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Given the change of statue and facings I think they expected it to explode right out the gate.

Obviously a spectacular failure of foresight due to total ignorance of what their customers actually wanted.

All AoS selling more than wfb means is 40k sales dropped due to having very few releases this year.

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hobojebus wrote:
Given the change of statue and facings I think they expected it to explode right out the gate.

It's really hard to say what they were expecting. The statue could have just been a move to convince customers it was going to hang around.


Automatically Appended Next Post:

 Bottle wrote:
I agree with your first two sentences, but the third also shows that AoS has picked up massively through the year compared to when it launched.

You're just guessing, it doesn't show anything, we don't have enough information to say anything beyond wild guesses. We don't know how well WHFB was doing, we don't know how they calculated that AoS was doing better than WHFB, there's no way to compare them based off the information we have to actually get a picture of how things are doing in absolute terms.

 Bottle wrote:

I agree with your first two sentences, but the third also shows that AoS has picked up massively through the year compared to when it launched. No doubt because GW proactively tried to right the wrongs (the GHB) and also released some fantastic new ranges.

We can't really say this. The only thing GW have stated is that "we finished the year with sales of Warhammer: Age of Sigmar at a higher rate than Warhammer has enjoyed for several years". The issue is that GW do not state what several years means (and what period of time "finished the year" means either). It could mean the last two years which hence is comparing sales just before AoS release (so inevitably low sales) and the previous year when we had what one/two factions so this shouldn't be too hard. However in the last few months we have had AoSQ and Generals compendium which can be picked up by all AoS players (hence giving a larger player base for these items); in addition sales of individual models might also be higher because of interest from TW (noting Karl Franz is still out of stock). The fact that they can't say that AoS is at least equalling WFB 8th edition release sales is not a good sign (on the basis that initial sales are always higher and then decline over time). Hence one rain storm does not make a flood - if they continue to maintain higher than WFB sales for a period of time then that is good, but peaks and troughs are to be expected; it's the long term trends that are important. That they mention AoS specifically is also telling; there is no mention of the Hobbit or 40k in a similar way. In effect they are defending a position else you wouldn't mention it at all.

Overall the report is "Ouch" for GW (or should be if they have any sense). They've had a massive profitability hit on their main core business. Royalties have saved their bacon else profits would have been down £4m. Their overall revenue is down only 1% (so again I think they have capped out the player's base purchasing power). However profitability is down 27%. But they also say that getting started sets are proving popular (which for the purposes of this report were all old models). Hence simply the new moulds they are making just aren't recovering the same level of profit that they use to and is being propped up by sales of older (capital recovered) moulds. It probably doesn't help that this is their policy

"We continued with our policy of only increasing the prices of our new releases (approximately 30% of our sales) to reflect the necessary investment in our product offer and the quality we have built into these new releases."

When base inflation is lower than this then in effect the cost of their product is increasing compared to the populations wages. In effect they are trying to prop up falling sales by increasing prices on new models to compensate.

This can be further evidenced by that all sales channels (constant currency) are down but this comment is even more scary under their mail order section..."Sales of our Forge World range grew by 28% offset by a 12% decline in our Citadel range". Effectively Forgeworld mail order sales are now about 33% of all mail order sales, considering this was meant to be a niche area at this rate of growth it won't be too long before Forgeworld exceed Citadel sales from a mail order perspective.

Although it's not all doom and gloom GW really need to look at what they are doing. Despite everything they are still failing to draw in enough new recruits and relying on the older guard to keep buying expensive stuff (e.g. the FW sales). Their overheads are going up with slightly reduced sales resulting in a significant drop in profits. This isn't sustainable - simply if their profits continue to nose dive in the same way as this year then in three years their core business will no longer be profitable and they will be relying on their IP to keep them in profit. It's unlikely to happen this quickly because they will likely cull non-profitable areas first, but with Star Wars going to be a big thing and if Nintendo start capitalising on Pokémon again (and to put it into perspective last time Pokémon was massive GW really struggled) I think GW have a couple of hard years ahead of them. The Brexit issues could help here because with a poor exchange rate they could easily drop their foreign sales prices and try and encourage more sales - but my fear is that GW won't do this; they will keep the old exchange rate prices and try to maximise the profit from the foreign sales market.; this could allow more flexible companies to eat into their sales if they are clever.

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I wish everyone would abandon the attempt to use the financial report to prove that AoS is a massive success/failure. It's impossible because the report does not split out AoS sales from other system sales.

 Bottle wrote:
It clearly states that AoS picked up through the year.

It says what it says. What you said it says is "...AoS has picked up massively through the year compared to when it launched." We don't know if it was massive, we don't even know if the sales per release picked up, we simply know they released more and we know that new releases tend to be the bulk of sales (30%).

All we know is they released more AoS products in the 2nd half of the year and they "finished the year" with sales higher than Warhammer "has enjoyed in the past several years", whatever the hell that means because they don't tell us how they determined that.

That.... mean.... nothing.... of.... significance.

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Whirlwind wrote:

 Bottle wrote:

I agree with your first two sentences, but the third also shows that AoS has picked up massively through the year compared to when it launched. No doubt because GW proactively tried to right the wrongs (the GHB) and also released some fantastic new ranges.

We can't really say this. The only thing GW have stated is that "we finished the year with sales of Warhammer: Age of Sigmar at a higher rate than Warhammer has enjoyed for several years". The issue is that GW do not state what several years means (and what period of time "finished the year" means either). It could mean the last two years which hence is comparing sales just before AoS release (so inevitably low sales) and the previous year when we had what one/two factions so this shouldn't be too hard. However in the last few months we have had AoSQ and Generals compendium which can be picked up by all AoS players (hence giving a larger player base for these items); in addition sales of individual models might also be higher because of interest from TW (noting Karl Franz is still out of stock). The fact that they can't say that AoS is at least equalling WFB 8th edition release sales is not a good sign (on the basis that initial sales are always higher and then decline over time). Hence one rain storm does not make a flood - if they continue to maintain higher than WFB sales for a period of time then that is good, but peaks and troughs are to be expected; it's the long term trends that are important. That they mention AoS specifically is also telling; there is no mention of the Hobbit or 40k in a similar way. In effect they are defending a position else you wouldn't mention it at all.

Overall the report is "Ouch" for GW (or should be if they have any sense). They've had a massive profitability hit on their main core business. Royalties have saved their bacon else profits would have been down £4m. Their overall revenue is down only 1% (so again I think they have capped out the player's base purchasing power). However profitability is down 27%. But they also say that getting started sets are proving popular (which for the purposes of this report were all old models). Hence simply the new moulds they are making just aren't recovering the same level of profit that they use to and is being propped up by sales of older (capital recovered) moulds. It probably doesn't help that this is their policy

"We continued with our policy of only increasing the prices of our new releases (approximately 30% of our sales) to reflect the necessary investment in our product offer and the quality we have built into these new releases."

When base inflation is lower than this then in effect the cost of their product is increasing compared to the populations wages. In effect they are trying to prop up falling sales by increasing prices on new models to compensate.

This can be further evidenced by that all sales channels (constant currency) are down but this comment is even more scary under their mail order section..."Sales of our Forge World range grew by 28% offset by a 12% decline in our Citadel range". Effectively Forgeworld mail order sales are now about 33% of all mail order sales, considering this was meant to be a niche area at this rate of growth it won't be too long before Forgeworld exceed Citadel sales from a mail order perspective.

Although it's not all doom and gloom GW really need to look at what they are doing. Despite everything they are still failing to draw in enough new recruits and relying on the older guard to keep buying expensive stuff (e.g. the FW sales). Their overheads are going up with slightly reduced sales resulting in a significant drop in profits. This isn't sustainable - simply if their profits continue to nose dive in the same way as this year then in three years their core business will no longer be profitable and they will be relying on their IP to keep them in profit. It's unlikely to happen this quickly because they will likely cull non-profitable areas first, but with Star Wars going to be a big thing and if Nintendo start capitalising on Pokémon again (and to put it into perspective last time Pokémon was massive GW really struggled) I think GW have a couple of hard years ahead of them. The Brexit issues could help here because with a poor exchange rate they could easily drop their foreign sales prices and try and encourage more sales - but my fear is that GW won't do this; they will keep the old exchange rate prices and try to maximise the profit from the foreign sales market.; this could allow more flexible companies to eat into their sales if they are clever.

Where are you getting the numbers for mail order for Citadel vs Forge World? From what I can see they're lumped together in the revenue table.

 Mymearan wrote:


Where are you getting the numbers for mail order for Citadel vs Forge World? From what I can see they're lumped together in the revenue table.

Page 6 under "Mail Order" section

"Mail order
Sales fell by 1.8% (-1.6% at constant currency). Sales of our Forge World range grew by 28% offset by a 12% decline in our Citadel range. In the first half of 2016/17 we will be making a change to our home page; removing complexity and adding a deeper introduction to our worlds. We are committed to continuous investment in our web store shopping experience."

What's also interesting and not what I was expecting that (excluding mail order) both the UK and continental Europe have seen approx. £1m decrease in revenue sales. Only USA and Asia (negligible) have seen an increase in sales. I'm a little surprised at this given that GW have been reported as falling off the top games from third party reports. So either a) the hobby market in the USA is massively expanded and GW are losing out; b) GW are maximising sale values off the back of a weakening £ (which even before Brexit was happening) or c) simply the trade reports are incorrect.

I wouldn't necessarily trust the ICv2 reports that say 40k has fallen off the top spot in the USA, they're just broad guesses.

Also the ICv2 numbers say specifically that 40k fell off the top of the charts for fall 2015, I don't know if BAC is included in those numbers and you'd have to look at how many 40k releases there was over that period, if the focus had shifted from 40k releases to AoS releases it wouldn't be surprising if 40k lost some ground.

Critically, ICv2 doesn't include direct sales. Given the attempts GW has made via exclusives, LEs etc to drive traffic through the direct channel, it isn't impossible that 40K is simultaneously growing and shrinking, depending on who you ask.

Nm

If you look at page 5, it reports that trade sales also were down slightly compared to last year.

This does not confirm the ICV2 information but it adds to the overall picture of slow decline.

Whirlwind wrote:

 Mymearan wrote:


Where are you getting the numbers for mail order for Citadel vs Forge World? From what I can see they're lumped together in the revenue table.

Page 6 under "Mail Order" section

"Mail order
Sales fell by 1.8% (-1.6% at constant currency). Sales of our Forge World range grew by 28% offset by a 12% decline in our Citadel range. In the first half of 2016/17 we will be making a change to our home page; removing complexity and adding a deeper introduction to our worlds. We are committed to continuous investment in our web store shopping experience."

What's also interesting and not what I was expecting that (excluding mail order) both the UK and continental Europe have seen approx. £1m decrease in revenue sales. Only USA and Asia (negligible) have seen an increase in sales. I'm a little surprised at this given that GW have been reported as falling off the top games from third party reports. So either a) the hobby market in the USA is massively expanded and GW are losing out; b) GW are maximising sale values off the back of a weakening £ (which even before Brexit was happening) or c) simply the trade reports are incorrect.

So how are you getting that FW is 33% of sales? I tried some equations but can't see how I could define FW sales in terms of Citadel sales to come to the conclusion you're drawing.

Roughly, if FW is 33% of sales then C is 66% of sales.

If FW grows by 28% = 0.33*1.28 = 0.42
C shrinks by12% = 66*0.88 = 0.59

0.59+0.42 = 1.01.

Therefore Forge World is about 33% of sales (and increasing as Citadel declines.)

Obviously this is a back of an envelope calculation with rounded numbers but it works out rather well.

Black Library is included in Mail Order too, to muddy the waters further.

Indeed KK, you're right and FW is in fact 36% of mail order sales of you just take Citadel and FW and exclude "non-core" mail order. That's insane!

"Sales" of course is units * price, and FW are notoriously expensive though in recent years the rapid increase of standard GW kit prices has brought many of them to a similar level.

It gives the impression that GW/FW are making a lot of sales to hardcore veteran customers.

It's also notable that retail sales fell despite a net 33 new stores, and that the "underlying performance" of -4,4% was only offset to -1,3% by these new stores despite them representing nearly an 8% increase in number of stores. I suppose it can be partly explained by that fact that out of those 33 stores, 31 were one-man stores, which naturally sell less than the multi-man stores, and the fact that new stores would probably take a while to establish themselves.

 Bottle wrote:

hobojebus wrote:
Given the change of statue and facings I think they expected it to explode right out the gate.

Obviously a spectacular failure of foresight due to total ignorance of what their customers actually wanted.

All AoS selling more than wfb means is 40k sales dropped due to having very few releases this year.

I agree with your first two sentences, but the third also shows that AoS has picked up massively through the year compared to when it launched. No doubt because GW proactively tried to right the wrongs (the GHB) and also released some fantastic new ranges.

GHB didn't come out til just now, so that wouldn't account for AoS sales pickup in the statements.

Personally, I think it's the models and packaging. The store I mostly shop at tells me that their AoS sales are stellar compared to several previous years pass, and that even a reboxing to white boxes (like lizardmen) results in good sales. AoS books are also selling well for them, probably because mostly, they're a good price. Start Collecting has also done really well for them.

Some of the new models for AoS are just spectacular, IMO. I'm jealous, though. GIMME MORE 40K!!! Ok, actually, it's fine, because I'm way, way behind in 40k atm and this is allowing me to catch up a little But I do think they've lost out on some retail sales, because my 40k buddies, like me, have spent quite a lot less sans new 40k releases.

The game launched with one boxed set and a couple of books, and a year later has 20 different new kits and IDK how many books and another boxed game.

It's not a surprise that sales would have gone up with there being a lot more products available.

 Bottle wrote:
Ah, so you interpreted my "massive" as me meaning it was doing well in comparison to say X-wing or something? No, I just meant it's doing a lot better than it had been.

No, I didn't misinterpret you at all, but you're clearly not comprehending what I've said.

You have no reference point to say it's doing "a lot better than it had been" or that "it picked up massively". The report just says they released more in the 2nd half of the year and they "finished the year.... at a higher rate than Warhammer has enjoyed for several years".

That's all it says, you're reading more in to it than it is actually saying.


Automatically Appended Next Post:

 Talys wrote:
Personally, I think it's the models and packaging. The store I mostly shop at tells me that their AoS sales are stellar compared to several previous years pass, and that even a reboxing to white boxes (like lizardmen) results in good sales. AoS books are also selling well for them, probably because mostly, they're a good price. Start Collecting has also done really well for them.

I highly doubt the white is of any significance

I imagine Lizardmen sales were good because the Lizardmen boxed set was good value. For the price of a Carnosaur you're getting a Carnosaur, 12 Warriors and 8 Cavalry.

I don't care about AoS in the slightest but as a retired WHFB Lizardmen player I was very tempted get the Lizardmen start collecting set for its value value, it's enough to offset having to buy square bases separately. But it put me off that in Australia it's not as much of a saving (in the UK and US the start collecting box is the same price as a Carnosaur, over here it's 40% more than the price of a Carnosaur).

The reboxing of the Saurus Warriors was also a slight improvement on price per figure.

But yeah, overall we really don't know how well AoS is doing other than they released more product in the 2nd half of the year and we know that new releases in and of themselves make money.

One interesting thing about this report is that we now know new releases make up about 30% of their sales. I don't think they've ever stated that in the past.

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 Bottle wrote:

AllSeeingSkink wrote:

 Bottle wrote:
Ah, so you interpreted my "massive" as me meaning it was doing well in comparison to say X-wing or something? No, I just meant it's doing a lot better than it had been.

No, I didn't misinterpret you at all, but you're clearly not comprehending what I've said.

You have no reference point to say it's doing "a lot better than it had been" or that "it picked up massively". The report just says they released more in the 2nd half of the year and they "finished the year.... at a higher rate than Warhammer has enjoyed for several years".

That's all it says, you're reading more in to it than it is actually saying.

You can deduce that when it launched it didn't have sales at the rate Warhammer Fantasy had had previously but by the end of the year the sales rate had surpassed Warhammer Fantasy. That means it picked up.

Yay! You've finally brought your comments roughly in line with what it actually says

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 Bottle wrote:
And we've had lots of sources state that AoS launched badly and the End Times sold well. Now that AoS is enjoying a higher sales rate than WHFB has been for the past several years (which includes the End Times), it should be fine to add value statements such as "it's doing a lot better".

Except we don't know how well ET sold, we don't know if those sales were included when the report stated "Warhammer" (you'll note all GW games are called "Warhammer"), if they were included we don't know if the ET sales were enough to offset the lull in WHFB in the 2nd half of the 2015 financial year, we don't know what "finished the year with a higher rate" means (is that the whole year, or just some period at the end of it?), we don't know what "several years" means, we don't know if they calculated the "rate" for that several years as an average or a year by year rate or a month by month rate. We do know new releases sell more than existing products and we know AoS released more in the 2nd half of the year, we don't know how healthy those releases were though.

To me, the statement that AoS is doing better than WHFB is extremely questionable, they avoided using definite language, the way it is worded is incredibly vague such there's there's several ways they could have fudged the numbers to make that statement while at the same time not actually meaning anything significant.

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 Bottle wrote:
And we've had lots of sources state that AoS launched badly and the End Times sold well. Now that AoS is enjoying a higher sales rate than WHFB has been for the past several years (which includes the End Times), it should be fine to add value statements such as "it's doing a lot better".

Let's say that Warhammer Fantasy sold for £100 the year before the Endtimes and for £125 during the Endtimes. Now, Age of Sigmar could sell for £126 and it would still be perfectly true that it sold better than Fantasy did for the last couple of years. But it would not be true to say that it sold "a lot better".

It's a very childish example, of course, but I hope it gets the point across.

Personally, going by local anecdotes, I'm actually surprised that Age of Sigmar did better than Fantasy. The few people I know who's still interested in playing Fantasy hasn't got a single nice thing to say about it. But each to his own, of course...

Age of Sigmar seems to be targeting a different group of players. And it might very well be true that it's doing better than Fantasy because of that. But then we must also consider the possibility that the growth has come by cannibalising 40K sales. Either that, or it's an entirely new group of players that Games Workshop has gotten through to, in which case 40K must have lost more players than is readily apparent.

I suppose, on the whole, it's actually a bit of good news. Games Workshop needs to diversify their portfolio - trying to survive on just a single product line is hard at best, downright suicidal at worst.

But GW has called themselves a post growth company.