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The leap to £30 a time codexes must have surely hurt sales. Certainly I went from "will try to pick up current editions of all codexes eventually" to "will think long and hard about adding a new army, even as allies, if the rules alone will cost an extra £30 for a 100-page book".

Annual report is up. £11 million decrease in revenue from last year. All is woe.

£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.

 Kilkrazy wrote:

NoggintheNog wrote:

 Kilkrazy wrote:
Prices are part of the problem, in my view, but it's not the whole story.

I actually dont think price per model is an issue at all in isolation, I've just happily paid £66 for a box of 15 metal miniatures from corvus belli.

It is the price to play the game that is an issue.
...

GW games cost too much to play. Rules costs are a huge part of that, minis are too. Its the overall cost that is the problem, price at skirmish level, require mass battle numbers. In todays market, they cannot have both, and the people making decisions need to accept that. Quickly.

Yes, that is what I mean.

For me to just continue playing current 40K would cost me £110 to buy the new rules and latest versions (already out of date) of the Tau and Tyranid codexes. No new models, but I could field a correctly pointed army using my current models.

A completely new player needs £80 for the rules and codex before buying a single model.

There's two other things for me:

1) It's the prices across the board; paying a premium for a well crafted mini is something I can bear (not going to throw a parade, but I feel I can justify it), but then I get gouged on every other product too. Cheap copy paste digital Inquisition codex anyone? Except it's not cheap. They need to decide where to make a profit and where to throw the customer a bone to keep the relationship going, rather than "ALL THE PROFIT, ALL THE TIME!"

2) On a related note, they need to improve quality and bring back some stability to the games; if you are going to gouge me on every single item I want some guarantee that you're going to proof read and play test every single document, critically review every design, such that it's the best it can possibly be. And then leave it alone. No " day one DLC" data slates, sudden edition changes or game changing compulsory expansions. If I've invested this amount of time and money I want to be left in peace for a while to enjoy the game and get some value out of my hard earns brass.

It is the decline in sales that is worrying.

 Idolator wrote:
Annual report is up. £11 million decrease in revenue from last year. All is woe.

£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.

This is great news!

 Kilkrazy wrote:
It is the decline in sales that is worrying.

How can the sales go up or get stable when the prizes are that high and new players hardly enter the game. Its like a dying star.

 -Loki- wrote:

 Idolator wrote:
Annual report is up. £11 million decrease in revenue from last year. All is woe.

£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.

This is great news!

It even says later in the report that the rolled out a new web store and that revenues were in-line with previous years sales. So..... Almost $7 million spent with no increase in sales. Good descision team!

Ouch - Aside from the big headline numbers being nasty, Cost of Sales is up substantially as a percentage.

In 2013, on sales of 134597k, CoS was 36772k - 27.3%

In 2014, on sales of 123501k, CoS was 36766k - 29.8%

That's an increase of 2.5% of sales (roughly 10% rise in costs), during a time where their retails are rising markedly, so they are selling less product , and making less margin on each one. Now if the story was that they'd had a big expansion in selling via wholesalers or independents, thus their margin has come under pressure, I'd buy that, but they have also tried to concentrate sales through their own channels. Something is going quite wrong in their cost control.

Jesus. I knew after I read that incoherent rant disguised as a letter it would be bad but...Jesus.

And yet I'm happy...

How far will the share price fall? And how quickly?

Not a financial expert, but earnings per share down by half and no dividend is surely going to scare off investors?

And despite having "a fantastic cash generating machine" cash generation is down by a sixth. As cash is the lifeblood of any business I'd say that's actually the most worrying bit, more than the other headline figures (profit, sales, etc.)

 Jadenim wrote:
Not a financial expert, but earnings per share down by half and no dividend is surely going to scare off investors?

And despite having "a fantastic cash generating machine" cash generation is down by a sixth. As cash is the lifeblood of any business I'd say that's actually the most worrying bit, more than the other headline figures (profit, sales, etc.)

doesn't the market open in about 45 minutes? We'll find out!

 Idolator wrote:

 -Loki- wrote:

 Idolator wrote:
Annual report is up. £11 million decrease in revenue from last year. All is woe.

£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.

This is great news!

It even says later in the report that the rolled out a new web store and that revenues were in-line with previous years sales. So..... Almost $7 million spent with no increase in sales. Good descision team!

Some capital projects will never bring increase in revenue. A new website might bring some, but the main aim is not that, it is avoiding loss in revenue due to outdated technology. It's also possible it has, but sales were lost elsewhere, pr vice versa.

 Idolator wrote:
Annual report is up. £11 million decrease in revenue from last year. All is woe.

£9 million decrease in profit. That's an almost 50% decrease in profitability. All is woe.

The profitability will be 'accounted for' by the expenditure, that is what the preamble was designed to do.

The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.

The killer for any wargame is losing players, it is a social hobby, the fact you could get a game of 40K pretty much anywhere was the reason it has maintained its market lead for 20 years, there will be a critical point where the player base erosion tips the game into free fall at some point. I dont think this is it, but even for Kirby et al, this should be a huge wake up call.

Does this mean we'll get 8th edition next year?

Should a link to the financials be posted in news and rumours?

Or is this the thread for dakka?


Also, stock opened down 21.75



Edit for stock notice

 Ferrum_Sanguinis wrote:
Does this mean we'll get 8th edition next year?

Christmas this year I reckon.

Actually, without trying to be facetious, I would bet on the next version of Fantasy being within the next 6 months to bolster the next set of numbers. They are running out of things to throw at it though.

Down 3.6% right off the bat..

NoggintheNog wrote:

The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.

7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.

But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.

Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.

Backfire wrote:

NoggintheNog wrote:

The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.

7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.

But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.

Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.

Would his "resignation" suggest that the other execs didn't buy his excuse?

 focusedfire wrote:
Should a link to the financials be posted in news and rumours?

Or is this the thread for dakka?


Also, stock opened down $21.75



Edit for stock notice

That number is in pence, not dollars. The UK stock market operates in pennies not pounds sterling. 586 is actually £5.86.

@Backfire-

Actually, They took pre-orders so they had more than a week for 7th ed.


@ Idolatar-

Thanks for the reminder, force of habit from our US stocks. Will correct it now.

Later,
ff

Backfire wrote:

NoggintheNog wrote:

The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.

7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.

But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.

Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.

GW doesn't break down their sales figures into smaller increments than 6 months, but I'm willing to bet that 75% of a books sales (especially a core rule book) is made within the first week of release...and they know it!

Also, that drop in stock price is from after hours trading. The market hasn't opened yet. I assume that the London Exchange opens at 9am.

There's still just no plan at all to stop shrinking, let alone return to growth.

Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.

I especially like this line:

"We do no demographic research, we have no focus groups, we do not ask the market what it wants."

I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.

Kirby points out the high exceptional expenses to account for decreased profits as a means to distract from the underlying problem of falling sales. They're released a new edition and a glut of product and have still lost profit. They're still profitable though so are not currently losing money.

 frozenwastes wrote:
There's still just no plan at all to stop shrinking, let alone return to growth.

Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.

I especially like this line:

"We do no demographic research, we have no focus groups, we do not ask the market what it wants."

I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.

The entire "Business model" section is pretty ridiculous.

 frozenwastes wrote:
There's still just no plan at all to stop shrinking, let alone return to growth.

Just nothing but charge more and sell less. Their aggressive release schedule and a new edition of the game, combined with a big space marine and knights release and the end result is... sales down, profit down, earnings per share, down.

I especially like this line:

"We do no demographic research, we have no focus groups, we do not ask the market what it wants."

I guess slow withering of sales, market share and customers is what you get when you have no intention of meeting the needs of the market and instead think you can tell the market what it should want.

What page is that line on? I missed it. I want to be able to quote that jewel when anyone ever tells me that GW cares about their customer base.

Never mind, found it. I especially like the use of the word "otiose" in regards to market research. Saying that market research is futile explains a whole lot about their business practices.

 Ferrum_Sanguinis wrote:

Backfire wrote:

NoggintheNog wrote:

The decrease in revenue whilst putting out a new version of your biggest selling game (and does it also include the marine codex, the biggest selling range as well?) and more actual new product per month that at any time in the companies history at a much higher price point shows a significant drop in the customer base.

7th edition was out just for a week before the end of their financial year, it's very unlikely it had any meaningful impact to the numbers.

But yeah, it's pretty bad result. Not quite as bad as forecasted from their previous half-year (which was £7 million drop in sales), but pretty bad nevertheless.

Kirby puts a lot of attention to "exceptional costs" (benefits, website design etc) which do eat profits, but it can't be denied that the sales drop is signifant.

Would his "resignation" suggest that the other execs didn't buy his excuse?

I doubt it, Kirby remains as chairman, he's not supposed to permanently be CEO as well so stepping down had to happen eventually.

@ Idolator-

I think that quote is from GW's deposition or testimony in the CHS lawsuit.


Later,
ff

I just can't get over the preamble. Can you imagine starting a college paper like this???

"____________ has had a really good year. If your measure of 'good' is the current financial year's numbers, you may not agree. But if your measure is the long-term survivability of a great cash generating business that still has a
lot of potential growth, then you will agree."

I had to write papers like this for Coca Cola and another hypothetical company for a business class and I can't even imagine turning in a paper that began like that. What a joke.