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PhantomViper wrote:Would these costs include any new machinery that needed to be bought to implement the Failcrap production methods? Because if they did, then those are 1 time investments that wouldn't be reflected in future reports.

Machinery is typically depreciated over several years (The number of years is based on an estimate of the life of the machinery). So no, it is not a one-time charge that you only see on one year's reports.

skyth wrote:

PhantomViper wrote:Would these costs include any new machinery that needed to be bought to implement the Failcrap production methods? Because if they did, then those are 1 time investments that wouldn't be reflected in future reports.

Machinery is typically depreciated over several years (The number of years is based on an estimate of the life of the machinery). So no, it is not a one-time charge that you only see on one year's reports.

Football teams do the same thing when they buy players.

As I see it, GW is still very much in the neutral gear they have been for a number of years - keep the profit margin, and thus the dividend payment, the same, despite falling sales. I feel they could increase turnover substantially by moving to a policy of aiming for fanbase growth through sales, smaller game modes (more support for kill team and other small size games in 6th, for instance) and a price freeze, and that the additional demand would make up for the lack of a price rise, but that's obviously not their plan. I don't think they are doing badly, but I do think they are behaving too conservatively and it's allowing other companies the opportunity to catch up and steal market share. If another game system breaks out and starts pulling in the non-gamer audience that GW are failing to attract these days, then I think their market position could change rather rapidly.

Doom! Gloom!

For some reason my stock share has risen 100p in the last 1/2 year.

LoL

Avakael wrote:

LunaHound wrote:

Avakael wrote:I'm mildly amused by the undertone I'm seeing that total sales dropped primarily because of a rebellion of gamers against Games Workshop increasing their prices, and not perhaps by the fact that if you live in the EU or North America, chances are you're presently struggling to pay the bills in the first place.

Earnings per share of 22.1p (2010: 15.6p)

That, however, has me scratching my head.

Im amused that you thought that, but not the case.

Its not any successful rebellion ( not even related ) , but rather the comedy that GW keep raising prices despite the situation you just described.

The audacity ^-^

Well, seems to be working for them.

Lol im no business major and even i know this statement is as slowed as it could possibly get.

agnosto wrote:Doom! Gloom!

For some reason my stock share has risen 100p in the last 1/2 year.

LoL

As shown in recent years the stock market has no correlation to reality whatsoever.

Korraz wrote:

agnosto wrote:Doom! Gloom!

For some reason my stock share has risen 100p in the last 1/2 year.

LoL

As shown in recent years the stock market has no correlation to reality whatsoever.

Shhh.... you might hurt the feelings of all those people that went to college to get a gamblers degree.


The amount of people trying to deny:

Price hike + decrease in sales + decrease in units sold + disparity betwin price hike and sales revenue = Shrinking consumer base.

Is amazing.

I'm making money, that's all I care about. I love having a hobby that nearly pays for itself because I bought stock in the company...

n0t_u wrote:Maybe the Grey Knights as well?

Also looking at the royalty part maybe also some of the funds from Space Marine unless I'm remembering the release wrong.

Royalty payments... how about from the PC and console games.. oh and the Ultramarines movie.

Silly question but how does one go about buying shares?

They only thing I can make from all these numbers is that I'm not looking forward to June again...

Daston wrote:Silly question but how does one go about buying shares?

I bought mine through an online stock broker; I'm sure you have similar services in he U.K. I'd advise you to wait though as the stock will probably dip after issuance of dividends as is usually the case and you can get a better deal then.

GW's going to do fine financially... with The Hobbit and 6th edition 40k looming, I can't see a change in that. Other game systems have started to do well, but that doesn't mean GW isn't, too.

Not worth stressing about it, really... they'll make business decisions just like any other company, hopefully it'll coincide with what's good for gamers. If not, there are other options... but I don't see this report (or any recent one) pointing towards a decline in GW, even with the lower volume in sales.

Honestly, I don't know why everything GW makes isn't in plastic (although I'm sure someone will tell me). I love their plastic models, the detail is great, and are easy to convert. They also are usually perfect.

Hopefully GW doesn't raise prices to go with 6th Ed. Or maybe they will, in the hopes that with increased sales due to the new edition + the higher prices they can squeeze more money out of us. The only problem is that the nanosecond I have 3k points worth of Necrons, I'm done, unless something amazing happens.

McNinja wrote:Honestly, I don't know why everything GW makes isn't in plastic (although I'm sure someone will tell me). I love their plastic models, the detail is great, and are easy to convert. They also are usually perfect.

Because tooling a plastic mold costs a gak load more than making a rubber metal/resin mold. It's simply not cost effective making them for everything. Lower selling units simply won't make the money back on the mold.

-Loki- wrote:

McNinja wrote:Honestly, I don't know why everything GW makes isn't in plastic (although I'm sure someone will tell me). I love their plastic models, the detail is great, and are easy to convert. They also are usually perfect.

Because tooling a plastic mold costs a gak load more than making a rubber metal/resin mold. It's simply not cost effective making them for everything. Lower selling units simply won't make the money back on the mold.

But if they put in that "gakload" as reinvested revenue they could have made it back by now.

-Loki- wrote:

McNinja wrote:Honestly, I don't know why everything GW makes isn't in plastic (although I'm sure someone will tell me). I love their plastic models, the detail is great, and are easy to convert. They also are usually perfect.

Because tooling a plastic mold costs a gak load more than making a rubber metal/resin mold. It's simply not cost effective making them for everything. Lower selling units simply won't make the money back on the mold.

Aren't they reusable though? If they can make enough models with it to cover the cost of the mold, then they should at the very least be breaking even, and probably make a fair bit more than the mold was worth.

Also, if Resin is that much cheaper, why not use that for everything, rather than some things? And for that matter, why is the price of Finecast models so much higher if they're cheaper to produce? More QA people?

As an aside, I like how Infinity models, which are metal, are about $12 a pop for an regular individual, while Finecast models are about $16.

McNinja wrote:Aren't they reusable though? If they can make enough models with it to cover the cost of the mold, then they should at the very least be breaking even, and probably make a fair bit more than the mold was worth.

YEs, they are reuseable, and that's where the decision comes in - do they expect the model to sell enough to make back the money on the mold in whatever timeframe they need it to (say, a year, for example). If they simply do not see the model selling enough - like Tyranid elites where people have, at most, 9 of the one model in an army, but very likely only 2 or 3 - they're just not financially viable to tool a plastic mold for.

McNinja wrote:As an aside, I like how Infinity models, which are metal, are about $12 a pop for an regular individual, while Finecast models are about $16.

GW pricing. Though Corvus Belli aren't saints in this area - having bought some Haqqislam models the other night, I paid $12 for a doctor and a fiday, but $22 for a panzerfaust ghulam. Which had about the same about of metal in it as the fiday. They do overpricing as well.

UNCLEBADTOUCH wrote:Gross profit in those two regions has actually fallen, Asia and its expanding markets have seen good growth in profit and some other regions have pretty much stagnated.

To me that seems like units sold in Europe and Uk must have fallen, otherwise like for like sales with price increases should have led to growth unless operating costs in those two regions increased more than there price rises.

It may just be that it's late and I'm really tired. But could the fact UK sales were down, sinceUK based web retailers like Wayland games and Malestorm can no longer ship their GW product over seas?

@.@

That explains the release of Apocalypse.

GW needs to (internally) go through why sales are declining, and figure out what they can do to stop that. I don't know if its the increase in prices, the lack of any sort of advertising/marketing outside of word-of-mouth, the terrible grip they have on their IP and who can sell what where, or the fact that wargaming simply isn't as easy to get into as, say videogames. $60 for a game you could potentially spend dozens of hours on, or $300 for a game that requires dozens of hours before you can even play? I'm not saying GW needs to start catering to everyone, but the small community of people that play tabletop games like 40k isn't getting much bigger, its the new people who are just getting started GW really relies upon.

There are plenty of things GW could do to increase its presence without spending a terrible amount of money, but they are being way too conservative with their money to even consider doing anything.

skyth wrote:

PhantomViper wrote:Would these costs include any new machinery that needed to be bought to implement the Failcrap production methods? Because if they did, then those are 1 time investments that wouldn't be reflected in future reports.

Machinery is typically depreciated over several years (The number of years is based on an estimate of the life of the machinery). So no, it is not a one-time charge that you only see on one year's reports.

To expand on that...

What happens is that cash is spent to acquire a piece of machinery which is capital equipment worth whatever was paid for it.

In other words the overall worth of the company does not change. A cash balance is replace by a capital balance. No goods have been produced, and in theory the machine can be sold for whatever it cost, so there isn't any cost of goods at this point. (If you are a retail business, in other words, you are selling the machines you buy, then things are different.)

GW is a manufacturer, though. The machine is run, and gets depreciated over several years, according to rules that vary by the company and machine type. For example in my company, computer equipment costing over £1,000 is a capital expense and gets depreciated to zero over three years (even if the computer is used for more than three years).

There are various ways to calculate depreciation, one of which is the straight line method. That means, at the end of year one of three, the machine loses 1/3rd of its value. The company has then lost capital worth £333.33. OTOH you aim to have used the machine to make goods worth more than £333.33. That is what business is all about.

Once you start running your machine, you have to absorb its fixed cost into your production costs. There are various ways of doing this. It is unusual to absorb it all at once because that causes the accounts to show major fluctuations. What is more likely is that the accountant will absorb the depreciation expense per year, divided by the number of goods made with that machine. Let's say the machine makes 300 models, then the fixed cost per model would be £333.33 / 300 = £1.11. That goes into your cost of goods, along with costs for electricity, materials, labour, maintenance and facilities.

As companies are assumed to be indefinitely ongoing concerns, they need to renew and replace their machinery on a regular basis, so there shouldn't be any major fluctuations from one year to the next except if there is a large expansion of plant such as expanding a factory.

Daston wrote:Silly question but how does one go about buying shares?

The following is genuine advice and hopefully will be heeded as such:

(Answer for long term interest) If you have to ask that question, you would do very well to become informed through channels that are NOT wargame forums.

(answer for short term interest) That, and if you have to ask that question, you really should stay away from the stock market.

Normally your bank can do it for you.

They will charge a fee.

McNinja wrote:That explains the release of Apocalypse.

GW needs to (internally) go through why sales are declining, and figure out what they can do to stop that. I don't know if its the increase in prices, the lack of any sort of advertising/marketing outside of word-of-mouth, the terrible grip they have on their IP and who can sell what where, or the fact that wargaming simply isn't as easy to get into as, say videogames. $60 for a game you could potentially spend dozens of hours on, or $300 for a game that requires dozens of hours before you can even play? I'm not saying GW needs to start catering to everyone, but the small community of people that play tabletop games like 40k isn't getting much bigger, its the new people who are just getting started GW really relies upon.

There are plenty of things GW could do to increase its presence without spending a terrible amount of money, but they are being way too conservative with their money to even consider doing anything.

I agree with you entirely.

The problem is, there is no cheaper entry level option to act as a hook to get people into the hobby. It's almost like they have no confidence at all in their ability to keep people buying games, more like "we'll get those 12 year olds addicted for one christmas, they'll spend $400 and then we will never see them again."

Yes, you can buy small model count games (Necromunda, BB etc.) from Specialist games, but I'm talking about games for the entry level here that are readily available to the wide-eyed kids stepping in to the store for the first time. The Space Hulks, Heroquests, yes even BB when they were all sold in store. Even things like Space Crusade, sold in toy shops for parents who would usually never step into a GW. How many of us here, especially the gamers 25+, were brought into the hobby, were first addicted, by playing one of those games? And by comparison, how many were brought in by immediately buying a 1500pt army for 40k or WFB?

There are only so many times that cutting staff and reducing overheads can be used to give a short-term profit. I worry that absolutely nothing is being done for the long term viability of Games Workshop, of truly hooking in customers beyond short term splurges of money that they know are unsustainable. And don't get me started on Space Marine, the opportunities for pulling people into GW to play games, and the things that could have been done, would be a 1st year project for a marketing undergraduate. Wargaming is already niche, and the company seems committed to ensuring it remains so.

Pacific wrote:

McNinja wrote:That explains the release of Apocalypse.

GW needs to (internally) go through why sales are declining, and figure out what they can do to stop that. I don't know if its the increase in prices, the lack of any sort of advertising/marketing outside of word-of-mouth, the terrible grip they have on their IP and who can sell what where, or the fact that wargaming simply isn't as easy to get into as, say videogames. $60 for a game you could potentially spend dozens of hours on, or $300 for a game that requires dozens of hours before you can even play? I'm not saying GW needs to start catering to everyone, but the small community of people that play tabletop games like 40k isn't getting much bigger, its the new people who are just getting started GW really relies upon.

There are plenty of things GW could do to increase its presence without spending a terrible amount of money, but they are being way too conservative with their money to even consider doing anything.

I agree with you entirely.

The problem is, there is no cheaper entry level option to act as a hook to get people into the hobby. It's almost like they have no confidence at all in their ability to keep people buying games, more like "we'll get those 12 year olds addicted for one christmas, they'll spend $400 and then we will never see them again."

Yes, you can buy small model count games (Necromunda, BB etc.) from Specialist games, but I'm talking about games for the entry level here that are readily available to the wide-eyed kids stepping in to the store for the first time. The Space Hulks, Heroquests, yes even BB when they were all sold in store. Even things like Space Crusade, sold in toy shops for parents who would usually never step into a GW. How many of us here, especially the gamers 25+, were brought into the hobby, were first addicted, by playing one of those games? And by comparison, how many were brought in by immediately buying a 1500pt army for 40k or WFB?

There are only so many times that cutting staff and reducing overheads can be used to give a short-term profit. I worry that absolutely nothing is being done for the long term viability of Games Workshop, of truly hooking in customers beyond short term splurges of money that they know are unsustainable. And don't get me started on Space Marine, the opportunities for pulling people into GW to play games, and the things that could have been done, would be a 1st year project for a marketing undergraduate. Wargaming is already niche, and the company seems committed to ensuring it remains so.

+1 on this.

As I have commented before we are talking about the decline of their customer base.

I've posted this before. The article was posted at URL on 11-02-11 concerning US summer sales.
http://www.icv2.com/articles/news/21399.html

I will post the important statement concerning sales:

Games Workshop, the leader in the non-collectible miniatures category, had a rough summer, with quality issues on its new Finecast resin line, spotty supply, and shorter solicitation cycles all affecting sales. Meanwhile, Privateer continued steps to shore up its backlist availability, and coupled with GW’s problems, was picking up customers.

I'm waiting for the next quarter of sales data and when found will be posted on Dakka of course.

People have already hit on the crux of the problem. They are losing their customer base. They are making up the loss by increases in prices and streamlining all revenue sources. This looks good short term. As far as fixing the problem I doubt it can be. Their business model is shifting more to Controlled licensing IP to other companies.
FW and BL are doing well but these are their subsidiaries, to me, better than the retail arm of the core company.

They will continue to make profit, which looks good to their share holders until something drastically gives.