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Hey guys,

It's quite easy to find if you just google "Games Workshop profits", you can get pages that show how much GW has actually made...

I make a point of looking it up every so often and though I'm not a guy for numbers or hell, even business, it just strikes me that they really don't make that much in profit.

So as much as we whine about price hikes... at the end of the day GW is a business and has to provide money to its shareholders. I dislike that philosophy, I dislike the free market... but it's the truth and unfortunately there's nothing that can be done to alter that.

So rather than whine about GW becoming a profit machine, shouldn't we be supportive of a business that is leading a niche industry that really doesn't make that much money? Running those stores must be bloomin' expensive...

Thoughts?

Personally, I will admit the one complaint that players have which strikes me as perhaps correct is the philosophy GW have of reeling in kids for a big purchase of stuff only for them not to continue the hobby: If the business was catered toward some hardcore fanbase that DID collect the hobby their whole lives, I imagine they'd make more.

I'm imagining someone is going to produce figures that'll own me now...

Hit up page 24 of this report here and it gives you a monetary breakdown of what GW did for the fiscal period of last year-

Page 2 provides a bare bones summary of how much they made.

Page 5-6 breaks down how much they sell by venue and where people buy their products.

There are alot of other pages too, but those stood out to me.

http://investor.games-workshop.com/downloads/results/results2009/gw_year_end_09.pdf#page=23

Wargaming was around before GW was invented and it will survive the collapse of GW.

If GW price themselves out of the veteran market they will have to hope that the newbie market will sustain itself.

Hi all.
If I am terrible at running my buisness and squander all my profit on outdated buisness practices.

Should I expect my customers to pay extra for my products to make up for my incompetance?
(GW charge 2 to 14 times as much for product compared to other retailers.)

Or would it be bettter to become more efficient and pass the savings on to my customers , to give them better value for money and grow my buisness like my competitors?

If you keep supporting GW corperate managers incompetance , you only have yourself to blame for the outcome.(IMO.)

I think GW is relying too much on it's 'heavyweight' status in the hobby market.

Granted that this status gives them some leeway when it comes to price increases, but there is undoubtedly a point where the model will collapse.

I do suspect that no-one on this board has experience equivalent to Tom Kirby in terms of running such a large company. I certainly don't. Perhaps there are tenets of business that none of us understand at this level that mean that GW is doing exactly the right thing to safeguard it's own future?

J.Black wrote:Perhaps there are tenets of business that none of us understand at this level that mean that GW is doing exactly the right thing to safeguard it's own future?

There is, of course, no guarantee that GW is currently doing this.

Or, in fact, is at all capable of doing this.

I know that

I'm just playing Devil's Advocate here

A business has to keep growing to survive, and i imagine the line between utter failure, and steady growth is very fine indeed. I personally think they have gone a little too far with their latest increases but, They could turn out to be the right thing to do....I guess we'll see in a couple of years

WarOne wrote:Hit up page 24 of this report here and it gives you a monetary breakdown of what GW did for the fiscal period of last year-

Page 2 provides a bare bones summary of how much they made.

Page 5-6 breaks down how much they sell by venue and where people buy their products.

There are alot of other pages too, but those stood out to me.

http://investor.games-workshop.com/downloads/results/results2009/gw_year_end_09.pdf#page=23

That was interesting, dunno if 5,000,000 in profit is good for a business of GW's size or if those dividends are of a reasonable size.

Lanrak wrote:Hi all.
If I am terrible at running my buisness and squander all my profit on outdated buisness practices.

Should I expect my customers to pay extra for my products to make up for my incompetance?
(GW charge 2 to 14 times as much for product compared to other retailers.)

Or would it be bettter to become more efficient and pass the savings on to my customers , to give them better value for money and grow my buisness like my competitors?

If you keep supporting GW corperate managers incompetance , you only have yourself to blame for the outcome.(IMO.)

Do said retailers run stores?

Well according to that report for Yr End 2009 they made 5.5 Million pounds after taxes. Compare that to the loss of 740,000 pounds the year before. Now i would say most of that is related to sales price increases.

But another important number to look at is cash Flow. They has positive cash flow for the year. A sign that they are not hurting for cash. Or at least not in a bad crunch for cash I should say.

Also their Liabilities dropped close to 6 million. Seems to me just looking at two years worth of data that they had a good year, and are using their money wisely.

£5,000,000 for a company the size of GW is not great no. Look at other retailers on the high street with the number of stores GW has, plus the international stores. I can imagine they make much more then that, tho the current recession blurs that picture a little.

Think about the companys and products GW owns, Black Libary, Citadel Minitures, White Dwarf, Forgeworld etc. They clearly aint raking it in if they are only pulling 5 million in world wide a year, can imagine the average tesco store pulls that in on it's own.

Lots of people slate GW, and i'm a bit torn if i agree or not, now ok i aint been in the hobby years and years, and yes i do believe it is expensive for what it is, however no other wargamming company gets even close and non provide the support to it's players like GW do. If my local GW closed i would have no other option but to look for wargaming companys over the internet, instantly losing that walk in the shop appeal that GW has.

What i keep thinking and what really stands out to me is the infirstructure GW has created for it's players, fans etc. You are paying for that when you buy a paint or a model, you are paying for all the game research that goes in, the high level figure designs etc. Basically it all levels out.

Also due to the recession everything is more expensive, so models are gonna be the same. for example can anyone tell me since when did chocolate get soooooo expensive. It's all relative.

Other things to consider are losses due to shoplifting and the fact that GW's £5,000,000 is also after its pay down of a portion of its debt. £10,000,000 was spent to pay down loans they took to build those newer US manufacuting facilities. Theft accounted for a £3,000,000 loss. So in a more idealized way GW can be generating £18,000,000.

This year they're expected to make more money with licencing fees from the Space Marines and Dark Millenium as well as other video game adding £12,000,000+. Their debt is pretty much paid off. They've slashed overhead and operating expenses. So for their £120,000,000 worth they'll be coming closer to 25% proft this year up from 4%.

This year should be a real turning point finanically that will hopefully give GW the opportunity to be less dickish.

Lanrak wrote:GW charge 2 to 14 times as much for product compared to other retailers.

Really? I'm looking at other big brands like Warmachine, Malifaux & Infinity and I'm not seeing that.

aka_mythos wrote:Other things to consider are losses due to shoplifting and the fact that GW's £5,000,000 is also after its pay down of a portion of its debt. £10,000,000 was spent to pay down loans they took to build those newer US manufacuting facilities. Theft accounted for a £3,000,000 loss. So in a more idealized way GW can be generating £18,000,000.

This year they're expected to make more money with licencing fees from the Space Marines and Dark Millenium as well as other video game adding £12,000,000+. Their debt is pretty much paid off. They've slashed overhead and operating expenses. So for their £120,000,000 worth they'll be coming closer to 25% proft this year up from 4%.

This year should be a real turning point finanically that will hopefully give GW the opportunity to be less dickish.

Given we are in the middle of a recession, to be clearing depts and decreasing overheads the company is putting it's self in a very good position for the future.

3 million in theft is a lot mind, didn't think it would be that substantial. Why not introduce electric tagging in stores? always confused me why they dont do that.

I didn't know theft was so easy... I'll have to bear that in mind ;P

Just keep in mind that 5 million is Net Profit, and not Gross sales (which was around 125 Million).

How do you define the "size" of GW? Keep in mind that gaming is a niche market, and war gaming is a niche market within a niche Market.

Where I live there is about 20-30 players. The town has 50,000 people. If i use 40 players (Absolute max) that comes out to be .08% of the population is a customer. Not a high percentage. Of course these numbers can vary greatly from city to city and state to state. Another town i lived in had a larger population and fewer players.


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aka_mythos wrote:Other things to consider are losses due to shoplifting and the fact that GW's £5,000,000 is also after its pay down of a portion of its debt. £10,000,000 was spent to pay down loans they took to build those newer US manufacuting facilities. Theft accounted for a £3,000,000 loss. So in a more idealized way GW can be generating £18,000,000.

This year they're expected to make more money with licencing fees from the Space Marines and Dark Millenium as well as other video game adding £12,000,000+. Their debt is pretty much paid off. They've slashed overhead and operating expenses. So for their £120,000,000 worth they'll be coming closer to 25% proft this year up from 4%.

This year should be a real turning point finanically that will hopefully give GW the opportunity to be less dickish.

Which pages are you getting these numbers from? The 10 Mil to pay down the debt is not an expense, so it does not show up on the income statement, that is a balance sheet item.

Where is the not that theif accounted for a 3 million lost? I am not seeing that one.

jbunny wrote:Just keep in mind that 5 million is Net Profit, and not Gross sales (which was around 125 Million).

How do you define the "size" of GW? Keep in mind that gaming is a niche market, and war gaming is a niche market within a niche Market.

Where I live there is about 20-30 players. The town has 50,000 people. If i use 40 players (Absolute max) that comes out to be .08% of the population is a customer. Not a high percentage. Of course these numbers can vary greatly from city to city and state to state. Another town i lived in had a larger population and fewer players.

I was simpliy looking at the number of stores world wide compared to other companys having a similar number of stores. But i suppose you could compare that to gross sales as well.

Wargamming is a niche market, but so are a lot of things, im a vinyl collector for example and the cost of vinyl keeps going up, more then my models in the past nine months. Basically i feel everything is going up. Except my wages, Ha-Ha.

Losses due to theft do have to be figured in as an operational cost. Every single store has to do it - the only thing that varies is the levels of theft in your industry and location.

In order to be able to operate a store, you have to accept you will be stolen from. If you don't', then a decent bank advisor will ask you why you haven't done so when you show them your business proposal. Unless you have some convincing arguments as to why theft will be zero or minimal, they'll not accept you just saying so, and will force you to adjust your figures or refuse your startup loan.

It doesn't matter what your market is niche or not, the question is whether GW's owners could do something better with their 100 million than invest it in GW and get a 5 million return.

Or words to that effect -- there are many ways of valuing companies.

GW's big problem is that their profits (or reduced losses) in the past two or three years have come from (A) rationalisation of the distribution and retail chain and (B) foreign exchange fluctuations. In other words, if the GBP hadn't tanked vs the Euro, US$ and JPY owing to the banking crisis, GW still wouldn't be making a profit.

Rationalising the distribution and retail chain is a good thing however at some point the chain is done being rationalised and can't be made any better.

Fifty wrote:Losses due to theft do have to be figured in as an operational cost. Every single store has to do it - the only thing that varies is the levels of theft in your industry and location.

In order to be able to operate a store, you have to accept you will be stolen from. If you don't', then a decent bank advisor will ask you why you haven't done so when you show them your business proposal. Unless you have some convincing arguments as to why theft will be zero or minimal, they'll not accept you just saying so, and will force you to adjust your figures or refuse your startup loan.

Not arguing that fact. I am contesting the 3,000,000 loss due to theif number that was given by someone else. Just looking for the page that gives that figure.

I think that the rise in prices is in part due to a rise in quality. I mean, GW provides a luxury wargaming product, so it makes sense that it's more expensive. What do I mean by luxury? I mean that WHFB has a 120 page full-color rulebook, while most other gaming systems have a black and white rulebook about the size of a GW codex (if they even print rules at all. Many systems just give out .pdf's that they make their players download and print).

Likewise, you pay a premium for the models because, well, look at the models. this is a nice model, but this is a work of art. That, and, as odd as this sounds, you do sort of pay a premium for having a game that you can play pretty much anywhere.

GW collapsing would be very bad (stop and really think of the rammifications not only to wargamming as a whole, but to your life personally), and them making profit reinforces this. That they are able to do so AT ALL in a recession while appealing to a niche market is commendable, especially how the previous person in charge apparently sort of ran GW into the ground.

I think the vast majority of customers understand that GW is a business and their overall goal is to make money. That said, there are good ways and bad ways to do that, with bringing in more customers and others that alienate the customer base.

Bad moves:
1) The U.S. anti-internet shopping cart. They didn't stop internet sellers or discounters. They made it more difficult for them to move GW's product to the point many failed and now there's an almost undisputed king of the hill (Warstore). GW failed to FORCE customers to buy via THEIR website and ultimately lost sales and money from it.

2) Global price variations-
SM Tactical squad
37.25 USD on U.S. site
22.50 GBP on U.K site= $34
62 AUD on Australia GW= $52.85
42 CAD on Canadian GW= $39

3) Price hikes- They happen and I can appreciate why. I don't appreciate willy nilly price hikes. I especially dislike more expensive kits with less pieces. New Hellhound without accessory sprue for example. I think many people bought standard Bastions and saved $16 on the Chaos versions. I honestly believe GW is pricing themselves out of their target audience, especially in these economic times.

deejaybainbridge wrote:

No other wargamming company gets even close and non provide the support to it's players like GW do. If my local GW closed i would have no other option but to look for wargaming companys over the internet, instantly losing that walk in the shop appeal that GW has.

To be fair, I think that is more GWs reach, quantity of service rather than quality, I don't think it's as good as it used to be. And in some ways that's understandable, I don't just want to rant. I still play their games. I think most other companies provide better service, because they are smaller companies. Sure, I'll have to ring them or email them but the service is usually helpful. GW Mail Order Trolls, yes that's their name, used to be much more willing to answer questions and sort stuff. The fact that they don't as much now is perhaps more down to guidelines than the staff themselves. I've never been fond of the realtively recent trend of Games Workshop staff trying to sell you everything in the store as soon as you walk in. Okay, it's an exaggeration, but still. But this is to be expected, it's being run more and more like a "proper buiness." I think the reason many slate it is that it's lost the hobby appeal it once had. The Perry's historical stuff is outstanding, and cheaper. Yes they still need to make a profit, but they have a love for the hobby, GW is no longer run by people who do. Again, this isn't a slate, I accept that things change.

And living near Nottingham I am near the bases of a significant number of non-GW companies so may find it easier to buy, say Foundry or Perry stuff from a store, than others may do. So I appreciate that I am rather lucky there


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Ailaros wrote:

GW collapsing would be very bad (stop and really think of the rammifications not only to wargamming as a whole, but to your life personally)

I don't think I'd miss GW producing miniatures or new editions of 40k / WHFB personally, but I know some would. As for the ramifications to wargaming, that would be minimal. Although GW games have been an entry point for many so there may be an effect there. But most other companies/miniatures ranges/rulesets have a customer base of primarily dedicated hobbyists that doesn't shift much, so I don't think there would be too much of an impact. Saying that, depends where you live. I'm primarily an historical gamer, based in the UK - can't see Games Workshops absence making much of a difference, although they seem to like to think of themselves as the be-and-end-all of wargames at times

Ailaros wrote:
... I mean that WHFB has a 120 page full-color rulebook, while most other gaming systems have a black and white rulebook about the size of a GW codex
Just my two cents.

Sure, it looks really pretty, and that drives cost up. But WHFB is an okay rule system, and 40k certainly isn't anything to shout home about. Depends what you want from a wargame I suppose. And yes the models are really nice, but non-GW stuff is getting better all the time., especially stuff doen by current or former GW sculptors. The Perry's stuff is amazing, and I can chat to them at shows - bonus all round. And I've played rulesets scrawled on the back of beer mats that really capture the feel of a period and provided awesome, fun games.

deejaybainbridge wrote:
3 million in theft is a lot mind, didn't think it would be that substantial. Why not introduce electric tagging in stores? always confused me why they dont do that.

That's only 2.5% - that's quite low tbh. Lots of other retail businesses with high value luxury items get hurt much worse.

The problem with tagging is cost. £120mill is (say) 6 million £20 boxes. If the tags are 3p each then they're costing you £180K per year in tags + the equipment to check for them (couple of grand each for entry-level systems) and the time of the staff to kill them at the checkout.

Then how many thefts do they actually stop? Peeling the tag off isn't that hard. Neither is emptying the box into a bag. Also, remember that employee theft is generally significantly higher than customer theft.

If your shrinkage (shoplifting and staff) is reasonably low it's difficult to justify this.


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Corbeau wrote:I'm primarily an historical gamer, based in the UK - can't see Games Workshops absence making much of a difference

Easy to say. How many entirely new gamers does your historial gaming group bring into the hobby vs people joining that already have wargaming exposure?

Scott-S6 wrote:
Easy to say. How many entirely new gamers does your historial gaming group bring into the hobby vs people joining that already have wargaming exposure?

That was a point I meant to include. A fair few, but it's a well known group (Newark Irregualrs). Certainly not as many as GW of course, but I don't see that many new, younger GW players sticking around too long, they stop playing althogether. What I suppose I was saying is iff they continue an approach which seems to be tailored to "new purchases" rather than making veteran gamers, whether they were absent or not may not make a difference. It would certainly have a long term effect though. I think historical gaming generally has a different audience taht don't always come into the hobby via GW is the point I was trying to make in a very roundabout way, then when you go to shows like Salute or Partizan you find new non-historical games. Hoepfully some of that waffle makes sense, apologies for the lack of coherency

Gamble wrote:2) Global price variations-
SM Tactical squad
37.25 USD on U.S. site
22.50 GBP on U.K site= $34
62 AUD on Australia GW= $52.85
42 CAD on Canadian GW= $39

Some of that is due to local taxes, import taxes, shipping costs, etc.

Corbeau wrote:

Scott-S6 wrote:
Easy to say. How many entirely new gamers does your historial gaming group bring into the hobby vs people joining that already have wargaming exposure?

That was a point I meant to include. A fair few, but it's a well known group (Newark Irregualrs). Certainly not as many as GW of course, but I don't see that many new, younger GW players sticking around too long, they stop playing althogether.

How many of the not-new members got their start with GW?

SilverMK2 wrote:Some of that is due to local taxes, import taxes, shipping costs, etc.

Oh, I understand that there are other factors to cost besides GW wanting more cash. Obviously I don't have numbers, but I'm confident alot of our web astute friends down under see the glaring price differences and get their product overseas. I know I do when I see variances in the USD to GBP. It seems to me the costs of having a GW store in AU (store and staff), the costs of getting product there (shipping and tax) and then having the customers buy from UK/ US retailers is a waste of money. The question is, is it an acceptable loss or does a tourniquet need to be applied?

Scott-S6 wrote:

Corbeau wrote:

Scott-S6 wrote:
Easy to say. How many entirely new gamers does your historial gaming group bring into the hobby vs people joining that already have wargaming exposure?

That was a point I meant to include. A fair few, certainly not as many as GW of course, but I don't see that many new, younger GW players sticking around too long, they stop playing althogether.

How many of the not-new members got their start with GW?

Probably a fair number, which I acknowledged. Some used to work for early GW/Citadel , but the further point I made was that was old "hobby-orientated" GW, GW of today doesn't seem as concerned with longevity.

You're absolutely right about GW introducing most people to wargaming these days, the poster I replied to seemed to almost be stating that wargaming would end without GW (which is more me reading between the lines) and that's more what my point was about, but perhaps I overstated on my part.

I don't know squat about business. However, my opinion, from what I consider as a layman's perspective, is thus:

A) Games Workshop going out of business would be bad. I play 40k. It's the only minis game I play, and the only one I intend to play. This hobby is ludicrously expensive and time consuming, so I can't afford the time or money to pick up another flavor of plastic heroin. I don't know about you guys, but Games Workshop contributes a healthy bit of money to my LGS. What's more, Games Workshop games (most of them, anyway) are not like, say, D&D. With RPG's, all you really need are the core rulebooks to have all the materials you are ever going to need. With Warhammer (either flavor) or Lord of the Rings, there is ALWAYS something new to add to your army.

B) It is in no immediate danger of doing so. Wargaming seems to be much like cigarettes. People SAY "If it gets any more expensive, I am going to quit." But they don't mean it. They say that if you put a frog into a pot of boiling water, he jumps out. But if you put him in a pot of normal water and bring it to a boil slowly, the frog will sit there until it dies. So long as the cigarette manufacturers (and the federal and state government) as well as Games Workshop, boil us all slowly, we will just sit there and take it.


It is the nature of the beast that prices rise. Sad, but true. I think that Games Workshop puts out a quality product, although I occasionally shop around for a bargain price, I will continue to buy their merchandise.

But, that's just me.

Once again, GW's profits are so low because they still operate on a buisness model that was birthed in the 80's. As a company today, they simply aren't viable.