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I don't think anything is going to fundamentally change by the next mid year. I would expect sales to be down once again for a multitude of reasons, but I expect GW to continue increasing releases and DLC type contact in an effort to wring the last bit of money out of its current player base.

I expect we'll see GW release the following in addition to what is currently known in the next half year
- New version of Warhammer Fantasy
- New Space Marine Codex
- Several supplements that make certain armies OP, especially for the bigger models.
- Potential for cut and paste of older games a DLC type content (Space Hulk, Necromunda, etc.)

As long as GW doesn't over produce, I expect they'll remain profitable for the next half year. The new CEO will be named sometime in the half year and any downward trends will be blamed on finishing up the transition. I expect this time next year will be very interesting.

 agnosto wrote:
From the Telegraph:

We think it many be £9.3m. But remember that, as [19th century German military strategist Helmuth] von Moltke said, ‘No plan survives contact with the enemy’.

..

Wait...who the is the enemy he's talking about here!?

Oh wait...it's us, the customers. Makes perfect sense.

So, what could they release this year to help them out? New edition of 40K? New edition of Fantasy? Resurrect one or more of the Specialist Games? Or release an all new game? And would it be enough?

Has anyone crunched the numbers to see how the second half of the year did on its own? We all know the first half tanked, did this carry on into the second half or did it pick up a bit?

 Blacksails wrote:

 Accolade wrote:

 Blacksails wrote:
I seriously wouldn't be shocked if we saw another edition prior to the next annual report.

I would love to see someone defending it.

GW is a business guys, come on, you all act like they shouldn't make money!

I'm kind of surprised I haven't seen someone defend this current report.

They're still making money, and they have money in the bank. The sky isn't falling.

Reddit to the rescue:

Bull[poop]. GW is a profitable company without major debts (as displayed in the chart). Not a very profitable one, but no one in this industry will makes millions.
I know there is a lot of people who hates GW around here, but they are still there for a few years at least.
This a "so-so" year for GW, nothing less, nothing more.

8.2% revenue drop: totes normal!

They are by far the oldest and most enduring company in the buisness.
We may not like their buisness model, but it worked for 20 years, and no change in the foresable future (3D printing being the big cloud on the horizon; but it will affect every company in the buisness equally: if it catch up, companies that are not able to adapt will die, but GW is already considering the idea of being a CAD-dealing company rather than a mini company.)

Buisness! Forward-thinking GW know what's up with technology and 3D and all that! Just look at the preamble; Kirby's even heard of it!

This. Also many people seem to conflate a drop in profits with a company making a loss!

So nothing to worry about!

There is a strong wind of change blowing from GW and it would be foolish to ignore it. If you look at some of the major changes that happened you will notice that someone is working hard there to gain back your sympathy (well, that is unless you are blinded by your hatred and ignorance).
Finecast retired, their [poopy] legal chief fired, fantastic free tutorials on their YT channel, Stormclaw (which is an amazing deal), good consumer support, license freed, all books in ebook format (which is easily pirated and GW knows this), etc. Even the more controversial things like Dataslates have, imo, their place as they are basically DLC patches that bring life to useless models (Helbrute).
GW isn't a good or bad company. They make their mistakes and they make good decisions. However they are important as they basically are the train that is pulling the whole industry forward.

Only hatred and ignorance can make someone think this has been anything but a great year! Kirby said so too: it's a good year! And he knows more than you, cause he's like a CEO and stuff! Look it up!

KommissarKarl wrote:
Has anyone crunched the numbers to see how the second half of the year did on its own? We all know the first half tanked, did this carry on into the second half or did it pick up a bit?

Down but not as much as the first half, hence why the total for the year is down 8-9% where the first half was down 10%.

GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.

 MWHistorian wrote:
GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.

It's the first thing Lego did.

........oh, girls do like Legos...I guess we should have known that...

weeble1000 wrote:

 MWHistorian wrote:
GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.

It's the first thing Lego did.

But this would require GW's upper management admit they were wrong!! They would have to admit they were wrong about things like Pokemon (honestly, who still remembers that thing!?!)

Clearly the only option is to stand proudly on the bow of the sinking ship and curse everyone jumping overboard.

 Da Boss wrote:
Wow, not looking good. I really expected them to do a little better considering the release of Knights, all the DLC and the new edition.

So did they.

Here's a new one: One of my favorite posters on BOLS, Auticus, a known GW apologist and someone who finds 40k to be great and amazing and better than everything else (and of course blames the tournament crowd for the perception that 40k sucks), just made the argument that GW can't match Perry, Warlord et all (and of course took the quality jab at Mantic) because they are a public company, so they can't charge $1 a figure while tiny companies like Perry or Warlord can. Of course he also makes the comparison that WHFB costs the same as 40k and WM/H costs the same as 40k, but is a bad game because it's small and doesn't have BIG ARMIES, while 40k and Fantasy appeal to a different crowd.

Auticus (BOLS) wrote:
Having to drop my price to $1 a figure because Perry and Mantic do that is not viable for a publically traded company. Perry and Mantic are not publicly traded, nor do they have anywhere near a fraction of the operating costs that GW has. They have to appease the handful of guys that sit at Perry and Mantic. That's all.

For a handful of Perry and Mantic workers, they can get away with $1 a fig to turn a profit because they don't have to appease shareholders and there are a lot fewer people with their hands in the pie.

 prowla wrote:
Kirby's rant gives me a very heavy impression that they are stacking their bets on defending what they used to have - often against tiny operators like Chapterhouse - instead of expanding and grabbing new opportunities.

GW kinda reminds me of the British Empire. It used to be that England had an enormous empire, and would smash aside all that opposed it, before they could become a threat.
Eventually we stopped doing it, and the empire kinda caved in on itself. But we made amends, and England remains quite strong, despite massive world powers like Russia and the US being left in the world.

What GW is doing is staying in the first stage, smashing the opposition, but the problem is that they are doing it ineffectually. The Empire changed tact at this point, and to some degree survived, but GW is trying to do everything the exact same way constantly, which will not work out. Eventually, unless they change, they will go where the Empire was headed - collapsing under its own enormity, and failing to adapt to change.

Should they take the hint, they could easily stay strong, and just have to accept and live with the competition.

 lord_blackfang wrote:

 Kilkrazy wrote:
GW currently have £17.55 million cash in the bank to spend against actual losses, so they could survive for several years.

Or commission 4 new websites!

Nah, I'm kidding. £17.55 million is probably Kirby's severance pay.

My thinking is this year's profit was down from £16 million to £8 million.

If it dropped another £8 million next year they would be in danger of starting to run at a loss. The year after, they could drop another £8 million to make it £8 million loss, to be made up from cash reserve.

Of course the profits drop faster than overall revenue due to the fixed cost base, so perhaps they would run out of cash in two years if things go on as they are.

 Selym wrote:

 prowla wrote:
Kirby's rant gives me a very heavy impression that they are stacking their bets on defending what they used to have - often against tiny operators like Chapterhouse - instead of expanding and grabbing new opportunities.

GW kinda reminds me of the British Empire. It used to be that England had an enormous empire, and would smash aside all that opposed it, before they could become a threat.
Eventually we stopped doing it, and the empire kinda caved in on itself. But we made amends, and England remains quite strong, despite massive world powers like Russia and the US being left in the world.

What GW is doing is staying in the first stage, smashing the opposition, but the problem is that they are doing it ineffectually. The Empire changed tact at this point, and to some degree survived, but GW is trying to do everything the exact same way constantly, which will not work out. Eventually, unless they change, they will go where the Empire was headed - collapsing under its own enormity, and failing to adapt to change.

Should they take the hint, they could easily stay strong, and just have to accept and live with the competition.

Funny. They're also very much like the Imperium. Art imitates life?

So I said I wouldn't pass judgment til I saw the numbers. And now I've seen the numbers.

In all, they were worse than I expected, and I wasn't expecting them to be all that great. I thought that there would have been less of a noticeable "clunk" of dropping because of the speed of new editions and codex releases. So color me surprised on that account.

As far as the takeaway, I'm going to agree with some of the other posters here that while there are signs of a shift, there is not going to be some kind of upheaval anytime soon. There is still a lot of entrenched culture within GW's management and it is going to take time for that to be cleared out entirely. That said, if Kirby does step down, that will be the first step, the first change of course small as it may be in overall effect. The big question of this is how long will GW take to fully change course? And, more pressingly, will they do it in time?

That all remains to be seen.

As for myself, I will continue to play their games and enjoy their products on my personal level. And let all of this talk of the unspeakable evils and unspeakable goods of GW go to those who are far more passionate than I.

 MWHistorian wrote:
GW needs to do market research and figure out why they're losing customers. That's the first step. If they don't do that, they're doomed in the long run.

Yes, that proud boast of doing no market research astonished me.

It makes it look like GW think that their customers are defined by buying GW stuff because it is GW stuff. Which is fine as far as it goes, but the trend seems to be for people to stop buying GW stuff, and they presumably don't know why.

I didn't see anyone comment on this line from page 6 of the report:

The bigger risk is the same one I repeat each year, and that is management. So long as we have great people we will be fine. Problems will arise if the board allows egos and private agendas to rule.

He does seem to be talking back to the board a few times in the preamble and here. He must have been seeing some pushback? Also not sure how he thinks sales are going to grow as they have been steadily falling, also from page 6:

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. I say ‘ought to’ because no plan survives contact with the enemy and we will not promise what we cannot deliver — in particular our policy of only returning surplus cash as dividends will remain. We will not borrow (nor engage in fancy
financial engineering) to pay a coupon.
Nevertheless, with or without growth, I expect to see dividends. I am not planning to sell any of my shares.

Of course there will be dividends, that's money in his pocket, after all!

WayneTheGame wrote:
Here's a new one: One of my favorite posters on BOLS, Auticus, a known GW apologist and someone who finds 40k to be great and amazing and better than everything else (and of course blames the tournament crowd for the perception that 40k sucks), just made the argument that GW can't match Perry, Warlord et all (and of course took the quality jab at Mantic) because they are a public company, so they can't charge $1 a figure while tiny companies like Perry or Warlord can. Of course he also makes the comparison that WHFB costs the same as 40k and WM/H costs the same as 40k, but is a bad game because it's small and doesn't have BIG ARMIES, while 40k and Fantasy appeal to a different crowd.

Auticus (BOLS) wrote:
Having to drop my price to $1 a figure because Perry and Mantic do that is not viable for a publically traded company. Perry and Mantic are not publicly traded, nor do they have anywhere near a fraction of the operating costs that GW has. They have to appease the handful of guys that sit at Perry and Mantic. That's all.

For a handful of Perry and Mantic workers, they can get away with $1 a fig to turn a profit because they don't have to appease shareholders and there are a lot fewer people with their hands in the pie.

Hah! Yeah, pass the expenses onto the customer. They totally won't figure out your stupid plastic men aren't worth the princely sum you demand for them.

 RiTides wrote:
I didn't see anyone comment on this line from page 6 of the report:

The bigger risk is the same one I repeat each year, and that is management. So long as we have great people we will be fine. Problems will arise if the board allows egos and private agendas to rule.

He does seem to be talking back to the board a few times in the preamble and here. He must have been seeing some pushback?

It's hilarious because this sort of thing goes on all the time at GW and has done for a long, long time

(Though they are far from unique in that respect)

 RiTides wrote:
I didn't see anyone comment on this line from page 6 of the report:

The bigger risk is the same one I repeat each year, and that is management. So long as we have great people we will be fine. Problems will arise if the board allows egos and private agendas to rule, except mine.

He does seem to be talking back to the board a few times in the preamble and here. He must have been seeing some pushback? Also not sure how he thinks sales are going to grow as they have been steadily falling, also from page 6:

Fixed that for him.

I read that report and then skipped to the end of the thread, confident I'd see it debunked as a fake. I didn't. Kirby reminds me more and more of Kevin Siembieda (of Palladium Games).

There's a reason why almost all companies (even start up businesses!) do market research: ebecause it fething works. It's not because they're sheeple and they just follow the trend and they can't innovate or whatever bs you want to spin. It's just common sense that you ask customers what they want to buy... and sell those stuff to them.

Sales 101

"Find out what they want and give it to them."

That's all sales is, when you get to the heart of it.

GW are ignoring the first part and failing at the second.

My friend, who's a much more successful author than me, said:
"There are only two rules of writing. If you readers love it and think it's awesome: do it. If they hate it and think it sucks, don't do it."
GW is ignoring those two simple rules.

It will be interesting to see what the shares close at.

 heartserenade wrote:
There's a reason why almost all companies (even start up businesses!) do market research: ebecause it fething works. It's not because they're sheeple and they just follow the trend and they can't innovate or whatever bs you want to spin. It's just common sense that you ask customers what they want to buy... and sell those stuff to them.

Yeah. It is absolutely incomprehensible that Kirby would boast with not doing market research, especially in a situation where the company is doing badly. If people are not buying your product, one could imagine you might want to know why!

If their strategy is "get good people, and all will be fine", then isn't the corollary something like, "when all is not well, you don't have good people?"


I know I'm spending less with GW and more in other places. I only really buy direct-only items from GW themselves, getting other (and less and less frequent purchases) from discounters.

My local GW shop went to the one-man approach, and that man doesn't work Sunday or Monday (two of the days I might actually make it to the shop). Apparently things are so bad that, with the announcement of the new cityfight battle board, rather than just get one for the store (as they would have in years past), they're actually seeking to get customers to pool money to buy one for the store. I could see that (maybe) at an independent game store.

More of the people I regularly game with are dropping out, and it's not just higher prices, it's the lackluster nature of the game 's recent editions. I don't think they realize that their customers aren't all twelve, and that a "murdernought with a murderfang and a murdershield" doesn't actually come across as cool.

 Kilkrazy wrote:
It is the sales decline, combined with increasing prices and the fact that major codexes (eldars, orks, tyranids, Imperialum Gardia) and cash cows (Space Marines, new 40k edition) were out, that is worrying, not the profits decline.

Fixed your post that didn't need to be fixed, but if you complete the picture, things look pretty grim.

I'm not a financial expert, and I'll admit that much of the information in the report is lost on me.

But I've got to chime in on that 'no market research' comment. That just blows me away.

How on earth can you justify (or brag about) doing no market research just because you're in a niche market?? I'm at a loss. This shouldn't be a thing. This shouldn't be real. A CEO in a modern corporation basically saying "You know all that research that every other company does in order to facilitate sales? Yeah, we don't do that. No need. We're in a special place, you see."

It hurts my brain. I'm trying to formulate words for that kind of arrogant stupidity, and it just...isn't...happening.

Instead of just looking at revenue, perhaps pay some attention to cash flows as well?

On the negative side: cash from operations is down 22%(!)

On the positive side: net cash flow is positive after GW cut the dividend. (18 million pounds to 5 million pounds)

As long as the dividend remains minimal, GW may be able to defend its position on the basis of that cash reserve. However, it cannot survive if cash from operations keeps declining like that.

Interesting side note: expenditure on product development increased about 32%.

The cash flow may reveal board (and shareholder) unhappiness. As long as the cash from operations keeps declining, there is far less prospect for any increase in dividends. The large cash reserve gives GW room to maneuver, at least in the near term, but if cash flows decrease like that, GW is in trouble.