Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

 frozenwastes wrote:
And they certainly don't need to blanket the country with them.

Except they do, because even medium-size towns in the US can easily have 2-3 FLGS within reasonable driving distance. If you don't blanket the country with GW stores then you don't create that isolation you're talking about.

They just need to identify good locations for their stores so they get enough profitable locations rather than dominate the market.

Except that's not possible. I live in a medium-size city with a single GW store and 3-5 FLGS within reasonable driving distance (depending on where exactly you are in the city). So let's look at how much money is available, assuming there are three independent stores in the area:

$X is the region's total sales of GW products
$Y is the region's total sales of non-GW products (MTG, comics, etc)
$Z is the average cost of running a game store (rent, salaries, etc)

Prior to the arrival of the GW store each store was making ($X/3 + $Y/3 - $Z) in profit. Once the GW store arrives the FLGS make ($X/4 + $Y/3 - $Z), while the GW store makes ($X/4 - $Z). The arrival of the GW store costs the other stores some profits, but the overall effect is probably fairly small since non-GW products are the majority of sales. Meanwhile the GW store is probably struggling to make any profit at all since it is selling so much less.

And now here's where you point out that the GW store doesn't have to pay the full $Z, and can still make money based on lower operating costs. Sure, they can do that, but then who would go to a GW store? Now you've created a FLGS that only sells products from one company, has much less gaming space, always sells at full retail price, is only open five days a week for limited hours, and randomly closes when the single employee can't come to work or needs a lunch break. Now the GW store isn't going to be making the full $X/4 from GW products because they're providing an inferior experience and even people who live near the GW store will be willing to drive the extra distance to a better store.

So, the end result is that GW might be able to find locations where they can make a net profit, but they're never going to build the kind of "the hobby happens in GW stores and only in GW stores" system that they have in the UK.

if population centres without enough going on to justify a GW store want to be serviced through independant trade accounts

It's not just population centers without enough going on to justify a GW store we're talking about. Population centers with enough going on to justify a GW store tend to have multiple independent stores already. So no matter where GW tries to expand their own stores they're going to be competing with other games.

GW will supply those guys, insist on draconian trade terms and then use their direct only approach to steal as many customers as possible.

And that's just plain stupid. GW can't dominate the market with their own stores, and those independent stores are vital to recruiting enough new players to keep the company profitable. Treating them like an enemy to be destroyed is suicide for a business in GW's position, at least in the long term.

And the question is, can GW develop enough of these sort of locations and have them be profitable to keep their revenue up in this new segmented market + direct sales approach?

Short term? Sure. Long term? Hell no. GW isn't going to be getting any replacement customers for the people who leave when they have a handful of stores in middle of nowhere areas with minimal traffic, while all of the RPG/MTG/etc players who get an interest in miniatures games are going to their competition instead (since they're playing MTG or whatever in a store that doesn't sell GW games). A few existing customers might continue to visit the store, but it will be a steadily decreasing number until GW can't even pay the rent.

GW is in a managed decline.

This seems to be another term for "death spiral"?

This obviously can't continue forever and they will reach a point where shedding more customers will lead to too many lost customers, but is that point really here yet?

Not yet, but that's not the point. Nobody is seriously expecting GW to fail overnight, the point is that their long-term future is in serious doubt. They're sacrificing future success to pay tomorrow's bills, and once that damage is done it's doubtful that it's possible to repair it.

GW shrinking to 250 or PP growing to 250 doesn't actually mean suicide or success for either company.

It really does, because you have to look at the new player factor. When GW has 5x the customers they're going to get the majority of new customers. If a MTG player starts thinking miniatures are interesting and sees a thriving 40k community and a couple people playing Infinity once a month they're probably going to start playing 40k. If you make those numbers equal then it's much less likely that they'll pick 40k, especially given the incredibly high up-front costs for a new player. That puts the trend strongly against GW: not only are they losing market share, they're almost guaranteed to continue losing market share.

if X players is enough for PP to have a vibrant community and a profitable business, why can't it be that way for GW, but with GW's added advantage of capturing more of the margin (PP rarely sells direct) and their completely paid for, in house, plastic production?

Because GW's games suck. Their rules are garbage, the models are inconsistent, and the cost to play the game is insane. They only have two advantages that keep people playing: the amazing fluff, and the fact that it's the game that everyone else plays and therefore finding opponents is easy. Other companies are able to survive with a smaller customer base because the games are better and they don't depend on "well, I guess it's what everyone else is doing" to recruit new players.

I think enough people will pay Forgeworld prices for GW plastics.

People will pay FW prices for GW plastics while the community exists. I seriously doubt you're going to find enough customers willing to pay those prices when they're the only person in the area who plays the game and everyone else has moved on to something else. And once that person quits (and they inevitably will, very few people remain in a hobby permanently) there won't be anyone to replace them.

Peregrine wrote:If you don't blanket the country with GW stores then you don't create that isolation you're talking about.

The isolation isn't market domination. The isolation is the idea that GW has their customer base that's largely ignorant of the larger hobby and knows about miniature gaming from them and buys just from them. GW could have one store and still have that isolation/segmented market. But they want it on a larger scale. So they're rolling out their new retail strategy and they are part way through doing it.

Prior to the arrival of the GW store each store was making ($X/3 + $Y/3 - $Z) in profit. Once the GW store arrives the FLGS make ($X/4 + $Y/3 - $Z), while the GW store makes ($X/4 - $Z). The arrival of the GW store costs the other stores some profits, but the overall effect is probably fairly small since non-GW products are the majority of sales. Meanwhile the GW store is probably struggling to make any profit at all since it is selling so much less.

This is the exact opposite of the segmented/isolated market approach I am talking about. I'm talking about the GW store opening up and doing it's own hard selling and building of it's own customer base as its own retail entity. Not just taking a small share of the existing market. Now after that, they will still take their share of the existing market. Other store will start getting short shipped on preorders and more and more will go direct only. The local gaming community will quickly realize that if they reliably want their product on release day, they better deal directly with GW.

but they're never going to build the kind of "the hobby happens in GW stores and only in GW stores" system that they have in the UK.

Not across the country, but on a store by store basis they sure can. And the stores that stay open through hitting their sales targets will be doing exactly that. My local one, for example, is full of 14 to 18 year olds all buying there. They've created the segmented market in an area drastically less populated than most of the US.

Population centers with enough going on to justify a GW store tend to have multiple independent stores already. So no matter where GW tries to expand their own stores they're going to be competing with other games.

Which is why they're going to try their best to create their own parallel customer base who's ignorant of non-GW options. Is it what I would do? No. But it's too early to say whether or not they got the right idea yet.

GW is in a managed decline.

This seems to be another term for "death spiral"?

Maybe I'll switch my terms when they actually post a loss and not a profit.

If a MTG player starts thinking miniatures are interesting and sees a thriving 40k community and a couple people playing Infinity once a month they're probably going to start playing 40k.

Or some 15 year old who's only passingly familiar with MTG and totally ignorant of miniature wargaming will walk into their shop, get sold using the demo sales process combined with traditional hard selling and spend the next couple of years giving GW all their part time job money, B-day and Xmas presents, etc.,.

If you make those numbers equal then it's much less likely that they'll pick 40k, especially given the incredibly high up-front costs for a new player.

If they fail to segment their market, then yes, I agree.

That puts the trend strongly against GW: not only are they losing market share, they're almost guaranteed to continue losing market share.

As I've said, GW is becoming irrelevant to the larger hobby/industry with every step in this direction. The far more interesting question is whether or not GW will succeed in making the larger hobby/industry irrelevant to them.

Because GW's games suck. Their rules are garbage, the models are inconsistent, and the cost to play the game is insane.

This is where customer ignorance comes into play. Sucks compared to what? inconsistent models compared to what? Cost compared to what? If they can sell someone who's ignorant of the larger hobby on their games, then they can rely on the sunk cost fallacy to keep them around for a couple years until they finally quit.

I also am beginning to think that GW's approach of rules only mattering in so far as they can sell models might have some merit with their target audience. If some teenage kid gets his stuff painted/built and gives the game a try, it'll probably be stupid fun and they'll be happy. If they don't quite get enough stuff together to play a full sized game before they quit, then well, that's what GW is expecting anyway.

I think the mistake you might be making is assuming their target audience are life long gamers like you or me who value games based on their merits in actual play whereas GW's target audience is actually teenage boys (stretching into early college age) that don't yet have the refined taste of someone with a lot of gaming experience.

People will pay FW prices for GW plastics while the community exists. I seriously doubt you're going to find enough customers willing to pay those prices when they're the only person in the area who plays the game and everyone else has moved on to something else.

Each GW store can have their own facebook page and runs their own events and can create their own little micro-community. Nicely segmented away from the larger industry and forums like Dakka. But even here, were everyone gets told about alternatives, the forum is still largely dominated by 40k. I keep seeing people post "I just started 40k" threads. Or post in the painting forum about how no one around them really plays yet they have 3000 points of a couple different armies listed in their signatures. If people are still often preferring 40k to the alternatives here on DakkaDakka, despite all their chances to be exposed to alternatives, imagine how much more reliably people will buy GW stuff when they don't even know of any other option.

I've accepted that my voice is not one that matters to GW. I'm not their target market. They fired me as a customer with the C&D letter from their lawyer related to using "bloodbowl" in a domain name. I wish that a company that legally threatens their most ardent fans would just die over night, but I'm just not their target audience anymore. And I don't think well informed 30-somethings are either.

We're not too far off from their next report. I think they'll have about 121 million for their yearly revenue. That means their customer and player base is continuing to decline. I think, however, that their costs will be down quite a bit as their closing of regional HQs will finally hit the books in this next report. So I think profits will be slightly higher than last half, but down compared to the previous year overall.

---

GW will never fall!

Gonna go buy a bunch of gak with friends right now.

I have no idea if your post is sarcastic or not, but the animated image in your signature is awesome.

 PrehistoricUFO wrote:
GW will never fall!

Gonna go buy a bunch of gak with friends right now.

Kinda funny you call it "gak" though.

 frozenwastes wrote:
The isolation isn't market domination. The isolation is the idea that GW has their customer base that's largely ignorant of the larger hobby and knows about miniature gaming from them and buys just from them. GW could have one store and still have that isolation/segmented market. But they want it on a larger scale. So they're rolling out their new retail strategy and they are part way through doing it.

Except the point is that GW can't do this without market domination. It isn't 1980 anymore, the internet exists and GW's target market are already playing MTG/video games/etc. Producing an inferior product and depending on your customers remaining ignorant of your competition is a losing strategy in 2014.

Also, any chance this strategy had of working died the moment GW abandoned high-traffic mall stores in favor of putting their stores in the cheapest middle of nowhere strip mall they can find. An isolated GW store can't survive long-term because GW has no advertising and very little random traffic to recruit from. The only way they are ever going to have access to enough customers to replace their losses is to participate in the larger hobby community.

I'm talking about the GW store opening up and doing it's own hard selling and building of it's own customer base as its own retail entity.

But GW can't do this. Modern GW stores have nothing to attract customers, so I am extremely skeptical that they can build their own customer base without any ties to the larger gaming community. And this is going to be even more true once GW implements your suggested "sell a few boxes at a high price" strategy and every parent who happens to have a kid walk into a GW store says "sorry, but we can't afford to pay $1000 for you to play space marines, let's get you an xbox game instead".

Other store will start getting short shipped on preorders and more and more will go direct only. The local gaming community will quickly realize that if they reliably want their product on release day, they better deal directly with GW.

This is great for tomorrow's financial report, since the current customers will be forced to buy direct from GW and give better profit margins. But throwing away GW's presence in independent stores is market share suicide, which means that as those current customers leave the game GW is going to struggle to replace them. Meanwhile the independent stores are quite happily selling people Warmachine/Infinity/etc. What GW needs to understand is that they aren't in a position of power here. GW needs independent stores. Independent stores do not need GW.

Which is why they're going to try their best to create their own parallel customer base who's ignorant of non-GW options.

You can not do this in 2014. And you certainly can't do it with the hardcore collectors who will keep paying no matter how expensive the models get.

Or some 15 year old who's only passingly familiar with MTG and totally ignorant of miniature wargaming will walk into their shop, get sold using the demo sales process combined with traditional hard selling and spend the next couple of years giving GW all their part time job money, B-day and Xmas presents, etc.,.

But why is this kid walking into a GW shop if they are totally ignorant of wargaming? The store is in a random strip mall where hardly anyone will find it unless they know about GW already and make an effort to go there, and if they're buying any MTG cards it's from some other gaming store. And how is this kid going to afford the game when GW has to keep raising prices to absurd levels to make up for their shrinking sales volume?

And yet i keep seeing people post "I just started 40k" threads. Or post in the painting forum about how no one around them really plays yet they have 3000 points of a couple different armies listed in their signatures. Each GW store can have their own facebook page and runs their own events and can create their own little micro-community. Nicely segmented away from the larger industry and forums like Dakka. But even here, were everyone gets told about alternatives, the forum is still largely dominated by 40k.

Yes, but that's true because it's still relatively early in the death spiral. GW is still the biggest company in the market for now, so it's not surprising that they'll still dominate forum traffic, or that even people who have mostly moved on to other games still have a bit of interest in GW. But that won't be true if GW follows your proposed route of becoming a niche hobby within a niche hobby.

And as for those facebook pages, congratulations, you just got all of your customers to look at facebook ads for other games. Or maybe someone posts a link to a forum thread with painting information, and people also read other forum topics about other games. You just can't create the kind of isolation you're talking about in 2014.

 Peregrine wrote:
Except the point is that GW can't do this without market domination. It isn't 1980 anymore, the internet exists and GW's target market are already playing MTG/video games/etc. Producing an inferior product and depending on your customers remaining ignorant of your competition is a losing strategy in 2014.

I do actually hope you're right. If only out of the desire to live in a sane world, but I'm not sure we do. Despite it being the information age and GW's target audience being the first generation to truly grow up with information technology available 24/7, there may actually be something to a person-to-person sales strategy that relies on the target being relatively uninformed about a niche hobby.

Also, any chance this strategy had of working died the moment GW abandoned high-traffic mall stores in favor of putting their stores in the cheapest middle of nowhere strip mall they can find. An isolated GW store can't survive long-term because GW has no advertising and very little random traffic to recruit from. The only way they are ever going to have access to enough customers to replace their losses is to participate in the larger hobby community.

If GW fails to get the right locations for their strategy, it's not going to work. Perhaps the ideal spots are not in the malls, but just off the malls. Where people driving or taking transit to the shopping centre will see them on the way in, but they won't have to pay the higher rent of being right in the mall.

But GW can't do this. Modern GW stores have nothing to attract customers, so I am extremely skeptical that they can build their own customer base without any ties to the larger gaming community.

I was to. Until I heard about GW stores that consistently hit their sales targets and are full of teenagers each Saturday and once or twice during the week. Now I think if they can replicate what works in one store across their chain, they can make it all work.

I originally criticized their "customer experience" position as being about the wrong thing. It's a job position they advertised a short while ago about figuring out the customer experience of buying "wonderful miniatures." I said they instead need to rethink the entire customer experience of the product itself from first contact through purchasing and years into the future. A complete revamp from the ground up.

Now I think this position is one where the person will go to the GW stores that are working. The ones that are hitting their sales targets. And figure out what they have in common. The position made no sense in terms of the larger hobby or industry as it assumed there was nothing wrong with the product itself, but it makes perfect sense in terms of what they are trying to accomplish with their retail restructuring.

And this is going to be even more true once GW implements your suggested "sell a few boxes at a high price" strategy

emphasis mine

Wait one minute. It is not at all my suggestion. At all. It's my description of what they are doing now and what they have been doing since they ended their program of yearly price adjustments and switched to price increases on new releases. It's not *my* plan. My plan would be to offer a great product at a good price and have an entire customer experience that would be about making each model feel as valuable as possible and a set of rules that would be amazing to play at every size, especially supporting smaller games to lower the barrier to entry. That's what I think works in the hobby gaming industry. GW is trying to segment themselves from that industry, so their plan is very, very different from what I would do.

This is great for tomorrow's financial report, since the current customers will be forced to buy direct from GW and give better profit margins. But throwing away GW's presence in independent stores is market share suicide, which means that as those current customers leave the game GW is going to struggle to replace them. Meanwhile the independent stores are quite happily selling people Warmachine/Infinity/etc. What GW needs to understand is that they aren't in a position of power here. GW needs independent stores. Independent stores do not need GW.

Absolutely. In the hobby gaming industry. GW is retreating from that market while attempting to develop their own parallel market.

You can not do this in 2014. And you certainly can't do it with the hardcore collectors who will keep paying no matter how expensive the models get.

We'll have to wait and see. I think they can.

And how is this kid going to afford the game when GW has to keep raising prices to absurd levels to make up for their shrinking sales volume?

When I was a teen and bought some 40k stuff, I did it by saving money I made babysitting and then asking for stuff for Christmas and my birthday. The only difference between me and a kid who's buying now is he'll get loss models for the same money. Although to be fair, I had to get both the 40k starter and the dark millennium expansion. In inflation adjusted dollars, they won't be paying that much more. GW tried cheap starters with the original launch of Black Reach. The price of that starter was quickly adjusted upwards.

Yes, but that's true because it's still relatively early in the death spiral.

Then let's watch the drop off in GW related forum activity together over the coming year.

But that won't be true if GW follows your proposed route of becoming a niche hobby within a niche hobby.

Again, not *my* proposed route. It's what I think they are doing. I happen to actually like the wider gaming industry and think success there would be superior to attempting to make an artificial parallel market that's reliant on customer ignorance and hard sales tactics.

GW grew to become a world wide company by working with existing stores and distribution channels in an established marketplace. I think their current draconian control of trade terms and distribution is the exact opposite of what a manufacturer should do.

You just can't create the kind of isolation you're talking about in 2014.

I hope you're right. Yet I keep encountering people who are totally inside of GW's ecosystem.

---

 poolatka wrote:
https://uk.finance.yahoo.com/echarts?s=GAW.L#symbol=GAW.L;range=1y

it seems like they split there shares in half and have gone up a ton since. thats insane. they've made so much money this year its not even funny. no way its going under. seems like they're spending tho, could be eternal crusade

I don't remember GW having done a share split this year.

The share price tells you nothing except for what price people want to buy and sell the shares at.

GW make nothing at all when a share is traded. Only the seller makes money and then only if he bought the share at a lower price.

 Kilkrazy wrote:

 poolatka wrote:
https://uk.finance.yahoo.com/echarts?s=GAW.L#symbol=GAW.L;range=1y

it seems like they split there shares in half and have gone up a ton since. thats insane. they've made so much money this year its not even funny. no way its going under. seems like they're spending tho, could be eternal crusade

I don't remember GW having done a share split this year.

They haven't. Poolatka doesn't realise that what he's looking at isn't the result of a share split, just GW's abysmal financials for the previous half year.

Why doesn't GW just make all the FLGS go out of buissness. Then they could take over the market and their stores wouldn't run non GW stuff.

Makumba wrote:
Why doesn't GW just make all the FLGS go out of buissness. Then they could take over the market and their stores wouldn't run non GW stuff.

Why don't the FLGS make GW go out of business?

Seriously though, my FLGS are one of the main reason why the only Games Workshop store in a 30 mile radius of where I live closed its doors a long time ago. FLGS are fun places to be: friends, food, many different types of games and people. Sometimes I'll show up without even buying anything and chat for a while and nobody cares. GW-official stores continually try to push gak on you, and just don't have the same friendly atmosphere. Not to mention the more questionable rumors I've heard about some GW stores, like auctioning off tables.

If I had a choice to go to a FLGS or a Games Workshop store, say if they were next to each other, I'd quickly forget about the GW store.

It appears that their real life demise matches with their fiction: The place where status quo is God, progress is nonexistent, and common sense is so rare it's an OP superpower.

 Mysterious Pants wrote:

Makumba wrote:
Why doesn't GW just make all the FLGS go out of buissness. Then they could take over the market and their stores wouldn't run non GW stuff.

Why don't the FLGS make GW go out of business?

Seriously though, my FLGS are one of the main reason why the only Games Workshop store in a 30 mile radius of where I live closed its doors a long time ago. FLGS are fun places to be: friends, food, many different types of games and people. Sometimes I'll show up without even buying anything and chat for a while and nobody cares. GW-official stores continually try to push gak on you, and just don't have the same friendly atmosphere. Not to mention the more questionable rumors I've heard about some GW stores, like auctioning off tables.

If I had a choice to go to a FLGS or a Games Workshop store, say if they were next to each other, I'd quickly forget about the GW store.

IMO, GW should close their stores and let the FLGS do the hard work. GW doesn't need to promote 'the hobby' as a whole any more, there's plenty of other games now to serve as a entry level for them. The brick and mortar they are invested in is a massive expenditure I don't think they need anymore, much better ways of advertising now.

They should be selling their IP out to merchandise.

They need to take a step back and move into modern business.


On the subject of not really talking to their customers- with what happened on the DE FB page I'm not really surprised. Some 40k fans are real idiots, more so than other disgruntled fans. They had a medium open and the fans abused it. Some poor guy had to work on a Sunday night removing all offensive posts... and we know other instances of... OTT fandom.

Why don't the FLGS make GW go out of business?

I know of around 4 FLGS who went down , because GW was late with shipments of stuff and I know the same happened in other cities here.

And while wasn't there when I happened, the story goes that driving shops bankrupt was what they did in UK in the 90s.


Maybe it is different here. To sell food you would need to have a special promision from the local administration and it both costs a lot ,and comes with our version of FaDA controls which close the shop for a week or two. Playing other games also ain't so easy , when PP or CB more or less give central europe the finger.

Makumba wrote:
Why doesn't GW just make all the FLGS go out of buissness. Then they could take over the market and their stores wouldn't run non GW stuff.

Because most FLGS, at least in the US, would hardly notice if GW disappeared. MTG is the cash cow, and they've also got RPGs/comics/other miniatures games/etc to add even more revenue. Obviously nobody wants to throw away the profit from selling GW stuff, but with such a diverse range of products to sell they aren't dependent on any one non-MTG product to stay in business. GW, on the other hand, needs those stores to cover sufficient geographical area with access to GW products and bring in new customers, something they can't do with their own stores. Which makes their decision to screw around with independent stores rather suicidal.

Quite a bit of talk about the GW store model.

I remember the early days of my business and pitching a direct selling model (i.e., sales people) to investors. Didn't go over well because it is an "expensive" way of acquiring customers and frequently doesn't pay off unless you are selling very expensive B2B products. So we struggled with finding a much more reliable and cost effective customer acquisition model and eventually found one.

The same can be applied to GW. While it is true they make more margin selling it themselves, it also comes with a much higher cost of acquisition. Is the current GW store model cost effective in acquiring customers? I would argue that the strategy they are pursuing is folly as, looking at their financials, maintaining those stores is becoming a larger and larger percentage of their costs. Where the stress frequently comes in these models is selling enough to cover the churn. Eventually your customer base grows to a point where you churn a certain amount of customers a month and your new sales must a least cover that or the decline happens. To stop that decline, you keep hiring more and more sales people (or in GWs case more and more stores). This is why companies like LinkedIn still haven't turned a profit, because their solid revenue growth has come at the expense of a massive sales expense.

So, while the store model may work, and they may figure out a way to do it, I would also argue it is not the most cost effective way of acquiring customers. If they had instead seen FLGS as partners, hired a team of channel people to manage, support, and build rapport with the channel, they may have had a much, much more cost effective model (and bigger delivery channel) than there current model will provide.

I also think this model isn't working well and that is why we saw so many products go direct only with the change of the website. So it seems the model is more a hybrid now where the stores "recruit" the new customer by selling the initial box and then try to get the new customer to then buy from the website to get a higher margin with lower cost. Does anyone see the paradox with this model? You depend on physical stores to get customers, completely ignoring that the internet exists in the most connected generation in worldwide history. Then, you expect them to use the internet to buy a good majority of the product afterwards. But, you expect them to "only" go to the GW website and avoid going to community gaming forums to otherwise expose them to other aspects of the hobby.

GW seemed to think they could cover the USA like they did the UK with their own shops. It didn't work. The country is too large. For a while they courted FLGS with support like branded shelving and good distribution service. That policy seemed to be changed a few years ago. I think GW now believe they can do it all themselves by selling on the Internet. I think that is a mistake as it ignores the role of the local shop as an experiential sampling zone for potential new customers.

Makumba wrote:
Why doesn't GW just make all the FLGS go out of buissness. Then they could take over the market and their stores wouldn't run non GW stuff.

They've been trying. Increasingly over the years when I've ordered things through my FLGS they've had had longer and more frequent delays. I don't think it's a coincidence that there happens to be a GW store just a couple more stops along the same train line. Year after year I hear the guy who owns the shop complaining more about how GW interact with him, though this is going back many years. He felt that GW screwed him over back in the day (15 or so years ago) because he largely helped establish a WHFB community and then a couple of years later a GW opened nearby and at the same time GW made it harder for him to do business.

But, as time has gone on, FLGS stores around this area have increasingly become competition to GW instead of supplementing GW. Back in the day all the FLGS's had large GW sections prominently displayed, now they only carry a skeleton offering from GW and it's hidden at the backs of all the stores. One store went so far as to no longer advertise GW new releases. You look in their newsletter and find Infinity, XWing, Malifaux, PP, Bolt Action, basically anything you could think of they carry and advertise the new releases and events. GW stuff, they carry it, but you wouldn't even know about the new releases unless you specifically asked.

If the actual local GW closes I'm not sure what will happen to 40k and WHFB, as none of the FLGS's really support it anymore, 40k game nights have gone from once a week to once every month if you're lucky, sometimes only every few months. There are clubs around which I personally don't frequent, if the GW store closes and the FLGS's don't pick up the slack, all the people I typically game with will be displaced and have no where to play.

 PrehistoricUFO wrote:
GW will never fall!

Gonna go buy a bunch of gak with friends right now.

Never say never.

I can see 4 likely outcomes based upon the current long standing trend.

Firstly Kirby takes early retirement and there is a massive restructuring of GW's management in response to their falling market share. GW is reset to what it was in the late 90's and actually makes good games again.

GW's revenues continue to fall rapidly and their overheads drag the company down leading to its fragmentation. This would be only scenario that would see GW disappear rapidly.

GW's revenues continue to decline and their low share price encourages a takeover, hopefully by someone who knows how to actually make good games.

Lastly GW basically shrivels, loses its dominance and becomes just another wargames company amongst many.

I can't see GW prospering if they don't do a root and branch reform of their entire company.

 Wayshuba wrote:
So, while the store model may work, and they may figure out a way to do it, I would also argue it is not the most cost effective way of acquiring customers.

It's obviously an inefficient approach compared to using sales channels that already exist. Using existing channels and existing distribution is how GW grew in the first place. Their stores should be destination stores, not their primary means of selling, but they've got this restructuring plan that seems to be betting the farm on the stores as primary sales channels and being as predatory as possible to those who they should treat as valued partners.

If they had instead seen FLGS as partners, hired a team of channel people to manage, support, and build rapport with the channel, they may have had a much, much more cost effective model (and bigger delivery channel) than there current model will provide.

I agree. Yet Kirby has bragged about how taking direct control of distribution was the best move they ever made and they have shown how they want to go about using that control: draconian sales terms and limits on product allocation for new releases meant to limit sales down this particular channel.

It's crazy.

Then, you expect them to use the internet to buy a good majority of the product afterwards. But, you expect them to "only" go to the GW website and avoid going to community gaming forums to otherwise expose them to other aspects of the hobby.

Well, if something's direct only and people go online, even if they find out about discounters or alternatives, if they want the direct only item that they went online in the first place to get, there's still only one place to go to get it.

What do I want to see? I want GW's decline to be as drawn out as possible and the ceding of their market share to their competitors to be as orderly as possible. So companies that are currently making miniatures that have a similar appeal to the miniatures GW produces will have ample time to grow and flourish and establish themselves so that GW's customer base can diversify and be supported by multiple companies rather than being dominated by one. I want to see diversity in game play, rules being played and miniatures used. I want to see more by-gamers-for-gamers as GW loses market share not only to other game systems but to companies like Kromlech, Creature Caster, Dreamforge or Anvil that make 40k appropriate miniatures. And then I want the new financial reality to force GW to change, or to allow someone else to come in and bring the change needed to really revitalize their fictional universes as miniature games.

Though it's just as likely their IP gets stripped to make shovelware phone and tablet games.

That all said, there's still a chance GW's market segmentation and inefficient retail model plan can actually work. I think they still have room on prices in many regions and likely have more costs to cut than we realize. And that the network effect might not be as key of an issue as I originally thought because actual enjoyable gaming on a regular basis might not be as important to the typical GW customer as it is for me.

---

))<>((

 Palindrome wrote:

 PrehistoricUFO wrote:
GW will never fall!

Gonna go buy a bunch of gak with friends right now.

Never say never.

I can see 4 likely outcomes based upon the current long standing trend.

...
...

GW's revenues continue to fall rapidly and their overheads drag the company down leading to its fragmentation. This would be only scenario that would see GW disappear rapidly.

GW's revenues continue to decline and their low share price encourages a takeover, hopefully by someone who knows how to actually make good games.

Lastly GW basically shrivels, loses its dominance and becomes just another wargames company amongst many.

I can't see GW prospering if they don't do a root and branch reform of their entire company.

The only thing is GW's revenues have not been declining. Until the Dec 2013 report at any rate. That is why the June 2014 end of year report will be so crucial, to see if they turned it around.

The issue that I see is that a GW store is useless unless somebody knows about them already; if they're trying to sucker in a MtG player, said MtG player isn't going to go into a GW store, and that would mean that they are trying to trick people into going in there by accident, similar to how a game store that has "Games" in the name might get somebody going there by accident who thinks they sell video games. Which IIRC was their idea at one point, hence why shopping malls seemed to be a good place for the GW store. Parents can drop the kid off there while they are shopping, or just wander in looking for the latest Call of Duty or whatever so the redshirt can sell them a 40k boxed set instead.

However, while that might work on parents/relatives, anyone who plays any kind of hobby game is 99.99999% likely to have the internet and would know what 40k/Games Workshop is, even if they don't play; likely that comes from seeing GW products on the shelves at the local shop when they play MtG or whatever card game. They might not know anything about GW as a company, but they've seen the boxes so know that 40k is a miniature game. They aren't going into a GW store blind.

On top of that, while it's decreasing 40k tends to still new small amounts of new players, again mostly because in some communities (mine for example) it's still popular, while other games aren't, so a new player is more likely to get started with 40k because they see people playing 40k; even if they would prefer Infinity/Warmahordes/Malifaux/etc. they don't see anyone playing those games, but they see 40k players, so 40k it is.

In general my thoughts are that GW's business model isn't sustainable forever. This idea of raising prices to cover lost revenue, or hell just because you can, is going to be the tipping point for everyone at some point - for many of us we've already reached it, but there are many more for whom it's still expensive but still okay. These people do have a tipping point, but it hasn't been reached yet. That's what makes GW in a downward spiral.

 pretre wrote:
I lol'd at this. I know you were probably being serious, but still...

If you've got something to say pretre, then come right out and say it. Otherwise quit needling people. It's annoying.

I meant sales volume. Although I wouldn't be suprised to see revenues begin this noticably decline in next year's mid year.

Makumba wrote:
Why doesn't GW just make all the FLGS go out of buissness. Then they could take over the market and their stores wouldn't run non GW stuff.

I live in metro Atlanta. The 9th largest metro area in the US. There is one, ONE GW store in the metro area. There are 9+ FLGS in area which carry GW products AND probably another 6+ FLGS which do not carry GW product for various reasons. If GW can't provide more than 1 store with the hours more than the below, then they have no prayer of taking on the FLGS.

Hours:
Monday Closed
Tuesday Closed
Wednesday 2:00 – 8:00 pm
Thursday 2:00 – 8:00 pm
Friday 12:00 – 8:00 pm
Saturday 12:00 – 9:00 pm
Sunday 12:00 – 6:00 pm

WayneTheGame wrote:
The issue that I see is that a GW store is useless unless somebody knows about them already; if they're trying to sucker in a MtG player, said MtG player isn't going to go into a GW store, and that would mean that they are trying to trick people into going in there by accident, similar to how a game store that has "Games" in the name might get somebody going there by accident who thinks they sell video games. Which IIRC was their idea at one point, hence why shopping malls seemed to be a good place for the GW store. Parents can drop the kid off there while they are shopping, or just wander in looking for the latest Call of Duty or whatever so the redshirt can sell them a 40k boxed set instead.

On that note, if I was in charge of GW I'd have the stores keep a few copies of the licensed games on hand - it would give the redshirts a tactful way to test the waters. If the lost video gamer seems interested in Space Marine or Dawn of War, broach the subject of the miniatures. If they won't look at anything that's not Call of Duty, save your breath.

 H.B.M.C. wrote:

 pretre wrote:
I lol'd at this. I know you were probably being serious, but still...

If you've got something to say pretre, then come right out and say it. Otherwise quit needling people. It's annoying.

I wasn't needling him. I was laughing at the return to Mat Ward. Sorry if that wasn't obvious.

edit: I also think Insaniak can defend himself from my relentless needling.

He also made a good point different from the one I thought he was aiming at. I disagree with the central premise, but I certainly see that the changes he is unhappy about did stem from that time period.

 AlexHolker wrote:

WayneTheGame wrote:
The issue that I see is that a GW store is useless unless somebody knows about them already; if they're trying to sucker in a MtG player, said MtG player isn't going to go into a GW store, and that would mean that they are trying to trick people into going in there by accident, similar to how a game store that has "Games" in the name might get somebody going there by accident who thinks they sell video games. Which IIRC was their idea at one point, hence why shopping malls seemed to be a good place for the GW store. Parents can drop the kid off there while they are shopping, or just wander in looking for the latest Call of Duty or whatever so the redshirt can sell them a 40k boxed set instead.

On that note, if I was in charge of GW I'd have the stores keep a few copies of the licensed games on hand - it would give the redshirts a tactful way to test the waters. If the lost video gamer seems interested in Space Marine or Dawn of War, broach the subject of the miniatures. If they won't look at anything that's not Call of Duty, save your breath.

That's... actually an interesting idea. I could see how that might work. Buy a copy of Space Marine for Little Timmy and then tell him that there's also a miniatures game around it.

Of course, things like that would be an easier sell if they still had the self-contained games like Space Hulk.

Yup. As much as I want GW to face the consequences of its incompetent business plan, there's always going to be that curious 10 year-old who sees the diorama on the street.