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 insaniak wrote:
I'm not sure what you think the example was showing, though. Yes, the Lego set only contains 7 'miniatures' (ignoring, of course, little details like the rest of the set). You could also point out that a single Sideshow Collectibles statue will cost you the same or more, and only contains a single 'miniature'... and it would still be completely irrelevant as an illustration of whether or not GW are out-pricing their customer base.

Is it? Comparisons of products with the exact some price tag for the exact same IP licence made from pretty much identical basic materials released virtually at the same time and you're saying they are not comparable?

By any measure, they certainly offer far better benchmarks for analysis than, for example, the incredibly flawed comparisons made between GW today and GW 5 years ago, which have far fewer variables in common than the Lego-GW comparison above.

 insaniak wrote:
Yes, but why...?

Totally different products. And nothing to do with the topic at hand.

Because when all you've got is straws, why not clutch at them?

 Zweischneid wrote:
Is it? Comparisons of products with the exact some price tag for the exact same IP licence made from pretty much identical basic materials released virtually at the same time and you're saying they are not comparable?

Given that one is marketed (ahem...) to wargamers, and the other is a toy that will sell for kids and collectors, yes, they are not directly comparable. Not when what you are trying to counter is the claim that GW's prices are eroding their customer base.

Lego has always (or at least for the last 30 years or so) been expensive. That generally works for them because they are also the best brand in their niche, and are a name that everyone knows, although they supposedly were having some financial difficulties for a while there that were turned around by the initial release of the Bionicle range followed by the Star Wars 'licence to print money' aquisition. But the amount that collectors and parents are willing to spend on Lego for their kids has no bearing whatsoever on whether or not gamers are willing to continue buying GW miniatures when GW keeps raising their prices. The only valid comparison there is GW's sales figures now compared to GW's sales figures from a time when they weren't as expensive per miniature... although even that is going to only give you a partial picture, since there are more factors involved that just the cost per miniature.

What are wargamers but kids and collectors? Yes, they collect slightly different products, but not incomparably so (as in.. dunno.. comparing GW to PepsiCo or something).

And Lego's transformation from (mainly) a fairly homogenous "hobby-product" to a strategy of (mainly) "splash-releases" of both their own branding and licensed branding isn't dissimilar to what GW is trying to do either.

 Zweischneid wrote:
What are wargamers but kids and collectors? Yes, they collect slightly different products, but not incomparably so (as in.. dunno.. comparing GW to PepsiCo or something).

To some extent that's correct, and moreso (at least the collectors part) for LOTR product, which largely didn't sell to GW's 40K and WHFB customers, but more to LOTR fans specifically... but that in itself also makes LOTR product a poor reflection of what is going on with GW generally. You can generally get away with charging a little more for licensed product, because people are a little more willing to spend for it, and it's not intended to have long-term viability... it just sells while people are still excited about the movie.


But you can't just directly compare the price of a Lego set (that incidentally doesn't yet have a proven sales record, so we have no way of knowing whether consumers will see that price as acceptable) against a similarly so-far unreleased GW miniature set and claim that it proves anything other than that the two sets are a similar price.

Incidentally, that 'move to splash releases' for Lego happened in the 80's. It's not a new thing. It's just more apparent these days as they cycle in new sets a little faster than they used to.

This article makes pretty interesting reading, written about 18 months ago (the last dividend payment? Was there another in-between then and now?) but a lot of it is still valid.

http://theback40k.blogspot.co.uk/2011/04/help-kirby-is-eating-our-hobby.html

I guess the argument goes back and forth as to whether you think it's a good thing that GW is a publicly owned company. I would tend to say no - GW changed from a company made 'by us, for us', into one that is seemingly run by suits on all levels, and only has the bottom line in mind. Most of the things that seem to tick people off (the lack of innovation, perennial price rises, resin problems) are probably related to it as it doesn't seem that any other companies have these problems, or at least on anything like the same scale.

Also, on a personal level I don't think it's right that GW lays off hundreds (thousands?) of staff in a time when sales are reducing, and then the CEO gets that amount of money in a year - more than a little obscene IMO considering the scale of the industry we are talking about here. I'm sure there are examples of much worse happening in other businesses/industries, and no doubt this will get a 'well that's the way the world works, duh' argument, but that doesn't make it any more palatable.

 Pacific wrote:
I would tend to say no - GW changed from a company made 'by us, for us', into one that is seemingly run by suits on all levels, and only has the bottom line in mind.

Careful now my oceanic friend – some chucklehead is sure to twist the above statement and say something like“So it’s not ok for a company to want to make money?” or “So they shouldn’t cater to their shareholders?” or something equally as pithy (READ: irrelevant).

 cyphertheory wrote:
Ah the Kirby gravy train keeps on'a rollin choo choo! kinda hard to think that they couldnt use the money for RnD to improve certain products or infrastructure before paying dividends

Yeah, much better to have a smaller dividend, then the shareholders will abandon GW, devaluing the stock, and the company can be bought and stripped by someone else! Yeah, sounds great!

Oh honestly Kaldor. While Zwie clutches at a few straws all you seem to want to do is build straw men just to knock 'em down.

Do you think that's what he meant? Do you think that's what he wants?



[EDIT]: Oh, and, prophecy fulfilled Pacific. It only took one post.

 H.B.M.C. wrote:
Oh honestly Kaldor. While Zwie clutches at a few straws all you seem to want to do is build straw men just to knock 'em down.

Do you think that's what he meant? Do you think that's what he wants?

I'm sure I don't need to explain to a sharp man like yourself why not paying a dividend is a bad thing. Perhaps you could explain it to cyphertheory though, since he seems to think paying dividends is a bad idea.

 Kaldor wrote:
Yeah, much better to have a smaller dividend, then the shareholders will abandon GW, devaluing the stock, and the company can be bought and stripped by someone else! Yeah, sounds great!

Actually that's an awesome scenario. Stock prices crash, WOTC buys GW, and finally the 40k IP is in the hands of professional game designers and we get a balanced and thoroughly tested product like MTG instead of the current "we're a model company, not a rules company" joke.

Or Hasbro buys it and we are stuck with gak. Ultramarines really becomes the Smurfs etc etc.

Zweischneid wrote:
Was meant as a reference to the discussion of GW pricing themselves out of the market with overblown price hikes.

Example:

If GW can keep recruiting customers at a rate only slightly less than they lose them, the price increases will make up the difference and they'll keep making money. It's not sustainable for ever, but for a long, long time.

First of all, the LEGO kit has 841 pieces, not just 10 minis.

Second of all, you are not understanding what I meant by that text of mine you quoted. If they can recruit enough that combined with price increases to make the same or more money with less expenses, how in the world is that "pricing themselves out of the market with overblown price hikes"? The fact that GW can replace enough customers to make more money last year than the year before shows that they have not yet priced themselves out of the market. My post was the wrong one to use as an example because it's saying that opposite of what you are making it out to say.

Kirby just got a lot richer with this dividend. It's what? 10-15 times the average person's income in the UK? And this is in addition to the salary he pulled of roughly the same amount.

GW is a money machine for the guy in charge. He's not going to change GW's direction. Why should he? He's sailing towards a golden retirement most can only dream of. If he's smart, he'll keep cutting internal costs, keep raising prices 10-15% a year and keep paying himself an impressive salary and even more impressive dividends. GW will stay the course and if change eventually becomes unavoidable, Kirby will retire a rich, rich man and it'll be someone else's problem. Perhaps his crowning achievement before retirement will be to arrange the sale of GW to a larger corporation in a way that lines his pockets even further.

Somehow I don't think he cares if I or anyone else in this thread sees him as a parasite feeding on the hobby.

 pixelpusher wrote:
Or Hasbro buys it and we are stuck with gak. Ultramarines really becomes the Smurfs etc etc.

Hasbro is the parent company of WOTC, and they're smart enough to let WOTC do their job of developing games and just collect the nice profits. MTG hasn't suffered from being in that situation, so why would GW?

 Kaldor wrote:

 H.B.M.C. wrote:
Oh honestly Kaldor. While Zwie clutches at a few straws all you seem to want to do is build straw men just to knock 'em down.

Do you think that's what he meant? Do you think that's what he wants?

I'm sure I don't need to explain to a sharp man like yourself why not paying a dividend is a bad thing. Perhaps you could explain it to cyphertheory though, since he seems to think paying dividends is a bad idea.

love to read the quote you will be able to give me where I made that statement?

first comment was on Tom Kirby making a mint out of GW paying dividends (no conflict of interest there then) and the second that I find it worrying that they couldn't find somewhere in the business to spend that money given the observed trend in reduction in number of sales meaning reduced product leaving the shelves (buoyed by a larger price tag on each item in an annual price rise to cover it) bearing in mind that in the 2010 annual report they said that they would only pay dividends on "truly surplus" profits

but yes please twist what I said into paying dividends is bad.

For me my army is established so im good.

But given prices i wont be starting a second 40k army.

Equally how many parents see that starer set now and recoil. There is a price sensitive point, especially given most parents have little appreciation of what game systems have a strong tournament scene let alone imagining little jonny getting deep into it.

As a product line that leaves innovation to enhancements like pushing terrain and fliers, which was clever. But again there is a limit how much you can push that, or codex creep, before your customer gets frustrated and goes back to world of warcraft or whatever other escapism they enjoy.

Its not just Dakka where GW patron are angry. Its TOs who now are completely meh about substitute minis right through to gamers no longer allowed to use GW paints to those in Sth Hemisphere no longer allowed to buy from maelstrom.

Talk to me about frustrated customers, financial statements and throw in a mention of blackberry/RIM loyal customers.

As a GW shareholder I thought I’d chime in here (yes I am one of the few who hold shares in GW and play wargames)

Barring for a moment the fact that as a Limited company GW is legally required to maximise profit for the shareholders, the dividend for GW really isn’t that high, particularly when you factor in the high cost of share at the moment.

People claim the money would be better spent on R&D, but have you seen GWs costs in comparison to there total expenditure? Now I admit that I’m not aware what all this cost is, but I would imagine that a very large portion of it is R&D. Considering that their cost to profit ratio is nearly 3 times every other company I invest in I think you would have a hard time convinceing investors that more R&D is needed at the expense of this dividend.

Lets not forget that shareholders have invested money in GW – often for no other reason than to see a return on that money, therefore to maintain that investment GW really have to offer a dividend atleast higher than the investors could get from having the money in the bank (for FTSE 100 companies the main shareholder profit comes from the high fluctuation of the price, buying low and selling high – GW doesn’t have this and sometimes can go days without anyone trading)

Indeed I think GW does well to get away with the small dividend/high R&D budget that they do, hell at the last shareholder meeting I got into a rather heated debate with another shareholder who couldn’t understand why GW were replacing functioning (and I’m suffering a mental block on the term now so I’ll call them machines to make models) the idea of making better quality modelsto keep up/ahead of competition made no sense to him "as GW models are needed for GW games", and no matter how I tried to make him see the sense of the investment he couldn’t.

The fact is GW has to keep us, the gamers happy – and the investors, many of who have never played a wargame in their life. Personally I think they do a good job all things considered.

I did like the persons suggestion of giving models instead of a dividend, I can just imagine the look on a pensioners face when his pension fund explains that his pension didn’t go up in value due to no dividend, but here is a nice plastic goblin for him to play with

Just as a general point of information, limited companies are not legally required to maximise profit for shareholders, they are legally required to fulfil the objectives set out in their founding documents.

GW haters are like marxists and fundamentalist Christians...they've been predicting the imminent end for years now

 Testify wrote:
GW haters are like marxists and fundamentalist Christians...they've been predicting the imminent end for years now

we're not haters, we're just "very disappointed". which we all know is a lot worse

Stranger83 wrote:
Considering that their cost to profit ratio is nearly 3 times every other company I invest in I think you would have a hard time convinceing investors that more R&D is needed at the expense of this dividend.

Has any other company you invest in, a strict "no advertising" and "no introductory products" and "raise starter cost by 10% each year" and "declining sales are fine as long as shareholders get more than annual profit" policy?

My stance is that with a minimum of standard business strategies, GW could easily raise sales, revenue and profit by 50% within 1-2 years.

 Kroothawk wrote:

Stranger83 wrote:
Considering that their cost to profit ratio is nearly 3 times every other company I invest in I think you would have a hard time convinceing investors that more R&D is needed at the expense of this dividend.

Has any other company you invest in, a strict "no advertising" and "no introductory products" and "raise starter cost by 10% each year" and "declining sales are fine as long as shareholders get more than annual profit" policy?

My stance is that with a minimum of standard business strategies, GW could easily raise sales, revenue and profit by 50% within 1-2 years.

Each question in turn:

a strict "no advertising" - generally yes, but I'll admit I invest a little different to most people - I'm less in it for the money and more in it for the support to things I find important or enjoy

"no introductory products" - did I dream the DV release?

and "raise starter cost by 10% each year" - actually yes, most companies I know will raise costs to what they think customers will pay, particularly if it can increase the R&D spend (and since the dividend hasn't increased, and costs have, I'm guessing thats where the extra profit goes to - though I suppose it could be "waste")

"declining sales are fine" - in the current climate, yes frankly, as long as profit stays the same or goes up (or even falls slightly at the moment) then that is fine in the short/medium term

"shareholders get more than annual profit" - I don't know any company that gives more dividend than annual profit, Such a company wouldn't stay in business for long. GW are not doing this this year and, dispite looking at my annual reports for the past 5 years, I cannot find any record of them doing this. I'm not saying they never did, just that for as long as I've been involved they have not.

 Peregrine wrote:

 pixelpusher wrote:
Or Hasbro buys it and we are stuck with gak. Ultramarines really becomes the Smurfs etc etc.

Hasbro is the parent company of WOTC, and they're smart enough to let WOTC do their job of developing games and just collect the nice profits. MTG hasn't suffered from being in that situation, so why would GW?

If we change Hasbro to Mattel, do my point get across to you then?

Stranger83 wrote:
"no introductory products" - did I dream the DV release?

I suspect that Kroot wasn't referring to starter sets, but to 'impulse buy' items.


Automatically Appended Next Post:

 pixelpusher wrote:
If we change Hasbro to Mattel, do my point get across to you then?

You can change it to whatever company you want, and the counterpoint will remain the same: Being bought out wouldn't automatically mean that the game would change.

 insaniak wrote:

Stranger83 wrote:
"no introductory products" - did I dream the DV release?

I suspect that Kroot wasn't referring to starter sets, but to 'impulse buy' items.

Correct.
"As an introduction to our 160 pages rules game, please read these 160 pages of rules, thank you."
That's why Space Crusade and Heroquest, accompanied with a wide distribution and massive TV advertising brought so many veterans to the hobby. The Fantasy starter doesn't even include the stats for the units in the box. And a $125.00 USD Hobbit starter box ("Oh, don't forget to buy glue, a primer, a knife, these 15 paints and this 50$ book on painting for a start.") is quite a hurdle for the target customers.

 Testify wrote:
GW haters are like marxists and fundamentalist Christians...they've been predicting the imminent end for years now

Very few people have been predicting an imminent end to GW, quite the reverse. The chattering internet masses do like to make up happy sound bites though.

By far the biggest slice of GW's expenditure is its chain of stores, R&D is tiny by comparison.

Yay more money for me! :-) Christmas came early.

Stranger83 wrote:
as a Limited company GW is legally required to maximise profit for the shareholders....

People claim the money would be better spent on R&D, but have you seen GWs costs in comparison to there total expenditure? Now I admit that I’m not aware what all this cost is, but I would imagine that a very large portion of it is R&D......

Lets not forget that shareholders have invested money in GW – often for no other reason than to see a return on that money......

Firstly, The company is not legally required to maximise profit for shareholders, it will aim to achieve the objectives of the business.....I.e. more growth, diversification, more emphasis on r&d - yes shareholders are important but management will be fulfilling their goals as well

Secondly, we don't know gw strategy, annual reports are opportunities to carry out information transfer and generally talk the business up...we don't now how much they spend on r&d - it is not possible to summise they are purely maximising revenue, we don't know the longer term strategy.

Finally I imagine there is no more than five or six major shareholders and I am sure they will be part of a balanced portfolio for pension companies etc, they will not be expecting massive returns....just a certain type of return within a per-determined timeframe.

And consider yourself lucky you even get dividends......apple went from 1995 to 2012 without paying a single dividend.....

So lets try to work out the key to this, what is gw's strategy moving forward, I think personally gw are dominant with a virtually unchallenged business model .....I.e. vertically integrated right through the supply chain with a highly differntiated product (through the unique ip) and therefore because of this in my oppinion they will be around until technology changes them (3d printing), they then have to adapt to meet the tech changes or somebody else will enter market around this technology.

Just my thought.......Gonna be worth watching though

Lovepug13 wrote:
Firstly, The company is not legally required to maximise profit for shareholders, it will aim to achieve the objectives of the business.....I.e. more growth, diversification, more emphasis on r&d - yes shareholders are important but management will be fulfilling their goals as well

And besides that, "increase profit for shareholders" is not the same as "give shareholders as much profit as possible right now". It's quite possible that if GW stopped paying dividends and focused on long-term growth (along with things like recognizing that it's not 1990 anymore and the internet is important) the profit over time would be larger than the current short-sighted plan.

 Testify wrote:
GW haters are like marxists and fundamentalist Christians...they've been predicting the imminent end for years now

And painting anyone who dislikes GW's practices as a 'hater' is akin to idiocy.