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 Kilkrazy wrote:

It is not GW's fault that The Hobbit films have not been so popular. Their mistake with The Hobbit game is around pricing and contents of the starter sets. and lack of widespread promotion.

Really, it looks like GW didn't care anymore about the license. They were just going through the motions, fulfilling the contract and preventing anyone else getting it. Their effort was very half-hearted, and it wasn't helped by general lack of enthusiasm about the movies compared to LOTR buzz.

For whatever reason, LOTR always came across as, I don't know, sterile...compared to the WHFB. I never had any enthusiasm towards it, despite being a big Middle Earth fan. The Hobbit, where even the source movie is very sterile, is even worse in this respect.

 Kilkrazy wrote:
GW did very well out of the original LoTR films in financial terms. The game was well designed and popular. The figures were ditto.

The mistake they made was to assume that all those new players would continue with the game or transfer to other GW games after the film buzz went away. They have also reportedly screwed up LoTR during the past few years by splitting the rules among lots of supplements in an attempt to sell more books.

IMO it was a mistake to make the film models true 25mm, making them incompatible with WHFB. It could have been a bridge from LoTR to WHFB if the two systems had compatible models.

It is not GW's fault that The Hobbit films have not been so popular. Their mistake with The Hobbit game is around pricing and contents of the starter sets. and lack of widespread promotion.

Given the silly rules about not mixing Warhammer and LotR stuff together for official purposes and clearly dividing the magazine, I would think that the more realistically proportioned scale of LotR was a deliberate choice, possibly imposed by New Line.

The Hobbit stuff was just ludicrously priced. When LotR came out you could get the whole Fellowship for £25. When the Hobbit came out they want £45 for the White council, just four small figures. That's what killed it, cranking prices up to the max when it was already dubious buying boxes of Finecast with the figures unseen.

Backfire wrote:


Really, it looks like GW didn't care anymore about the license. They were just going through the motions, fulfilling the contract and preventing anyone else getting it. Their effort was very half-hearted, and it wasn't helped by general lack of enthusiasm about the movies compared to LOTR buzz.

For whatever reason, LOTR always came across as, I don't know, sterile...compared to the WHFB. I never had any enthusiasm towards it, despite being a big Middle Earth fan. The Hobbit, where even the source movie is very sterile, is even worse in this respect.

that's my read on it as well.

Backfire wrote:
Too many chieftains, not enough Indians.

Or, in this case, no chiefs.

There is actually room for a middle ground between 'bloated' and 'no' middle management.

 Howard A Treesong wrote:

The Hobbit stuff was just ludicrously priced. When LotR came out you could get the whole Fellowship for £25. When the Hobbit came out they want £45 for the White council, just four small figures. That's what killed it, cranking prices up to the max when it was already dubious buying boxes of Finecast with the figures unseen.

The story is that New Line cranked up the licensing fees quite a bit. Dunno if it's true, but Lego Hobbit range is crazy expensive as well.

My guess is that GW figured that LOTR range was dead anyway, and they might just as well simply cash on from the LOTR collector fanatics who will buy *anything*, regardless of what it is, or how it's priced.

 Howard A Treesong wrote:

The Hobbit stuff was just ludicrously priced. When LotR came out you could get the whole Fellowship for £25. When the Hobbit came out they want £45 for the White council, just four small figures. That's what killed it, cranking prices up to the max when it was already dubious buying boxes of Finecast with the figures unseen.

To be fair, the Fellowship were the heroes of the film so would have broader appeal, and were needed to play most of the scenarios in the book. I'm not sure who the White Council is supposed to be aimed at.

I did hear stuff back in the day (as a LotR SBG player but not anything else) about New Line insisting that the LotR figures were a different scale to prevent too much crossover between the lines. This was from a store worker though, so no idea how clued up he really was.

Well, I already commented that the preamble seemed unprofessional yesterday, and I still think that the extended tangent about 3D printing is just a smokescreen - something, anything, that he can spin to try to sound good. But that was before the full report came out. I may not hold any qualifications in business or finance but even a monkey can see that a decrease in profits of nearly a half is not a good thing. Some things I noticed:

With the sole, and rapidly declining, exception of products from Tolkien's books we use only our own imaginary worlds.
I assume this means that because the third Hobbit film will soon be out, Kirby is already impatient to drop the game and move on. Well, like it or not it is up there as one of your three core games. This comes off as way too dismissive and typical of this man's "shut up, I'm right" style.

Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle-class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things are otiose in a niche.
Then why are they losing customers? Why the £9 million drop in profits? And really, what company is so opposed to expanding its customer base? Young middle class males might be the group that keeps cropping up, but if,they tried to branch out beyond that group they could benefit. Very dismissive attitude to customers.

What will not change is the eternal desire for some always to want yet more of the small, jewel-like objects of magic and wonder that we call Citadel miniatures.
Again, they shouldn't just be taking this for granted. To wave his hand and essentially say "don't worry about them, they'll keep buying whatever we crank out" seems to be a bit too much of a gamble at this time. It obviously hasn't worked for them this year!

Fiddling while Rome burns? More like holding a private rock concert.

It is the sales decline that is worrying, not the profits decline.

Tsilber wrote:

 Azreal13 wrote:

Tsilber wrote:
So another doomsday report, the sky is falling for GW... Same old song for 20 years boys and girls.

You're entitled to your opinion, of course, but d'you fancy backing that thinking up with any sort of facts or figures at all? Or would you perhaps want to wait less than 24 hours so you'll have all those astonishing performance numbers to make us all look like fools with?

No facts or evidence required and have no intention to make anyone look like fools. I just stated the facts, its another 'Gw is terrible and/or going under type article/post/thread', the same thing thats been said for years (i guess this would be my fancy backing).... Yet the world has kept spinning and will keep spinning and GW will continue to exist is all Im stating, I do not see anything in the report or this thread that has not been seen or accused before. Maybe this will be it, this will be the year,, who knows /shrug...

I'm slightly inclined to agree with this. GW reminds me of the German army in WW2. No matter how many crazy orders they get from the top, they always seem to hang on, year from year. Not that I'm comparing Kirby to the mad man with the dodgy fringe

Ever since I got into GW in the 1980s, the company is always on life support, but years later, it's still here.


I'm surprised nobody has claimed this as a signature: Our crops will wither, our children will die piteous
deaths and the sun will be swept from the sky. But is it true?

I'm taking it, first

 Kilkrazy wrote:
It is the sales decline that is worrying, not the profits decline.

I'd say it's a combination of both. With a lower profit margin, they are more vulnerable should the trend of falling revenue continue. Their pre-tax profit is now only slightly higher than what they lost in revenue over the last year. If this keeps up, they could be posting red numbers already next summer, and if it remains stable, they will have burned through all their cash in three years.

The new web store allows us to sell online more efficiently. It cost around £4 million.

That is a hell of a price for a web store O_o

 Kilkrazy wrote:
It is the sales decline that is worrying, not the profits decline.

Ha, as I say I'm no expert. Must have focused straight on the figure that looked like it had taken the biggest whack. I'd have more respect for the man if he at least explicitly acknowledged that losing sales was a problem to focus on instead of breezily assuming it would just sort itself.

So basically profits are halved, but they've doctored up a 4 mil new webstore expense to make it look they're only down by a third.

Mail order
Our new online shop was launched this year and our online sales are broadly in line with the prior year.

And all for nothing, too.

It's worse; there's been a huge push towards direct only content in the last year i.e. stuff you can only get from the webstore. So that means the direct only thing hasn't pushed sales up.

We can also take "broadly in line with the prior year" to mean down slightly, or they'd have said "our online sales are up slightly compared to the prior year".

I can't believe they posted this.

We are vertically integrated. We design, manufacture and distribute ourselves; we have our own stores and web store.
With the sole, and rapidly declining, exception of products from Tolkien's books we use only our own imaginary worlds.
They are rich enough and deep enough to accommodate anything we may want to make, and they remain our property. The courts would tend to disagree
We sell to third party retailers under closely controlled terms and conditions. Those terms and conditions mean that we are unlikely to be
attractive to heavy discounters, chains or mass - marketers. In other words, I doubt you'll find our products in Toys ‘R’ Us or Walmart. Or any other retailer as it happens.
We publish two magazines.(catalogs) A weekly (White Dwarf) that announces new products and events and a monthly (Warhammer Visions) that glories in the aesthetics of our miniatures.

Our own stores attract a lot of attention, as they should, because they are the way we recruit the majority of new customers.
Their modal style is small (cheap), off the beaten track (cheap), and with only one member of staff, the store manager (cheaper than five staff, but with our performance related pay scheme the managers are capable of earning far more than before).
We require all our stores to be profitable. In bad times as well as good. Our growth comes from geographic spread, led by these stores, so it would make no sense to be growing less and less profitable as we went.
But they are less profitable
Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things are otiose in a niche

And there you have the reasons we're failing as a company

Profits is the money left over after the company finishes spending everything it wants to or needs to on "stuff".

It is important but it is not the whole story and a lack of profit is not always a worry, because a company may be ploughing a lot of money back into investments that will pay off well in the future.

 Kilkrazy wrote:
Profits is the money left over after the company finishes spending everything it wants to or needs to on "stuff".

It is important but it is not the whole story and a lack of profit is not always a worry, because a company may be ploughing a lot of money back into investments that will pay off well in the future.

Revenue is down 11 mil, that's a worry.

 loki old fart wrote:
We do no demographic research, we have no focus groups, we do not ask the market what it wants.

They didn't really say that...?

Am I missing something here, those figures appear to be down across the board. To a layman these don't look good!?!

 Wolfstan wrote:
Am I missing something here, those figures appear to be down across the board. To a layman these don't look good!?!

Don't worry, I'm sure they don't look good to a professional, either

 Wolfstan wrote:
Am I missing something here, those figures appear to be down across the board. To a layman these don't look good!?!

You need to look at them through Citadel(TM) Vision(TM) and you will see that everything is fine, and nothing is broken.

richred_uk wrote:
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%

So despite all of their streamlining and cost-cutting, cost of sales went up?

Something seems awry.

Ahhhh I see... swapping glasses over now sir! Oh yes that's better. Nothing to see here, move along!

Backfire wrote:
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.

That weeks sales will include a (normally) massive rush of sales as everyone wants the new edition. Although I would assume that would have been slowed down somewhat by the fact that few of their customers were told that a new edition was coming...

It will also include all of the pre-orders, and all of the stock sold to independents.

So yes, it should have had a meaningful impact on the numbers. It was the launch of a new edition of their flagship (and shortly sole, the way they're going) title. If it didn't have a meaningful impact on the numbers, they did something seriously wrong.




(One could theorise that launching a new edition after 2 years, not telling anyone about it in advance, jacking up your prices even further, and not releasing the new rules in a format that people actually want could have had something to do with it. One could also point out that a company would be aware that these things might be potential issues if they were of a mind to conduct market research, host focus groups, and, you know, communicate in a meaningful way with their customer base. )

 H.B.M.C. wrote:

 loki old fart wrote:
We do no demographic research, we have no focus groups, we do not ask the market what it wants.

They didn't really say that...?

They did
And also in the news.
Games Workshop's Annual Profit Drops On Revenue Fall, Restructuring
Tue, 29th Jul 2014 11:19

LONDON (Alliance News) - Games Workshop Group PLC reported a huge drop in profits and failed to pay a dividend in its last financial year after posting a significant fall in revenue which it said was due to business restructuring.

The maker of miniature figures and gaming sets posted a pretax profit of GBP12.4 million for the financial year to June 1, compared with GBP21.4 million a year earlier, on the back of lower volumes and sales. During the year, the group also booked GBP4.5 million in exceptional costs associated with its restructuring.

Revenue for the year fell by 8.2% on a reported basis to GBP123.5 million, down from GBP134.6 million the prior year, hit by declining sales in most of its markets.

The group said its falling profits and sales across the business has been largely due to the transition from multi-man stores to one-man stores and the reduction of trading hours across the group.

"Next year, internally, there will be some disruption remaining from the big reorganisation we have just made and from the one man store programme. Nevertheless I still believe we should be growing by opening new stores; particularly in North America and Germany," said Chairman and Acting Chief Executive Officer Tom Kirby in a statement.

The games retailer did not declare a dividend for the year, compared with last year when it declared a dividend of 58 pence per share.

"Beyond next year, the business ought to be able to increase sales (single digit growth, not more) for many years and to provide owners with a steady flow of dividends... Nevertheless, with or without growth, I expect to see dividends. I am not planning to sell any of my shares," said Kirby.

Games Workshop said that it expects to benefit from the more focused selling operation and lower cost base, although profits will remain under pressure while it implements these changes.

Games Workshop shares were down 2.7% at 588.88 pence Tuesday morning.

By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty

Copyright 2014 Alliance News Limited. All Rights Reserved.

 loki old fart wrote:

The group said its falling profits and sales across the business has been largely due to the transition from multi-man stores to one-man stores and the reduction of trading hours across the group.

Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.

 RatBot wrote:

 loki old fart wrote:

The group said its falling profits and sales across the business has been largely due to the transition from multi-man stores to one-man stores and the reduction of trading hours across the group.

Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.

Yeah and if something was causing lost sales, You'd stop doing it.

 RatBot wrote:
Isn't this the reason they gave for falling profits and sales last year? And the year before? And the year before? But no, seriously guys, they'll make more money next year. Seriously. We mean it this time. Seriously.

Actually, this time they said they'll make more money starting with the year after the next.


Automatically Appended Next Post:

 insaniak wrote:

richred_uk wrote:
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%

So despite all of their streamlining and cost-cutting, cost of sales went up?

Something seems awry.

Cost of sales in the absolute is pretty much exactly the same, just the percentage went up because actual sales are down. Which makes sense. You pay the same lease and wage no matter how many boxes you sell. And all the streamlining has already been done long ago, it's like the Wayland Games warehouse move now, just a fall-back excuse.

When your core sales concept is "They'll buy what we make" rather than "We'll make what they'll buy", well... then you're bound to run into troubles. And here's the proof. And the fact that they seem proud of the fact - even arrogantly abhorred by even the suggestion - that focus groups/talking to the customer base is something they don't need to do just makes them look even worse.

 insaniak wrote:

richred_uk wrote:
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%

So despite all of their streamlining and cost-cutting, cost of sales went up?

It's that minimum wage thing. It's got to be.

Whatever Kirby is on I want some, that;'s all I can say. This guy needs to go off and start religion, he will be minted