What Keeps GW Financially Alive and Why do they not Tank?

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.

**Deadnight**

Las wrote:
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.

The majority of gw players or the majority of gw players that are left? Because there are seemingly fewer people playing now than before!

And your proof that the majority both enjoy the game/hobby anddon't see a diminishing return in regards to cost/quality is?

**Thud**

Talys wrote:
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.

Meanwhile, in the real world, Marvel Entertainment LLC did not exist until 2009, and Marvel Entertainment Inc (which I assume you're referring to) had an annual revenue of $485.8 million USD in 2007. Which then grew to $676.2 million USD for 2008. They also had net profits of $205.5 million USD in 2008, after $139.8 in 2007. And assets of close to one billion USD. They were then bought by Disney in August 2009 and turned into an LLC.

Source: Page 26 of the pdf, page 18 of the document.

**Mymearan**

Why are some people assuming that 40k players are responsible for the revenue decline? Wouldn't it make more sense to assume that LotR sales are tanking hard, since LotR was also responsible for the huge rise in revenue in the 2000s? Combined with the apparently abysmal sales of Fantasy and a steadily increasing number of competitors, I'm not surprised at the falling revenue.

It would be interesting to see GWs revenue before LotR. If it was more along the lines of their current revenue or even less, then is it not possible that what happened is this: The success of LotR caused GW to grow faster than they could reasonably sustain in the long run. With LotR and Fantasy sales falling rapidly, and the competition growing fiercer every day, they are now forced to take desperate cost-cutting measures to avoid shrinking back to a more sustainable size (which is probably what they actually should do). At the same time they cut LotR and make a last ditch effort to save Fantasy.

**Talys**

@thud - in 2008, the first Iron Man movie was produced. Disney bought Marvel following its success.

I took the 2007 revenue number of $125.7m from Marvel's Wikipedia entry.

But my point stands: in the late 90s, fans thought marvel was going to die because they wouldn't listen to fans, made overly complicated crossover story arcs that forced you to buy 6 titles, and jacked prices to something fierce. By the mid-200s hardly anyone bought Marvel comics.

Yet, a disproportionately large percentage of moviegoers watch Marvel movies. A lot fans haven't bought a comic since the 80s. This was the analogy I was trying to make -- that the number of current 40k/fb players from last year are irrelevant.

Automatically Appended Next Post:

Mymearan wrote:
Why are some people assuming that 40k players are responsible for the revenue decline? Wouldn't it make more sense to assume that LotR sales are tanking hard, since LotR was also responsible for the huge rise in revenue in the 2000s? Combined with the apparently abysmal sales of Fantasy and a steadily increasing number of competitors, I'm not surprised at the falling revenue.

It would be interesting to see GWs revenue before LotR. If it was more along the lines of their current revenue or even less, then is it not possible that what happened is this: The success of LotR caused GW to grow faster than they could reasonably sustain in the long run. With LotR and Fantasy sales falling rapidly, and the competition growing fiercer every day, they are now forced to take desperate cost-cutting measures to avoid shrinking back to a more sustainable size (which is probably what they actually should do). At the same time they cut LotR and make a last ditch effort to save Fantasy.

In past incarnations of this debate, this has been argued effectively. Some think GW got used to the nice LoTR profits, and tried tocompensate as that dried up.

Personally, I hope fantasy makes a resurgence, even though I am not a big fan. Most of my stores sell practically no fantasy stuff anymore.

**Herzlos**

DorianGray wrote:
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.

According to Wikipedia, GS has a revenue of about $40bn, or about 30 times that of GW, so GW's CEO's base salary is 3x that of the total compensation given to the GS CEO, as a ratio of revenue.

But there's more. Kirby was also Chairman, so got a salary of around £300k, and owns 7.9% of the stock, so gets about £400k/dividend, or £1.2m/year, so his total compensation in 2014 was about £1.5m, or about 20x less than GS. That means the GW CEO gets something like 15x more than the CEO of Goldman Sachs, compared to revenue.

That's a hell of a lot of money.

**Osbad**

Mymearan wrote:

It would be interesting to see GWs revenue before LotR. If it was more along the lines of their current revenue or even less, then is it not possible that what happened is this: The success of LotR caused GW to grow faster than they could reasonably sustain in the long run. With LotR and Fantasy sales falling rapidly, and the competition growing fiercer every day, they are now forced to take desperate cost-cutting measures to avoid shrinking back to a more sustainable size (which is probably what they actually should do). At the same time they cut LotR and make a last ditch effort to save Fantasy.

This is a graph I've kept running for the last few years, well decade. You can see how GW's revenues and profits have performed since 1997, and the impact that the stock exchange listing and the LOTR effect have both had in that time.

The dark lines show real value (i.e. discounted for RPI), and the lighter lines show cash values.

Just to confirm that the LOTR bubble effect seems to have ended in 2006, and since then LOTR sales have been pretty negligable overall. As was said earlier in the thread, the real sales, which are a proxy for their voume sales show a very worrying trend, i.e. that the amount of product sold now is no larger than it was at the turn of the century, and given GWs price rises proably outstrip UK RPI, they are probably actually somewhat less. 15 years of no net volume growth says all it needs to say about Kirby and his teams abiities to grow a business.

**ced1106**

Swastakowey wrote:
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.

Yep. The app world calls them "whales". They're the small percentage of players who spend the most money and sustain the company. I guess it's the 80/20 rule all over again.

Also, many hobbies have a 400 lb gorilla, which, afaik, is considered to be the "gateway" into the hobby -- and many hobbyists don't look further or need to:
* Miniatures wargames: 40K
* CCGs: Magic
* Comic books: Marvel and DC
* RPGs: D&D
* Cards: Poker
* Boardgames: Chess and Monopoly

**Thud**

Talys wrote:
@thud - in 2008, the first Iron Man movie was produced. Disney bought Marvel following its success.

I took the 2007 revenue number of $125.7m from Marvel's Wikipedia entry.

But my point stands: in the late 90s, fans thought marvel was going to die because they wouldn't listen to fans, made overly complicated crossover story arcs that forced you to buy 6 titles, and jacked prices to something fierce. By the mid-200s hardly anyone bought Marvel comics.

Yet, a disproportionately large percentage of moviegoers watch Marvel movies. A lot fans haven't bought a comic since the 80s. This was the analogy I was trying to make -- that the number of current 40k/fb players from last year are irrelevant.

I know Iron Man came out in 2008. I don't actually live in a cave. Also, I read the report I used as a source in my previous post which refers to its success. Also, Marvel's comic book sales were steadily rising throughout the '00s (while licencing revenue was skyrocketing).

I'm not arguing that 40k (or GW) has too few fans to have a box office success, nor that the 400,000 figure is relevant to how many people would watch a 40k high-quality movie, but rather that your comparison between Marvel and GW is way off base. I mean, you're comparing the giant of a niche market to the comic book publisher that didn't have Superman or Batman and acting as though their products are comparably mainstream, based on how the total annual revenue of one is not enough to estimate total potential fanbase, but the partial annual revenue of the other somehow is? What? Also, Marvel has spent the last two decades transforming itself from a comic book publisher to an IP producer/seller and film maker. GW also licences its IP, it's just that Marvel gets about 200 times as much licencing revenue as GW. Marvel is also making almost as much from making their own films as from licencing, btw.

And finally, whether or not Marvel fans were sure Marvel was going down in the late 90s means nothing. I'm sure if you dig around, you'll find GW fans claiming impending doom in 2002-2003. So what? Some people were wrong? This, at best, really isn't relevant to anything in this thread, or, at worst, is a logical fallacy ("in the past people thought GW was in trouble, and were wrong, therefore people who now think GW are in trouble are wrong"). Things change. GW is in a precarious situation, and they don't seem to know what they're doing.

**Herzlos**

I'm not a Marvel (or DC) fan, but I know enough about them to know roughly what Iron Man (or Batman, Spiderman, Superman, Hulk, Avengers, Thor, Daredevil) is to consider going to see a film about it. And whilst I'm not a comic book fan (I prefer fiction novels), I can still enjoy the films.

40K just doesn't have anywhere near the broad market appeal. I'm not sure I've ever had to explain to anyone who Iron Man or Batman is, but I'd certainly need to explain who Horus is ("No, not the Egyptian God").

So, sure, there probably are more than 400k people who might be interested in a 40K based film, but it must be a few orders of magnitudes away from the numbers of people who'd go and see any Marvel film.

Automatically Appended Next Post:

Talys wrote:

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.

Average full-time adult salary in the UK is about £24k (£32k in London). Kirby makes about 10 times the average salary *before* stock, or about 60 times after. Average workers don't get any stock bonuses.

**Nomeny**

Not to mention that most CEOs are vastly over-compensated, and that being compensated in stock and options is typically a counter-incentive to the company's continued financial success.

**BeAfraid**

DorianGray wrote:
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?

If you promise to put me in charge of tech continuity in 40K, I might know a few people who MIGHT be convinced to do such a buyout.

MB

Automatically Appended Next Post:

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.

£257K/yr is roughly $400K/yr.

That isn't chump change, AND he gets a hefty bonus and stock dividends that amount to about 2X to 3X his salary.

MB

Automatically Appended Next Post:

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.

And this is completely lately irrelevant to the state of the company.

The fan's could be willing to kill themselves to save the company.

But if they, collectively, do not produce enough sales, then it does not really matter.

The die-hard fans are not what keeps the company afloat.

MB

**Easy E**

Back to the OP's Question. What keeps GW financially alive?

I don't even think GW knows anymore. The rest of us are just speculating.

**CT GAMER**

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.

That shoe fits, so I'll wear it...

**Barfolomew**

IMO, the are a couple of key reasons that GW continues to make sales.

1) The game is not stagnant. They are continually releasing new models for people to buy and have moved to an incredibly fast release schedule. New products have to be offered to continue to extract money from the populace and GW is doing that.

2) People play what their friends play. As long as there is a community that allows people to get relatively easy games, people will not drop the game. In areas that are heavily GW dominated, starting a new game like X-wing, is even more challenging because people are already established in one game, making it harder to switch to something new. There is also a large community for the game, making pick-up games easier and online resources available.

3) The game is playable enough and isn't drastically worse than anytime in the past. Due to item 2, where people may not play other games, there is the chance that people will never be exposed to other games and discover how poor GW rules are.

4) The fluff is pretty good, even though it is wildly inconsistent, but it's still fun.

5) Reasonably available everywhere.

**Chute82**

GW turn and burn release schudele is what's keeping them alive at the moment. Making people update rule books and codex every two years is making them short term profits. Changing a few words here and there, a lot of copy and paste and boom new rulebook or codex. I totally expect 8th edition 40k to be released this time next year with the cost of the new rulebook costing $99.

**Nomeny**

I've played plenty of other games, and 7th is my favourite edition so far. I think GW is still here because they're catering to people that like 40k, and enjoy playing it, and not people whose hobby is running it down.

**TheAuldGrump**

And the pool of people that like 40K is shrinking....

But that couldn't possibly have anything to do with how GW is running things, now could it?

In any business, if your base is shrinking while your competitors' are growing then you have a problem.

If your base is shrinking while the industry that you are in is growing then you have a bigger problem.

GW has a bigger problem.

I think one of the root causes is that for a long time GW really didn't have competition. They had nothing to measure themselves against.

Now that they do have competition they have no idea of what to do.

When the CEO of a company proudly proclaims that they do no market research then the company really needs a new CEO.

When a company that relies on their customers to do their advertising for them starts to alienate those customers then they will lose customers.

GW is losing customers.

Saying 'They know what they are doing!' does not work when the raw numbers are saying 'They really don't know what they are doing'.

They really don't know what they are doing.

I love it when somebody throws in 'They are too big to fail!'

GW is small.

The industry is small.

The Crown will not step in to save GW from bankruptcy. Being too big to fail simply means that the collapse of a company would do enough damage that it cannot be allowed to fail.

GW is not one of those companies - if it failed today it would be replaced by half a dozen others.

The Auld Grump - I remember when folks thought that TSR was too big to fail....

**Azreal13**

Point of order, The Crown wouldn't step in to save anything, we're a constitutional monarchy, it would be the government that stepped in.

The Queen's not actually in charge you know!

**Vermis**

I can't come close to topping what Thud and others said. Bravo guys. But I'll stick my oar in anyway. To the OP (and Easy E): Inertia, bubbles, and a degree of institutionalisation that'd make Brooks Hatlen take a step back and exclaim 'buddy, there's something wrong with you."

XdeadpoolX wrote:
Thats an easy one. How many GW stores have an intro table where the staff member will play a fun and friendly game with you and explain the rules and phases? Every single one of them!

Now tell me where you can go to learn any other system of gaming where you can just walk in and get a intro game that isn't a local gaming group bringing a friend into the fold. Yes i am sure you could think of a few but GW has that market cornered.

I joined a club where I didn't previously know anyone and promptly introduced them to Hail Caesar and Black Powder. Sure, it can be a bit more convenient in GW (though how much since so many changed to one-man stores? And what about the ones still crowded with aromatic neckbeards...?) but like I'm fond of arguing, that doesn't make it completely impossible anywhere else, and might not even be that beneficial in certain ways, to gamers and to GW itself. That's that third thing I mentioned above. Some gamers, weirdly enough, gather together the resources to put on intro games for the systems they like and want others to try. I've done it myself, once or twice. (It helps that many, many games don't cost nearly as much as GW rules and armies, and that some minis can be used for multiple games.)

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.

I agree with this, mostly...

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.

... but not this. I play in clubs where I know (and, this is crucial, get to know) other gamers, and over kitchen tables. I don't play in GW stores, FLGSs, and definitely not in tournaments, not since my round of vets got shoved out of GW Belfast. Socialisation is the thing, but it helps to do it with good, well written games, otherwise you might as well be shooting the breeze by watching movies or... traffic. I don't like playing games I don't like, strangely enough, which largely boils down to badly written games that provide all the stimulation of rolling a dice to see if you land on a snake or a ladder, but cost a truckload more. I'm fortunate that the folks I play with mostly gravitate towards the type of games I do like, too. I don't know if playing bad games - feeling like nails-on-blackboard for a whole evening - necessarily makes or merely leaves the socialisation completely enjoyable..
Which is a drawn-out way to say, I don't doubt that part of that demographic is only looking to spend piles of money so they have brightly coloured objects to look at while they sink beers, but not all of it.

deviantduck wrote:And almost every person buys all of their GW merch at full price from our FLGS, myself included.

I don't think you lot are going to be enough to save them.

Accolade wrote:well, I guess GW will be able to just knock the "S" off their signs and consider THAT their fancy new makeover.

They could call themselves WorkHOP and sell pancakes?

(FinecakesTM made from plaster instead of flour and sold for $20 each)

Azreal13 wrote:Point of order, The Crown wouldn't step in to save anything, we're a constitutional monarchy, it would be the government that stepped in.

The Queen's not actually in charge you know!

Amazing how many people don't seem to get this.

**Azreal13**

If I was feeling particularly uncharitable I'd have added "just like Obama!"

**TheAuldGrump**

Azreal13 wrote:
Point of order, The Crown wouldn't step in to save anything, we're a constitutional monarchy, it would be the government that stepped in.

The Queen's not actually in charge you know!

Given that, as far as I know, neither Crown nor Parliament has ever spoken up to prevent a corporation from failing... a mute point.

(Get it, not speaking up, mute? Huh, huh?... never mind.)

The Auld Grump

**Azreal13**

Oh, the govt stepped in and spoke up when all the banks were wobbly, the people technically own one of the largest in the UK at the moment.

**TheAuldGrump**

Azreal13 wrote:
Oh, the govt stepped in and spoke up when all the banks were wobbly, the people technically own one of the largest in the UK at the moment.

Heh, I wasn't thinking about the bank bailouts - either in the UK or the US.

For some reason I was fixating on manufacture, production, etc.. (Specifically the big car manufacturers, here in the States.)

But I am pretty sure that the bank bailout dwarfed that....

The Auld Grump - never assume that an industry will police themselves... they won't.

**Azreal13**

Well, the last time GW went wobbly, Kirby et al stepped in to bail it out, so who knows, if they continue to wobble..

**Lanrak**

@Azreal13.
I thought the management buy out was when Steve Jackson and the other co founders moved on and the remaining management team bought it off them.
I did not think the company was in any financial trouble back then?
Or are you referring to the decision to make GW a plc? Again I did not think the company was in financial difficulty...

I could be mistaken remembering this , or simply forgot stuff.(Its old age you know...

)

**kb305**

I think the UK is propping them up. they seem to be failing pretty hard in north america.

I remember back in 5th everything seemed much busier.

**Azreal13**

Lanrak wrote:
@Azreal13.
I thought the management buy out was when Steve Jackson and the other co founders moved on and the remaining management team bought it off them.
I did not think the company was in any financial trouble back then?
Or are you referring to the decision to make GW a plc? Again I did not think the company was in financial difficulty...

I could be mistaken remembering this , or simply forgot stuff.(Its old age you know... )

IIRC Bryan Ansell bought it from Jackson et al, and Kirby led the buyout from Ansell. I may just be assuming the financial trouble bit, but that's often the situation that leads to a buyout. But equally time, lack of Internet and GW not having to make all matters public back then may mean I have the specifics wrong.

**notprop**

It's only ever been said that Bryan Ansell lost interest in GW when it became just the big business Warhammer on the horizon.

**doctor_zoidburg**

I'd like to add my 2 cents, as both and ex GW employee (from the early 00's glory days) and now a retail business owner.

Firstly, retail has changed. I've worked as in retail for half my life and my entire working life and dynamism drives companies forward, it's steadied well thought out business models who thrive on service (John Lewis for all you brits) and killed off those unwilling to change or too blinkered to see change until it is too late (Blockbuster). People's buying habits have changed but GW's is a business that cannot adapt in a way others have. It relies on customer facing retail in order to drive customer stimulation but due to the low internet-only overheads it cannot rely solely on retail stores to compete. I personally see GW essentially normalising.

LOTR was a blip, a good blip but a blip nonetheless, it was always going to be a short-ish term project, a true "make hay whilst the sun shines" scenario with a limited shelf life, and if it wasn't viewed as such by management and investors then there truly is no hope! GW's overall failing with LOTR was not converting enough players onto their other games in my eyes.

I would imagine a significantly larger proportion of GW's sales are through independent retailers, a number who will have no bricks and mortar outlets, purely online, where price is the biggest overriding factor. This is fine, it keeps cashflow steady but it reduces margin. Obviously GW would rather you buy through their stores but as long as people are buying product and they can operate within those margins, fine. The only way to increase that revenue is either to cut wholesale margin (which will just make stocking GW product not viable) or increasing prices. Option 2 has clearly been taken; but there will come a point where the product will become prohibitively expensive.

GW cannot close too many of it's retail stores because that truly will destroy the brand and my recent experience has been that they have probably trimmed their customer facing expenditure to the bone.

In my eyes, a true reflection would be to know the volume of units GW moves but that info is almost certainly unavailable to a very select few.

I truly do not see GW going completely, it's ripe for someone with clearly greater business acumen to repair it, but it does want to be run more like a business than a hobby.

**Azreal13**

doctor_zoidburg wrote:

LOTR was a blip, a good blip but a blip nonetheless, it was always going to be a short-ish term project, a true "make hay whilst the sun shines" scenario with a limited shelf life, and if it wasn't viewed as such by management and investors then there truly is no hope! GW's overall failing with LOTR was not converting enough players onto their other games in my eyes.

Then there may truly be no hope, as there was absolutely no attempt to duplicate the success of LotR with The Hobbit. It would have been ambitious to expect a similar level of success, but the extent of GW's attempts was to put it on the site and in White Dwarf - essentially preaching to the choir.

I would imagine a significantly larger proportion of GW's sales are through independent retailers, a number who will have no bricks and mortar outlets, purely online, where price is the biggest overriding factor. This is fine, it keeps cashflow steady but it reduces margin. Obviously GW would rather you buy through their stores but as long as people are buying product and they can operate within those margins, fine. The only way to increase that revenue is either to cut wholesale margin (which will just make stocking GW product not viable) or increasing prices. Option 2 has clearly been taken; but there will come a point where the product will become prohibitively expensive.

GW won't allow a company to open a trade account without a B+M location, and the split of their revenue is roughly 40/40/20 Indy/Direct Store/online, Black Library and Forgeworld.

GW cannot close too many of it's retail stores because that truly will destroy the brand and my recent experience has been that they have probably trimmed their customer facing expenditure to the bone.

That's a very UK centric view, other markets are largely composed of Indys doing all the customer facing stuff just fine, and carrying all of the risk. It was a mistake to double down on their own retail stores in the first place, as they're not making the company money, it was a bigger mistake to piss the Indys off with various anticompetitive clauses in their trade agreements and there's now no easy way back.

In my eyes, a true reflection would be to know the volume of units GW moves but that info is almost certainly unavailable to a very select few.

I truly do not see GW going completely, it's ripe for someone with clearly greater business acumen to repair it, but it does want to be run more like a business than a hobby.

Unit sales leaked on a document that was part of the Chapterhouse case - they were a lot lower than you think. But falling revenue in the face of rising prices means that volume is almost certainly down significantly, and as more players quit both simultaneously feeding the 2nd hand market and removing the opportunity of someone else to play against, I can only see it going one way. Perhaps it will find equilibrium, maybe it won't.

Ironically, while they no doubt need some more competent people in key positions, I think they need reminding that they're in the hobby business, and they could be a little less mercenary and a little more fanboy.