GW Annual Report for 2012-2013

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**Yodhrin**

Agamemnon2 wrote:
Herzlos wrote:
I'd say it's never been weaker; the CHS lawsuit has highlighted several things GW claimed to own but hasn't, and has set fairly firm boundaries on what other companies can do without stepping on their toes. The 3rd party market will be exploding fairly soon.

I doubt it. The 3rd party market is already past saturation point. How many more sources for Ork heads do we actually need? If anything, we're going to see a significant reduction once the novelty wears off.

The point being made was that the 3rd party market was rather samey before for two main reasons; what's easy to make that sells well, what can they make without getting sued. The latter of those is now much less of a concern, so while I don't doubt we'll continue to see many, many more variations on Ork heads, I also suspect we're going to see lots of diversification as new or existing bitz makers expand into areas they were hesitant to before.

**Herzlos**

Or at the very least 3rd party parts will be easier to find, as they is legal precedent for using "compatible with Games Workshop Space Marines" instead of "for 28mm space knights".

There will also no doubt be ventures people have considered but left because they though they'd get sued but now have decent legal justification for.

I won't argue that we're probably saturated with Ork heads and melta-guns though.

**loki old fart**

Herzlos wrote:
Or at the very least 3rd party parts will be easier to find, as they is legal precedent for using "compatible with Games Workshop Space Marines" instead of "for 28mm space knights".

There will also no doubt be ventures people have considered but left because they though they'd get sued but now have decent legal justification for.

I won't argue that we're probably saturated with Ork heads and melta-guns though.

A lot of these bits suppliers are at the point where they could start their own game, with a decent rule set.

**Backfire**

Surtur wrote:

Actually, we have those numbers. We have them in spades really. While we don't have individual product sales, the have numerous accounts of the price changes over the years for some time. The averages paint a picture that is supposed to be close to results. If you dilute a price increase over the entire range by using averages, then that is what you should look for in terms of approximate revenue growth.

No you don't, because there are big differences in how much the individual items have their prices changed over the years. Some items have seen their price increase up to 30 or even 60% in just few years, some items have had no price changes at all during that period. Calculating the average over their entire catalogue won't help.

Automatically Appended Next Post:

Herzlos wrote:
Fair enough. Based on the excitement I've witnessed for other games, and the change in what's been going on at clubs & conventions, I'd happily believe the icv2 figures.

Crazy idea: with console and PC game market being in doldrums, maybe there is actually a shift from computer games to tabletop games, amongst the "serious" gamers?

This idea sounds completely counter-intuitive, but perhaps something like that is going on?

**Shaozun**

Herzlos wrote:
Yup, it's only their retailers. But that information must be closer to other games retailers than the figures for Power Rangers and Barbie.

If the trends were vastly different in terms of GW's performance (since that is essentially what we're talking about here), then it'd be reflected in GW's figures. As it isn't we can assume GW's performance has been lower (up to about 7%) than other games at a group of retailers exhibiting growth of (20-25%).

That's essentially all we can take from this information, but that should be enough for what we're discussing here. GW doing alright, Gaming in general doing better.

Not really. You have to compare anything in commerce with heapings of salt. Even prior financial statements to current ones have to be taken with a heaping of salt due to reporting differences (especially when GW changed significant ones in 2011 IIRC), let alone companies with COMPLETELY DIFFERENT business strategies.

Not forgetting that greater than inflation growth is unsustainable.

**Herzlos**

How is beating inflation growth unsustainable? Because eventually you'll hit a saturation point?

**boyd**

Shaozun wrote:
Herzlos wrote:
Yup, it's only their retailers. But that information must be closer to other games retailers than the figures for Power Rangers and Barbie.

If the trends were vastly different in terms of GW's performance (since that is essentially what we're talking about here), then it'd be reflected in GW's figures. As it isn't we can assume GW's performance has been lower (up to about 7%) than other games at a group of retailers exhibiting growth of (20-25%).

That's essentially all we can take from this information, but that should be enough for what we're discussing here. GW doing alright, Gaming in general doing better.

Not really. You have to compare anything in commerce with heapings of salt. Even prior financial statements to current ones have to be taken with a heaping of salt due to reporting differences (especially when GW changed significant ones in 2011 IIRC), let alone companies with COMPLETELY DIFFERENT business strategies.

Not forgetting that greater than inflation growth is unsustainable.

Prior year should be more comparable as they are required to show the accounting change in all reported years. Read the foot notes. It's a standard note. It's GAAP just about everywhere.

**Osbad**

Shaozun wrote:
Not forgetting that greater than inflation growth is unsustainable.

I wouldn't say so. The company I work for has had turnover increases exceeding RPI annually every year for at least the last 12 years, and probably longer, but I wasn't working for them then so I don't know.

It depends on your strategy, product quality, sales imperative, a lot of awfully hard work and like anything else: a bit of luck!

**weeble1000**

Backfire wrote:
One thing which struck me was how little they make from FFG licenses, despite large number of GW licensed titles offered by FFG. It's all positive, of course, but probably partly explains why they still want to make occasional boxed game set of their own.

The real LOL is that GW spent almost as much on just the costs of the Chapterhouse trial, not including attorney fees or anything else related to the nearly 3 years of litigation, as they got from FFG this year.

All of those FFG licenses were barely enough to pay for printing, flights, and hotel rooms. Man, what a great decision going to trial was.

**Zweischneid**

Shaozun wrote:

Not forgetting that greater than inflation growth is unsustainable.

Not forgetting that growth, even if it's eaten by inflation, is still growth you need to work for... in an environment where your customers need to pay just that inflation % more for food, housing, gas, electricity, etc.. .

Toys and hobbies are an easy thing to cut for most people. Mattel sales only grew 1% last year. Hasbro lost 2%.

It's also a good reason to try to position yourself more as a premium product for better-off customers, who are less affected by inflation, than trying to run the business on a broad customer basis first and foremost.

**BryllCream**

weeble1000 wrote:
Backfire wrote:
One thing which struck me was how little they make from FFG licenses, despite large number of GW licensed titles offered by FFG. It's all positive, of course, but probably partly explains why they still want to make occasional boxed game set of their own.

The real LOL is that GW spent almost as much on just the costs of the Chapterhouse trial, not including attorney fees or anything else related to the nearly 3 years of litigation, as they got from FFG this year.

All of those FFG licenses were barely enough to pay for printing, flights, and hotel rooms. Man, what a great decision going to trial was.

Probably still cheaper than letting other companies steal your ip and use it to make cheaper competing products.

**weeble1000**

BryllCream wrote:
weeble1000 wrote:
Backfire wrote:
One thing which struck me was how little they make from FFG licenses, despite large number of GW licensed titles offered by FFG. It's all positive, of course, but probably partly explains why they still want to make occasional boxed game set of their own.

The real LOL is that GW spent almost as much on just the costs of the Chapterhouse trial, not including attorney fees or anything else related to the nearly 3 years of litigation, as they got from FFG this year.

All of those FFG licenses were barely enough to pay for printing, flights, and hotel rooms. Man, what a great decision going to trial was.

Probably still cheaper than letting other companies steal your ip and use it to make cheaper competing products.

Uh huh, that is exactly what Chapterhouse Studios was doing. It is a fact that Chapterhouse's products are more expensive than GW's comparable products. It's even in the transcript:

"talked about yours being $1 for one shoulder pad, right?
A. Yes.
Q. And Games Workshop's being $8.25 for ten shoulder pads?
A. Yes.
Q. So that was why you were saying that yours was more
expensive?
A. Yeah. If you wanted ten of those, you had to pay $10
versus $8 and change from the Games Workshop site.
Q. And then you said that your Warrior Priestess is $16 --
or I forget what you said. How much?
A. I want to say it's 16.
Q. Okay. And Mr. Merrett testified that the Striking
Scorpion product that Games Workshop says is infringed by
that product costs $41 for six figurines?
A. Okay.
Q. So how does that compare to your product?
A. 16 times six, if you want to compare apples to apples,
as he would want -- $96, I guess? Is that correct? 16 times
six? Yeah.
Q. Is it more or less expensive?
A. More expensive."

Those are only two examples. If you go through the products, which is really easy to do since both companies have prices right on their websites, Chapterhouse Studios is not selling cheap knockoffs of GW products. If something is a copy of another product, but costs more, how is that a functional business strategy? If a product is a poorer quality copy of another product, but costs more, how is that a functional business strategy? These are all things Games Workshop said: CHS's products are the same as GW products, they are of poor quality, and they cost more that Games Workshop products.

Again, Bryll, wake up to the real world.

**PhantomViper**

BryllCream wrote:
weeble1000 wrote:
Backfire wrote:
One thing which struck me was how little they make from FFG licenses, despite large number of GW licensed titles offered by FFG. It's all positive, of course, but probably partly explains why they still want to make occasional boxed game set of their own.

The real LOL is that GW spent almost as much on just the costs of the Chapterhouse trial, not including attorney fees or anything else related to the nearly 3 years of litigation, as they got from FFG this year.

All of those FFG licenses were barely enough to pay for printing, flights, and hotel rooms. Man, what a great decision going to trial was.

Probably still cheaper than letting other companies steal your ip and use it to make cheaper competing products.

Not when those other companies are still around and producing those products after the trial, except that now they can use GW's name to promote their products as well!

**BryllCream**

weeble1000 wrote:
BryllCream wrote:
weeble1000 wrote:
Backfire wrote:
One thing which struck me was how little they make from FFG licenses, despite large number of GW licensed titles offered by FFG. It's all positive, of course, but probably partly explains why they still want to make occasional boxed game set of their own.

The real LOL is that GW spent almost as much on just the costs of the Chapterhouse trial, not including attorney fees or anything else related to the nearly 3 years of litigation, as they got from FFG this year.

All of those FFG licenses were barely enough to pay for printing, flights, and hotel rooms. Man, what a great decision going to trial was.

Probably still cheaper than letting other companies steal your ip and use it to make cheaper competing products.

Uh huh, that is exactly what Chapterhouse Studios was doing. It is a fact that Chapterhouse's products are more expensive than GW's comparable products. It's even in the transcript:

"talked about yours being $1 for one shoulder pad, right?
A. Yes.
Q. And Games Workshop's being $8.25 for ten shoulder pads?
A. Yes.
Q. So that was why you were saying that yours was more
expensive?
A. Yeah. If you wanted ten of those, you had to pay $10
versus $8 and change from the Games Workshop site.
Q. And then you said that your Warrior Priestess is $16 --
or I forget what you said. How much?
A. I want to say it's 16.
Q. Okay. And Mr. Merrett testified that the Striking
Scorpion product that Games Workshop says is infringed by
that product costs $41 for six figurines?
A. Okay.
Q. So how does that compare to your product?
A. 16 times six, if you want to compare apples to apples,
as he would want -- $96, I guess? Is that correct? 16 times
six? Yeah.
Q. Is it more or less expensive?
A. More expensive."

Those are only two examples. If you go through the products, which is really easy to do since both companies have prices right on their websites, Chapterhouse Studios is not selling cheap knockoffs of GW products. If something is a copy of another product, but costs more, how is that a functional business strategy? If a product is a poorer quality copy of another product, but costs more, how is that a functional business strategy? These are all things Games Workshop said: CHS's products are the same as GW products, they are of poor quality, and they cost more that Games Workshop products.

Again, Bryll, wake up to the real world.

Open your eyes to the jury of peers who found chapterhouse guilty on all sorts of things. Chs are a company that are dedicated to using gw ip to sell products to the public. Clearly games workshop should devote resources to shutting them down.

Also, please don't quote court transcripts.

**Kroothawk**

Ianrak over at Warseer wrote:I have just looked back at the fiscal reports for the years when previous new editions of 40k were released.
When 3rd edition released, revenues increased by 12%.
When 4th ed released, revenues increased by 15%.
When 5th ed released , revenues increased by 12%.

When 6th edition released , revenues increase by 3.5 %.

**PhantomViper**

BryllCream wrote:

Open your eyes to the jury of peers who found chapterhouse guilty on all sorts of things. Chs are a company that are dedicated to using gw ip to sell products to the public. Clearly games workshop should devote resources to shutting them down.

And the same jury found that CHS was not guilty of an even bigger amount of stuff that GW claimed they were. Hence why CHS now can use GW product names when promoting their own products.

BryllCream wrote:

Also, please don't quote court transcripts.

Why? Because they make your job of pretending that reality isn't what it really is harder?

**Alfndrate**

BryllCream wrote:
Open your eyes to the jury of peers who found chapterhouse guilty on all sorts of things. Chs are a company that are dedicated to using gw ip to sell products to the public. Clearly games workshop should devote resources to shutting them down.

Except you said cheaper product, the quote said that CHS's stuff was more expensive that the GW alternative. Unless you mean worse quality, and then well that shouldn't matter for GW who has a less expensive and higher quality product. They shouldn't give a feth.

Also, please don't quote court transcripts.

Yes, please don't, we don't want to have quotes from people that would be perjury (a crime) if they lied under oath. Probably one of the few times in life you can trust what someone has said.

**decker_cky**

Herzlos wrote:
decker_cky wrote:
Most importantly, GW's IP is strong as ever, meaning there's a huge potential for licensing to continue (it was low this year, but there were no major computer game releases and there was the turmoil with that license which is now dealt with for the better in GW's mind).

I'd say it's never been weaker; the CHS lawsuit has highlighted several things GW claimed to own but hasn't, and has set fairly firm boundaries on what other companies can do without stepping on their toes. The 3rd party market will be exploding fairly soon.

In terms of computer gaming licenses they are in a fairly good place, as they've got some series and mindshare, but in terms of tabletop gaming a lot of their IP protection has vanished.

Different aspects of IP. I mean the story, the universe, the things companies would actually care to license out. At some point, GW will license out their properties to be made into real movies, and GW will likely make a pile of money, and realize that although they need to keep the hobby going to support the IP, keeping strong IP is more valuable than their actual games. Marvel and DC have to an extent done the same thing, cashing in hugely on super-hero movies in a time where their comics don't generate near the income they once did.

Regarding knock-offs, their IP protection is a bit better, but I don't believe even inferior knockoffs ever hurt them. Now maybe GW will stop wasting so much energy on frivolous lawsuits.

**AgeOfEgos**

Let's keep the Chapterhouse case out of this thread---it tends to derail very quickly. Thanks.

Ryan

**silent25**

Well bit of threadomancy here, but got some interesting information to help put these numbers in perspective. A local came back from Games Day and was able to talk with one of his friends who is high up in GW US.

40k: Doing great, sales and numbers are up. Accounts for over 2/3rds of GW sales now.
Fantasy: Horrible. Sales down over a third from last edition. 2015 was the planned release date for 9th, but was moved up to 2014 in attempt to revitalize the game. Numbers are reflected in new army releases as well.
The Hobbit: Absolute disaster. Only sold about a 3rd of its production run and the rest is gathering dust in the UK warehouse. They were anticipating LotR size sales number to give you an idea of the production run.

So to put GW's numbers in perspective, 40k was able to turn a disastrous year into an so-so year. They also claim that the current head of GW North America (her name is eluding me right now) is actually banging the drum on trying to turn things around and believes GW can't sustain itself with only 40k. They are supposedly looking at improving things, but couldn't comment otherwise except that GW is a large company and unfortunately doesn't move fast. It takes on average two years for an idea to move from inception to reality.

*edit* Brain fart.

**Zweischneid**

silent25 wrote:

Fantasy: Horrible. Sales down over a third from last edition. 2014 was the planned release date for 9th, but was moved up to 2013 in attempt to revitalize the game.

Are you sure?

**silent25**

Brain fart: 2015 to 2014.

**Kilkrazy**

GW report in GBP but take in a lot of their revenue in Euros and USD. Thus, their reported revenue has been helped by exchange rate fluctuations this year. I don't know how much effect that has had.

**Backfire**

silent25 wrote:

The Hobbit: Absolute disaster. Only sold about a 3rd of its production run and the rest is gathering dust in the UK warehouse. They were anticipating LotR size sales number to give you an idea of the production run.

Really? Well that has been a huge miscalculation then: lots of people have been cynically suggesting that GW is only hanging on to license to stop anyone else getting it. It should have been obvious that it wasn't going to be as big as LotR in any case, though even the cynics probably failed to predict just how badly the movie failed to capture public imagination.

This is what Kirby said in 2005 report:
When I returned to the business five years ago, one of the first decisions I had to make was: should we take a license
from the producers of the film The Lord of the Rings? It was touch and go. The arguments for doing so were: acquiring
more hobbyists, acquiring more independent trade accounts, stopping someone else doing it, and going with the general
feeling throughout the Company that we had to do this. It was the last that was most important in my decision to say yes,
closely followed by the third. The first two I was more nervous about. Yes, we would get more, but for how long? Would
it be permanent and, if so, at what level?

I should have been more optimistic. Not only was the product much more successful than I ever dreamed it would be
(thank you Rick Priestley for a great game design), it has given us a valuable third product line to support Warhammer
and Warhammer 40,000. Lord of the Rings product sales have declined faster than we anticipated after the
unsustainable levels of the last two years, but we still see them contributing to our sales and expect them to do so far
into the future.

**frozenwastes**

Kilkrazy wrote:GW report in GBP but take in a lot of their revenue in Euros and USD. Thus, their reported revenue has been helped by exchange rate fluctuations this year. I don't know how much effect that has had.

They compensate for currency fluctuations in the report (that's what all that constant currency business is).

The short version is that the decline of the pound happened at the perfect time for GW as an exporter. If the pound was still at 2008 levels, they'd be outright losing money and a lot of it.

**Pacific**

Backfire wrote:
silent25 wrote:

The Hobbit: Absolute disaster. Only sold about a 3rd of its production run and the rest is gathering dust in the UK warehouse. They were anticipating LotR size sales number to give you an idea of the production run.

Really? Well that has been a huge miscalculation then: lots of people have been cynically suggesting that GW is only hanging on to license to stop anyone else getting it. It should have been obvious that it wasn't going to be as big as LotR in any case, though even the cynics probably failed to predict just how badly the movie failed to capture public imagination.

I don't think the movies failed at all, in fact I think they were pretty successful financially?
In that case what failed was GW in capturing the public interest from those films in the way they did with LoTR - insert a reason here why that might have been the case; from the prices, to lack of advertising, to Martin Freeman's face not having the same effect as Elijah Wood in making people want to collect an army?

Incidentally, I wonder how GW will react to dropping WFB and LoTR sales. Will those games gradually scale back until they disappear, and GW become a company that only sells 40k, or will the company return to what many regard as the 'golden age' of wargaming of the 90's, with scores of different new games being released and both within existing and even new game universes?

**Backfire**

Pacific wrote:
[
I don't think the movies failed at all, in fact I think they were pretty successful financially?

The Hobbit (only one has come out so far) did fairly well financially, though less than anticipated. What was clearly missing, however, was any kind of positive buzz around the movie, like LOTR had back in the day. Or for example, Game of Thrones has today. Which is what GW should be licensing if they want to repeat LOTR phenomenon...

**doc1234**

Backfire wrote:
Pacific wrote:
[
I don't think the movies failed at all, in fact I think they were pretty successful financially?

The Hobbit (only one has come out so far) did fairly well financially, though less than anticipated. What was clearly missing, however, was any kind of positive buzz around the movie, like LOTR had back in the day. Or for example, Game of Thrones has today. Which is what GW should be licensing if they want to repeat LOTR phenomenon...

Didn't fantasy flight beat them to it?

http://www.waylandgames.co.uk/fantasy-flight-games/battlelore/cat_1368.html

And I don't mean with the boardgames either.

**insaniak**

Pacific wrote:
In that case what failed was GW in capturing the public interest from those films in the way they did with LoTR - insert a reason here why that might have been the case; from the prices, to lack of advertising, to Martin Freeman's face not having the same effect as Elijah Wood in making people want to collect an army?

I would suspect that presenting it as a whole new game rather than just as supplemental material for the old one might have made a difference, as well. Aside from the new characters, why would you buy into the Hobbit after already buying 3 rulebooks for ever larger games from the previous films?

**Howard A Treesong**

The Hobbit seems to have had a lesser impact than LotR which was everywhere, it just was a major event those years. GW has that to deal with but their prices on the Hobbit were absurd, the LotR fever wasn't replicated, partly their fault, partly due to generally less enthusiasm for the franchise.