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I'd argue that turnover for something like a games company is a reasonable idea of health, because you need players to keep up the critical mass / market dominance. I can see that it'd be a less useful indicator for, say, washing machines.

Surely making profit by losing less sales than price increases isn't maintainable though, as you'll either (a) start to see a faster drop off as the prices rise or (b) reduce sales below the point you can benefit from economies of scale?

 TheSecretSquig wrote:
It could be a cost cutting excersise. GW now save a 6 figure salary and all the associated costs with that.

Which of course means prices will have to increase to compensate.

Herzlos wrote:
Thanks

I'd argue that turnover for something like a games company is a reasonable idea of health, because you need players to keep up the critical mass / market dominance. I can see that it'd be a less useful indicator for, say, washing machines.

Surely making profit by losing less sales than price increases isn't maintainable though, as you'll either (a) start to see a faster drop off as the prices rise or (b) reduce sales below the point you can benefit from economies of scale?

Not when volume losses are that big year on year (they aren't for GW btw). Companies tend to go in pulses, either growing turnover and reducing profits or vice versa depending on what the big issue is at the time for the company. At the moment in the financial cycle cash is king, borrowing is bad, and many companies are concentrating on maximising profit rather than turnover. Once we get out of recession/stagflation (this may take some time), then things will turn round and turnover growth will be what everyone is going for.

 Holdenstein wrote:

Herzlos wrote:

 Flashman wrote:

Herzlos wrote:

agustin wrote:
I seem to recall starters and core unit boxes going up more than 5%. Something like 10% or 12%

Yup a lot of plastics went up a fair whack, but then a huge range of prices stayed level, so the average increase is pretty small. Without knowing how much of what is selling (though we can assume mostly starter sets and core plastics from stores, and assume very little mail order only is sold) we can only guess as how the sales volume has changed.

I did some sums the other day and sales volumes will have to fall significantly before it affects profit. In fact there is a point where revenue falls, but actual profits still increase.

By that you mean revenue from lower profit margin stuff falling whilst revenue from higher profit margin stuff increases or remains constant?

Correct-kind of. If your average margin is 40% (you make in £40 in gross profit for £100 in sales) and you put your prices up by 10% then you can afford to lose 10% in volume sales and still be making more profit. Turnover would be down 1% (£99), but gross profit up by just over 10% (£45). You can also raise your margin by concentrating on the items that make the most profit, and attempting to sell more of those.

Turnover is actually a terrible measure of a company's health.

I don't agree with your maths. Using your example I calculate the same £ profit will occur at a 20% fall in volume with a 10% price rise, if we factor in VAT then it can actually then you can absorb a 10% price rise up to a 26% fall in volume.

Yes, but the general point is the same i.e. falling sales volumes because of price increases don't impact on profits in the way we as buyers would hope.

Keep in mind when comparing this years 6 month period to last years 6 month period...last year did not include the "Black Friday" weekend and subsequent "Cyber Monday" which are historically very large retail days in the US (and I would think with Christmas being a somewhat global thing - a tick up in toy sales for the rest of the world as well).

5 days of sales during the Christmas season would likely well and good account for the whole of the difference between last years numbers and this years numbers.

We will miss Mark's expertise on marketing and selling shampoo.

GW is now searching for a new strawman posing as a CEO under Tom Kirby
Didn't know that it is still legal in UK to have the Chair of the main CEO control mechanism to be also the CEO.

agustin wrote:
So if GW saw their revenue increase 7.06% What was the last price increase? 10%? 15%? So they still have falling volume and a declining customer base with the price hikes being the only thing hiding that they're actually losing market share.

My Space Marines had about ~12% price increase over inflation... from 2004 to 2012. If you count starter set bundle savings, they went down in price over that time. It's important to remember that price increases do not apply to all items.

What nonsense. It's far more likely that Mark Wells has been headhunted to a much larger business. He's seen as something of a miracle worker around retail as he's managed to improve profitability in a company that was struggling while in the UK high street chains are going pop at the rate of one a week since Christmas. Keep your eyes peeled in 1-3 months once his grace period ends.

I agree. The savings in overhead, headcount, warehousing, as well as the rise in licencing profits were all pretty remarkable (compared to GW prior performance, at least).

 Kroothawk wrote:
Didn't know that it is still legal in UK to have the Chair of the main CEO control mechanism to be also the CEO.

It's still being debated whether it constitutes good or bad corporate governance, a random Google stat from PWC (didn't check the date, my bad) had approx 40% of British businesses with the role merged (PWC's own opinon was that each business should make a decision on the optimum board structure for itself).

It's hard to grasp how much some things have increased with the general numbers, so let me show you guys a picture



On the left is the old Orc boyz box, before the new army book came out. There are 20 in the box, and the price is hard to read in the photo, but it is $35. That makes it $1.75 per model, which is somewhat reasonable given that you can get it on sale, but you need a Lot of these models.

On the right is the new Orc boyz box. It looks a little thinner, right? And hey, it's cheaper, too! But it turns out there are only 10 in the box now, for $29. That makes it $2.90 per model.

Going from $1.75 per model to $2.90 per model is a 66% price increase. And this is on the main core unit of the army, which you need a Lot of to play, the sculpt of which has not changed in a long time.

This is why almost every Orcs & Goblins player I see is a legacy player- either they've been playing forever, or they got their army used from someone who had been. GW has literally priced themselves out of having anyone but a very Tiny fraction of people start a new Orcs & Goblins army. A smarter long-term business move would be to keep the core of the army cheap, to lure players in, and cash in when they want to buy the more exotic/expensive units.

I think Mark Wells has seen that things are not good, and The Hobbit is not going to buoy them as much as they thought (note the stack of boxes in the picture although these are LOTR I believe, The Hobbit is still upfront, gathering dust in a different part of the store) and it was a good time to jump ship.

The reality on the ground is that GW have simply made abundant room for competition with insane business moves like the price of the Orc Boyz box. It's just one example, but illustrates the situation very well. If you find Anyone starting a New, from scratch, Orcs & Goblins army, please point them out to me... they're nearly an extinct species now.

Rob Lane as GW new CEO, its a match made in heaven lol!

Matt Ward has my vote. Someone should start an online petition to get him the job...those things ALWAYS work

Just the natural flow of GW. One man shops, now one man board of directors. Pretty soon one man production team and in five years it will be Kirby being the only man playing games workshop products.....right on his timeline.

Hummm...what's the news here? We suspected Kirby never left and was always in control (status quo was maintained and will be maintained). And this confirmed it.

Senator Palpatine was behind Dooku...Dooku departs...who will become Anakin?

One man company.

Sweet, the £400k/year they're saving in salary costs can be spent on tooling 10 new hard plastic kits for specialist games each year. :p

The Orc Boys boxset prices are an absolutely perfect point to make.

Remember, 2 months after GW raised the prices on those, Mantic released hard plastic orcs for 83p/mini compared to GW's £1.85/mini, with even better discounts to be had in their army boxes (which offer far greater savings than GW battleforces).

Of course, veteran orc players won't buy them (ebay or kitbash "like a proper orc" for them!), but I've seen quite a few new Orc and Undead armies made entirely from Mantic stuff.

Interesting phrasing.

In the post by faet212, they say the position was redundant due to overlapping responsibilities.

However, on the investor site they simply say that mark is stepping down and the position will be filled as soon as they can find a replacement.

Sounds to me like Mark wanted to reign in his control as CEO and Kirby wouldn't let that happen. So they are going to find a new CEO who simply wants a nice office and pay package.

For us gamers, I don't think the news is positive or negative. It's just a minor changing of the guard to give a new face.

Wow they come 10 in a box. So a 40 character mob is insanely priced. Just wow. How many would be in a unit for orc boyz. My brettonian archers are like 35.00 for 16 and i need anout 16-20 per unit so that price is ok. The knight of the realm gives me 35 for 8 so more or less a full unit.

 RiTides wrote:
It's hard to grasp how much some things have increased with the general numbers, so let me show you guys a picture



On the left is the old Orc boyz box, before the new army book came out. There are 20 in the box, and the price is hard to read in the photo, but it is $35. That makes it $1.75 per model, which is somewhat reasonable given that you can get it on sale, but you need a Lot of these models.

On the right is the new Orc boyz box. It looks a little thinner, right? And hey, it's cheaper, too! But it turns out there are only 10 in the box now, for $29. That makes it $2.90 per model.

Going from $1.75 per model to $2.90 per model is a 66% price increase. And this is on the main core unit of the army, which you need a Lot of to play, the sculpt of which has not changed in a long time.

This is why almost every Orcs & Goblins player I see is a legacy player- either they've been playing forever, or they got their army used from someone who had been. GW has literally priced themselves out of having anyone but a very Tiny fraction of people start a new Orcs & Goblins army. A smarter long-term business move would be to keep the core of the army cheap, to lure players in, and cash in when they want to buy the more exotic/expensive units.

I think Mark Wells has seen that things are not good, and The Hobbit is not going to buoy them as much as they thought (note the stack of boxes in the picture although these are LOTR I believe, The Hobbit is still upfront, gathering dust in a different part of the store) and it was a good time to jump ship.

The reality on the ground is that GW have simply made abundant room for competition with insane business moves like the price of the Orc Boyz box. It's just one example, but illustrates the situation very well. If you find Anyone starting a New, from scratch, Orcs & Goblins army, please point them out to me... they're nearly an extinct species now.

When I managed a store for GW (I left a little over a year ago) I was told that the yearly price rises were set to about 3% across the entire range of products. I remember when we got our sheets to change prices, there would be the occasional "odd" item like "Bloodbowl starter sets" that we didn't actually carry in store anymore.

As a result, to earn my yearly bonus, the store had to earn more than 3% of what it did the previous year. Every dollar above 3% would be used to calculate my bonus.

Did items really go up in price only by 3% across the board? I don't know. I didn't sit down and calculate all the price changes for all the products they sell. But I know how my bonus scheme worked, and the reason they used to calculate it seemed sound.

Go out and take a good look in your local gaming community and compared with what you saw 5 years ago, the market share has been steadily dropping everywhere and will continue to do so.

Either GW make a big change or it is going to sink fast. I am only surprised that the top management change does not come earlier.

Clarence wrote:
When I managed a store for GW (I left a little over a year ago) I was told that the yearly price rises were set to about 3% across the entire range of products. I remember when we got our sheets to change prices, there would be the occasional "odd" item like "Bloodbowl starter sets" that we didn't actually carry in store anymore.

As a result, to earn my yearly bonus, the store had to earn more than 3% of what it did the previous year. Every dollar above 3% would be used to calculate my bonus.

Did items really go up in price only by 3% across the board? I don't know. I didn't sit down and calculate all the price changes for all the products they sell. But I know how my bonus scheme worked, and the reason they used to calculate it seemed sound.

The problem is is how does that take into account boxes that they cut in half but only reduce the cost by 20-25%. Does it just ignore them, or worse, count them as the same item but with a price decrease, because whenever that happens the actual cost for building the army for those factions goes up massively. (i.e. orcs, anything LotR, IG)

I hate to be the one to bring this up, but despite the endless predictions of hellfire and brimstone, I don't think GW is going to crash and burn. The problem is, for most people, this hobby is a small addiction. I'm not saying I'd be buying my kits from a pusher in the alley behind the library, but it's not far off from that. The prices will go up, but I feel many of us, myself included, will whine and moan but would eventually just open our wallets up a little bit further. And I think they know that.

I imagine they would treat those kinds of boxes like "new releases." That is, 0 sales records prior to the price increase. Don't know for sure, though.

 noneoftheabove0 wrote:
I hate to be the one to bring this up, but despite the endless predictions of hellfire and brimstone, I don't think GW is going to crash and burn. The problem is, for most people, this hobby is a small addiction. I'm not saying I'd be buying my kits from a pusher in the alley behind the library, but it's not far off from that. The prices will go up, but I feel many of us, myself included, will whine and moan but would eventually just open our wallets up a little bit further. And I think they know that.

Many of us are still in the "Hobby" () but are "opening our wallets" to other companies, instead.

Even for games workshop games, I buy 3rd party models now, and many do similarly. It's a trend, and GW will wake up to the music one way or the other, eventually. Their delaying to do so just strengthens the competition, which is actually a good thing for the "Hobby", but not so much for GW.

For the past five years Games Workshop has had the best CEO it has ever had. Under Mark Wells’ leadership we have become better organised, clearer thinking and commercially more robust.

GW writing reminds me of North Korea by this point.

Anyway there's a saying about changes in leadership on a national level. "Goodbye old boss, hello new boss, same as old boss". Sums up my opinion on this.

 noneoftheabove0 wrote:
I hate to be the one to bring this up, but despite the endless predictions of hellfire and brimstone, I don't think GW is going to crash and burn. The problem is, for most people, this hobby is a small addiction. I'm not saying I'd be buying my kits from a pusher in the alley behind the library, but it's not far off from that. The prices will go up, but I feel many of us, myself included, will whine and moan but would eventually just open our wallets up a little bit further. And I think they know that.

So don't open your wallet for GW at all. It is a pretty easy solution. The only GW products I have bought in I think 3 years now have been two GW tape measures because I needed ones with centimeters to play Freebooter's Fate and the FLGS had them handy. I have a Mantic undead army, a heavily converted Perry Brothers Imperial guard army, several Red Box Games Mordheim warbands, Perry Brothers and Mantic Blood Bowl teams, and I haven't actually played Warhammer or 40K in about 2 years now.

My enjoyment of my hobby has actually increased since separating from GW on purely principled grounds. It wasn't actually the prices that pushed me out. If you don't like the way a company does business, you can simply stop rewarding that business model with your custom. I have always been amazed by the "we know we'll just keep buying it" attitude. It is an entertainment product in an increasingly competitive market, not gasoline, grain, or crack.

I think that part of the problem is that GW sees that many customers buy more than one army. They must think to themselves, these folks have lots of money. Why don't we sell them one army instead of two or more, and charge them as much as two or more armies currently cost.

 noneoftheabove0 wrote:
I hate to be the one to bring this up, but despite the endless predictions of hellfire and brimstone, I don't think GW is going to crash and burn. The problem is, for most people, this hobby is a small addiction. I'm not saying I'd be buying my kits from a pusher in the alley behind the library, but it's not far off from that. The prices will go up, but I feel many of us, myself included, will whine and moan but would eventually just open our wallets up a little bit further. And I think they know that.

That only works if the hobby is GW. I've come back to Wargaming in a big way lately, at first buying GW again but in the last couple of years whilst my hobby spend has gone up drastically, all I'm actively buying from GW is essentials, the rest of my money is going to myriad other gaming companies. So whilst some people may buy GW stuff whatever they charge, I'd wager there are more who'll either give up or seek better value elsewhere.

I don't think GW is going to crash and burn any time soon; they are still fairly profitable and can weather the reduced sales, but their growth is nonexistant compared to their competitors, so I'm not sure I'd have the same view in a few years. It may be a gradual death by a thousand papercuts.

 noneoftheabove0 wrote:
The prices will go up, but I feel many of us, myself included, will whine and moan but would eventually just open our wallets up a little bit further. And I think they know that.

I also like people that "stick it to GW" by buying things from an online retailer. Morons