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i can understand why they stopped selling other companies' games, but i do think it is a shame that they don't carry their own back catalog...
lots of good stuff there...

cheers
jah

Trasvi wrote:
I've yet to see someone using 3rd party minis in Malifaux or Warmachine, but nearly all my regular 40k opponents feature at least 1 non-GW model in their forces.

It is more uncommon but not unique. My Cygnar Trencher heavy force for Warmachine is comprised of WWI German Stormtroopers as PP's Trencher sculpts are awful. The only actual PP models are the Jacks and the caster.

The ubiquity of 40K is what allows the companies that produce alternatives and ancillaries to GW models to thrive. There also seems to be a great deal less brand loyalty to GW when it comes to little men, there seems to be a lot of resistance amongst, for example, Infinity players to use proxies while 40K players will happily use entire proxied armies.

 Azreal13 wrote:
My assertions are simple - GW spend around 50m on the stores, the stores generate around 51.5m in revenue. Even if they're making a "profit" at the distribution end, they're still spending the same amount on the retail chain as they're taking in, near as dammit.

I think as long as GW are making similar revenue as it costs to run the stores, the stores are probably fine. They do serve somewhat as advertising for other channels as well, so their sales can't be considered in isolation. I'm sure there's lots of people who benefit from having a GW store nearby but still purchase through online discounters, other FLGS's or even GW's own online store.

I agree, in principle at least.

The obligation is my biggest contention, carrying that sort of overhead severely restricts your ability to take risks, and for a company with creativity at its core, at least theoretically, that's a big downside. If there were clearer hard benefits (you can't accurately value the intangibles, and the value the stores bring is a debate in itself) then fair enough, but I personally don't think the return warrants the investment.

Oooooor they can spend that money on actual advertising and let FLGS owners do the work (i.e. sell their product) for them?

 Talys wrote:
Where do you see that they spend GBP50m on the stores, anyways? All I see is $36m COGS and $76m operating expenses. I'm not arguing with you, I just want to know where it is.

If you took out the stores, GW would sell a lot less product (unless you disagree with that). It's really as simple as that. Even if stores didn't ever make a dime in the end calculus, they are driving sales to GW instead of other products. It's more players, more mindshare, more awareness, new players, a place for existing players to socialize, and some of which translates into purchases from other channels, and in the end, is a good thing.

13/14 Report Page 42 - Operating Expenses by Segment

If you simply removed the stores at a stroke, then yes, they'd shift fewer boxes (although I've always questioned the wisdom of just shifting product for the sake of it) but I'm more arguing if they'd not lent so heavily on developing their own chain and instead concentrated more on acting as a wholesaler, which they're probably more appropriately set up to be, over the last X years, then any loss in revenue in comparison to how they've actually proceeded would be more than compensated for by the reduction in overhead, exposure and risk. I think GW without retail (or limited to a handful of destination stores) would be a leaner, fitter animal better positioned to compete with its many tiny competitors, rather than sitting there, wheezing, while they all take chunks out of it unchallenged.




Automatically Appended Next Post:

 heartserenade wrote:
Oooooor they can spend that money on actual advertising and let FLGS owners do the work (i.e. sell their product) for them?

Don't be so otiose.


Automatically Appended Next Post:
I actually don't see conventional advertising as the way forward, either, but there's probably plenty of unconventional advertising to be explored.

 Silent Puffin? wrote:

Trasvi wrote:
I've yet to see someone using 3rd party minis in Malifaux or Warmachine, but nearly all my regular 40k opponents feature at least 1 non-GW model in their forces.

It is more uncommon but not unique. My Cygnar Trencher heavy force for Warmachine is comprised of WWI German Stormtroopers as PP's Trencher sculpts are awful. The only actual PP models are the Jacks and the caster.

I have also seen Warzone Tommies being used in the same manner - but his reasoning was that he could get the plastic Tommies from Prince August for very little money.

Looks good on the table, too.

The Auld Grump

*EDIT* And once upon a time, Games Workshop used to be a retailer for games by many companies, not nearly so isolated from the industry. And they produced games for other companies into the bargain - Call of Cthulhu and RuneQuest both saw hard cover editions in the UK because of GW.

 Azreal13 wrote:

I actually don't see conventional advertising as the way forward, either, but there's probably plenty of unconventional advertising to be explored.

They don't have to do above the line advertising. There's a lot of below the line stuff that they can explore. Social media management is really huge right now and they're fialing at that... badly. Best thing is they don't have to burn that much money as they do on their actual stores.

Hell, for a great example of basic community-based advertising that works extraordinarily well, just look at what Forgeworld does. The events they go to, the events they host, and their willingness to actually communicate brings them a lot of goodwill. Just look at the N&R thread for Forgeworld every time they have an event to see how foaming at the mouth rabidly lusting for their product we are. That doesn't happen in the normal GW news thread.

 Azreal13 wrote:

 Talys wrote:
Where do you see that they spend GBP50m on the stores, anyways? All I see is $36m COGS and $76m operating expenses. I'm not arguing with you, I just want to know where it is.

If you took out the stores, GW would sell a lot less product (unless you disagree with that). It's really as simple as that. Even if stores didn't ever make a dime in the end calculus, they are driving sales to GW instead of other products. It's more players, more mindshare, more awareness, new players, a place for existing players to socialize, and some of which translates into purchases from other channels, and in the end, is a good thing.

13/14 Report Page 42 - Operating Expenses by Segment

If you simply removed the stores at a stroke, then yes, they'd shift fewer boxes (although I've always questioned the wisdom of just shifting product for the sake of it) but I'm more arguing if they'd not lent so heavily on developing their own chain and instead concentrated more on acting as a wholesaler, which they're probably more appropriately set up to be, over the last X years, then any loss in revenue in comparison to how they've actually proceeded would be more than compensated for by the reduction in overhead, exposure and risk. I think GW without retail (or limited to a handful of destination stores) would be a leaner, fitter animal better positioned to compete with its many tiny competitors, rather than sitting there, wheezing, while they all take chunks out of it unchallenged.

You are misreading it.

"Operating Expenses - Sales Businesses" is not just retail sales. It's ALL sales, including trades, online sales, retail sales.

All costs of sales is rolled into the 50 million. I don't know how GW sales reps are paid, but this includes their compensation, the cost of regionally warehousing and delivering product, management costs per region, et cetera.

Edit -- it's actually defined in p. 40 -

Sales businesses. These businesses sell product to external customers, through the Group’s network of Hobby centres, independent retailers and direct via
the global web store. The sales businesses have been aggregated into segments where they sell products of a similar nature, have similar production
processes, similar customers, similar distribution methods and are affected by similar economic factors. The segments are as follows:

Note that BL, WHW, and FW actually fall into "Other".

As well, Product and Supply (something I didn't understand earlier, looking at the half-year report, and misread) means the design and manufacture of products.

And Service Centre means non-sales support services (IT, accounting, payroll, HR, etc).

You're right I misinterpreted the information, it was late and I just scanned through the document until I found what I though I was looking for.

I am curious why you felt the need to both point me to where the definitions were listed and explain them again in thread. Never 1 word when 10 will do eh?

So I dug a little deeper, and ironically, while my method was flawed, it looks like my conclusion wasn't far off the money!

It won't be possible to generate a precise figure because of the nature of the reporting of some figures, but the cost of leases on hobby centres as £8.5m, the spend on salaries (company wide, sales staff FT and PT equate to about half the total number of employees, but not likely a high average per head) is around £42m and there's nothing I can find WRT variable costs for the shops (utilities etc) so presumably they're buried in the operating expenses somewhere, but if they are pegged at about the same cost as leases (which is pure speculation, but has often been the case in retail units I've worked, that may be pure coincidence rather than any general rule, would need to be a lot of coincidences though) then overall cost is likely still knocking on the door of £40m.

Maybe they'll change the accounting method this year to make it easier to decipher, but it still doesn't change my point about it being a big, ponderous overhead that GW doesn't need.

Or a big ponderous overhead that GW should be making more use of.

As I mentioned before, it is easy for us to forget that historically GW is not a rules publisher or a model kit designer, it is a retail and distribution company.

One of their problems IMO is that they do not have a wide enough range of products in their shops.

Yep, I could get behind that. Traditional retail is getting harder, and GW has historically been slow to adapt to new technology, but I can't think of a better opportunity to drive people into your stores than a product that requires amounts of space and resources that not everyone has access to.

Has this been posted?

https://uk.finance.yahoo.com/news/why-buy-games-workshop-group-125718230.html

I have literally zero financial insight, but seems to paint a prettier picture than I often see in these threads.

Yes, it has been posted. You'll notice it was written back in May, before the "broadly in line with managment expectations" aka "if there were anything to crow about we'd mention it, so prepare for yet another very ordinary year" press release back in early June.

Additionally, from a purely investment perspective GW currently is a reasonable prospect, the share price is no longer vastly overinflated and the dividend payouts are regular and healthy. It's only when you peek behind the curtain and you see that the Wizard Of Kirby is just a near pension age taxman out of ideas that things look less rosy.

lets do a little math 2015 - 2014
- Revenue 119.1-123.5 = -4.4
- Operating profit 16.5 - (12.3 + 4.5) = -0.3

They only got a 25% jump in profit because they took into account the exceptional expense of restructuring last year, if you actually took that out of the equation you would see that both Revenue and Profit are down, again.

They also paid 1 million less in taxes for some reason (new tax break?).

 Azreal13 wrote:
Yep, I could get behind that. Traditional retail is getting harder, and GW has historically been slow to adapt to new technology, but I can't think of a better opportunity to drive people into your stores than a product that requires amounts of space and resources that not everyone has access to.

This was my thought as well. Few companies are as well positioned to take advantage of the change in retail environment, I would have thought.

The way I see it, which is admittedly fairly uninformed, the focus in stores should be on maintaining a positive gaming and collecting space rather than trying to push plastic. There's so many other ways of getting the models into the hands of customers - the traditional boxes on shelves feels like a massive waste of space. A combination of an Argos-style system, a few racks with the last few months' releases, and the good ol' glass cases of finished minis should surely be enough?

Of course if they're actually making money hand over fist at the till then I guess maybe what they're doing is working. It was just a thought.

 warboss wrote:
They also paid 1 million less in taxes for some reason (new tax break?).

Different tax rates in different countries and a change in the sales mix across those countries would be my guess.

 Azreal13 wrote:
Yep, I could get behind that. Traditional retail is getting harder, and GW has historically been slow to adapt to new technology, but I can't think of a better opportunity to drive people into your stores than a product that requires amounts of space and resources that not everyone has access to.

I wonder what would happen if GW decided to change their retail store model away from a single manufacturer boutique model into something more resembling the FLGS where they stocked a wide variety of game systems. They would probably see a bit less of their own product being moved, but would seem an increase (obviously from zero) of other product being moved. Would the increase in revenue from other products at their retail locations be larger than any reduction in revenue from lost in-house product sales?

I am disappointed. They seem to have done ok in 2015 on their 40k releases, and I was hoping, PRAYING that this would be burnout for 40k buyers. I guess enough elder players went to buy scatbikes to pull GW through the year.

Still hoping GW dies and dies fast!

Saldiven wrote:

 Azreal13 wrote:
Yep, I could get behind that. Traditional retail is getting harder, and GW has historically been slow to adapt to new technology, but I can't think of a better opportunity to drive people into your stores than a product that requires amounts of space and resources that not everyone has access to.

I wonder what would happen if GW decided to change their retail store model away from a single manufacturer boutique model into something more resembling the FLGS where they stocked a wide variety of game systems. They would probably see a bit less of their own product being moved, but would seem an increase (obviously from zero) of other product being moved. Would the increase in revenue from other products at their retail locations be larger than any reduction in revenue from lost in-house product sales?

Or they could just sell a range of different games they produce themselves?

Revolutionary, I know.

Marlov wrote:
I am disappointed. They seem to have done ok in 2015 on their 40k releases, and I was hoping, PRAYING that this would be burnout for 40k buyers. I guess enough elder players went to buy scatbikes to pull GW through the year.

Still hoping GW dies and dies fast!

Why?

What have they done to you, personally?

What do you gain if they fail?

If you don't like them, play something else.

I can get not liking a company, but to PRAY that they fail? That's just sick, man.

I also want to add that I am worried about the stock review thing. As a sister player that kind of talk worries me.

Perhaps we will be martyred to the Emperor soon after all...

Or

They could get rid the metal models so they didn't have to bother with metal at all and reboot us with new plastics.

Faith...I must have faith...

 kronk wrote:

Marlov wrote:
I am disappointed. They seem to have done ok in 2015 on their 40k releases, and I was hoping, PRAYING that this would be burnout for 40k buyers. I guess enough elder players went to buy scatbikes to pull GW through the year.

Still hoping GW dies and dies fast!

Why?

What have they done to you, personally?

What do you gain if they fail?

If you don't like them, play something else.

I can get not liking a company, but to PRAY that they fail? That's just sick, man.

You just don't understand religion, that's all.

I druther they straighten up and get things back on a friendly footing, but barring that....

I am not sure which is worse, a slow decline and fall that drags out for another decade, or a fast decline that is brutal, but allows another to take over the properties before they lose all value.

I really think that half a quarter of the problems that GW has stem from them seriously overvaluing their IP.

It is not as unique as they feel, nor is it nearly as much of a moat and castle as they have claimed - if the Chapterhouse case proved nothing else, people can legally make compatible products.

The Auld Grump

I believe it's now been officially downgraded to a hedge, according to the latest report.

 Azreal13 wrote:
I believe it's now been officially downgraded to a hedge, according to the latest report.

What is a hedge?

Davor wrote:

 Azreal13 wrote:
I believe it's now been officially downgraded to a hedge, according to the latest report.

What is a hedge?

A lot less impressive than a Moat and Castle.

The Auld Grump

Marlov wrote:
I am disappointed. They seem to have done ok in 2015 on their 40k releases, and I was hoping, PRAYING that this would be burnout for 40k buyers. I guess enough elder players went to buy scatbikes to pull GW through the year.

Still hoping GW dies and dies fast!

You...you I like.

 MrFlutterPie wrote:
I also want to add that I am worried about the stock review thing. As a sister player that kind of talk worries me.

Perhaps we will be martyred to the Emperor soon after all...

Or

They could get rid the metal models so they didn't have to bother with metal at all and reboot us with new plastics.

Faith...I must have faith...

They won't give any warning though. Just like when they pulled the plug on specialist games and there was a panic as the stock suddenly dried up overnight. The lesson is that if you want something you should get it now and not keep putting it off, as you'll get no warning when it goes. Just another of those 'communication' things GW doesn't do.