Spiggott wrote:

Kid_Kyoto wrote:But the FLGS has revenue streams from other products and even other industries (comics, videos, novels, whatever), the GW store has to support itself solely on GW products.

True and each product in each store pays its share of the rent. GW stores have low and high profit margin items just like any other store. I would guess that superglue and other hobby supplies are among the higher ones and rulebooks, codices and the like amongst the lower ones.

Kid_Kyoto wrote:I've been of the opinion for a long time that GW stores cannot possibly make a profit.

I've believed this for some time, I suspect many GW stores run at a loss. However stock sold in a LGS or over the internet (especially from GW's site) probably helps to make up the difference for GW.

First up, you are right about the LGS. Far and away, they offer GW the biggest source of *profit* overall. Not all GW stores run at a loss, but I don't think any of them are exactly money spinners. They serve a different task, which is recruiting and retaining customers, something which a price cannot be put on.

But, about the PP prices and having similar overheads to GW...not in a million years. Although there will be some economy of scale (they use less metal than GW, thus are likely to pay a higher wholesale rate) it's not enough to drive their prices anywhere near GW's. Before anyone freaks out, I'm going on the UK prices for PP stuff, which are surprisingly high. Now, PP don't have the management structure of GW, or anywhere near it. They don't have the stores. I don't think they even own their own Foundry to cast it (might be wrong, but I'm not aware of one) and so on. They have fewer sculptors, and the merest fraction of GW's employees. All this should mean they can sell at a far lower price to the FLGS, but it would appear (and only appear. I'm no FLGS owner, so I don't know the supply prices) that they don't. Where is this profit going? Can you really call GW a bunch of grubbing little oiks and exonerate PP of the same?

Mad Doc Grotsnik wrote:Although there will be some economy of scale (they use less metal than GW, thus are likely to pay a higher wholesale rate) it's not enough to drive their prices anywhere near GW's.... ...Now, PP don't have the management structure of GW, or anywhere near it. They don't have the stores. I don't think they even own their own Foundry to cast it (might be wrong, but I'm not aware of one) and so on. They have fewer sculptors, and the merest fraction of GW's employees. All this should mean they can sell at a far lower price to the FLGS, but it would appear (and only appear. I'm no FLGS owner, so I don't know the supply prices) that they don't. Where is this profit going?

A nice bit of supposition to start with regarding economy of scale since we don’t know PP’s costs and GW’s quoted 4% is too generalised to be meaningful. If PP’s management structure, sculptors and staff are proportionally the same size as GW’s then this isn’t a factor, but of course we don’t have that information either. They have at least two foundries (US & UK) and both products pay for stores, a chain of stores will be cheaper to run than a single store. From where I’m sat PP stuff is often slightly cheaper that GW stuff. e.g. the Venerable Dreadnought is £35, Deathjack is £33 .

Mad Doc Grotsnik wrote:Can you really call GW a bunch of grubbing little oiks and exonerate PP of the same?

Nobody's saying this Grotsnik, you're off in GW fanboi fantasy land again.

Actually, I think you'll find people esposuse PP being cheaper than GW as one of it's main appeals.

A single store has the same running costs a single store from a chain, depending on location. They still need Staff to, well, staff it. Electricity bills, business rates, insurance etc all the same... And most GW's will have more staff than an FLGS, so the cost is probably higher into the bargain.