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.

Noir wrote:
No it not, it really is not. If anything GW has proved going public is the worse thing to happen to a table top minituare game company player base.

Being public is not the issue. Being poorly managed is the issue. I've seen this equally between public and private firms.

I would sell GW's IP to the highest bidder and move on.

 tyrannosaurus wrote:

 H.B.M.C. wrote:
Now don't say that. Facts do nothing but stain our bright white armour. Let's talk about the GFC some more, 'cause that only happened 6 years ago and is totally the reason why GW's 13/14 report is bad (except it's not bad - everything is fine!).

I assume this was a snipe at me - If you read my post I said it was a reason why GW might have focussed on its core games rather than risky new product releases. At no point have I suggested that the financials aren't negative, although imo GW is far away from collapse and has some very easy to implement solutions available to boost sales. I am however disappointed at how many gloaters there are [you brand anyone who doesn't join in the GW bashing a 'white knight', so I'll make generalisations too] trumpeting how wonderful it is that GW posted some negative financials. It's almost as though they have a personal reason to want GW to fail, despite spending their time posting on a website with an overwhelming 40k bias. The same 5 or 6 people always try to tear down any positive threads, inflate any negativity, and gang up on anyone who dares to disagree or have a more positive outlook. I ignore most of it because it boils down to 'hating' GW, because, GW.

Back OT - I think the role of GW shops in the US is different to the UK. In the UK [I would assume] most gamers play in a club, or round each other's houses. GW shops are more a place to buy models, unless you are too young to be in a club. Therefore the move to 1 man shops with the associated lack of gaming space wouldn't have such a negative impact. In the US most people [again I assume] need shops as a place to game, as clubs are far less prevalent. 1 man shops and reduced gaming is going to have a much larger negative impact, which could help to explain the poor sales in North America.

to address the "gloating" as you called it.

. A company is making a product that you had enjoyed and has the sole license to produce begins to (to you) diminish the product. The company has stated directly that they do not do market research. The company says that they do not even ask what the market wants! The only metric left that would alert those running the company that changes need to be made is the financial reporting. Poor performance, that's it and that's all. So, those that are "gloating" are expressing their hope that these dire reports may affect the change that so desperately desire.

Now, the truly terrible thing about not doing market research and investigating what a market will bear is that the only way that you have of knowing a product will win or lose is to spend and wait for results. Following that bit, the truly terrible thing is that even after a win/loss you still don't do market research and you have no idea why it won/lost.

 Idolator wrote:
to address the "gloating" as you called it.

. A company is making a product that you had enjoyed and has the sole license to produce begins to (to you) diminish the product. The company has stated directly that they do not do market research. The company says that they do not even ask what the market wants! The only metric left that would alert those running the company that changes need to be made is the financial reporting. Poor performance, that's it and that's all. So, those that are "gloating" are expressing their hope that these dire reports may affect the change that so desperately desire.

Now, the truly terrible thing about not doing market research and investigating what a market will bear is that the only way that you have of knowing a product will win or lose is to spend and wait for results. Following that bit, the truly terrible thing is that even after a win/loss you still don't do market research and you have no idea why it won/lost.

Which is exactly what GW is facing. Without research or anything in place to find out what the market actually wants, all they are left with is "Sales are down". They have no idea why sales are down, or what can be done to fix it. They're basically coming up with an idea in isolation, putting it out there and seeing if it gets any bites. If it does, they figure they can do more of the same but if it doesn't, they have no idea why and waste more time trying another idea that may or may not fail.

It's truly mind-boggling.

WayneTheGame wrote:

 Hulksmash wrote:
I feel like the next report will be the truly telling one. But I'm not an expert by any stretch.

Thing is though... this last report was a new edition of their flagship game, plus a big kit with nostalgic value (Knight), plus during this year was the 6th edition Space Marine codex, which is the bestselling codex for the bestselling army. And they still had a drop.

What could they do for the next report that could match? 9th edition Fantasy? Necrons? Dark Eldar? Bretonnia?

Plus Christmas. Don't forget that huge dump of cash into the coffers.

WayneTheGame wrote:

 Idolator wrote:
to address the "gloating" as you called it.

. A company is making a product that you had enjoyed and has the sole license to produce begins to (to you) diminish the product. The company has stated directly that they do not do market research. The company says that they do not even ask what the market wants! The only metric left that would alert those running the company that changes need to be made is the financial reporting. Poor performance, that's it and that's all. So, those that are "gloating" are expressing their hope that these dire reports may affect the change that so desperately desire.

Now, the truly terrible thing about not doing market research and investigating what a market will bear is that the only way that you have of knowing a product will win or lose is to spend and wait for results. Following that bit, the truly terrible thing is that even after a win/loss you still don't do market research and you have no idea why it won/lost.

Which is exactly what GW is facing. Without research or anything in place to find out what the market actually wants, all they are left with is "Sales are down". They have no idea why sales are down, or what can be done to fix it. They're basically coming up with an idea in isolation, putting it out there and seeing if it gets any bites. If it does, they figure they can do more of the same but if it doesn't, they have no idea why and waste more time trying another idea that may or may not fail.

It's truly mind-boggling.

Even if it does work, they won't necessarily understand why it worked, so won't be able to capitalise on whatever aspect was successful.

 MWHistorian wrote:

Barfolomew wrote:
I usually have pretty good respect for the stuff over at Frontline Gaming, but this article is pretty meandering.

http://www.frontlinegaming.org/2014/07/31/tinbane-on-analyzing-gws-sales-figures-a-40k-players-guide/

That sounded like an attempt to calm passengers on the Titanic.

I've known those guys over at Frontline for years. In person, face to face, played against most of them, have them in my cell phone. They truly have an upbeat attitude that permeates into just about everything that they do.

They especially have to keep that upbeat attitude in the face of these disappointing yearly results of a company from which they derive a large portion of their income.

While I don't agree with that assessment, I do understand that this is a genuine opinion.

 Idolator wrote:
Plus Christmas. Don't forget that huge dump of cash into the coffers.

I don't know what your childhood was like, but Christmas is actually every year (so a Christmas season would have been included in the current report as well).



On a more serious note; I assume you mean the next half-year report. The first half of GW's business year only goes through November (June through November plus December through May for the whole fiscal year). So, the upcoming half-year will be measured against the one that, albeit disappointing, included the Space Marine release, so it could end up looking rather bleak.

 Thud wrote:

 Idolator wrote:
Plus Christmas. Don't forget that huge dump of cash into the coffers.

I don't know what your childhood was like, but Christmas is actually every year (so a Christmas season would have been included in the current report as well).



On a more serious note; I assume you mean the next half-year report. The first half of GW's business year only goes through November (June through November plus December through May for the whole fiscal year). So, the upcoming half-year will be measured against the one that, albeit disappointing, included the Space Marine release, so it could end up looking rather bleak.

It's to reference the second half of the years performance. That includes Christmas and a ton of releases (including the basic rules for their biggest selling line) and still only managed to have 2.5 million better sales than the first half of the year. Not enough to overcome the first halls dismal reporting.

GW doesn't ever break down the annual reporting into it's constituent parts so some math had to be done. A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), new product releases, and a new edition of the core rules of their biggest seller only generating that small of an increase is not good at all.

 Idolator wrote:
A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), ...

I'm fairly sure GW have said in their financials previously that Christmas isn't actually a huge sales boost for them. Which, given the nature of their release cycle and the fact that they don't do sales, would make sense.

 Yodhrin wrote:
I actually think GW could get away with a new edition of 40K in the near-ish future, but only if they handled the process with a finesse and transparency that the existing management is likely completely incapable of.

....

I also think they could manage it because there are so many people who haven't bought 7th who have nothing to lose by a swift transition to 8th. But the 8th edition would have to fix the problems, which I have no confidence of.

Someone else has to follow up because I'm on my phone, but masterminis is reporting that the Games Day manager, Brian Aderson, is leaving the company tomorrow after over a decade of service, to paraphrase. I'm told his own Facebook confirmed this.

As the ship takes on water, even the bilge rats be packing their dirty bags?


Automatically Appended Next Post:
Someone else has to follow up because I'm on my phone, but masterminis is reporting that the Games Day manager, Brian Aderson, is leaving the company tomorrow after over a decade of service, to paraphrase. I'm told his own Facebook confirmed this.

As the ship takes on water, even the bilge rats be packing their dirty bags?

CalgarsPimpHand talks a lot of sense in his posts. It is like we are channelling the same goddess of wargaming business. I too believe 40K is saturated, people have stopped buying and that is what caused the sales drop.

Prices are too high. Doubling the price of codexes is what helped cause this last year's sudden collapse. People didn't buy 6th edition codexes because they doubled in price. People who don't buy codexes don't buy models either. Then they don't buy the next edition of the rules, then they leave the game.

The rules bloat is also a problem. For every player who thinks Flyers or LoW are the best thing ever, there is another one who thinks they are worst thing ever. This didn't matter than those extra things were in optional supplements (Apocalypse and so on) but now they have been crammed into the core rules, pissing off half the player base.



So, in the spirit of positivity and hope, here is my Five Point Plan to Fix Games Workshop


1. Reconnect with your customers. Right now you have got half your old fans actively working to undermine you because they are so angry with the direction you have taken the company and the game(s).

2. Reconnect with your retailers. You might make less from one kit sold through an independent, but if you can sell two kits through the independent you make more. Also you can't fill the world with official GW shops. It is too big.

3. Make proper use of your shops. Get some new games to sell. Bring in the best licensed 3rd party games such as the Fantasy Flight role-playing and card games.
Get more staff to run demo games and modelling skills classes. You don't have any other way to recruit new players because you pissed off the veterans, you don't go to shows, you don't sponsor clubs and tournaments any more, and you don't sell White Dwarf in newsagents.

4. Make some boxed games. Some of them should be complete-in-one-box type (like Space Hulk.) Others could be extendable, like a renewed Battle Fleet Gothic with fleet expansion packs. You should make some new games though, not just recycle old ideas. You need to show people who go into your shops that they don't have to just spend £500 on being able to play only one game.

5. Prices need to at least be held for a while to allow people to price back in. Maybe do some bundles to provide value without obvious price cuts.
Also, the rules and codexes really need to be available in cheaper editions. People who don't buy the rulebooks won't buy the models.

 Idolator wrote:

 Thud wrote:

 Idolator wrote:
Plus Christmas. Don't forget that huge dump of cash into the coffers.

I don't know what your childhood was like, but Christmas is actually every year (so a Christmas season would have been included in the current report as well).



On a more serious note; I assume you mean the next half-year report. The first half of GW's business year only goes through November (June through November plus December through May for the whole fiscal year). So, the upcoming half-year will be measured against the one that, albeit disappointing, included the Space Marine release, so it could end up looking rather bleak.

It's to reference the second half of the years performance. That includes Christmas and a ton of releases (including the basic rules for their biggest selling line) and still only managed to have 2.5 million better sales than the first half of the year. Not enough to overcome the first halls dismal reporting.

GW doesn't ever break down the annual reporting into it's constituent parts so some math had to be done. A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), new product releases, and a new edition of the core rules of their biggest seller only generating that small of an increase is not good at all.

Ah, I misunderstood your post then. I thought you were adding to WayneTheGame's musings over what could be potential money-makers in the near future.

 insaniak wrote:

 Idolator wrote:
A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), ...

I'm fairly sure GW have said in their financials previously that Christmas isn't actually a huge sales boost for them. Which, given the nature of their release cycle and the fact that they don't do sales, would make sense.

Though given the fact that Christmas is a huge sale boost to everything that isn't basic commodities it also would not make sense.

I take with a large pinch of salt anything GW say in their preambles since so much of it is excuses for why their figures are crap.

 Kilkrazy wrote:
CalgarsPimpHand talks a lot of sense in his posts. It is like we are channelling the same goddess of wargaming business. I too believe 40K is saturated, people have stopped buying and that is what caused the sales drop.

Prices are too high. Doubling the price of codexes is what helped cause this last year's sudden collapse. People didn't buy 6th edition codexes because they doubled in price. People who don't buy codexes don't buy models either. Then they don't buy the next edition of the rules, then they leave the game.

The rules bloat is also a problem. For every player who thinks Flyers or LoW are the best thing ever, there is another one who thinks they are worst thing ever. This didn't matter than those extra things were in optional supplements (Apocalypse and so on) but now they have been crammed into the core rules, pissing off half the player base.



So, in the spirit of positivity and hope, here is my Five Point Plan to Fix Games Workshop


1. Reconnect with your customers. Right now you have got half your old fans actively working to undermine you because they are so angry with the direction you have taken the company and the game(s).

2. Reconnect with your retailers. You might make less from one kit sold through an independent, but if you can sell two kits through the independent you make more. Also you can't fill the world with official GW shops. It is too big.

3. Make proper use of your shops. Get some new games to sell. Bring in the best licensed 3rd party games such as the Fantasy Flight role-playing and card games.
Get more staff to run demo games and modelling skills classes. You don't have any other way to recruit new players because you pissed off the veterans, you don't go to shows, you don't sponsor clubs and tournaments any more, and you don't sell White Dwarf in newsagents.

4. Make some boxed games. Some of them should be complete-in-one-box type (like Space Hulk.) Others could be extendable, like a renewed Battle Fleet Gothic with fleet expansion packs. You should make some new games though, not just recycle old ideas. You need to show people who go into your shops that they don't have to just spend £500 on being able to play only one game.

5. Prices need to at least be held for a while to allow people to price back in. Maybe do some bundles to provide value without obvious price cuts.
Also, the rules and codexes really need to be available in cheaper editions. People who don't buy the rulebooks won't buy the models.

This. Very much this.
If GW did these things they could easily pull out of their death spiral before its too late.

But they won't.

Instead they've decided to go even more juvenile and just keep doing more of the same thing and then talk about growth potential in their financial reports like maybe it will happen by accident or something.

Murderfang. Now with murderclaws! (you have to say it in an overly dramatic voice)

I'm sure that's just the product to turn things around for them. I'm sure murderfang will sell out repeatedly and save GW.

Johnny: "But I play Orks."

Staffer: "Unbound! Murderfang works with orks. They like killing. He likes killing. It's a natural fit!"

Johnny: "And then maybe I can summon some daemons!"

Staffer: "That's right! They'll work great with the frost rays shooting all over the place from the Stormfangs! Smart move kid!"

Johnny: "Ring me up! I'll buy it all!"

Hey Kirby, be sure to let us know how this all works out for you. I'm sure it'll all be fine. What could go wrong?

---

A much better analysis of GW's problem:

http://www.torrentoffire.com/5408/hows-the-jingle-in-gws-pocket

23 1-man stores closed in 1 year!

 insaniak wrote:

 Idolator wrote:
A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), ...

I'm fairly sure GW have said in their financials previously that Christmas isn't actually a huge sales boost for them. Which, given the nature of their release cycle and the fact that they don't do sales, would make sense.

They may have said that, but they have also said that they have had a good year....if you don't count sales and profit. I don't believe that statement at all. Factor in the vagueness of it and it becomes meaningless any way.

If the Christmas season, for which they create wish lists and actually do perform a bit of marketing on their site, were to only generate a 5% increase to sales in a reporting period. That amount would be £3 million.

Compare that to the actual increase in sales of £2.5 million and you can see the problem. Combine that with the Knight, Tempestus, IG and new book release in the same reporting period and you really start to see something.

Honestly, with the way that their statements are written, they would claim that Christmas didn't affect their sales if all they made was Santa suits.

Anyway if Christmas has no positive effect on sales, then February has no negative effect, so it is all the same for the year as a whole.

 Kilkrazy wrote:

 insaniak wrote:

 Idolator wrote:
A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), ...

I'm fairly sure GW have said in their financials previously that Christmas isn't actually a huge sales boost for them. Which, given the nature of their release cycle and the fact that they don't do sales, would make sense.

Though given the fact that Christmas is a huge sale boost to everything that isn't basic commodities it also would not make sense.

I take with a large pinch of salt anything GW say in their preambles since so much of it is excuses for why their figures are crap.

Dunno if they adjust their release schedule to reduce seasonal effect or what, but indeed it seems that Christmas is not that big a deal for GW. For example in 2009-10, first half-year revenue was £62.5 million, second half £64 million. Pretty much same appears to be true for almost every year. They have mentioned in the reports that they do have some sort of stock/capital buildup for Christmas.

 frozenwastes wrote:
Instead they've decided to go even more juvenile and just keep doing more of the same thing and then talk about growth potential in their financial reports like maybe it will happen by accident or something.

Murderfang. Now with murderclaws! (you have to say it in an overly dramatic voice)

I'm sure that's just the product to turn things around for them. I'm sure murderfang will sell out repeatedly and save GW.

Johnny: "But I play Orks."

Staffer: "Unbound! Murderfang works with orks. They like killing. He likes killing. It's a natural fit!"

Johnny: "And then maybe I can summon some daemons!"

Staffer: "That's right! They'll work great with the frost rays shooting all over the place from the Stormfangs! Smart move kid!"

Johnny: "Ring me up! I'll buy it all!"

Hey Kirby, be sure to let us know how this all works out for you. I'm sure it'll all be fine. What could go wrong?

---

Can't help myself....

Backfire wrote:

 Kilkrazy wrote:

 insaniak wrote:

 Idolator wrote:
A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), ...

I'm fairly sure GW have said in their financials previously that Christmas isn't actually a huge sales boost for them. Which, given the nature of their release cycle and the fact that they don't do sales, would make sense.

Though given the fact that Christmas is a huge sale boost to everything that isn't basic commodities it also would not make sense.

I take with a large pinch of salt anything GW say in their preambles since so much of it is excuses for why their figures are crap.

Dunno if they adjust their release schedule to reduce seasonal effect or what, but indeed it seems that Christmas is not that big a deal for GW. For example in 2009-10, first half-year revenue was £62.5 million, second half £64 million. Pretty much same appears to be true for almost every year. They have mentioned in the reports that they do have some sort of stock/capital buildup for Christmas.

That was actually a good indicator year. As I don't think that there was a "big" release that year. Meaning that Christmas could conceivably be responsible for the 1.5 million increase. Alas GW, in their financial reporting, is as vague and stingy with the numbers as the law allows (maybe even more so).

Edit: if GW were traded on the NYSE, we would be able to know a lot more about the company. Quarterly reports, reports on any litigation, etc. etc.

What an excellent article Orthon! All the confused talk of dividends here that I was too lazy to point out is the first bullet on the page.

GW really should have paid a low dividend and reinvested in itself. It's typical of stalwarts like utilities or tobacco pay out dividends because they do not feel the re-investment will equal growth. In GW's case, it seems a bit more indicative of an inability to turn that money into growth.

Been a fair few trades of late.
http://www.lse.co.uk/ShareTrades.asp?shareprice=GAW&share=games_workshop

 Thokt wrote:
GW really should have paid a low dividend and reinvested in itself. It's typical of stalwarts like utilities or tobacco pay out dividends because they do not feel the re-investment will equal growth. In GW's case, it seems a bit more indicative of an inability to turn that money into growth.

Here at GW we don't need focus groups or market research or even marketing. We operate in a niche market where our customers treat our product as wonderful and jewel-like. They can't help but buy our wonderful citadel miniatures. We also don't need to reinvest in the company because it's already a finely tuned cash machine with growth potential. What's going to go wrong? 3d printers? Surely you jest. They can only ever make a miniatuere per day and if they get better, we'll just sell Citadel Printers. Our success is assured because we hire for attitude and never skill. Because Steve Jobs.

Here's the thing. We are all now talking about how these numbers are really bad. If you think this is bad, just wait until we get a load of the next period half year results.

GW pulled out all the stops in the last year and still declined. They managed to tick down the losses in the last period by 3% (from 11% to 8%) but that does not show the true effect of 7th edition yet - that will be in the next period reporting. In other words, there are a lot of customers who left BECAUSE of 7th edition (for many various reasons) and this will be felt soon over the next period.

GW also shows no sign of letting up on the price increases. I have never seen a single company in my life (that being only a short 50 years), continue to ratchet up pricing this fast. It speaks volumes to this one thing: GW knows they are in very serious trouble, but they don't know why they are. They have managed to cover up the customer losses for the last decade with the price increases, so why not do that even harder than ever before.

The most telling number in the whole financials, however, even more than the dismal revenues and massive plummet in profits was the cost of sales numbers. Considering the large drop in revenues, the Cost of Sales was relatively flat. This means that it most likely represents fixed costs in getting their product to market. That being said, if you do the math, a 15% drop in sales will put GW into negative territory. The only way to avoid that, is to begin cutting sales costs and with that further revenue erosion will happen. This cycle is then a rinse and repeat and thus the term "death spiral".

At this point, I honestly believe GW cannot fix things. Seventh edition was the last point they could have done it and it didn't happen. Their independent channel relations are shattered, they charge a premium price for a sub-market product, and they are completely ignorant of the real issues they face. As it is, even bringing in a new a great CEO and letting him/her have free reign to fix things would have a hard time doing so with the amount of time left before the collapse takes them.

I know to many I am very pessimistic on GW. However, I have seen this tune played one too many times in quite a few businesses to not know what I am looking at here. While many think this period is bad, I'm willing to say that you all haven't seen anything yet. GW pulled out all the stops and couldn't even get to flat line in the last period. Now, the revenue losses will accelerate very fast from here and in 12-18 months time, we will all be saying how rosy this report looked in comparison.

 Idolator wrote:

 insaniak wrote:

 Idolator wrote:
A 2.5 million increase in sales after factoring in Christmas (the biggest selling season of the year), ...

I'm fairly sure GW have said in their financials previously that Christmas isn't actually a huge sales boost for them. Which, given the nature of their release cycle and the fact that they don't do sales, would make sense.

They may have said that, but they have also said that they have had a good year....if you don't count sales and profit. I don't believe that statement at all. Factor in the vagueness of it and it becomes meaningless any way.

If the Christmas season, for which they create wish lists and actually do perform a bit of marketing on their site, were to only generate a 5% increase to sales in a reporting period. That amount would be £3 million.

Compare that to the actual increase in sales of £2.5 million and you can see the problem. Combine that with the Knight, Tempestus, IG and new book release in the same reporting period and you really start to see something.

Honestly, with the way that their statements are written, they would claim that Christmas didn't affect their sales if all they made was Santa suits.

At this point, any year in which GW hasn't yet collapsed is a good year.

Deathspiral! The new Dark Eldar character. He can fight alongside Murderfang thanks to unbound!

Joking aside, the cost of sales number is by far the most troubling bit of information in the report. You have way less product being made and shipped but the core costs of making it don't go down.

The trade sales dropping by 9% or so is also more troubling than it sounds at first because that's at trade discount. So as far as product volume goes, it represents a bit less than twice that in terms of final MSRP worth of product that is not selling.

What this means is that just the sales drop in trade sales alone represents about a 6.5% drop in GW's total worldwide customer volume. And then once you add in the reduction in units sold because of average higher prices on new releases, it gets even scarier. If there is anything to the network effect idea, this is seriously bad. Especially in places like North America that rely heavily on trade sales.

Originally I had made the case that the right combination of location and store staff who use the hard sales approach could sell what GW needs to sell. I missed one very, very obvious thing though. Closing sales with traditional hard sales techniques is a skill. Uh-oh!

 Hulksmash wrote:

Hopefully GW can right the ship or it's not as bad as predicted. It would suck to have to learn to play Warmachine

Truer words have never been spoken .