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Another year of flat revenue in real terms. They grew in today's dollars, but barely enough to keep up with inflation.

Kirby was able to pay himself a really huge dividend. The machine is working for his purposes.

I think GW can continue the process of moving everyone towards paying Forgeworld and Australian/Canadian prices. They haven't hit the point where their customers are buying less in any way that drops their revenues, so there's more room for more price increases.

And I think if this year is any indication, the price increases will no longer be an across the board adjustment, but based on new releases.

GW's revenue grows, but not by much in real terms, Kirby pays himself a big fat cheque, and the customer base shrinks ever so slightly as new prices x units sold = flat revenue.

Looks like another year of business as usual at GW.

I think in about five years. They may hit the tipping point, where their market is severely impacted by the new games/figures manufacturers.
When its as easy to get a game of warmachine/fow etc, and 40k is not the obvious gateway into wargaming. The cracks are showing, the dam can burst.

Wolfstan wrote:There appears to of been a major influx of Kickstarter projects this year, so I wonder if they will show an impact on the next set of figures?

Kickstarter projects don't directly hurt GW. In some ways, they probably even help GW (helping to provide for those in the community who won't pay as much, for example).

But what it does mean is that there's more competitors, and the existing competitors are growing at a much faster rate (along with traditional competitors growing, such as privateer press). As long as the pie grows, it's fine for GW, but at a certain point, some of those companies will start eating into GW's bottom line. So not a direct threat, but it's something GW would have to keep their eyes on for the future.

Kroothawk wrote:To summarize:

This financial year had:
- a new 40k edition with rules and starter box
- a new Hobbit edition with rules and starter box (costing double the price than its predecessor at release, same with miniatures)
- 6 new Codices/Armybooks from January to May (each costing double the price than its predecessor at release)
- Miniature releases with big boxes at ever rising prices (Eldar Titan outside of this financial year though)

Still, the total revenue only managed to stay flat adjusted for inflation. What options have they left to keep revenue flat next year? Another 40k Edition? 2 Codices per month? Quadrupling prices?

Why does Tom Kirby have mixed feelings about this result? Because he still gets one million GBP out of this!

Profit was also (essentially) flat this year and over the past few years, when GW has obviously been pumping out a lot more plastic than in the past. Finecast is something a lot of people see as an issue, but it's a smaller and smaller proportion of the overall range. GW obviously isn't going to disappear in a year or two, and if they keep this up, the range will be almost entirely plastic within a couple of years. Prices will still be expensive, but the all plastic range is a big advantage.

The hobbit thing actually bears commenting on. If it did bring in all sorts of money, then 40k sales shrank. If it didn't, then what a waste of resources that could have gone into their best selling products.

 frozenwastes wrote:
The hobbit thing actually bears commenting on. If it did bring in all sorts of money, then 40k sales shrank. If it didn't, then what a waste of resources that could have gone into their best selling products.

I'm sure GW is happy to dump money into the hobbit to stop other companies from getting the license.

decker_cky wrote:

 frozenwastes wrote:
The hobbit thing actually bears commenting on. If it did bring in all sorts of money, then 40k sales shrank. If it didn't, then what a waste of resources that could have gone into their best selling products.

I'm sure GW is happy to dump money into the hobbit to stop other companies from getting the license.

On the contrary it would seem that they're tied in to a deal. There's no way gw made money from the hobbit, I doubt they will from the second and third releases.

 BryllCream wrote:

decker_cky wrote:

 frozenwastes wrote:
The hobbit thing actually bears commenting on. If it did bring in all sorts of money, then 40k sales shrank. If it didn't, then what a waste of resources that could have gone into their best selling products.

I'm sure GW is happy to dump money into the hobbit to stop other companies from getting the license.

On the contrary it would seem that they're tied in to a deal. There's no way gw made money from the hobbit, I doubt they will from the second and third releases.

I'd qualify that with "if they continue to take the same approach"

There is money to be made from the Hobbit licence, but not if they continue to sit on their corpulent backsides and expect all the people they haven't advertised their product to to come flocking into their stores (assuming its not on a Monday or Tuesday, as the 'manager' will be on his days off and the store will be shut) waving money to buy vast quantities of high priced miniatures that are merely variations on models they have already released from the first film or the LOTR trilogy. If they actually put some effort in, and try to offer a product of reasonable value to a market that is slightly broader than "people who would have come into the shop and bought it already" then they, and we, may be pleasantly surprised.

I love how Tom Kirby can't shut up about hiring for "attitude" rather than skills. He's basically saying he doesn't want skilled intelligent frogs (employees) who may actually notice and take issue with the water temperature slowly rising so to speak. Locally our store is shutting down and moving, becoming a "one man" store with no gaming area, this is regardless of the fact that it’s one of the best performing stores in canada. It's going from like 4 employees to just the manager. All of the employees I'm sure were told about a "career" at games workshop, all of them put in an honest effort and did what they were told, they all drank the koolaid and fit into the gw mindset (attitude) as best they could. They're all losing their jobs, it's pretty sad.

We all joke about the cliche of "that's it, I'm not bying anymore gw stuff", the reactionary people who say that kinda stuff everytime some crappy pr comes out way. Well I've never said that myself, however I've noticed that I haven't purchased a gw kit in almost 10 months. I've ordered the occasional bits, can't lie about it, but when it comes to straight up boxed purchase it's been a while. I don't know if that's just subconcious block on purchasing due to extreme hate for the corporate side of the company or that they really haven't released too much that I want or can afford.

The report seems to make sense, they're not really making more money, they're spending less to make it. All I know is the store here where I live supports a decent 40k community and when it closes, that community will probably change, those that can game at home will likely continue to do so but if others can't find a game, there's warmachine, flames of war, malifaux, infinity and mercs all waitin to scoop them up and a few of those don't involve that much money to get into. I don't think 40k will die locally, but it will certainly shrink.

It certainly *feels* like I've not bought any GW products in ages.

But, truth be told.....

July: Apocalypse Rulebook, Apocalypse Templates, Vortex Template
June: Eldar codex. 3 versions of Bugman, Bugmans Boardgame, Abaddon+Loken, Rhino Doors, Bugmans Pitcher. Belial.
May: 2 Vengeance Cruisers, 9 escorts. Planet Killer. Orbital BatteriesGaunts Ghosts, Last Chancers. Assorted Mordians.
April: Tau Codex
March:
February: Chaos Demons Codex
January: Dark Angels codex, Nephilim Fighter
December: The Hobbit game. Crusade of Fire
November: Helltalon fighter. Eavy Metal paint set
October: Chaos Space Marine codex.
September: Dark Vengeance
August:
July: 40k 6th Edition Collectors book.


Admittedly, it's mostly books (but doesn't include my black library purchases including the darned limited editions). Yet, that's genuinely a stupid amount of purchases for buying from a company I don't like anymore.

I'm completely a grade A sucker. Hook line and sinker.

Surely making more money, however you go about it, is good?

Well done GW. I can't remember them not posting profits. I don't like all the releases but with Space Marines getting a new book between now and the next report, I guarantee they post profits next time too.

 loki old fart wrote:
When its as easy to get a game of warmachine/fow etc, and 40k is not the obvious gateway into wargaming. The cracks are showing, the dam can burst.

I think this is a huge key, but is it really even close to being the case yet?

As to the attitude over skill thing: this really isn't that uncommon for large companies. Again, it's much easier to hone the skills of someone with a great attitude than it is to readjust the attitude of someone with great skills.

 Davylove21 wrote:
Surely making more money, however you go about it, is good?

I thought that too until my baby seal beating business was burned down.

In business, it is much easier to fix a skill issue than a will issue.

 frozenwastes wrote:
They haven't hit the point where their customers are buying less in any way that drops their revenues, so there's more room for more price increases.

And I think if this year is any indication, the price increases will no longer be an across the board adjustment, but based on new releases.

Actually I think, we ARE now in the escalation phase:
- Total revenue is flat, but declining in its core market UK, rest of Europe and Australia. Only in North America (and Asia but this market is neglegible) was an increase, that is a fraction of the total market.
- Biggest increase was with BL and FW, the latter maybe because GW prices are now close to FW prices. Another segment reducing revenue from the core products. So core products also generate less revenue globally.
- Price increases went up to flat out doubling. Most prominent with everything from the Hobbit (killing the game from the start among other things), 2 sprue kit variants for over 50$ (e.g. DA Landspeeder and Dark Talon) and Codex kits for over 110$. This is a desperate and unsustainable strategy, that can only be followed one or two years before crippling the market.
- Sales of Products are mostly done in the 1-2 months after release, that's why price increases are now concentrated on those without any consequences. That's why all Finecast is mail order only after a few weeks.

Future trend: Half the Codices (called supplements!) plus half the rulebooks (e.g. Death from the Sky) are mail order only to maximize profit and minimize effort and risk (English only). Supplements again cost about double previous supplement price in addition to reduced margins for FLGS, while its content is blown up to Codex page size with big sometimes recycled pics.

 Kroothawk wrote:

 frozenwastes wrote:
They haven't hit the point where their customers are buying less in any way that drops their revenues, so there's more room for more price increases.

And I think if this year is any indication, the price increases will no longer be an across the board adjustment, but based on new releases.

Actually I think, we ARE now in the escalation phase:
- Total revenue is flat, but declining in its core market UK, rest of Europe and Australia. Only in North America (and Asia but this market is neglegible) was an increase, that is a fraction of the total market.
- Biggest increase was with BL and FW, the latter maybe because GW prices are now close to FW prices. Another segment reducing revenue from the core products. So core products also generate less revenue globally.
- Price increases went up to flat out doubling. Most prominent with everything from the Hobbit (killing the game from the start among other things), 2 sprue kit variants for over 50$ (e.g. DA Landspeeder and Dark Talon) and Codex kits for over 110$. This is a desperate and unsustainable strategy, that can only be followed one or two years before crippling the market.
- Sales of Products are mostly done in the 1-2 months after release, that's why price increases are now concentrated on those without any consequences. That's why all Finecast is mail order only after a few weeks.

Future trend: Half the Codices (called supplements!) plus half the rulebooks (e.g. Death from the Sky) are mail order only to maximize profit and minimize effort and risk (English only). Supplements again cost about double previous supplement price in addition to reduced margins for FLGS, while its content is blown up to Codex page size with big sometimes recycled pics.

Certainly the relentless move (first in dribs and drabs, but more recently in huge leaps) of GW kits toward FW prices has something to do with FW's good performance, but I would say that another reason that FW is doing better than GW as a whole is that FW is putting out consistently high-quality product (in terms of design). When was the last time FW put out a new kit that people (at least some) were like "ZOMG that looks awful!" ? I can't remember when. The HH stuff has been solid overall, with some pieces being truly impressive. 40K and Fantasy have had some real fugly releases though - as well as some good ones, of course. On the whole however, FW is putting out very consistently well-designed models, while Citadel is putting out a very mixed bag of good stuff with some really awful, burns-the-eye-to-look-at models.

I also agree that the "leaps" in price increases aren't sustainable, and that it smacks of desperation. It's as if they're trying to squeeze maximum cash from existing fans because they know that they've priced the game (40k and Fantasy) out of almost all new potential players ability or willingness to pay.

If this is a lot of tap-dancing to make mediocre or bad numbers seem good to investors (and I'm no accountant, but do know human nature, so I suspect it IS true) then we'll see things getting worse and Kirby having to tap-dance harder next year. He'll be happy to do so, and continue tap-dancing this company into the ground (however long that takes) since he can continue to enrich himself, and even if he totally destroys the entire company, he will land on a pile of money so huge with his golden parachute that it won't matter.

-C6

It's also never been easier to play certain 40k armies either partially or entirely count as using other manufacturers miniatures. And with GW pulling out from tournaments, there's no one there to tell you that your wargames factory shock trooper can't be used as an imperial guardsmen because it's not "official". The third party market also seems to have a good ear for what people want too, look no further than all the different aegis lines out there that fit the aesthetic of armies better.

That's true, any Undead armies I see at my gaming club include at least some Mantic models. I think newer ones are mostly mantic.

There's people on the 40k side of things considering collecting Guard, who have started with sets of Corporation Troopers.

Like I said the cracks are showing.

What cracks? I mean, people complain about prices all the time but seemingly, most people still are totally ok with these prices, else GW would be at a loss, not where they stand right now.

Sure, if you have to rise prices to keep a profit, that ain't a good sign, but if you still maintain such a positive balance...that's a minor flesh wound.

Furthermore, as others already pointed out: GW's "competitors" are a joke right now if you compare their sales numbers to GW's. Sure, that might change in the future, but that's all guessing into the blue. What we have right now, right here, is a paper showing us that GW makes a profit. That's good for independents too and that also benefits GW's marketing model: lure people into the hobby. Make them buy a few boxes at high prices, then let them wander away to other miniature games.

The fact that they released a new edition of their flagship product and re-released a huge number of 40k armies in the past year and have nothing to show for it (revenue barely kept pace with inflation) should be more than a little disconcerting for investors. But I guess that's why they're so focused on making those dividend payments--gotta do something to keep people from dumping shares.

 Danny Internets wrote:
The fact that they released a new edition of their flagship product and re-released a huge number of 40k armies in the past year and have nothing to show for it (revenue barely kept pace with inflation) should be more than a little disconcerting for investors. But I guess that's why they're so focused on making those dividend payments--gotta do something to keep people from dumping shares.

Don't they have like, 140 million things to show for it?

I think we're underestimating the loss that The Hobbit products could potentially be running at. If, in fact, The Hobbit is running at a loss (like many people have speculated) then it speaks pretty well to their agility as a business that they can cover those losses with 40k and Fantasy.

 Sigvatr wrote:
What cracks? I mean, people complain about prices all the time but seemingly, most people still are totally ok with these prices, else GW would be at a loss, not where they stand right now.

Sure, if you have to rise prices to keep a profit, that ain't a good sign, but if you still maintain such a positive balance...that's a minor flesh wound.

Furthermore, as others already pointed out: GW's "competitors" are a joke right now if you compare their sales numbers to GW's. Sure, that might change in the future, but that's all guessing into the blue. What we have right now, right here, is a paper showing us that GW makes a profit. That's good for independents too and that also benefits GW's marketing model: lure people into the hobby. Make them buy a few boxes at high prices, then let them wander away to other miniature games.

Stopping tournment support, thus enabling people to use competitors products as stand ins.
Stopping gaming in store. Forcing customers to play at independent stores where they will become more aware of competitors games and figures.
On there own each competitor is no problem, combined they're a large slice of GW's market.
Most people post about how much they would have spent.
This year GW sold me 2 pots of paint and 1 dark vengeance, for the rule book

Personally, I am all in your boat. I still play 40k and WHFB, but the only thing I bought in 2 years from GW directly is the army book...and even that was from Wayland Games. A few paints, but also bought at the FLGS. Everything else was bought via second hand at a killer price.

I wish GW would have severe problems right now. Forcing them to react, forcing them to fire the idiot Kirby is (and he recently proved that he is one again in his "shareholder speech"). But right now, that's not happening. GW is operating well and the ship might have scratched a few rocks, but it's far from sinking...yet.

WotC buying GW's IP would be the best thing that could happen. But alas, that's wishful thinking again...

I think "mixed year" is a fair assessment of the year. They increased profit, albeit via cost cutting (reducing average # of employees in store, more SKU's in Finecast, etc etc). I don't think there's a case to be made that GW is in any real danger of collapse in the immediate future.

I do think they're going to take steps to get more sales volume or generate revenue in other ways in the future, as there's a point where you can't get any "leaner and meaner".

Those new sources of revenue* may be a boon to the consumer. The recent pace of releases has been great; we're getting more armies out in faster times than I've ever seen. Supplements are a great idea; while I don't love the prices I do like having the option. Lots of products have gone digital (albeit at comically high prices), which is something I quite like. Despite the bad (i.e.- continued price creep), GW has done some decent things this year.

2014 and 2015 will be interesting years for GW. On the one hand, its hard for me not to see $100+ Land Raiders and increasing large and complex (and pricey) plastic kits becoming the norm. On the other hand, GW has an opportunity to do some interesting things with some of its IP. I'm hoping the rumors about the changes to 9th edition WFB are true (going to "Armies of Good"/"Armies of Bad" style supplements with an Allies Matrix). With the Hobbit in decline, it'll be interesting to see if they branch into a new game (maybe bring bad Bloodbowl?).

Here's hoping for a forecast that includes something beyond "DOOOMMM!!!"

* - Here's hoping this isn't just price hikes.

To be fair to Kirby - I remember when everyone was claiming Pokemon was going to kill of GW by stripping away all the younger player base. A bit gun-ho with "where are they now?", but a fair shout to call the people who were hailing it as the last horseman of the apocolypse for the hobby...

Revenue
- Revenue at £ 134.6m (2012: £131.0m)
- Revenue at constant currency* at £135.6m (2012:£131.0m)


So, with under a 3% increase, now approaching a flat line, in a growing market, how much loger a are we supposed to eat the BS sandwich that GW is not shrinking?.

That just seems weird. Isn't pokemon more for pre-teens, whereas GW's market is for early-teens.

Plus, I think (anecdotally) a lot of indy stores end up having Magic The Gathering pay the bills more that GW.

Weirdly this has been the least painful year for us folks in Oz, as the prices haven't been rising for us. The prices for the rest of you have just be rising to match our own.

The exception are the Codices of course. They're so damned expensive now that they're just not worth it. I'll take a beautifully produced FFG hardback with twice the content for half the price thanks.

@H.B.M.C.: Make sure that your colleagues at FFG get to read all the belittlement and insults, Tom Kirby is throwing at the folks working on the 40k RPGs:

How about other games like Pokémon or role-playing games? (Who can remember them, now?)
(...)
Nearly all our royalty income (88% last year and 82% this) comes from licences sold to computer games companies.
(The balance is from Fantasy Flight Games which makes card games and board games - and very good they are too!)

 Kroothawk wrote:
@H.B.M.C.: Make sure that your colleagues at FFG get to read all the belittlement and insults, Tom Kirby is throwing at the folks working on the 40k RPGs:

How about other games like Pokémon or role-playing games? (Who can remember them, now?)
(...)
Nearly all our royalty income (88% last year and 82% this) comes from licences sold to computer games companies.
(The balance is from Fantasy Flight Games which makes card games and board games - and very good they are too!)

Youch.......