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BEASTSOFWAR wrote:and independents and 3rd party products are as un-cool as visiting a fossil convention

I try to be fair with GW but when this atitude rears it´s ugly head is when I go foaming at the mouth against GW and the HOOOOOOOBBY (probably TM by GW)

M.

my two cents.

I'm sad that it is almost 50% cheaper to get my GW stuff from the US. Aus prices are crazy so for me it's one of those things where yes I want lots of models for cheap but if I do I'm hurting my FLGS, so in most cases I foot the cost knowing that I'll have my gaming store to go to to play my games.

Prices are crazy things, prices are set based on the most efficient level of supply verse demand that results in the greatest margin. It is a constant balancing act. This means that it can be better to charge more for a product to actually reduce demand if it means you get a better margin.

e.g. say if they sell greatswords at $20 and this creates a demand for 100 units but the margin for producing 100 greatswords is 55% ($1100 profit). If they charge $30 and this creates demand for only 60 units, however the margin for producing 60 greatswords is 70% ($1260 profit). This results in almost the same net profit and also means less staff needed to produce the greatswords and less risk in delays and machine break downs. You can then see it makes sense to raise the price so demand is reduced to that optimal level. But bear in mind charging too much can also reduce margins so for the previous example if they charge $35 and this creates demand for only 40 greatswords and that margin is only 55% then the price is too high.

Actual margins are much more complicated than this but the example is to exaggerate the point. Don't be surprised when more price increases come along. Prices will only decrease when demand across all gw products falls to below the optimal margin and we all know we are far too addicted to this hobby for that to happen. Unless of course a serious competitor to GW comes along opening their own stores.

lastly,

Outsourcing to china makes sense because china under values their currency on purpose to attract companies like GW to outsource. It's not fair but who said business was fair. I hate outsourcing because it means the jobs locally disappear and good people are left without work.

so this means that all this time ive been waiting for plastic Vostroyans and all that is going to come (if they ever do) are most likely more expensive than the metal ones..

What always cracks me up about GWS is they have a store 5 min down the road from a LFGS, everyone in the area knows that the LFGS sells its new models at 20% off of GWS prices....keep in mind the LFGS was in place LONG before the GWS store opened...

Who in their right mind pays the full retail price when a 5 min drive saves you 20%?

And then I hear the GWS manager complaining they cant sell any battleforces!!! Really? no kidding? lol

Man, would I love seeing Chinese knockoffs of GW products.

$50 a box for 10 plastic toy soldiers? That's insulting. And that insult pretty much a license to cast, IMO. I'm all for GW ripoffs, given these ridiculous prices. Someone with connections in China should encourage enterprising folks there to manufacture and distribute copies.

Flashman wrote:So they're not making any money... but in a good way?

Profit is profit, wherever it comes from.

The worry is that the profit actually came from currency fluctuations rather than growth of the company, so it could turn into losses the same way.




Automatically Appended Next Post:

JohnHwangDD wrote:No different from anything made here or in the UK.

Heck, I still remembered when British-built cars were shipped to the US... Pre-Ford, a Jag was a luxury car for the well-to-do because you needed to buy a second one to drive while the first was in the shop... Or how the Ford guys were amazed how the Jags couldn't make it around the durability track without parts literally falling off the car...

And then there's the whole debacle of MGs and Triumphs and so forth, how you needed to be a weekend mechanic just to drive the car during the week...

And don't get me started on Chrysler. I completely agree with Jeremey Clarkson when he pronounces it "the worst car in the entire world."

Perfectly true.

Even Japanese companies have been seen to cut corners:

Motorway flyover pier construction.
Faked earthquake proofing data.
Condemned food labelled as fit for human consumption.

Kilkrazy wrote:

Flashman wrote:So they're not making any money... but in a good way?

Profit is profit, wherever it comes from.

The worry is that the profit actually came from currency fluctuations rather than growth of the company, so it could turn into losses the same way.

Got it in one.

The exchange rate gain is a one off. No one is expecting sterling to devalue by 20% this year. On the other hand it may regain some of its value as the banking crisis resolves over time, and so some of those gains may turn into losses next year.

Something similar could be said for royalties revenues which at £3.5M is at an all time high. Given this is mainly due to WAR, which is just about dead in the water now, it would be optimistic in the extreme to expect anything other than a fall in these revenues next year.

The underlying trading revenue, once adjusted for currency fluctuations, shows a small (3.3%) increase over 2008. Now the big question is whether this represents any real growth in the volume of products sold, or whether it can be wholly explained by the price rises in 2008/09 (which were >3.3% on many items, but was not on all items across the range). Bear in mind that these figures include the release of WotR in April 2009, which was a huge, but short lived success (is anyone still playing it?), and that GW themselves stated that 3rd quarter (i.e. Christmas) sales were very disappointing, and you have somewhat mixed reviews.

UK RPI as at the end of May was actually negative so on that basis it does reflect small but real growth. However, I'd be absolutely amazed if GW's actual average increase in retail and wholesale prices was only 3.3% last year. I have no data to verify this though as GW's pricing system is so opaque and prices fluctuated by very differing amounts and at diffferent points in the year, and of course we do not have any data on the relative volumes of various product streams, so cannot weight the various price rises, even if we knew what they were.

In anycase, it is far from spectacular. All their profit growth this year is due to lucky one-off items. The fools in the City which as a result of the profit announcement raised the share price by 30% over 4 days clearly can't understand a set of accounts. No wonder we had a credit crunch! I fully expect the share price to fall again after next year's results unless there is a similar "windfall" gain in the meantime. My share advice, should you want it, is to sell short.

No, no Osbad, we need to buy at least a couple shares to troll the forums by being the eeeeeeeeeeeeeeeeevil shareholder :d

M.

2010 will be interesting to see if thier profit climbs further. The trend points that it will but i thikn they have really got to knuckle down now and see what they can do to bring things into better ground over the Xmas period this year.

The love of the game and the richness of the background is what keeps many of us with GW. To look at an army in the glass case in a GW is always what brought me into the store. and even though i can get things cheaper, i wont ever turn my back on GW totally.
Just for the richness the hobby has. i could read a book, then paint something, then go order a new release and read up on tactics for another unit im considering.

Thats why GW is the market leader. they created a world thats so full of different things to do that in all honesty that you dont need to play flames of war, or warmachine. But for what its worth i embrace every company and every game with the same wallet burning passion i do with GW.

But liek i said, they have to knuckle down and say "ok guys. whats next?

BoW- John

See, I gotta figure that GW's own stores are what are dragging them down. Maybe not in the UK, but in the states at least there doesn't seem to be much point to them.
For instance, a few weeks back a couple of friends and I took a trip to the Glenn Burnie Battle Bunker to pick up some models our local stores didn't have and grab the blast scapes and mines splash releases, as well as some FW stuff I needed. Much to my disappointment, they had a smaller (!) selection than either the Hobby Town or Portal near my place, and didn't even receive the blast scapes according to the red shirt. Fortunately I had called to confirm that they had some of the FW stuff, but even then they only had a little and apparently are not restocking it at all.
So what did the store offer? Well, they had some nice tables, I will give them that, but Mik's store down in Media has just about as many, and just about as nice, with a better model selection to boot. There were some nice display models, but hell, so do most small stores.

I guess my point is that I would much rather go to a game store that has tables and many different lines of models and games than go to a store with tables and only one line of models. When the single line store charges as much or more than an independant store, what is the point? How much does GW spend on these stores to advertise their game lines and host painting sessions or modeling sessions? Wouldn't it be a lot cheaper to simply hire a few people to put on such demonstrations at other hobby stores? Brick and mortar stores are certainly not cheap to maintain, and I don't see any advantage a GW store has in competing against an independant store that gets to sell Magic and Yugioh to help pay the rent.

PS: the Portal actually DID have blastscapes, and they were as full of fail as everyone has been saying. More's the pity.

When I look at the results I am relieved that GW will be around another year. One of the worst things that can happen is to have the company go under and all of a sudden the game and community atrophies and dies. So much for for all those hours spent painting those little guys! Who plays Confrontation (the old one) anymore these days. And even with Hell Dorado, which by all accounts is a great game, I struggle to convince people to start collecting and playing because they think since the company is dead (or in trouble) the game is dead too. So overall I am pleased that the community and company that support my main hobby are doing well enough (barely it seems given these one off gains) to be around another year.

With regards to prices: prices, costs and profit are all interlinked obviously. I would be much happier to see GW making much more money because that meant there could theoretically be room to drop prices. But given these profits - which for all intents and purposes are break even on a long term basis - there is only room to drop prices if you cut costs. Cutting costs would have implication, perhaps on quality, which has dramatically been improving, or on customer service or events (no GT's).

So with respect to wishing for something, you can either wish for lower prices and lower quality, fewer events etc. Or the status quo. Or for the company to go under. But you cant have your cake and eat it too. Low prices, awesome quality, lots of events, great service, high quality control and a successful and long lasting company - that makes no sense and just sounds like whining. We can do better.

One of the interesting questions that I am mulling over is just why do they consider Christmas 2008 was a "bad" quarter? Clearly sales were down, and I would lay that clearly at the door of their high prices. There wasn't an obvious new release aroound Christmas that tanked though was there? I can't recall one.

See a "bad Christmas" when there was no "shiney new release" would indicate to me (in the absense of evidence to the contrary) that they are very, very dependent now on the "fanbois" element who slurp up every new release. But the trouble is that now, with high prices, once the fanbois have bought all they are going to buy and are waiting for the next new release to hit, there is no-one else left to support their core in between times.

This is, as I see it, the problem with their stratospheric pricing, and one of the reasons that if I were a shareholder I would be skeptical about long term growth with high prices. Sure the "price insensitive fanbois" will still buy whatever the price, but the high prices put off the less "dedicated", who are more concerned with shopping around and don't see GW as the be-all and end-all of their lives. In the past the "less dedicated" could be relied upon to buy something for Christmas for themselves or their kids that they hadn't bothered to pick up at the time of release. This year it seems they didn't.

GW didn't propose any answer in their report.

But their must have been a reason.

Sunspots? Swine Flu? I mean come on... Clearly it is price! Isn't it?!

Osbad wrote:One of the interesting questions that I am mulling over is just why do they consider Christmas 2008 was a "bad" quarter? Clearly sales were down, and I would lay that clearly at the door of their high prices. There wasn't an obvious new release aroound Christmas that tanked though was there? I can't recall one.

Because every retailer considered Christmas 2008 a bad quarter. We're in the middle of a major recession. Unemployment numbers in the US are at 10%, using the 'new math' that ignores many of the unemployed to boot. I don't think that higher prices had anything to do with the bad Christmas, I think it was lack of Christmas budgets. If grandma budgets $50 for timmy's christmas gift, and timmy wants space marines, Grandma is going to buy him $50 of Space Marines. If Grandma lost 50% of her retirement assets, and only has $20 for Timmy's gift, Timmy's only getting $20 worth of Space Marines...

Redbeard wrote:

Osbad wrote:One of the interesting questions that I am mulling over is just why do they consider Christmas 2008 was a "bad" quarter? Clearly sales were down, and I would lay that clearly at the door of their high prices. There wasn't an obvious new release aroound Christmas that tanked though was there? I can't recall one.

Because every retailer considered Christmas 2008 a bad quarter. We're in the middle of a major recession. Unemployment numbers in the US are at 10%, using the 'new math' that ignores many of the unemployed to boot. I don't think that higher prices had anything to do with the bad Christmas, I think it was lack of Christmas budgets. If grandma budgets $50 for timmy's christmas gift, and timmy wants space marines, Grandma is going to buy him $50 of Space Marines. If Grandma lost 50% of her retirement assets, and only has $20 for Timmy's gift, Timmy's only getting $20 worth of Space Marines...

I don't know about this.

I'm not saying you're wrong, but I think that Osbad might be on to something here.

Have we finally reached the price ceiling?

if they want to bump it again then they have to put more value into the products, you could be right Alpharius

BoW- John

Last Christmas only had the Realm of Battle released.

Blackmoor wrote:Also when was the last time you saw a GW sale? Yeah, that is what I thought. In fact they are going in the other direction and stopping internet retailers who offer their products below retail.

Yeah, but the smart ones have worked around it. They don't put the items on their internet store to be placed in a shopping cart, they only list availability, give you an 800 number to call, and keep their brick and mortar store. This way if you want to get 20% off retail, you ring them up, place your order over the phone (or arrange the order to be placed via fax) and voila, an order is placed at a 20% discount.

I used to purchase everything from my local GW store because I liked supporting a local store. Any more, I buy from my favorite online hobby store and still play at my local GW store.

R3con wrote:What always cracks me up about GWS is they have a store 5 min down the road from a LFGS, everyone in the area knows that the LFGS sells its new models at 20% off of GWS prices....keep in mind the LFGS was in place LONG before the GWS store opened...

Who in their right mind pays the full retail price when a 5 min drive saves you 20%?

And then I hear the GWS manager complaining they cant sell any battleforces!!! Really? no kidding? lol

There was a FLGS close to the GW store in my town when it first opened. After a couple of years, GW stopped selling any product whatsoever to the FLGS because fo direct competition with their store. The FLGS closed about a year later.

All the talk about lower prices equalling a higher sales volume is nice and all if that is your goal. GW is trying to be the Ferrari of miniatures... or maybe Rolls Royce or some other company... the point is they don't want their models to be come to excessible. Excitement and anticipation mean more to them the satisfaction and happiness. This consideration of elite status is only within the confines of miniature gaming, outsiders just see it as a giant price tag. I think it is slowly building the threshold of intertia for beginners to get into the hobby.

Exclusivity is the word, keeping people at bay, having them want drive obsession. Thats why GW will never sell cheap.

The question then becomes, when will the prevebial bubble burst? At what point do enough people refuse to buy from GW anymore because its too expensive? At the rate GW's going a tactical squad will cost $50+ within the next 5 years. I know prices only go up, but at some point people will seriously weigh their options more closely, either because the price gets so high it diminishes their demand, or because cost benefit is trumped by better deals for entertainment else where.

I've started a blog on how I'm building an army of Knights titans by digitally modelling them, having the prototyped, and then cast its going to cost me around $800, by the time I'm done. The fact that its worth it to me to do that is because for not much more price as I'd spend on a brand new GW army, I can produce something similar and unique.

With the exception of Space Hulk or other potential surprise releases, I don't have any more plans to purchase from GW if I can help it. While the price of their models doesn't kill me or my wallet, the ill will it leaves with me, has left me fed up. I can afford it. Its just not worth it.

Unfortunately, I think you are correct about GW's "plan" Mythos. I think the fatal flaw is that unlike a Ferrarri or what not which everyone can look at and think "Wow, that man has a tremendous penis/paycheck/hole in his life" miniatures only say "Big hole in life." With so many other ways to spend entertainment dollars, much less wargaming dollars, I just don't see this strategy being a win for GW.

Redbeard is mostly right. US economy is the worst it's been since the recession of '29 and it is going to continue to be bad for awhile longer at least.

US may not be a HUGE chunk of GW's revenue source but I am sure that it has a lot to do with it. I know the economy is bad all over but in the state of Minnesota, where I live, our unemployment rate was 8.4% in June, down from 8.9% in March but up from 5.5% in March of 2K8.

When major department stores and retail chains like Target and Wal-mart, where things are sold on the cheap, report losses in Q4 of 08 vs Q4 of 07 and call it "a bad quarter" people should realize it's no wonder GW called "Christmas of 2008" a bad Christmas.

I don't excuse high prices and I would love to see them go lower but the realist in me knows for a fact that will never happen. With the exception of a few releases their plastics (and for the most part their metals) are of superior quality to anything, any other company makes. PP is close and so is Confrontation but mini for mini PP is on par with GW as far as pricing (and it's all metal which is just a nightmare to assemble).

I dabbled in WM and it was fun but with not much disposable income, friends who don't have income to support 2 hobbies and very little time with real life going on, I'd rather spend my dollars on a product I know I'll enjoy and can at least find people to play it with.

I think GW will be around for at least another 20 years. Their business model is wonky (though I'm not a business major so that's just opinion, not educated fact) but look around.......lots of other forms of entertainment are vastly overpriced and yet are doing well. I mean, c'mon.....$60 for a PS3 or 360 or PC game that maybe costs $20/unit to make and that will entertain me for around a couple of weeks, maybe months if I'm lucky VS $60 on a model/unit that will last me until the army gets dropped by GW or GW goes under, which to say will not be 2 months from now. I'd say of all the entertainment to spend money on 40k is a pittance compared to video games or movie watching or any kind of sports.

8-odd% unemployment?

That's nothing.

In the "great state of California", we've been over 10% for ages...

In soviet California there ARE no jobs!

It goes without saying....GW prices aren't cheap but then again nothing entertainment (or even necessary for survival) is cheap.

I can excuse a SINGLE company making a miniature game charging high prices more than I can justify Sony or EA or THQ charging $60 for something that costs pennies on the dollar.

I'm willing to bet that a $42 dread costs more per unit to manufacture than a $42 PC game does

R3con wrote:Who in their right mind pays the full retail price when a 5 min drive saves you 20%?

The answer to that is Panic, the answer to why? Umm, well, yeah...

Redbeard wrote:Because every retailer considered Christmas 2008 a bad quarter. We're in the middle of a major recession.

Well, I'm not denying that retailers in general had a bad Christmas. Clearly that was also a factor. Whether it was the defining factor? I'm not so sure. I suspect that GW will reference whether a Christmas is "good" or "bad" against their internal budget, not against simply last year's figures. Their internal budget should incorporate the effects of an economic downturn as well as the "new release" (or lack of one) effect. Clearly the downturn, which was even worse (at least here in the UK) in April than it was at Christmas did not prevent them having a "good" 4th quarter.

I appreciate I am speculating here. As are we all, in interpreting the entrails of the report.

Where I am coming from is their comment that they failed to convert the new gamers from events in the summer into sales at Christmas. They lay that at the door of their retail infrastructure. Many of us lay it at the door of their pricing strategy.

JohnHwangDD wrote:8-odd% unemployment?

That's nothing.

In the "great state of California", we've been over 10% for ages...

Can I throw my state into the ring?

15-20% depending on who your talking to.......think about that 1 in 5 people without a job.

YAY Michigan, last one out turn out the lights.

Whats funny is the GWS stores are still packed =)

An interesting article about the latest numbers here, apologies if it has already been posted:

http://www.fool.co.uk/news/investing/company-comment/2009/07/28/dare-you-roll-the-dice-with-games-workshop.aspx

-Tim

Score one for the Observant (Tyranid) Tim.
I'm not one to follow the fool blindly but that is a pretty darned even handed assessment.

Redbeard wrote:

Osbad wrote:One of the interesting questions that I am mulling over is just why do they consider Christmas 2008 was a "bad" quarter? Clearly sales were down, and I would lay that clearly at the door of their high prices. There wasn't an obvious new release aroound Christmas that tanked though was there? I can't recall one.

Because every retailer considered Christmas 2008 a bad quarter. We're in the middle of a major recession. Unemployment numbers in the US are at 10%, using the 'new math' that ignores many of the unemployed to boot. I don't think that higher prices had anything to do with the bad Christmas, I think it was lack of Christmas budgets. If grandma budgets $50 for timmy's christmas gift, and timmy wants space marines, Grandma is going to buy him $50 of Space Marines. If Grandma lost 50% of her retirement assets, and only has $20 for Timmy's gift, Timmy's only getting $20 worth of Space Marines...

Good post. I believe you are referring to 'Discouraged Workers' when you talk about the lack of reflection in unemployment rate. From the US Dept. of Labor;

"Persons Not in the Labor Force (Household Survey Data)

About 2.2 million persons (not seasonally adjusted) were marginally
attached to the labor force in June, 618,000 more than a year earlier.
These individuals wanted and were available for work and had looked
for a job sometime in the past 12 months. They were not counted as
unemployed because they had not searched for work in the 4 weeks
preceding the survey."


Scary times......glad I'm in healthcare...


http://www.bls.gov/news.release/empsit.nr0.htm

AgeOfEgos wrote:... "wanted and were available for work and had looked
for a job sometime in the past 12 months. They were not counted as
unemployed because they had not searched for work in the 4 weeks
preceding the survey."

Nice that they don't count because they were *looking* for work, so they must be employed!

Wish I could do that with the house payment. "It counts as paid because I *wanted* to pay it..." I don't think that'd fly.