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So I was searching through all my old college work, and came across this case study for Games Workshop from 2000. You are the teacher - give me a grade! Mez

EDIT - yeah, I know the "Cygax" thing is pretty unforgivable, (it's like writing on the history of basketball and saying "Michael Rorden was the best player ever". I thought about correcting it, but that wouldn't be very honest. What you see below is the what I turned in - no edits no matter how bad the mistake....

History

In the early seventies, Ian Livingstone and Steve Jackson decided to start a business around their favorite hobby - gaming. They were both friends since meeting in grammar school, and enjoyed playing strategy games in their shared flat in London. They named their company Games Workshop, and started by manufacturing and retailing fantasy games and models. Livingstone, who had graduated from Manchester University in business, worked for an oil company in London. He spent all his free time running the game business out of their London flat.

Livingstone and Jackson started a newsletter named Owl and Weasel, which they distributed to others they knew in the gaming hobby. This caught the attention of Gary Cygax, the American creator of Dungeons and Dragons. He needed a European distributor for his role-playing game, and contacted Livingstone and Jackson. Cygax gave Games Workshop a three-year exclusive distribution deal for Dungeons and Dragons. He had no idea the only access the two had to a telephone was outside the hall of their flat, and that the two had no office and no staff.

Quitting their day jobs, Livingstone and Jackson devoted all their time to running Games Workshop and distributing Owl and Weasel, now a full-fledged magazine. They left their flat, rented an office, lived in a van, and used the toilets and showers at a squash club that they joined. After Game Workshop opened its first retail store in 1977 to a waiting crowd of 200, Livingstone said, “I think we’ve got something.”1 As wargaming and role-playing become more popular, Games Workshop became more profitable opened more retail stores in Britain.
Up to this point, Games Workshop had sold mostly games from other companies in its retail stores. In 1981, a Games Workshop employee named Rick Priestly combined role-playing, miniatures wargaming, and miniatures collecting to create Warhammer Fantasy Battle. That same year, Games Workshop acquired Citadel Miniatures, a manufacturer of lead miniatures for role-playing and other games. Citadel Miniatures started producing miniatures for the Warhammer game. Owl and Weasel became White Dwarf magazine, and in it the company began promoting Warhammer.

Games Workshop started producing other games; (many based off the same Tolkien mythology used in Warhammer). Due to the popularity of its own games, Games Workshop concentrated solely on promoting and selling only its own games. Livingstone and Jackson left Games Workshop in 1991, but Games Workshop continues to keep many gaming enthusiasts on its management staff. In 1994, Games Workshop went public, and started expanding its hobby-gaming products across the globe. Tom Kirby became chief executive and led the effort to give Games Workshop an international presence. Until recently, its top management included many gamers, but they’ve started recruiting professional managers in the business instead of enthusiasts.2 In 1998, Chris Prentice succeeded Kirby as chief executive, and promised to move the business from its entrepreneurial origins to a more solid, professional approach.3

Games Workshop’s Strengths

Games Workshop has a low risk of potential competitors in its niche simply because of its strong consumer loyalty. It is the leader in the hobby gaming niche, and its primary strength lies in its loyalty from a specific group of consumers - about half in the hobby are teenagers, and about 98% of them are male. Currently, White Dwarf magazine has a distribution of 152,000 in Britain, and is the second most popular magazine for male teenagers. White Dwarf is Games Workshop’s sole method of advertising. Prentice has stated that, “boys know about us and tell their friends, and that is the best form of advertising we can have. It is not aimed at adults and we don’t care that they don’t know about us.”4 This “word-of-mouth” advertising approach has worked well in Britain.

Games Workshop’s products can be divided into three areas: the games, the miniatures used to play the games, and the painting products used to paint the miniatures. Its primary core games are Warhammer Fantasy Battle and Warhammer 40,000 (a futuristic version). Games Workshop re-launches these core products in an eight-year cycle. The purpose of re-launching these products is to create a revised and updated set of rules. This requires its loyal customers to reinvest in the game, and buy more miniatures. “Mini-rule sets” are frequently released, and require customers to again buy new miniatures and painting supplies.

Games Workshop has the monopoly on its game system, and because of this, it is able to charge a premium for its miniatures and painting supplies. The games, the miniatures, and the painting supplies are sold in retail stores, through mail order, and over the Internet. A majority of sales come from independent stores, but a comparable amount is sold through Games Workshop stores. Mail Order and Internet sales compromise 9% of total sales, and grew by 27% during 1999. The trend in Internet sales is expected to continue into the future.5 Sales over the years have been very steady, but Games Workshop has seen a decline in this growth over the past three years.

Games Workshop prides itself on two things - customer service and innovation. They have a toll free number to help customers with problems from missing parts in its kits to deciphering ambiguous rules in its games. In Games Workshop stores, members of the sales staff are familiar with the games, and are happy to assist newcomers in painting their models or taking an afternoon to teach them how to play the game. Its games, based on a “Tolkien mythology”, appeal to teenagers. Game designers base games on this popular mythology, which includes an entire history and story line.

Games Workshop’s Weaknesses

The high cost of entrance to this hobby is a deterrent to potential customers. Computer games can be purchased for $30 to $50, and is the only investment ever required to play. In comparison, Warhammer requires an initial investment of $60, and the customer will need to spend about $300 more to buy and paint the miniatures used in the game. Most importantly, the customer needs to find another person to play the game with.

Lately, Games Workshop has offered plastic miniatures as an alternative to more expensive pewter miniatures, but the quality of these plastic miniatures is lower and their cost is only slightly lower. In 1998, Games Workshop acquired TJA Tooling Limited, (a manufacturer of tools for injection molding), and Triple K Injection Moulding Limited, (an injection molding company).5 This move toward vertical integration made Games Workshop less dependant on other manufacturers. This was an expensive acquisition for Games Workshop, and cost them 5.2 million pounds, or almost 8 million US dollars. Games Workshop hopes that this will lower its product costs in the future, and will make it less expensive for consumers to enter the hobby.

Games Workshop has had stocking shortages caused by a mismatch in sales and production in the last year. Stocking shortages were then followed by periods of over-stocking to compensate for the shortages. This problem has resulted in a slowdown in sales, and at the same time, an increase in inventory. Much of the problem stems from a lack of coordination between different groups within the company. As a result, Games Workshop has invested heavily in a restructuring that will streamline activities and ensure that it is better equipped to respond to demand from customers. Prentice has stated that the restructuring will cost five million pounds over the next two years. Many investors pointed at this failure as a serious flaw in Games Workshop’s ability to expand. Because of this, and a slowdown in sales, Games Workshop’s stock price has suffered in the last three years. Its Price-Earnings Ratio value, measuring expected future growth, has plummeted over this period.

Sixty-percent of its sales are outside of Britain. Games Workshop continues to expand and open stores in the USA, Canada, Germany, France, Spain, Italy, New Zealand, and Australia. They have just started to expand into the Philippines, Taiwan, Korea, and Hong Kong.

Games Workshop does not undertake local customization of its product and market strategy. This has contributed to problems in coordinating inventory, and has contributed to the inventory shortages in the last year. To fight this, Games Workshop has created an international management structure where international board members can provide local market knowledge and easily coordinate between each other.

The Internet – Threat Or Opportunity?

The explosion of the Internet and computer games has created competition outside of Games Workshop’s specialty niche. This new competition does not require another person in the same room to play the game. Games Workshop is quick to point out that its gaming hobby includes the collecting and painting its miniatures, and targets a different market than computer gaming companies. Internet and computer games sales are a threat to Games Workshop because without demand for the game, other supporting products like miniatures and painting supplies are unnecessary.

The Internet presents a great opportunity for Games Workshop to expand outside its niche market. Because Games Workshop is the leader in its niche, it is primarily focused on expanding internationally. It does not perceive a need to change its strategy or structure to adapt to the Internet. At the same time it’s focusing on expanding its current products and hobby, Games Workshop is not responding to the more important opportunities that lie with the Internet. Games Workshop has given licenses to many companies, and there have been many successful computer games using the Warhammer “mythology”. However, so far, Games Workshop has responded to the Internet in the same unexciting manner as most companies – it has simply started selling its products on-line.

Recommendation

First, Games Workshop must better respond to local markets. In Britain, teenagers are more interested in fantasy games and “Tolkien mythology”. Games Workshop is selling the same Warhammer game in other countries that it does in Britain. Because it does not advertise its games outside of White Dwarf, it is difficult to reach consumers in foreign markets. Different markets require different marketing strategies, and Games Workshop needs to give regional managers more power in how to best target consumers. For example, the “word-of-mouth” strategy has worked well in Britain, but is not appropriate to other markets. Despite what management in Britain believes, advertising will be necessary in overseas markets to create interest for the hobby.

Second, Games Workshop must embrace the Internet and other media. For example, creating an on-line Internet version of Warhammer would allow a single user to play the game, and would also create a lower cost introduction to the hobby. An on-line version would not cannibalize the miniatures hobby because it would offer a unique experience from the collecting and painting of miniatures. Computer games based on Warhammer and Warhammer 40,000 have already been very popular and have introduced many newcomers to the hobby. Licensing an animated series based on Warhammer is also an example of a method that would give more exposure to the hobby.

Game Workshop owns the hobby-gaming niche. Its investment in the manufacturing of miniatures and its customer loyalty allows it to be the leader in the hobby. To compete, it must continue to expand overseas and respond appropriately to the needs of the local market. Foreign managers must be given more power in deciding the proper method to advertise and introduce the hobby to the target audience. It must also use the Internet as a tool to stimulate consumer interest. By following these recommendations, Games Workshop will continue to expand its hobby and lessen the impact of competition from the Internet and computer gaming.

End Notes

1. H. Kunzru, “Not Connected: Not Playing When He Plays Wired World: The Dungeon Master Hari Kunzru Meets Ian Livingstone.” The Daily Telegraph, December 8, 1997.
M. McGrath, “A Visit To The Fantasy World Of Ian Livingstone.” Independent, June 6, 1998.
2. N. Cope, “Games Workshop Seeks New Markets.” Independent, January 28, 1999.
3. G. Malkani, “Games Workshop Goes For Growth.” The Financial Times, August 5, 1999.
4. K. Watson-Smyth, “Secret’s Out On Boys’ Own Game.” Independent, August 13, 1998.
5. Games Workshop. Annual Report, 1999.

Wonderful read!

Thanks for sharing.. very, interesting..

Who is Gary Cygax again?

Games Workshop has the monopoly on its game system, and because of this, it is able to charge a premium for its miniatures and painting supplies. The games, the miniatures, and the painting supplies are sold in retail stores, through mail order, and over the Internet.

Lately, Games Workshop has offered plastic miniatures as an alternative to more expensive pewter miniatures, but the quality of these plastic miniatures is lower and their cost is only slightly lower. Definatly not. Your information is flawed.

Games Workshop hopes that this will lower its product costs in the future, and will make it less expensive for consumers to enter the hobby.
Uh... no.

As a result, Games Workshop has invested heavily in a restructuring that will streamline activities and ensure that it is better equipped to respond to demand from customers. Prentice has stated that the restructuring will cost five million pounds over the next two years. Many investors pointed at this failure as a serious flaw in Games Workshop’s ability to expand. Because of this, and a slowdown in sales, Games Workshop’s stock price has suffered in the last three years. Its Price-Earnings Ratio value, measuring expected future growth, has plummeted over this period.

uh... yeah. no. Prentice is smoking something that he needs to stop. Its effect is more of the double talk, and misinformation thats also in the mode of "Drinking the kool aid", and completely false advertising.

Your "Price/ Earning ratio is flawed as well. Stats over on GW's own page counter your discussion. go back and look there.

Australia has been gelded like the preverbial bull, by GW. They killed thier own sales options there.

"Games Workshop does not undertake local customization of its product and market strategy." should be changed to Does not understand local markets, or how to sell its products in new markets."

"Second, Games Workshop must embrace the Internet and other media. For example, creating an on-line Internet version of Warhammer would allow a single user to play the game, and would also create a lower cost introduction to the hobby. An on-line version would not cannibalize the miniatures hobby because it would offer a unique experience from the collecting and painting of miniatures. Computer games based on Warhammer and Warhammer 40,000 have already been very popular and have introduced many newcomers to the hobby. Licensing an animated series based on Warhammer is also an example of a method that would give more exposure to the hobby."

Conjecture. Opinion stated as facts.

"Game Workshop owns the hobby-gaming niche. Its investment in the manufacturing of miniatures and its customer loyalty allows it to be the leader in the hobby. To compete, it must continue to expand overseas and respond appropriately to the needs of the local market. Foreign managers must be given more power in deciding the proper method to advertise and introduce the hobby to the target audience. It must also use the Internet as a tool to stimulate consumer interest. By following these recommendations, Games Workshop will continue to expand its hobby and lessen the impact of competition from the Internet and computer gaming."


"Owns the "Hobby- Gaming Niche..."? Are you sure about that?

"Investment in customer loyalty"- taken straight out of the Real Estate handbook on the GW webpage. Other then that, GW is loyal to your cash, which they see as rightfully thiers- seeing as thier prices range from ridiculous, to extreamly ridiculous. However they can part you from large amounts of it for less, the better.

The reality is out there to be seen about GW's loyalty to its fans. Between the C and D's, to the squelching of whole game systems that five minutes before hand were touted as the second coming, and the general attitude that Space marines are what its really about.

You would spend your loyalty on a shark, at least you know you are going to get bit.

No mention of Flames of War, Warmahordes, Malfaux, or any of the up and comers eating GW's lunch. GW has plenty of computer gaming of the eye candy kind, they already delved into CGI animation, and have for many years now had several on-line Warhammer, and 40K online tabletop games.

As to the "Online Version..."

GW doesn't do online well. as a matter of fact, they don't really want to do werll at it, as pointed out several times through thier spotty track record of games. WAR... is just... bad. the 40K MMO is vaporware. GW and online do not belong in the same sentence.


You put alot of effort into putting them on a pedistal. Good job, I guess.

Overrated them a bit much, and you never really agknowledged thier finecrap, the shoddy deal that they gave thier Australian "Fans", or the continuous, obligatory "Price Hikes", for no other reasons then to pad Wells's pockets, but a good job.


Other then that, your heresy has been noted.

To not know the hollowed name of Gygax, is your most heinious of crimes. You need to fladgellate yourself, as penance.

Solid D for that in itself.

@ Grot, keep in mind this was written in 2000, so your point about the upstarts may not apply. If anything, PP may have been a minor ankle biter back then (me no play WM).I agree with your other comments.

@ OP, the Cygax typo really put me off. While it may be just a minor typo, it made me stop reading. I couldn't trust the accuracy of the rest of your document and thus wasn't worth reading to me.

Mezmaron wrote:



Games Workshop’s Strengths

Games Workshop has a low risk of potential competitors in its niche simply because of its strong consumer loyalty. It is the leader in the hobby gaming niche, and its primary strength lies in its loyalty from a specific group of consumers - about half in the hobby are teenagers, and about 98% of them are male. Currently, White Dwarf magazine has a distribution of 152,000 in Britain, and is the second most popular magazine for male teenagers. White Dwarf is Games Workshop’s sole method of advertising. Prentice has stated that, “boys know about us and tell their friends, and that is the best form of advertising we can have. It is not aimed at adults and we don’t care that they don’t know about us.”4 This “word-of-mouth” advertising approach has worked well in Britain.

given their policy on "spoilers" i'm finding this part of your report extremely amusing

Came off as very shallow. You claim of giving it a monopoly without citing any evidence for this, so it reads as heavily biased.

This paper is also misinformed. I distinctly remember the build-a-gaunt on the tyranid portion of the web-page as well as the bug-hunt game they had. There were a few other things besides I can't remember anymore either, but GW did add some fun things to it's web-page to have people come, it wasn't exclusively a store. They might not have done what you suggested, but there was more to their webpage than another store-front.

Elsewise I remember everything you mentioned in this article.

Gamble wrote:
@ OP, the Cygax typo really put me off. While it may be just a minor typo, it made me stop reading. I couldn't trust the accuracy of the rest of your document and thus wasn't worth reading to me.

Best troll post ever.

I hope you aren't serious because if you are

I think Grot 6 missed that this case study was from the year 2000 so well ahead of Finecast or the ROW embargo.



Mezmaron, I think your case study was an interesting read. I was only marginally aware of GW's actions in 2000, and while there is some conjecture in places as Grot pointed out, overall I found this to be a fascinating piece which provided a time-capsule peek at GW from the turn of the century. It also seems thorough and well researched. I do take issue with your claim that "Computer games can be purchased for $30 to $50, and is the only investment ever required to play." In the next sentence you cite the initial investment of Warhammer ($60 how quaint!) but failed to acknowledge the initial investment required for PC or console gaming (many hundreds of dollars even in 2000). So, that didn't seem like a particularly fair comparison.

Your recommendation for GW to embrace the internet is just pure awesome since, you know, they have been slow to do so.

I'd give this an A.

I'd give you a C.

Your history of the company is askew. And your recommendations are wishlisting as opposed to dealing with the reality of the situation.

I would refer you to the interview with Rick Priestly by Henry Hyde of Battlegames (which is pretty hard to find as Battlegames has gone the way of all flesh). I would also suggest that you consider researching the antipathy towards the company that has always existed within the wider wargaming 'community' and the ways in which the company has overcome this antipathy.

Hahaha, cheaper models, R-I-G-H-T....
A- or B+

It is not really a case study so much as it is an opinion piece. The piece has no title and, with one exception, all of your references are from newspapers.

You get an F.

Can't wait to hear what actual grade the paper received.

Barksdale wrote:It is not really a case study so much as it is an opinion piece. The piece has no title and, with one exception, all of your references are from newspapers.

You get an F.

While I thought it was a good read, it seemed like something written on BOLS/a blogspot.

In terms of grading this as a paper, you most likely recieved a Low C or D~ depending on what level of English level you were at in College. (Associates in Education). Barksdale had the right idea. When you actually write an indepth case study, your mind will explode with how many citations and references you have to provide.

Grot 6 wrote:

As to the "Online Version..."

GW doesn't do online well. as a matter of fact, they don't really want to do werll at it, as pointed out several times through thier spotty track record of games. WAR... is just... bad. the 40K MMO is vaporware. GW and online do not belong in the same sentence.

Never played WAR, the 40k MMO is not a single player game, Space Marine sold relatively well (and didn't suck). GW has a dozen ways to embrace the internet, it's just they those who make those sorts of decisions are short-sighted nincompoops who can't even fathom what the internet is or the potential it has.

Auxellion wrote:

Barksdale wrote:It is not really a case study so much as it is an opinion piece. The piece has no title and, with one exception, all of your references are from newspapers.

You get an F.

While I thought it was a good read, it seemed like something written on BOLS/a blogspot.

In terms of grading this as a paper, you most likely recieved a Low C or D~ depending on what level of English level you were at in College. (Associates in Education). Barksdale had the right idea. When you actually write an indepth case study, your mind will explode with how many citations and references you have to provide.

It was a pretty good read, and from a strictly English based standpoint, I would give you a solid B+ or A.

However, I found your lack of citations disturbing. For a (5 page, double spaced) research paper on the Libyan uprising of 2011 I did recently, the total number of citations was 65. That's right, 65. And I'm just in highschool. Considering that this paper (written for college), double spaced, would be ~4 pages long, 6 citations is very lackluster. So from a research standpoint, you get a D, or if I was having a bad day when I was grading the paper, an F.

What was the grade your teacher gave you?

_Tim?

I really enjoyed that.. Used to read fighting fantasy game books when i was in primary school, written by Ian Livingston!

I had no idea it was the same bloke who founded GW... Why the hell did they leave?!

mattyrm wrote:I really enjoyed that.. Used to read fighting fantasy game books when i was in primary school, written by Ian Livingston!

Those books were the dogs bollocks, i think they are probably what got me into fantasy if i am honest.

mattyrm wrote:I really enjoyed that.. Used to read fighting fantasy game books when i was in primary school, written by Ian Livingston!

I had no idea it was the same bloke who founded GW... Why the hell did they leave?!

Moved on to bigger things like Eidos Interactive...

This is good for secondary school (high school, college).

If by college you mean tertiary school (university level) then it lacks references. You made several statements about what people like, where the market is headed, without giving any clue as to what facts those statements were based on. In all likelihood you made them up based on your own personal experience.

It is very heavy on assumption, such as the consumer loyalty you mentioned, and light on corroborating fact.
The format is not particularly good either. Your style of "writing" changed in accordance with the source material. The information gleaned from the report appears a lot more concise than that from the newspaper articles where redundant words and phrases are used.

Overall it looks like the information was thrown together without an attempt to blend it together and the case study is simply a collection of paraphrased articles on the history of GW and some information about it's business activities in the late 90s.

I was irritated right from the beginning with the open line: "In the early seventies..."
It's supposed to be a case study, you should have been more specific. Your "study" also omits one very important piece of information about the company and that is when it was founded, which presumably was before they opened their first shop.

On a personal note I was interested to read about the early history as I wasn't aware of it. It was also interesting to read that some of the criticism of GW back then is exactly the same today. As for the paper, I'd give it a C+.

Uh what is grade used in your homeland for a total failure to produce a objective studie? And I would acctualy liked a bit more lengt considering how long GW has been around, even when you made this in 2000. But besdie from that is was good I guess

Trondheim wrote:Uh what is grade used in your homeland for a total failure to produce a objective studie? And I would acctualy liked a bit more lengt considering how long GW has been around, even when you made this in 2000. But besdie from that is was good I guess

I'd love to know what grade you get on your English papers.

fishy bob wrote:

Trondheim wrote:Uh what is grade used in your homeland for a total failure to produce a objective studie? And I would acctualy liked a bit more lengt considering how long GW has been around, even when you made this in 2000. But besdie from that is was good I guess

I'd love to know what grade you get on your English papers.

Boom.

Headshot!