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They sell a product that has demand and they can set the price higher and higher and people still buy it. When the price gets to a point where the high price is out of balance with the number of sales, the price will hold and new products will come out to entice buying yet again such as a new codex.

What you're describing is 'Price Elasticity Of Demand' and that elasticity can snap very quickly once a line is crossed.

 KiloFiX wrote:
Even though GW's profits are in decline, it is still currently profitable.

Regarding why it is still currently profitable - I think 'gamers', to a certain extent, do underestimate the volume that 'collectors' purchase.

Even with no new models or rules, but as long as the fluff is there, some folks out there will purchase the same set of Space Marine models and paint them as Ultramarines, then another set and paint them as White Scars, and repeat - throughout their lifetime.

The question is whether this core set of 'collectors', plus however many 'gamers' are happy with things, will be enough to keep GW profitable indefinitely, once it has declined to the point where all the other 'gamers' that are unhappy with GW have transitioned to something else.

Edit - Btw, I'm not saying that what GW is doing is 'right', I'm just offering a potential explanation of the current situation.

The current situation is actually not very mysterious, at least for people with a decent understanding of finance.

So, bear with me while I try to convey this in understandable English. It will probably also be a fairly lengthy post, and I can't be bothered to fact-check all the details (such as which year and when), but errors should only be minor. Let me know if you spot any.

First off, GW's revenue (i.e., the amount of money that comes in to GW trough sales, and not profit which is revenue - expenses) is a lot worse than it may seem. Inflation adds up to a lot more than you'd think over a lot shorter period than you'd think. Inflation means your money becomes worth less over time, like how your grandparents could buy a new car for £50 or whatever. I'm sure you've heard complaints about the glorious past with its cheap everything. Luckily you're earning somewhat more than your grandparents did, though. In effect, this means when talking about growth for a company, we can talk about nominal growth and real growth. Nominal growth is the actual figure; GW made £100 last year, and £102 this year. 2% nominal growth. But with an inflation rate of 2% that would be zero real growth. With an inflation rate of 3% that would be a real decline.

For instance, GW's peak was in 2005, and had their revenue growth matched inflation, their revenue in the recently concluded financial year (FY) would have been in the neighbourhood of £210m. It won't be. It was £123.5m last year, and is looking like it will end up around £115m this year. That means in a decade they've effectively halved in size.

In addition to this, GW's prices have increased well above inflation (spending forever and a half to dig through the numbers and only ending up with an approximation, due to lack of data on sales distribution, is not particularly appealing to me, but it's not exactly a controversial statement. Also, bear in mind that non-identical replacement products (such as a plastic Librarian taking the place of an older finecast version counts for this, and as do new products like Imperial Knights, LE codices etc)). As a result, this means that unit sales for GW are way down from their peak. Unit sales, by the way, refers to how many boxes of Tactical Marines they have sold over a year, while revenue refers to how many pounds they received from selling boxes of Tactical Marines.

Lower unit sales (especially in conjunction with declining revenues) means fewer customers. In general, a fewer customers doesn't have to be a bad thing. Let's say I have a lemonade booth. A cup of lemonade costs me 50p to make, and I sell them for £1. Every day I sell 100 cups. £100 revenue minus £50 expenses equals £50 profits. Not bad. But, what if I increased the price to £10 per cup? Obviously that's quite a lot for some lemonade, so now I only sell 10 cups a day. But, my revenue remains the same at £100. My expenses, however, are now only £5. Which means a £95 profit. Nice! This means my profit margin has increased, i.e., that for every £ I collect, 95p are straight profits.

The two above phenomena (unit sales and profit margins) are important when looking at GW's current situation. Over the last two-three years GW have introduced several products that have very high profit margins. Limited edition books, high-cost units (Imperial Knights, Wraithknights etc), and hardcover codices, as well as a push towards their online store. The latter (everything you purchase directly from GW, including FW and BL), for example, only accounts for about 20-23% of GW's revenue, yet accounts for half of GW's profits (the other half is from sales to independent retailers ("trade accounts"), while GW stores are losing money). This is connected with lower unit sales in the way that while you might have been spending £300 every year on GW products, but if you got yourself a £100 LE codex and two new Imperial Knights this year you will have contributed a lot more to GW's profits than from buying Tacticals and Terminators previously. In the end, GW is able to maintain profits through declining revenue. At least for now, but we'll get to that.


One other thing also needs to be taken into consideration; the cutting of expenses. Unfortunately for GW the lemonade example from above doesn't quite work in the real world due to overhead. Overhead is the expenses that don't really change whether you sell one or two boxes of Space Marines, like rent for their HQ, the salary of the administrative staff etc. Well, I say don't really change, but this is where GW has been doing a lot of their cutting. Mainly in two areas; their retail division and regional HQs. The retail cuts should be familiar to most of you; one-man stores, smaller stores, cheaper locations. In addition they used to have larger regional HQs that were responsible for GW's sales regions, but they have been severely downsized (North America) or axed altogether (Europe, which has been brought under central control along with the UK).

So what's the problem with this? Two things mainly; one, they can't keep cutting forever since they need to actually make a product to be able to sell it, and two, the retail cuts will lead to decreasing revenues both in the short term (shorter opening hours, lower staff, poorer locations) and the long term (how are potential new customers supposed to buy stuff if they don't know it exists?). This is also connected with GW's status as a niche, luxury product. Since GW is a small company, they can't afford expensive marketing campaigns to entice new customers. That's ok, since they get to benefit from the network effect; that is, you are a GW customer, you want to play GW games, so you get your friends to play too. Or, you like comics, you go to the comic book store, you see people playing 40k, it looks awesome, you're hooked. Or, you walk past a GW store, it looks awesome, you go in, get a demo game, buy some stuff, show up every week for some games against the other guys there, buy more stuff, etc. Declining revenue is bad in itself, but due to the network effect, those declining revenues also shut off potential new customers, either through independents or GW stores no longer carrying GW products/being located in the boonies, or your friends never started playing in the first place, and obviously then did not introduce you. And now it becomes hard to regain that foothold, especially if Warmahordes steps in to fill the gap. And if GW fails to turn this around, sooner or later it's all over.


Finally, there's a popular trope in the 40k internet discussion forums that GW customers are all 70 year old luddites who are convinced the internet is just a fad, and never, ever play with strangers, if they even play the game at all, which apparently no one does. Amirite? So, there are actually surveys about how much wargamers spend on their hobby annually, not just GW games, but in general. One recent one from the US put the average spending at $450 per year. Or about £300. If you've bought all the codices GW has put out this year, you're already well above that. Or three Imperial Knights. Or 3 LE codices. Or half an army. You get the point. It's not an unreasonable average to apply to GW customers, and, if anything, the GW average might even be higher. If GW shows a revenue of £115m this year, that equates to 383,000ish customers. Let's round it up to 400,000, because why not. That's not a lot. I listened to a Frontline Gaming podcast recently and they've got 1,500 people on their list of people having participated in ITC events this year. And that's mostly on the US West Coast, in addition there's the South, and the North East with significant tournament scenes. North America has about a quarter of GW's sales. Or, 100,000 customers. See where I'm going with this? Are tournament gamers a small minority of GW's customers? Yes. Obviously. But, during Las Vegas Open earlier this year there were more than 1,000 people watching the games live. MiniWargaming have 160,000 Youtube subscribers, and enough paying subscribers to pay the salaries of, what, five-six people? Dakka has 90,000 members. How many are active? One sixth? For every one those tournament players, how many don't go to tournaments but play at a store or a club? Bag them all together as those who engage in organized play, how many have you got? 10,000? 20,000? That's a minority, but still a good chunk of revenue right there, and that brings me to a very important aspect of business; it's not a democracy. Even if the happy-go-lucky, only-collecting, maybe once-in-a-blue-moon play a game in the kitchen with mates people are the majority of the customers (which they very well might be, as just like GW I haven't done any market research on their customer base), driving away the gamer segment, while still slashing overheads to maintain profits, is not just poor business strategy, it's ridiculous. And it's very unsettling for someone who wants their hobby (yes yes yes, there are other games, blah-blah-blah) to actually be around for a while longer.


TL;DR: GW maintains profits by cutting costs, focusing on products with higher profit margins, and hoping everything turns out alright, somehow, and, just because Jervis once said no one actually plays their games doesn't make it true.

Edit: Apparently I write "GW" way too often.

 Massawyrm wrote:
Garage gamers, the silent majority. There exists a large group of gamers who only play with a friend or two in their basement or garage. If they buy from a store at all, they show up once every few months, buy several hundred dollars worth of kits and are rarely seen again. They don't typically frequent forums, they don't play in tournaments, they don't always even stick with the most recently updated rules. They just drink a few beers, roll some dice and shoot the breeze with their buddies. They're the reason GW has shifted away from the tournament scene and towards "Play how you want," and why GW employees refer to the forums as the loud 1%. Balance isn't an issue with these players; for them COOL is king. They're the market GW is chasing, as they're the ones keeping the lights on.

I think this is largely the situation. In my experience the forums, podcasts, tournaments, blogs, etc...is where I hear all of the doom and gloom chatter. when I am in the stores and at friends houses there is not a lot of that. Too read things on the internet you would think the sky is falling, nobody can possibly have fun with such a broken game, and GW is ready to collapse under its own weight. I just don't see that reality once I look up from my computer screen.

 Swastakowey wrote:
I have noticed that there exists a group of people who love the idea of making 40k armies. That group then buys an army and paints a couple of models. They then quickly move to a new army do the same thing. Some of these people sell before moving on, others horde.

I personally think its these people who spend a load of cash on GW more so than anyone else. One of my friends is like this. Constantly buys whole armies then sells them really cheap. Loves coming up with army ideas but doesn't look like he actually enjoys playing the game.

Of course there are people who do this and love the game, but in my experience there aren't heaps of those.

The amount of money people from this group spends is huge. Add the cost of a 1800 point army, then (in the case of a friend) multiply that by 10+ armies and it adds up.

Almost like an addiction really.

But other than financial reports there isn't really hard info on GW and their downfall. As much as I think they won't last people have been saying it's coming since before my time.

I'm an 26 year old investment banker on Wall Street in NYC (and yes I play 40k). I'll took a look at their financials and any equity research coverage. GW is a public company folks TICKER is GAW on the LSE. Anyone can access their financial statements.

They ARE tanking. Their 2012 revenue was 131.0M GBP 2013 was 134.6 then 123.3 and 119.5M (2014) their earnings was 14.7 16.3 8.8 7.0M GBP (2014) so they been steadily going down since 2013. The thing is their 2014 COGS (cost of goods sold or the money it takes to actual MAKE the miniatures is only 37.1M so 31% is raw materials/transport/etc cost but their SG&A is 68.4M GBP or a whooping 57% so add that 88% is cost out the window and add in one-time expenses and other extraordinary items the company makes only 7.0M out of 119 top line which is a pathetic 5% profit margin.

I wonder why their SG&A is so high and I'd have to see the UK FSA filings on how much their executives make but clearly they are NOT making a killing. I wouldn't invest in TICKER:GAW. If they sold their miniatures any cheaper they would be losing money. They only make 7.0M GBP a year.

The ideal solution is to raise sales AND cut SG&A to slightly lower prices through a combination of efficiency and higher revenues (by a better price point) but there is so much competition from Warmachine, Infinity, etc right now. Put me in charge of GAW and I'll would cut SG&A, streamline playtest rules through open community playtesting in the UK, and lower prices in hopes of gaining more market share, change the approach to brick and mortar stores, and I would kill some non-selling factions like Sisters of Battle - I mean sorry guys. Basically make a last ditch bid to be great again. If I fail I would bring down the company and bring the END of 40k because no Private Equity shop will do a buyout of a toy company with such pathetic profit margins. I would only take a salary of 175,000 GBP a year to save the company that I love. Also feth Nottingham I'm moving the HQ to some cheap location where its livable. haha

I can argue GAW might be better as a private company like Privateer Press and not have to worry about the market as much. Who wants to do a LBO (Leveraged Buyout) of GAW like Dell did, go private, and put me in charge?

Loborocket wrote:

 Massawyrm wrote:
Garage gamers, the silent majority. There exists a large group of gamers who only play with a friend or two in their basement or garage. If they buy from a store at all, they show up once every few months, buy several hundred dollars worth of kits and are rarely seen again. They don't typically frequent forums, they don't play in tournaments, they don't always even stick with the most recently updated rules. They just drink a few beers, roll some dice and shoot the breeze with their buddies. They're the reason GW has shifted away from the tournament scene and towards "Play how you want," and why GW employees refer to the forums as the loud 1%. Balance isn't an issue with these players; for them COOL is king. They're the market GW is chasing, as they're the ones keeping the lights on.

I think this is largely the situation. In my experience the forums, podcasts, tournaments, blogs, etc...is where I hear all of the doom and gloom chatter. when I am in the stores and at friends houses there is not a lot of that. Too read things on the internet you would think the sky is falling, nobody can possibly have fun with such a broken game, and GW is ready to collapse under its own weight. I just don't see that reality once I look up from my computer screen.

I'd counter that by stating that things like GW's financials just aren't on the radar of the people you're talking about. Equally, they're not going to be aware of the scale of brokenness unless they trip over it (and let's face it, if they were seriously motivated to be winning games they'd be on the net looking for an edge.)

Ignorance is bliss.

I did some digging on my bloomberg terminal and the CEO of GAW only makes 257,000 GBP a year. The highest paid person is the Chairman with 500k GBP a year but I'd bet he owns a decent slice of the company.

The CEO of GW which at the end of the day is not rocking it with the private jets.

Investment Banking Managing Directors in London make 500-2.0M GBP at decent banks and they are a dime a dozen.

Being the CEO of GAW is NOT lucrative lmao.

Up until recently, the Chairman and CEO were the same person, who also happens to own the largest individual stake in the company (~8% IIRC)

If you think £500k isn't lucrative, no wonder the bankers screwed the economy!

 Azreal13 wrote:
Up until recently, the Chairman and CEO were the same person, who also happens to own the largest individual stake in the company (~8% IIRC)

If you think £500k isn't lucrative, no wonder the bankers screwed the economy!

Given the kind of responsibility the CEO of a struggling company has to bear, 500k doesn't seem that much. Think of it like this: other people make 5-10x more for kicking a ball across a patch of grass.

Do you know how much a flat in South Kensington or West Village, Manhattan costs?

You'll need to save up for years to afford those esp. after UK or US taxes. Face-palm*


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LordBlades wrote:

 Azreal13 wrote:
Up until recently, the Chairman and CEO were the same person, who also happens to own the largest individual stake in the company (~8% IIRC)

If you think £500k isn't lucrative, no wonder the bankers screwed the economy!

Given the kind of responsibility the CEO of a struggling company has to bear, 500k doesn't seem that much. Think of it like this: other people make 5-10x more for kicking a ball across a patch of grass.

500k is for the Chairman of the Board, the CEO is getting only 257k. The Chairman likely owns a decent % of the company (hence he's like an owner, rather than an employee)

If you don't think that kind of money is "lucrative", then you're insane, that's more than enough to put in the top 99.99% of earners in developed, industrialized nations, much less the planet at large.

No, it's not Warren Buffet rich, but that's plenty rich to afford to live just about anywhere without a 10 digit pricetag attached. That the kind of money that buys a multi-million dollar home (not outright perhaps, but mortgaged), with multiple luxury cars, and every creature comfort short of a private jet or a massive yacht one could want.

 DorianGray wrote:
Do you know how much a flat in South Kensington or West Village, Manhattan costs?

You'll need to save up for years to afford those esp. after UK or US taxes. Face-palm*

You know neither of those places is near Nottingham right?

You know that Kirby's getting £100Ks from dividends too?

Outside of London, and even then only select parts, £1-2m can get you an astonishing property.

 Swastakowey wrote:
I have noticed that there exists a group of people who love the idea of making 40k armies. That group then buys an army and paints a couple of models. They then quickly move to a new army do the same thing. Some of these people sell before moving on, others horde.

I personally think its these people who spend a load of cash on GW more so than anyone else. One of my friends is like this. Constantly buys whole armies then sells them really cheap. Loves coming up with army ideas but doesn't look like he actually enjoys playing the game.

Of course there are people who do this and love the game, but in my experience there aren't heaps of those.

This describes me (love to make 40k armies) but I don't sell them, though I do occasionally gift old models. There are a few people at my store that are like me, and it's the old "80/20" rule of retail -- 80% of your sales come from 20% of your customers.

My store knows that if it's 40k to hold aside 1 of any new kit for me (though there are a couple of factions I don't take), and I'll tell them ahead of time if I want multiples. When my store has a boxing day or other type sale, where they'll give me > 30% discount, I will literally go in and buy out whole shelves -- like, "just box up what's left of the space marines and imperial guard shelves".

I also love playing the game, but because game nights basically stretch into the entire night, my friends and I (who all have families) can't do this often -- couple of times a month is all we can get away with.

Note that I don't exclusively collect GW stuff. I buy a ton of PP models, almost every new Infinity release, and a ton of modelling supplies (Woodland Scenics, etc.). At the end of the day though, I simply buy more GW and it excites me more because there's something new almost every week.


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 DorianGray wrote:
I did some digging on my bloomberg terminal and the CEO of GAW only makes 257,000 GBP a year. The highest paid person is the Chairman with 500k GBP a year but I'd bet he owns a decent slice of the company.

The CEO of GW which at the end of the day is not rocking it with the private jets.

Investment Banking Managing Directors in London make 500-2.0M GBP at decent banks and they are a dime a dozen.

Being the CEO of GAW is NOT lucrative lmao.

It's still a healthy job More than I make!!

Though I bet you I have more time to paint space marines than the CEO of GW, so THERE.

 Azreal13 wrote:

 DorianGray wrote:
Do you know how much a flat in South Kensington or West Village, Manhattan costs?

You'll need to save up for years to afford those esp. after UK or US taxes. Face-palm*

You know neither of those places is near Nottingham right?

You know that Kirby's getting £100Ks from dividends too?

Outside of London, and even then only select parts, £1-2m can get you an astonishing property.

To put into context the CEO of Goldman Sachs received $41.0M (26.21M GBP) in total compensation in 2014. That is more than 100x the compensation of the CEO of Games Workshop.

Lloyd Blankflein is wealthy, the CEO of GW is merely middle class. That's all I'm saying. Among the rank of CEOs, Games Workshop is really far down the totem pole.

You have a really distorted idea of what constitutes "middle class" (it's a socio-economic group, not purely economic.)

What's the valuation of Goldman Sachs vs GW? I think that may give you a clue as to the disparity.

 Azreal13 wrote:

 DorianGray wrote:
Do you know how much a flat in South Kensington or West Village, Manhattan costs?

You'll need to save up for years to afford those esp. after UK or US taxes. Face-palm*

You know neither of those places is near Nottingham right?

You know that Kirby's getting £100Ks from dividends too?

Outside of London, and even then only select parts, £1-2m can get you an astonishing property.

Indeed. Between his salary as CEO & Chairman, and dividends, his yearly intake was likely just about a million Pounds. That's about ~$1.6 Million/year.

There's a reason he *borrowed* money to pay dividends

 DorianGray wrote:
I did some digging on my bloomberg terminal and the CEO of GAW only makes 257,000 GBP a year. The highest paid person is the Chairman with 500k GBP a year but I'd bet he owns a decent slice of the company.

The CEO of GW which at the end of the day is not rocking it with the private jets.

Investment Banking Managing Directors in London make 500-2.0M GBP at decent banks and they are a dime a dozen.

Being the CEO of GAW is NOT lucrative lmao.

The CEO salary seems low due to GW's executive salary structure. In a couple of years it will have tripled (and that's without counting the stock options and bonuses).

If you have some google fu, you should be able to dig up an article from a year or two ago, showing that compared to company size, Kirbz was the highest paid executive in the UK.

Don't worry about Kev. He'll be able to buy shiny things soon enough.

 DorianGray wrote:

To put into context the CEO of Goldman Sachs received $41.0M (26.21M GBP) in total compensation in 2014. That is more than 100x the compensation of the CEO of Games Workshop.

Lloyd Blankflein is wealthy, the CEO of GW is merely middle class. That's all I'm saying. Among the rank of CEOs, Games Workshop is really far down the totem pole.

I will happily agree with you that there is an avalanche of higher-paid CEOs than Games Workshop's. Then again, Games Workshop is a tiny company compared to a lot of publicly traded companies, which just shows you what a niche market miniatures are. In the context of CEOs of miniature and wargaming companies, he's probably one of the best paid

However, the CEO of GW is NOT "merely middle class". If you take "middle class" to mean, either mean or median income of the entire population of the UK, it's nowhere near 250k GBP, hehehe. Median income, I'm going to guess that he earns 10 times or more than the average wage earner.

500 k, I would trade him jobs in a minute but I don't think Kirby has the balls to work in a state prison as a guard. 500k doesn't seem like a lot when comparing him to other companies but it's a lot for a nitch market. Iam sure Kirby lives a pretty comfortable life or at least I would making that kind of money

People hear declining profits and automatically assume GW is losing money and in the red. I've had discussions with my local group about this and there is so much misperception about this.

Although GW isn't making as much money these days, they are still making money. So to easily answer the OP, the reason GW isn't tanking, is because they are still turning out a profit.

riburn3 wrote:
People hear declining profits and automatically assume GW is losing money and in the red. I've had discussions with my local group about this and there is so much misperception about this.

Although GW isn't making as much money these days, they are still making money. So to easily answer the OP, the reason GW isn't tanking, is because they are still turning out a profit.

For now. Nobody thinks GW is going to die next week. The important thing to note is that if the revenue trend they've been on for the last ten or eleven years continues, they won't be making a profit anymore in 4/5/6 years. And it's clear GW has seen this too, hence the radical changes in 40k and Fantasy over the last 12 months.

riburn3 wrote:
People hear declining profits and automatically assume GW is losing money and in the red. I've had discussions with my local group about this and there is so much misperception about this.

Although GW isn't making as much money these days, they are still making money. So to easily answer the OP, the reason GW isn't tanking, is because they are still turning out a profit.

Wait, your argument is "GW isn't taking because they still are making a profit"?

If GW gets to the point where they're having a net loss of money on a yearly basis, they're gone. Toast. Immediately, they'll be on the chopping block very quickly and the company would go through some really violent changes if it were to even theoretically continue.

In the meantime, they're shedding upwards of 10 million pounds of revenue on a nearly yearly basis and have shrunk from their height around 2005 at 200 million to close to $100. I suppose that doesn't qualify as "straight into the drain", but I think it's in the category of "dire straits." That, compounded with no evident turn-around in sight, and I think there is a great deal of evidence to be concerned (that is, if you're interested in this stuff, of course).


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 Vaktathi wrote:
For now. Nobody thinks GW is going to die next week. The important thing to note is that if the revenue trend they've been on for the last ten or eleven years continues, they won't be making a profit anymore in 4/5/6 years. And it's clear GW has seen this too, hence the radical changes in 40k and Fantasy over the last 12 months.

Yeah, I think this will be the clearest example of whether GW can turn it around. If Super All-Stars WHFB ends up being massively popular, then I think a lot of misgivings will start to go away. However, if this attempt at revitalization fails and WHFB ends up in an even worse spot...well, I guess GW will be able to just knock the "S" off their signs and consider THAT their fancy new makeover.

If you're measuring the success of Games Workshop base on enthusiasm from people on this forum then you are making a huge mistake. The reality is that the majority of GW players enjoy the game/hobby and do not see a diminishing return in regards to cost/quality. Not to say those players don't have concerns or criticisms, but 40k is a popular game and is fully capable of supporting GW, atleast for the time being.

No, I'm measuring the success of GW by the only metric that matters, which is how much cash their customers give them, and it's falling.

Let's not forget that Mr. Kirby saw fit to give himself a 24%(24-26, I can't recall exactly) raise last year. I'd love to get that big of a raise.

@Thud. Thank you for your concise and eloquent evaluation; you stated some of the items that I've tired to convey in better terms than I did.

Thud and DorianGray posts were pretty informative. 7m a year is pretty low for a company with the global reach GW has. That SG&A expense is mind-blowing.

As DorianGray, I wouldn't put one cent on GW if I didn't know what was its business. Andd by the expenses on SG&A, selling models ins't it

 Las wrote:
If you're measuring the success of Games Workshop base on enthusiasm from people on this forum then you are making a huge mistake. The reality is that the majority of GW players enjoy the game/hobby and do not see a diminishing return in regards to cost/quality. Not to say those players don't have concerns or criticisms, but 40k is a popular game and is fully capable of supporting GW, atleast for the time being.

While the majority of GW playets might be still enjoying the game, their finances seem to point out pretty clearly there's less and less GW players as time goes by.

 Thud wrote:
Finally, there's a popular trope in the 40k internet discussion forums that GW customers are all 70 year old luddites who are convinced the internet is just a fad, and never, ever play with strangers, if they even play the game at all, which apparently no one does. Amirite? So, there are actually surveys about how much wargamers spend on their hobby annually, not just GW games, but in general. One recent one from the US put the average spending at $450 per year. Or about £300. If you've bought all the codices GW has put out this year, you're already well above that. Or three Imperial Knights. Or 3 LE codices. Or half an army. You get the point. It's not an unreasonable average to apply to GW customers, and, if anything, the GW average might even be higher. If GW shows a revenue of £115m this year, that equates to 383,000ish customers. Let's round it up to 400,000, because why not. That's not a lot. I listened to a Frontline Gaming podcast recently and they've got 1,500 people on their list of people having participated in ITC events this year. And that's mostly on the US West Coast, in addition there's the South, and the North East with significant tournament scenes. North America has about a quarter of GW's sales. Or, 100,000 customers. See where I'm going with this? Are tournament gamers a small minority of GW's customers? Yes. Obviously. But, during Las Vegas Open earlier this year there were more than 1,000 people watching the games live. MiniWargaming have 160,000 Youtube subscribers, and enough paying subscribers to pay the salaries of, what, five-six people? Dakka has 90,000 members. How many are active? One sixth? For every one those tournament players, how many don't go to tournaments but play at a store or a club? Bag them all together as those who engage in organized play, how many have you got? 10,000? 20,000? That's a minority, but still a good chunk of revenue right there, and that brings me to a very important aspect of business; it's not a democracy. Even if the happy-go-lucky, only-collecting, maybe once-in-a-blue-moon play a game in the kitchen with mates people are the majority of the customers (which they very well might be, as just like GW I haven't done any market research on their customer base), driving away the gamer segment, while still slashing overheads to maintain profits, is not just poor business strategy, it's ridiculous. And it's very unsettling for someone who wants their hobby (yes yes yes, there are other games, blah-blah-blah) to actually be around for a while longer.

This is a pretty cool breakdown, and on an unrelated note is why all the people with their "40K is just as big as Star Wars or LOTR make a movie please!" threads are ignorant. 383,000 fans worldwide is not a very big number.

 greyknight12 wrote:

 Thud wrote:
Finally, there's a popular trope in the 40k internet discussion forums that GW customers are all 70 year old luddites who are convinced the internet is just a fad, and never, ever play with strangers, if they even play the game at all, which apparently no one does. Amirite? So, there are actually surveys about how much wargamers spend on their hobby annually, not just GW games, but in general. One recent one from the US put the average spending at $450 per year. Or about £300. If you've bought all the codices GW has put out this year, you're already well above that. Or three Imperial Knights. Or 3 LE codices. Or half an army. You get the point. It's not an unreasonable average to apply to GW customers, and, if anything, the GW average might even be higher. If GW shows a revenue of £115m this year, that equates to 383,000ish customers. Let's round it up to 400,000, because why not. That's not a lot. I listened to a Frontline Gaming podcast recently and they've got 1,500 people on their list of people having participated in ITC events this year. And that's mostly on the US West Coast, in addition there's the South, and the North East with significant tournament scenes. North America has about a quarter of GW's sales. Or, 100,000 customers. See where I'm going with this? Are tournament gamers a small minority of GW's customers? Yes. Obviously. But, during Las Vegas Open earlier this year there were more than 1,000 people watching the games live. MiniWargaming have 160,000 Youtube subscribers, and enough paying subscribers to pay the salaries of, what, five-six people? Dakka has 90,000 members. How many are active? One sixth? For every one those tournament players, how many don't go to tournaments but play at a store or a club? Bag them all together as those who engage in organized play, how many have you got? 10,000? 20,000? That's a minority, but still a good chunk of revenue right there, and that brings me to a very important aspect of business; it's not a democracy. Even if the happy-go-lucky, only-collecting, maybe once-in-a-blue-moon play a game in the kitchen with mates people are the majority of the customers (which they very well might be, as just like GW I haven't done any market research on their customer base), driving away the gamer segment, while still slashing overheads to maintain profits, is not just poor business strategy, it's ridiculous. And it's very unsettling for someone who wants their hobby (yes yes yes, there are other games, blah-blah-blah) to actually be around for a while longer.

This is a pretty cool breakdown, and on an unrelated note is why all the people with their "40K is just as big as Star Wars or LOTR make a movie please!" threads are ignorant. 383,000 fans worldwide is not a very big number.

I disagree. To see how many people spent money on a franchise in the previous year is a horrible metric by which to measure whether a company would be successful in the movie or other businesses.

For example: how many people went to see the first Iron Man movie, who hadn't bought a Marvel comic book in.... more than a decade? How many people are aware of and love Star Wars, but spent NOTHING on it last year? How much money did you spend on Star Trek last year -- but would you see a new Star Trek movie? How many people had heard of the Guardians of the Galaxy before the film? The list could go on forever.

If you measured the number of people who played 40k since its inception in the mid-80s, you might be closer to a useful number -- quite possibly, still not nearly the threshold to invest a quarter billion dollars or more into a motion picture. But still, remember that Marvel was going out of business not that long ago -- according to fans, mostly because comic books were just too expensive for the everyday person, Marvel was mismanaged, was going bankrupt (actually, it did file for bankruptcy protection in 1996). It was to be the end of a once glorious era. All because of greedy executives who wanted to milk their rapidly shrinking subscriber base.

Wanna know something funny? In 2007 Marvel Entertainment, LLC's annual revenue was HALF of Games Workshop's today ($125.7 million USD). It was purchased by Walt Disney for $4 billion.

So don't be laughin' at that GBP 115m revenues all that hard. You might just be able to take it to the bank.

Marvel didn't turn that around by doubling down though. Ultimately, money spent in the previous year is pretty much how the success of businesses are measured. But then it comes down to other factors like brand recognition and the mood of the fanbase - if the people that paid to watch the movie thought it was a stinker, they're less likely to watch the next one.