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I should point out us talking about how far the profit has dropped, not the company making an actual loss. Yet.

 H.B.M.C. wrote:
I dunno. I still think that the Cash-Grab Edition of 40K will bring them above the line.

They are above the line.

Games Workshop in 2012/2013 - A ~24% drop in net profits.
General Motors in 2012/2013 - A ~88% drop in net profits
--- The Line ---
Starbucks in 2012/2013 - A company actually making losses (below the line).
Twitter in 2012/2013 - A company actually making losses.

They could have been below the line in May, then the 7th ed release brought them above it in June. Another way to say it would be "keep them above the line" whereas without it, they may have been below the line. Damn you English language ; p

 H.B.M.C. wrote:
I dunno. I still think that the Cash-Grab Edition of 40K will bring them above the line.

I suspect that WH40K:CGE will be paying the dividends - not going to much actual profit for the company.

Though I have this pleasant fantasy of Kirby dumping all of his stock, just before the crash... then being charged with insider trading.

A chain smoker, sitting on a barrel of gunpowder... he so wants a puff....

The Auld Grump

 Yonan wrote:
They could have been below the line in May, then the 7th ed release brought them above it in June. Another way to say it would be "keep them above the line" whereas without it, they may have been below the line. Damn you English language ; p

I doubt it. GW still made 7.7 Million Operating Profit in the "scandalously bad" 6 months that lead to the stock-drop.

That means that in this "really, really, really bad" half-year, they still made over a Million GBP a month in profit (!). Maybe they get back to ~2 Million GBP profit a month they did in their heydays. Maybe not. And possibly there will be some fluctuations.

But I've seen no evidence whatsoever that GW ever wrote red numbers since they went public.

 Zweischneid wrote:
They are above the line.

More Apples to Oranges to Bottle Rockets to Split Infinitives comparisons (that is to say, companies and markets that do not share a stage) again from you Zwei. I'm sorry. I'll be less mean to your precious GW in the future... ah who am I kidding. No I won't.

What I was saying, if you paid any fething attention, is that Cash Grab Edition 40K will make it so the significantly bad results from the last report won't be as bad this time around. I think it reverse their fortunes. I'm saying they will do well, and have a positive full-year report.

 H.B.M.C. wrote:

 Zweischneid wrote:
They are above the line.

More Apples to Oranges to Bottle Rockets to Split Infinitives comparisons (that is to say, companies and markets that do not share a stage) again from you Zwei. I'm sorry. I'll be less mean to your precious GW in the future... ah who am I kidding. No I won't.

What I was saying, if you paid any fething attention, is that Cash Grab Edition 40K will make it so the significantly bad results from the last report won't be as bad this time around. I think it reverse their fortunes. I'm saying they will do well, and have a positive full-year report.

I don't deny that. But that is not what you were saying. That might have been what you wanted to say.

What you really did say was...

I dunno. I still think that the Cash-Grab Edition of 40K will bring them above the line.

But "below the line"/"above the line" has a specific definition, no matter what company you talk about it (actually it has two, one for accounting and one for advertising, but I think we're talking accounting here).

It describes a loss in the current account period.

There was no loss in GW's most recent financial statement, just a drop in profits (e.g. smaller profits, but still profits).

I am not sure why you think accusing me of GW-fanboyism will make your misapplication of even the most basic of vocabulary more acceptable?

Again, to use a non-GW example, as you seem incapable of using cool thoughts in anything related to GW.

General Motors had a 88% drop in profits.
http://business.financialpost.com/2014/04/24/general-motors-co-suffers-88-drop-in-profit-in-first-quarter-after-massive-recall/

But they are NOT (!) below the line. They are still above the line. Just the margin by which they are above the line is only 22% of what it used to be.

On the other hand, Twitter reported losses of $645m (£396m) for 2013.
http://www.bbc.co.uk/news/business-26059710

That (!) is below the line. It's red numbers. Negative profit, if you want to call it that.

 TheAuldGrump wrote:
I suspect that WH40K:CGE will be paying the dividends - not going to much actual profit for the company.

Paying dividends to FFG maybe. AFAIK GW just collects a licensing fee from other companies. I don't think they get a cut of the sales.

 Zweischneid wrote:

 Yonan wrote:
They could have been below the line in May, then the 7th ed release brought them above it in June. Another way to say it would be "keep them above the line" whereas without it, they may have been below the line. Damn you English language ; p

I doubt it. GW still made 7.7 Million Operating Profit in the "scandalously bad" 6 months that lead to the stock-drop.

That means that in this "really, really, really bad" half-year, they still made over a Million GBP a month in profit (!). Maybe they get back to ~2 Million GBP profit a month they did in their heydays. Maybe not. And possibly there will be some fluctuations.

But I've seen no evidence whatsoever that GW ever wrote red numbers since they went public.

Take a look at the 2006-2007 figures.

http://investor.games-workshop.com/wp-content/uploads/2011/02/gw_year_end_07.pdf

jamesk1973 wrote:
30% down. I wonder how deep their cash reserve is.

Cash reserves are reported in financials. After paying out their dividend, their cash reserve is rather low for a company facing these tidal shifts; especially a thirty year old company which should have substantially more cash reserves than they do now. Honestly, I don't think management ever thought they would be facing what they are now.

They really do encompass a misguided sense of worth in the industry today - which I believe comes from too many years without truly serious competition, which they now have in spades. When you think on this point, their absurdity with their pricing makes more sense. They think they can set any price because of the mindset "where else are people going to go". Instead of thinking "if our prices are too high, we will drive current players to new game systems and be unable to attract new players with the high cost of entry." But they just don't see it this way.

 Kilkrazy wrote:

 Zweischneid wrote:

 Yonan wrote:
They could have been below the line in May, then the 7th ed release brought them above it in June. Another way to say it would be "keep them above the line" whereas without it, they may have been below the line. Damn you English language ; p

I doubt it. GW still made 7.7 Million Operating Profit in the "scandalously bad" 6 months that lead to the stock-drop.

That means that in this "really, really, really bad" half-year, they still made over a Million GBP a month in profit (!). Maybe they get back to ~2 Million GBP profit a month they did in their heydays. Maybe not. And possibly there will be some fluctuations.

But I've seen no evidence whatsoever that GW ever wrote red numbers since they went public.

Take a look at the 2006-2007 figures.

http://investor.games-workshop.com/wp-content/uploads/2011/02/gw_year_end_07.pdf

Fair enough. So they actually were below the line 2006/2007.

 H.B.M.C. wrote:

that Cash Grab Edition 40K will make it so the significantly bad results from the last report won't be as bad this time around. I think it reverse their fortunes. I'm saying they will do well, and have a positive full-year report.

But will it really?

Sure, a new edition is always a "big thing", but it only "forces" players to buy a new 85$ book and from what anecdotal evidence I have access to, both FLGS's and actual players didn't exactly rush out to buy the new book in the first place.

And lets not forget that the first semester of the month included the re-release of the Space Marine line and THAT didn't save them from those disastrous results...

PhantomViper wrote:

 H.B.M.C. wrote:

that Cash Grab Edition 40K will make it so the significantly bad results from the last report won't be as bad this time around. I think it reverse their fortunes. I'm saying they will do well, and have a positive full-year report.

But will it really?

Sure, a new edition is always a "big thing", but it only "forces" players to buy a new 85$ book and from what anecdotal evidence I have access to, both FLGS's and actual players didn't exactly rush out to buy the new book in the first place.

And lets not forget that the first semester of the month included the re-release of the Space Marine line and THAT didn't save them from those disastrous results...

True. But the "drop" was also relative against the 6 months the year before, which did include the release of 40K 6th Edition.

Half-Year report 2012/2013 - Profits down from 11m to 7.7m from a "new-edition"-half-year to a "no-new-edition"-half-year

http://investor.games-workshop.com/wp-content/uploads/2014/01/2013-14-Press-statement-final-released.pdf

Half Year report 2011/2012 - Profits up from 9.5m to 11m from a "no-new-edition"-half-year to a "new-edition"-half-year.
http://investor.games-workshop.com/wp-content/uploads/2013/01/Half-year-press-statement.pdf

It doesn't explain all of it, but about 1.5m in profits over 6 months of the swing seems to be due to a new edition alone (whether or not they can replicate that with 7th, no "Dark Vengeance", being another question).

6th Edition came out the year before that, didn't it?

2012/13 was WHF 8th
2011/12 was 40K 6th?

I agree with H.B.M.C.

I assume that GW should have been able to sell 100,000 copies of 7th edition in the first two weekends. This lets them book sales revenue of £6,000,000 before the end of their financial year. That amounts to over 4% of their annual turnover which has to make the bottom line look a lot better than without 7th edition.

When the core game rules change it forces people to upgrade or drop out. A new codex only affects the players of that army, even if SMs are the most popular, and new models don't invalidate your older ones.

 Zweischneid wrote:

 Yonan wrote:
They could have been below the line in May, then the 7th ed release brought them above it in June. Another way to say it would be "keep them above the line" whereas without it, they may have been below the line. Damn you English language ; p

I doubt it. GW still made 7.7 Million Operating Profit in the "scandalously bad" 6 months that lead to the stock-drop.

That means that in this "really, really, really bad" half-year, they still made over a Million GBP a month in profit (!). Maybe they get back to ~2 Million GBP profit a month they did in their heydays. Maybe not. And possibly there will be some fluctuations.

But I've seen no evidence whatsoever that GW ever wrote red numbers since they went public.

Yes, they are still turning a profit. But if profit was the only true measure of a business, they wouldn't require all the other financials to be reported.

Like it or not, you need money coming in to turn a profit. What matters is how this profit is being made as well. GW is managing to turn a profit because they are still squeezing costs from the organization in the face of falling sales and have managed to be able to hike prices on a declining base to make up for the lost customers. However, they have now reached the point where the cost cuts left are all needed items that drove them to the revenue heights they had before. In addition, their product line is precariously small for a company of such size. Finally, their prices have now reached the breaking point with a vast majority of their customer base. Now, the cost cuts are all going to effect their ability to make revenue - and that is the key metric to keep one's eye on.

So, they have managed to turn a profit because of the above. But once the options of the above run out, profit quickly (very quickly) catches up with the path of falling sales. Thus why so many of these outright end in collapse.

Herzlos wrote:
6th Edition came out the year before that, didn't it?

2012/13 was WHF 8th
2011/12 was 40K 6th?

WHF8th was 2010.

40k6th would have been in the 2012/13 period I think, because IIRC it was out in june (6th only lasted 22 months).

 Jehan-reznor wrote:
This "The Future of Games Workshop - Part 14: Judgement Day" is all lies off course.
This is all good news!

But seriously where can GW still cut?

It's nose off, to spite it's face.

I was going to say "itself, off at the knees", but that might have already happened.

 Kilkrazy wrote:


When the core game rules change it forces people to upgrade or drop out.

Yes, it does. Unfortunately, by many indicators, it appears more players have opted for the latter than the former this time around. When more opt for dropping out, this becomes a lot less for "upgrading" at a later point. Couple this with the insanity of the price point now, which are keeping many new players from coming into the HHHobby, and you are not replacing the customer base attrition fast enough.

 Wayshuba wrote:

 Zweischneid wrote:

 Yonan wrote:
They could have been below the line in May, then the 7th ed release brought them above it in June. Another way to say it would be "keep them above the line" whereas without it, they may have been below the line. Damn you English language ; p

I doubt it. GW still made 7.7 Million Operating Profit in the "scandalously bad" 6 months that lead to the stock-drop.

That means that in this "really, really, really bad" half-year, they still made over a Million GBP a month in profit (!). Maybe they get back to ~2 Million GBP profit a month they did in their heydays. Maybe not. And possibly there will be some fluctuations.

But I've seen no evidence whatsoever that GW ever wrote red numbers since they went public.

Yes, they are still turning a profit. But if profit was the only true measure of a business, they wouldn't require all the other financials to be reported.

Like it or not, you need money coming in to turn a profit. What matters is how this profit is being made as well. GW is managing to turn a profit because they are still squeezing costs from the organization in the face of falling sales and have managed to be able to hike prices on a declining base to make up for the lost customers. However, they have now reached the point where the cost cuts left are all needed items that drove them to the revenue heights they had before. In addition, their product line is precariously small for a company of such size. Finally, their prices have now reached the breaking point with a vast majority of their customer base. Now, the cost cuts are all going to effect their ability to make revenue - and that is the key metric to keep one's eye on.

So, they have managed to turn a profit because of the above. But once the options of the above run out, profit quickly (very quickly) catches up with the path of falling sales. Thus why so many of these outright end in collapse.

I don't necessarily disagree.

But they are not "below the line".

It seems futile to even attempt to go into more in-depth analysis, of the kind you suggest, if people like H.B.M.C. and others cannot even get such basic terminology right.

 Kilkrazy wrote:

I assume that GW should have been able to sell 100,000 copies of 7th edition in the first two weekends.

How are you arriving at that number? Is it pure speculation or do you have some basis for it?

100k copies seems like a huge number to me (does anyone still have the leaked financial documents from the CHS trial and can check how many rulebooks they sell in a year in the US?).

Also you are assuming a 60 GBP selling price on each rulebook sold and that would only be true for those sold through their retail chain and their webstore. Any rulebook sold through a third party retailer will net GW a much smaller revenue value.

 Zweischneid wrote:
But "below the line"/"above the line" has a specific definition, no matter what company you talk about it (actually it has two, one for accounting and one for advertising, but I think we're talking accounting here).

It describes a loss in the current account period.

You're right, it does have a specific accounting definition. That isn't it.

In accounting terms, "above or below the line" describes the part of the financial statements that an accounting entry will impact on. Whether it's positive or negative, and the totality of that effect isn't anything to do with it.

In the 2006/7 financial reports you'll find it was a loss-making year.

 Kilkrazy wrote:
I agree with H.B.M.C.

I assume that GW should have been able to sell 100,000 copies of 7th edition in the first two weekends. This lets them book sales revenue of £6,000,000 before the end of their financial year. That amounts to over 4% of their annual turnover which has to make the bottom line look a lot better than without 7th edition.

When the core game rules change it forces people to upgrade or drop out. A new codex only affects the players of that army, even if SMs are the most popular, and new models don't invalidate your older ones.

It's still only £50 for the rules, thankfully. So £5m at RRP. Then GW would only get £30 for any of those sold from independents, but I don't know the ratio of direct:indirect sales.

It'll certainly go some way to shore up a bad set of results, but I don't think it's going to be enough to provide stability or growth, even if they did sell 100,000 copies. I'd estimate it at under half of that since most players will wait for the box set / mini book.

 Kilkrazy wrote:
I assume that GW should have been able to sell 100,000 copies of 7th edition in the first two weekends. This lets them book sales revenue of £6,000,000 before the end of their financial year. That amounts to over 4% of their annual turnover which has to make the bottom line look a lot better than without 7th edition.

Of course it's all smoke & mirrors and, true to GW style, beyond short-sighted as it deals only in the short term (ie. 40K Cash Grab Edition was released specifically to make the very next end-of-year report look good, and not to further enhance/grow the game). I remember that the year after Space Hulk came out there was chatter around the idea that they had to do something big for September, otherwise it would look strange that they had a spike one September and lower numbers the next. The focus was all on ensuring that the numbers on the next report looked good to avoid anyone raising questions of performance.

So, smoke and mirrors. A shell game.



Now, let's all start putting "words" into "quotes" so we can "dismiss" out of "hand" and try to "pretend" that the last "report" wasn't as "bad" as "everyone" said it was.

 H.B.M.C. wrote:




Now, let's all start putting "words" into "quotes" so we can "dismiss" out of "hand" and try to "pretend" that the last "report" wasn't as "bad" as "everyone" said it was.

That kick in sales though for next year's same time period will be interesting to see as I do not envision a major change with an 8th edition.

So perhaps another space marine release then?

For some reason I thought the rules were £60, however I notice the Special Edition rules have dropped to £200, perhaps the main rules have been dropped in price recently?

My figure of 100,000 is educated guesswork based on some modestly informed ideas on the size of the market and the sales pattern for this kind of product.

 H.B.M.C. wrote:
So, smoke and mirrors. A shell game

Or as we say....."accounting".

And you forgot "telling people off for using the wrong definition.....and using the wrong definition".

Am I doing it right?

 H.B.M.C. wrote:


Now, let's all start putting "words" into "quotes" so we can "dismiss" out of "hand" and try to "pretend" that the last "report" wasn't as "bad" as "everyone" said it was.

You didn't say the last report was bad, at least not in those words. If you had, I wouldn't have disputed that.

Again, your exact quote was...

 H.B.M.C. wrote:
I dunno. I still think that the Cash-Grab Edition of 40K will bring them above the line.

And that is factually wrong. Nothing can bring "them above the line" if they aren't under it to start with.

People can only respond to what you actually posted, not to what you believed you were posting but failed.

The distinction is important because the world is just a sliver more complex than "good" and "bad" (I know, tough stuff, but try to work with the concept).

A) Games Workshop's most recent results were bad, as in profits shrunk.
B) Games Workshop's most recent results were not bad, as in the made losses.

While both A) and B) could be grouped under the broader heading of "bad", only A) is factually true and B) is not.

Just because both qualify as "bad", doesn't mean B) is correct, as you've claimed.

 Zweischneid wrote:
Again, your exact quote was...

 H.B.M.C. wrote:
I dunno. I still think that the Cash-Grab Edition of 40K will bring them above the line.

And that is factually wrong. Nothing can bring "them above the line" if they aren't under it to start with.

Wait, you're still telling someone they're factually wrong about something you're factually wrong about?

 Kilkrazy wrote:
For some reason I thought the rules were £60, however I notice the Special Edition rules have dropped to £200, perhaps the main rules have been dropped in price recently?

My figure of 100,000 is educated guesswork based on some modestly informed ideas on the size of the market and the sales pattern for this kind of product.

I think those are the starting prices. GW have never (as far as I can recall) reduced any prices except in re-packs (10 to 5 troop boxes, metal to plastic)

 Baragash wrote:
Or as we say....."accounting".

How callous of me. You are of course right, although I would add the qualifier "creative" in front of "accounting".

Herzlos wrote:
... reduced any prices except in re-packs (10 to 5 troop boxes, metal to plastic)

And sometimes they don't even reduce the price there...