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2015/06/27 10:18:25
Subject: What Keeps GW Financially Alive and Why do they not Tank?
Kilkrazy wrote: Perhaps tabletop games, like computer games, have changed from being a niche to a mass market industry in the past 20 years.
I have to disagree. While tabletop games have made a ridiculous amount of progress in the past few decades it is still very much a niche market that doesn't come close to video games.
Whenever people unaware of wargaming's existence come into my FLGS or see some of my miniatures they react like they just entered the twilight zone. I've had an immense amount of trouble finding fellow 40k players and the mere act of explaining wargaming to the uninitiated takes a lot of effort.
Even then video games aren't even that popular when in the context of other past times. Pick any sport and odds are it has had made more money and made more of a cultural impact than any video game (even nintendo.)
This message was edited 1 time. Last update was at 2015/06/27 10:19:09
2015/06/27 10:53:05
Subject: What Keeps GW Financially Alive and Why do they not Tank?
Kilkrazy wrote: Perhaps tabletop games, like computer games, have changed from being a niche to a mass market industry in the past 20 years.
I have to disagree. While tabletop games have made a ridiculous amount of progress in the past few decades it is still very much a niche market that doesn't come close to video games.
Whenever people unaware of wargaming's existence come into my FLGS or see some of my miniatures they react like they just entered the twilight zone. I've had an immense amount of trouble finding fellow 40k players and the mere act of explaining wargaming to the uninitiated takes a lot of effort.
+1 to this.
For everyone who says to "prove that GW knows their market", I can equally ask the same question of "prove that GW doesn't know their market". Like I said before, you can't make claims about what information they possess unless you work for GW. For example, just because they don't conduct research on their own doesn't mean that they don't outsource or contract another company to do so, or get market insights from them, such as Frost & Sullivan, S&P Capital IQ, IBISWorld, BizMiner, etc.
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2015/06/27 10:57:37
Subject: What Keeps GW Financially Alive and Why do they not Tank?
I'd say that the troubles they're currently in speaks volumes about a company that's completely out of touch with not just their customers but reality itself.
2015/06/27 11:18:02
Subject: What Keeps GW Financially Alive and Why do they not Tank?
For everyone who says to "prove that GW knows their market", I can equally ask the same question of "prove that GW doesn't know their market". Like I said before, you can't make claims about what information they possess unless you work for GW. For example, just because they don't conduct research on their own doesn't mean that they don't outsource or contract another company to do so, or get market insights from them, such as Frost & Sullivan, S&P Capital IQ, IBISWorld, BizMiner, etc.
1. They've stated they do no research. Interpret that how'd you like, but it indicates more that they do no research than the opposite. If you're going to claim they do in spite of their statement otherwise, you're the one who needs proof, otherwise the only logical conclusion from the facts is that they do not, in fact, perform market research or ask what the market wants.
2. Since cutting various specialist games, several companies have introduced games that are eerily similar that one could easily argue are filling the void left behind by GW. Had GW known what the market wanted, they would have been able to continue making SGs into bigger and better lines. Instead, they were left to stagnate unsupported until they pulled life supported.
3. Their revenue and profit is falling. Despite significant price increases, they are making less money, which means they're moving less product. If they're moving less product, it also stands to reason its because they don't know what the market wants; in this case with regards to value which is important.
4. The lesser of the points I'll make, but every bit of anecdotal evidence we have from stores, distributors, and gamers themselves through posts, polls, and petitions (I'm aware of the unscientific nature) all point to a growing crowd is dissatisfied customers moving on to other games for many reasons that would be apparent to GW should they only ask on twitter. Now, of course the internet is only a small representation of the customers. Of course the most positive people are less likely to post their support. Of course the polls and posts are not proper statistical sources. That said, it'd be hard to hand wave it all away without acknowledging that this is literally free market research full of rather simple ideas they could implement tomorrow if they wanted.
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2015/06/27 11:24:02
Subject: What Keeps GW Financially Alive and Why do they not Tank?
For everyone who says to "prove that GW knows their market", I can equally ask the same question of "prove that GW doesn't know their market". Like I said before, you can't make claims about what information they possess unless you work for GW. For example, just because they don't conduct research on their own doesn't mean that they don't outsource or contract another company to do so, or get market insights from them, such as Frost & Sullivan, S&P Capital IQ, IBISWorld, BizMiner, etc.
1. They've stated they do no research. Interpret that how'd you like, but it indicates more that they do no research than the opposite. If you're going to claim they do in spite of their statement otherwise, you're the one who needs proof, otherwise the only logical conclusion from the facts is that they do not, in fact, perform market research or ask what the market wants.
2. Since cutting various specialist games, several companies have introduced games that are eerily similar that one could easily argue are filling the void left behind by GW. Had GW known what the market wanted, they would have been able to continue making SGs into bigger and better lines. Instead, they were left to stagnate unsupported until they pulled life supported.
3. Their revenue and profit is falling. Despite significant price increases, they are making less money, which means they're moving less product. If they're moving less product, it also stands to reason its because they don't know what the market wants; in this case with regards to value which is important.
4. The lesser of the points I'll make, but every bit of anecdotal evidence we have from stores, distributors, and gamers themselves through posts, polls, and petitions (I'm aware of the unscientific nature) all point to a growing crowd is dissatisfied customers moving on to other games for many reasons that would be apparent to GW should they only ask on twitter. Now, of course the internet is only a small representation of the customers. Of course the most positive people are less likely to post their support. Of course the polls and posts are not proper statistical sources. That said, it'd be hard to hand wave it all away without acknowledging that this is literally free market research full of rather simple ideas they could implement tomorrow if they wanted.
Ironically, I think this discussion is coming to an end if I can state with certainty that I alone (not to mention countless others) have already addressed and offered rebuttal for all four points that you just raised (which other people have raised before this) in the 13 pages on this thread and the 21 pages in the "GW financials latest" thread. So, don't mind me if I just offer you to peruse the rest of the two threads instead of reposting my counter-points.
This message was edited 1 time. Last update was at 2015/06/27 11:24:52
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2015/06/27 12:40:02
Subject: Re:What Keeps GW Financially Alive and Why do they not Tank?
Blacksails wrote: What makes you believe they understand the market fine? What makes you believe they don't need to perform market research?
Well, they have hundreds of stores, and they have hundreds of employees. A lot of those people are hired to understand the market, and they do sell a lot of product. They have a large structure which invites the sort of customer that they want to come and spend time and I'm sure they talk with these customers.
How much money did Dreamforge or Mantic or CB or Anvil spend on market research? Or Advertising?
I'm not saying that funding market research would be a bad thing; just that they probably know more about the miniature wargaming industry than any of us.
Mantic does market research all the time.
They ask for feedback from their players.
They maintain a forum, and actually address their audience there - going so far as to admit when something isn't working.
They run Kickstarters - which act as advertising and market research in one.
Mantic is growing.
GW is shrinking.
There is a direct causal relation there....
Warpath has not yet seen a full release, in part because the market research that Mantic has done showed that the game was nowhere near being ready for a full release.
GW threw Dreadfleet on the market, then wondered why it didn't sell.
The GW stores are an anchor thrown to a drowning man - they are making less and less of GW's profit. Those hundreds of employees are being reduced to one man per store, and the store closes when he needs to eat.
They are selling less and less product.
And GW has no real idea as to why.
The Auld Grump
Kilkrazy wrote:When I was a young boy all my wargames were narratively based because I played with my toy soldiers and vehicles without the use of any rules.
The reason I bought rules and became a real wargamer was because I wanted a properly thought out structure to govern the action instead of just making things up as I went along.
2015/06/27 12:44:38
Subject: What Keeps GW Financially Alive and Why do they not Tank?
For everyone who says to "prove that GW knows their market", I can equally ask the same question of "prove that GW doesn't know their market". Like I said before, you can't make claims about what information they possess unless you work for GW. For example, just because they don't conduct research on their own doesn't mean that they don't outsource or contract another company to do so, or get market insights from them, such as Frost & Sullivan, S&P Capital IQ, IBISWorld, BizMiner, etc.
1. They've stated they do no research. Interpret that how'd you like, but it indicates more that they do no research than the opposite. If you're going to claim they do in spite of their statement otherwise, you're the one who needs proof, otherwise the only logical conclusion from the facts is that they do not, in fact, perform market research or ask what the market wants.
2. Since cutting various specialist games, several companies have introduced games that are eerily similar that one could easily argue are filling the void left behind by GW. Had GW known what the market wanted, they would have been able to continue making SGs into bigger and better lines. Instead, they were left to stagnate unsupported until they pulled life supported.
3. Their revenue and profit is falling. Despite significant price increases, they are making less money, which means they're moving less product. If they're moving less product, it also stands to reason its because they don't know what the market wants; in this case with regards to value which is important.
4. The lesser of the points I'll make, but every bit of anecdotal evidence we have from stores, distributors, and gamers themselves through posts, polls, and petitions (I'm aware of the unscientific nature) all point to a growing crowd is dissatisfied customers moving on to other games for many reasons that would be apparent to GW should they only ask on twitter. Now, of course the internet is only a small representation of the customers. Of course the most positive people are less likely to post their support. Of course the polls and posts are not proper statistical sources. That said, it'd be hard to hand wave it all away without acknowledging that this is literally free market research full of rather simple ideas they could implement tomorrow if they wanted
.
Ironically, I think this discussion is coming to an end if I can state with certainty that I alone (not to mention countless others) have already addressed and offered rebuttal for all four points that you just raised (which other people have raised before this) in the 13 pages on this thread and the 21 pages in the "GW financials latest" thread. So, don't mind me if I just offer you to peruse the rest of the two threads instead of reposting my counter-points.
If people are still posting points you feel you've rebutted, I think it's fair to say you've not been as convincing as you'd like to think.
We find comfort among those who agree with us - growth among those who don't. - Frank Howard Clark
The wise man doubts often, and changes his mind; the fool is obstinate, and doubts not; he knows all things but his own ignorance.
The correct statement of individual rights is that everyone has the right to an opinion, but crucially, that opinion can be roundly ignored and even made fun of, particularly if it is demonstrably nonsense!” Professor Brian Cox
There is a difference between denying and rebutting....
The Auld Grump
Kilkrazy wrote:When I was a young boy all my wargames were narratively based because I played with my toy soldiers and vehicles without the use of any rules.
The reason I bought rules and became a real wargamer was because I wanted a properly thought out structure to govern the action instead of just making things up as I went along.
2015/06/27 12:59:30
Subject: What Keeps GW Financially Alive and Why do they not Tank?
If people are still posting points you feel you've rebutted, I think it's fair to say you've not been as convincing as you'd like to think.
Not necessarily.
Playing devils advocate (I'm on the fence here personally - I think enigwolf raised some interesting points as well as a different narrative) azreal, but it is my experience that some of those people still posting points are also just as unwilling to accept any narrative that isn't 'all the negative, all the time' with regard to gw, as well as being unwelcoming of views from a different perspective, or playing games a different way.
This message was edited 1 time. Last update was at 2015/06/27 13:00:03
2015/06/27 13:08:24
Subject: What Keeps GW Financially Alive and Why do they not Tank?
That, in turn, comes from GW's unwillingness to communicate.
It is easy to believe the worst when all that you see are the results, and it is too late to do anything about it.
Hell, I think most folks are not that upset with GW - they are upset with Kirby and the Kronies.
The Auld Grump
Kilkrazy wrote:When I was a young boy all my wargames were narratively based because I played with my toy soldiers and vehicles without the use of any rules.
The reason I bought rules and became a real wargamer was because I wanted a properly thought out structure to govern the action instead of just making things up as I went along.
2015/06/27 13:32:00
Subject: What Keeps GW Financially Alive and Why do they not Tank?
If people are still posting points you feel you've rebutted, I think it's fair to say you've not been as convincing as you'd like to think.
Not necessarily.
Playing devils advocate (I'm on the fence here personally - I think enigwolf raised some interesting points as well as a different narrative) azreal, but it is my experience that some of those people still posting points are also just as unwilling to accept any narrative that isn't 'all the negative, all the time' with regard to gw, as well as being unwelcoming of views from a different perspective, or playing games a different way.
Well, that's every discussion forum on every topic anywhere on the Internet in essence!
But my issue is I feel I'm making points, and seeing others do likewise, based on evidence, be it financial reports, past behaviour or whatever, im then seeing counterpoints along the lines of "ah, but you don't know that they don't have some mystical book in the basement that tells them all the things" or "I feel that those figures somehow don't tell the whole story, it's all part of a bigger plan!"
If someone could take hard evidence and put together a compelling argument for a different narrative, I'd be more than willing to listen, but I just don't see that happening.
We find comfort among those who agree with us - growth among those who don't. - Frank Howard Clark
The wise man doubts often, and changes his mind; the fool is obstinate, and doubts not; he knows all things but his own ignorance.
The correct statement of individual rights is that everyone has the right to an opinion, but crucially, that opinion can be roundly ignored and even made fun of, particularly if it is demonstrably nonsense!” Professor Brian Cox
If people are still posting points you feel you've rebutted, I think it's fair to say you've not been as convincing as you'd like to think.
Not necessarily.
Playing devils advocate (I'm on the fence here personally - I think enigwolf raised some interesting points as well as a different narrative) azreal, but it is my experience that some of those people still posting points are also just as unwilling to accept any narrative that isn't 'all the negative, all the time' with regard to gw, as well as being unwelcoming of views from a different perspective, or playing games a different way.
Well, that's every discussion forum on every topic anywhere on the Internet in essence!
But my issue is I feel I'm making points, and seeing others do likewise, based on evidence, be it financial reports, past behaviour or whatever, im then seeing counterpoints along the lines of "ah, but you don't know that they don't have some mystical book in the basement that tells them all the things" or "I feel that those figures somehow don't tell the whole story, it's all part of a bigger plan!"
If someone could take hard evidence and put together a compelling argument for a different narrative, I'd be more than willing to listen, but I just don't see that happening.
Or some people haven't read the rest of the pages in the two relevant threads, mostly those who've joined half-way through, and thus didn't see them?
Click here for my Swap Shop post - I'm buying stuff! DR:90-S++G++M+B++I+Pw40kPbfg99#+D++A++/eWDR++T(T)DM+ Black Legion/Iron Warriors/Night Lords Inquisitorial Friends & Co. (Inq, GK, Elysians, Assassins) Elysian Droptroops, soon-to-add Armored Battlegroup Adeptus Mechanicus Forge World Lucius
2015/06/27 14:15:49
Subject: What Keeps GW Financially Alive and Why do they not Tank?
We find comfort among those who agree with us - growth among those who don't. - Frank Howard Clark
The wise man doubts often, and changes his mind; the fool is obstinate, and doubts not; he knows all things but his own ignorance.
The correct statement of individual rights is that everyone has the right to an opinion, but crucially, that opinion can be roundly ignored and even made fun of, particularly if it is demonstrably nonsense!” Professor Brian Cox
We find comfort among those who agree with us - growth among those who don't. - Frank Howard Clark
The wise man doubts often, and changes his mind; the fool is obstinate, and doubts not; he knows all things but his own ignorance.
The correct statement of individual rights is that everyone has the right to an opinion, but crucially, that opinion can be roundly ignored and even made fun of, particularly if it is demonstrably nonsense!” Professor Brian Cox
Kilkrazy wrote: Perhaps tabletop games, like computer games, have changed from being a niche to a mass market industry in the past 20 years.
I have to disagree. While tabletop games have made a ridiculous amount of progress in the past few decades it is still very much a niche market that doesn't come close to video games.
Whenever people unaware of wargaming's existence come into my FLGS or see some of my miniatures they react like they just entered the twilight zone. I've had an immense amount of trouble finding fellow 40k players and the mere act of explaining wargaming to the uninitiated takes a lot of effort.
Even then video games aren't even that popular when in the context of other past times. Pick any sport and odds are it has had made more money and made more of a cultural impact than any video game (even nintendo.)
I am talking about all tabletop games including wargames, boardgames, RPGs -- what might be called "hobby games" in general.
Here is some recent info about video games.
I would be surprised if tabletop games had that much penetration, but suppose 20% of people are playing tabletop games. Partication in TT games has increased a lot over the past 10 years. I can't find a major piece of research on it, which of course is indicative in itself.
Of course we don't have an agreed definition of mass market.
I don't think the relative popularity of sports is relevant to video games or tabletop games. One might as well talk about the popularity of cooking and eating out. It's something nearly everyone does, and I don't see that it precludes participation in video or tabletop games.
If people are still posting points you feel you've rebutted, I think it's fair to say you've not been as convincing as you'd like to think.
Not necessarily.
Playing devils advocate (I'm on the fence here personally - I think enigwolf raised some interesting points as well as a different narrative) azreal, but it is my experience that some of those people still posting points are also just as unwilling to accept any narrative that isn't 'all the negative, all the time' with regard to gw, as well as being unwelcoming of views from a different perspective, or playing games a different way.
Well, that's every discussion forum on every topic anywhere on the Internet in essence!
But my issue is I feel I'm making points, and seeing others do likewise, based on evidence, be it financial reports, past behaviour or whatever, im then seeing counterpoints along the lines of "ah, but you don't know that they don't have some mystical book in the basement that tells them all the things" or "I feel that those figures somehow don't tell the whole story, it's all part of a bigger plan!"
If someone could take hard evidence and put together a compelling argument for a different narrative, I'd be more than willing to listen, but I just don't see that happening.
Or some people haven't read the rest of the pages in the two relevant threads, mostly those who've joined half-way through, and thus didn't see them?
Or some read everything and CAN understand the GW reports. What do you use tro get your views?
Peter: As we all know, Christmas is that mystical time of year when the ghost of Jesus rises from the grave to feast on the flesh of the living! So we all sing Christmas Carols to lull him back to sleep.
Bob: Outrageous, How dare he say such blasphemy. I've got to do something.
Man #1: Bob, there's nothing you can do.
Bob: Well, I guess I'll just have to develop a sense of humor.
2015/06/27 16:50:02
Subject: What Keeps GW Financially Alive and Why do they not Tank?
There are facts not in dispute, but there's more than one set of narrative for those. If a hotdog stand sells 100 hot dogs on Monday, and 98 hot dogs the next week, and 96 the week following, are they doing something wrong? Is it a business in decline? If they sell 110 hot dogs the week after that, did they do something right?
Sometimes, things just happen. Anyone who's run a business for a long time knows that it's almost impossible to always do better than your last year, every year, for thirty years. At times you're going to have great years for all sorts of reasons, some totally out of your control, and other times, you'll make blunders that will leave you with decreased sales. Sometimes you'll make blunders, but your revenue numbers will be up.
Given that, we can all agree with this fact: The total sales of the wargames market has increased while GW's revenues and profits have decreased in the last couple of years.
But "why" is the quintessential question, and the honest answer is that we don't have the facts to support a conclusion.
There are things like the LOTR bubble, which made GW a lot of money and isn't anymore, the decline of Warhammer Fantasy Battle, the increase in competitors, people who are unhappy with GW, people who are happy with GW, increased release cadence, and pricing increases -- to name just a small number of factors.
How do you interpret that?
One scenario is that GW's policies are a failure and that people are leaving in droves, and GW is at the start of a death spiral. People who subscribe to this narrative feel that GW is just milking the last pennies out of their most loyal customers before they flee due to having nobody to play with.
Another scenario is that GW's sales volumes are re-aligning with pre-LoTR numbers; assuming that Fantasy is flagging (lots of anecdotal evidence of this, plus the big shift in Sigmar to reboot it), one must assume that 40k numbers have grown. People who subscribe to this narrative feel that GW is doing great, 40k is doing better than ever, and despite pissing off the some people, GW is doing better by pleasing the modelling-centric hardcore enthusiast (or GW superfan, or whatever you want to call them).
In one scenario, Games Workshop is foolish for raising prices and rapid releases because it pisses off a lot of players. In the alternate, this strategy has paid off, and has maximized their income by tapping vertically into the customers it deems most valuable.
In one scenario, Games Workshop is releasing tons of new models and rules because it's going out of business and this is all a last huzzah. In another scenario, Games Workshop is releasing tons of new models and rules because it's going stronger than ever, and they must do something with those profits, right?
Again, the honest truth is that nobody who's been posting on this forum has the information to nail it down, but we're all entitled to speculate.
I happen to think that Games Workshop is a successful, profitable company, and that although I might differ with them on how to do certain things, they're better at operating their hundreds-of-millions-of-dollar business than me; and also, that a decline in sales doesn't equate to a death spiral. I also happen to think that GW management actually cares about the health of their company, and not just the stock price for the next ring of the bell; and that Games Workshop writers and sculptors are talented folks who care deeply about their product. But that's all opinion, not fact.
This message was edited 6 times. Last update was at 2015/06/27 17:00:25
2015/06/27 16:56:37
Subject: What Keeps GW Financially Alive and Why do they not Tank?
There are facts not in dispute, but there's more than one set of narrative for those. If a hotdog stand sells 100 hot dogs on Monday, and 98 hot dogs the next week, and 96 the week following, are they doing something wrong? Is it a business in decline? If they sell 110 hot dogs the week after that, did they do something right?
Sometimes, things just happen. Anyone who's run a business for a long time knows that it's almost impossible to always do better than your last year, every year, for thirty years. At times you're going to have great years for all sorts of reasons, some totally out of your control, and other times, you'll make blunders that will leave you with decreased sales. Sometimes you'll make blunders, but your revenue numbers will be up.
Given that, we can all agree with this fact: The total sales of the wargames market has increased while GW's revenues and profits have decreased in the last couple of years.
But "why" is the quintessential question, and the honest answer is that we don't have the facts to support a conclusion.
There are things like the LOTR bubble, which made GW a lot of money and isn't anymore, the decline of Warhammer Fantasy Battle, the increase in competitors, people who are unhappy with GW, people who are happy with GW, increased release cadence, and pricing increases -- to name just a small number of factors.
How do you interpret that?
One scenario is that GW's policies are a failure and that people are leaving in droves, and GW is at the start of a death spiral.
Another scenario is that GW's sales volumes are re-aligning with pre-LoTR numbers; assuming that Fantasy is flagging (lots of anecdotal evidence of this, plus the big shift in Sigmar to reboot it), one must assume that 40k numbers have grown. So in this scenario, 40k isn't just healthy, but stronger than ever.
In one scenario, Games Workshop is foolish for raising prices and rapid releases because it pisses off a lot of players. In the alternate, this strategy has paid off, and has maximized their income from the customers it deems most valuable.
Again, the honest truth is that nobody who's been posting on this forum has the information to nail it down, but we're all entitled to speculate.
I happen to think that Games Workshop is a successful, profitable company, and that although I might differ with them on how to do certain things, they're better at operating their hundreds-of-millions-of-dollar business than me; and also, that a decline in sales doesn't equate to a death spiral. But that's an opinion, not a fact.
Ahhh.... so "feelings" I it now.
Peter: As we all know, Christmas is that mystical time of year when the ghost of Jesus rises from the grave to feast on the flesh of the living! So we all sing Christmas Carols to lull him back to sleep.
Bob: Outrageous, How dare he say such blasphemy. I've got to do something.
Man #1: Bob, there's nothing you can do.
Bob: Well, I guess I'll just have to develop a sense of humor.
2015/06/27 17:01:44
Subject: What Keeps GW Financially Alive and Why do they not Tank?
I'm sorry, but I don't understand this. I'm just trying to present the two sides of the same coin. I'm willing to acknowledge the possibility of the scenarios unfavorable to Games Workshop, as are some of those who hold a positive opinion of GW. Likewise, some of the people who hold a negative opinion of GW are willing to consider the alternate narratives too.
The open-minded folks, even though they favor one narrative or another, who debate these points in a Socratic discussion are interesting for me to back-and-forth with.
This message was edited 1 time. Last update was at 2015/06/27 17:11:17
2015/06/27 17:12:45
Subject: What Keeps GW Financially Alive and Why do they not Tank?
There are facts not in dispute, but there's more than one set of narrative for those. If a hotdog stand sells 100 hot dogs on Monday, and 98 hot dogs the next week, and 96 the week following, are they doing something wrong? Is it a business in decline? If they sell 110 hot dogs the week after that, did they do something right?
Sometimes, things just happen. Anyone who's run a business for a long time knows that it's almost impossible to always do better than your last year, every year, for thirty years. At times you're going to have great years for all sorts of reasons, some totally out of your control, and other times, you'll make blunders that will leave you with decreased sales. Sometimes you'll make blunders, but your revenue numbers will be up.
Given that, we can all agree with this fact: The total sales of the wargames market has increased while GW's revenues and profits have decreased in the last couple of years.
But "why" is the quintessential question, and the honest answer is that we don't have the facts to support a conclusion.
There are things like the LOTR bubble, which made GW a lot of money and isn't anymore, the decline of Warhammer Fantasy Battle, the increase in competitors, people who are unhappy with GW, people who are happy with GW, increased release cadence, and pricing increases -- to name just a small number of factors.
How do you interpret that?
One scenario is that GW's policies are a failure and that people are leaving in droves, and GW is at the start of a death spiral.
Another scenario is that GW's sales volumes are re-aligning with pre-LoTR numbers; assuming that Fantasy is flagging (lots of anecdotal evidence of this, plus the big shift in Sigmar to reboot it), one must assume that 40k numbers have grown. So in this scenario, 40k isn't just healthy, but stronger than ever.
In one scenario, Games Workshop is foolish for raising prices and rapid releases because it pisses off a lot of players. In the alternate, this strategy has paid off, and has maximized their income from the customers it deems most valuable.
Again, the honest truth is that nobody who's been posting on this forum has the information to nail it down, but we're all entitled to speculate.
I happen to think that Games Workshop is a successful, profitable company, and that although I might differ with them on how to do certain things, they're better at operating their hundreds-of-millions-of-dollar business than me; and also, that a decline in sales doesn't equate to a death spiral. But that's an opinion, not a fact.
Its not the total vacuum of information as you make it out to be
GW has had many major releases these past few years than at any time in their history. Two editions, two Space Marine books (their top sellers) Two Eldar books, IK's, Freaking Ad Mech too. Previously these have been huge boosts to their sales. So, currently, what they're doing now causes a decline in revenue.
Now, after more major releases than ever they're still declining in revenue.
Declining revenue is a trend.
1. They either do something different and pull up and get more sales.
2. Steady out and find a new normal.
3. Continue trend and go under.
To pull out of it and raise again, they will have to change what they're doing.
leveling out depends on the causes of decline as does going under.
Now, we have some evidence as to why GW has declining revenue, but it's not conclusive.
http://www.dakkadakka.com/dakkaforum/posts/list/653048.page From the financial reports we also know what money they're taking in and where it's going.
The brick and mortar stores are an anchor, costing more money than they bring in. Store locations also don't lend to advertising.
Also, check out my history blog: Minimum Wage Historian, a fun place to check out history that often falls between the couch cushions.
2015/06/27 17:59:16
Subject: What Keeps GW Financially Alive and Why do they not Tank?
Kilkrazy wrote: Perhaps tabletop games, like computer games, have changed from being a niche to a mass market industry in the past 20 years.
I have to disagree. While tabletop games have made a ridiculous amount of progress in the past few decades it is still very much a niche market that doesn't come close to video games.
Whenever people unaware of wargaming's existence come into my FLGS or see some of my miniatures they react like they just entered the twilight zone. I've had an immense amount of trouble finding fellow 40k players and the mere act of explaining wargaming to the uninitiated takes a lot of effort.
Even then video games aren't even that popular when in the context of other past times. Pick any sport and odds are it has had made more money and made more of a cultural impact than any video game (even nintendo.)
I am talking about all tabletop games including wargames, boardgames, RPGs -- what might be called "hobby games" in general.
Here is some recent info about video games.
I would be surprised if tabletop games had that much penetration, but suppose 20% of people are playing tabletop games. Partication in TT games has increased a lot over the past 10 years. I can't find a major piece of research on it, which of course is indicative in itself.
Of course we don't have an agreed definition of mass market.
I don't think the relative popularity of sports is relevant to video games or tabletop games. One might as well talk about the popularity of cooking and eating out. It's something nearly everyone does, and I don't see that it precludes participation in video or tabletop games.
The correlation between Video Games, Tabletop games, and sports is that all of them have extremely dedicated (but admittedly small) sects of participants that are in it for the competition and little else.
Look at the recent effort to get some video games to be classified as sports (which as someone who formerly identified as a "gamer" I must day is utter Crap) you see the same "take no prisoners" attitude in the more fanatical audiences of all 3 mediums. Look at some of the posts on this very forum and you'd think people were talking about real war when they fight over toy soldiers. The primary similarity is in the attitudes of the audiences.
And when you boil it down their all games generally involving point systems, teams and detailed rule sets.
2015/06/27 18:28:38
Subject: What Keeps GW Financially Alive and Why do they not Tank?
Everyone is going to have their own opinions, or what you call "feelings". Since none of us work for GW, no one can definitively state the position the company is in financially. So till then, we speculate. And anything without perfect or near-perfect information is pure speculation.
Talys wrote:@Noir -
There are facts not in dispute, but there's more than one set of narrative for those. If a hotdog stand sells 100 hot dogs on Monday, and 98 hot dogs the next week, and 96 the week following, are they doing something wrong? Is it a business in decline? If they sell 110 hot dogs the week after that, did they do something right?
Sometimes, things just happen. Anyone who's run a business for a long time knows that it's almost impossible to always do better than your last year, every year, for thirty years. At times you're going to have great years for all sorts of reasons, some totally out of your control, and other times, you'll make blunders that will leave you with decreased sales. Sometimes you'll make blunders, but your revenue numbers will be up.
Given that, we can all agree with this fact: The total sales of the wargames market has increased while GW's revenues and profits have decreased in the last couple of years.
But "why" is the quintessential question, and the honest answer is that we don't have the facts to support a conclusion.
There are things like the LOTR bubble, which made GW a lot of money and isn't anymore, the decline of Warhammer Fantasy Battle, the increase in competitors, people who are unhappy with GW, people who are happy with GW, increased release cadence, and pricing increases -- to name just a small number of factors.
How do you interpret that?
One scenario is that GW's policies are a failure and that people are leaving in droves, and GW is at the start of a death spiral. People who subscribe to this narrative feel that GW is just milking the last pennies out of their most loyal customers before they flee due to having nobody to play with.
Another scenario is that GW's sales volumes are re-aligning with pre-LoTR numbers; assuming that Fantasy is flagging (lots of anecdotal evidence of this, plus the big shift in Sigmar to reboot it), one must assume that 40k numbers have grown. People who subscribe to this narrative feel that GW is doing great, 40k is doing better than ever, and despite pissing off the some people, GW is doing better by pleasing the modelling-centric hardcore enthusiast (or GW superfan, or whatever you want to call them).
In one scenario, Games Workshop is foolish for raising prices and rapid releases because it pisses off a lot of players. In the alternate, this strategy has paid off, and has maximized their income by tapping vertically into the customers it deems most valuable.
In one scenario, Games Workshop is releasing tons of new models and rules because it's going out of business and this is all a last huzzah. In another scenario, Games Workshop is releasing tons of new models and rules because it's going stronger than ever, and they must do something with those profits, right?
Again, the honest truth is that nobody who's been posting on this forum has the information to nail it down, but we're all entitled to speculate.
I happen to think that Games Workshop is a successful, profitable company, and that although I might differ with them on how to do certain things, they're better at operating their hundreds-of-millions-of-dollar business than me; and also, that a decline in sales doesn't equate to a death spiral. I also happen to think that GW management actually cares about the health of their company, and not just the stock price for the next ring of the bell; and that Games Workshop writers and sculptors are talented folks who care deeply about their product. But that's all opinion, not fact.
I think this pretty much nailed down the entire thread in a nut-shell.
This message was edited 2 times. Last update was at 2015/06/27 18:30:53
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2015/06/27 19:06:21
Subject: Re:What Keeps GW Financially Alive and Why do they not Tank?
Yeah, specially the "GW stronger than ever" scenario. Truly believable, with two editions for their best-selling game (2012-14) and two releases of their best-selling codex (2013-15) so far failing to counter a trend in declining sales and profits.
I wouldn't be surprised if, after a few years, we look back on 40k 6th edition as the shot in the foot that began to crumble a giant who was stepping on less solid ground than expected.
If the whole Fantasy reboot fails to make a strong impact, I don't think they will have much to celebrate in the next years.
Progress is like a herd of pigs: everybody is interested in the produced benefits, but nobody wants to deal with all the resulting gak.
GW customers deserve every bit of outrageous princing they get.
2015/06/27 19:31:44
Subject: Re:What Keeps GW Financially Alive and Why do they not Tank?
Korinov wrote: Yeah, specially the "GW stronger than ever" scenario. Truly believable, with two editions for their best-selling game (2012-14) and two releases of their best-selling codex (2013-15) so far failing to counter a trend in declining sales and profits.
I wouldn't be surprised if, after a few years, we look back on 40k 6th edition as the shot in the foot that began to crumble a giant who was stepping on less solid ground than expected.
If the whole Fantasy reboot fails to make a strong impact, I don't think they will have much to celebrate in the next years.
Actually, this wasn't quite the scenario I put forward. I was positing that there are essentially three periods: pre-LoTR, LoTR, and post-LoTR. During the latter 2, I theorize that Fantasy Battle declined, but LoTR more than made up the difference. From that period until now, both LoTR and Fantasy Battle have declined. However, 40k most likely has increased in sales, or we'd see more severe revenue declines.
Therefore, my theory is that overall, GW's revenue has declined, but 40k's revenue is higher than it's ever been. Does that mean the 40k ecosystem is stronger than ever? Not necessarily. Taking an extreme example, if one superfan billionaire decided to buy $50 million in 40k models and fill up his 23 storey underground bunker so that he'll have models to paint during the zombie apocalypse, that wouldn't do anything for the ecosystem, right? On the other hand, a smaller number of more dedicated players might not be a bad thing, if they're actually playing the game, evangelizing the product, and bringing in new players who are also dedicated to the game.
Could the split be otherwise? Of course. Since GW doesn't show the outside world the profit split, we can't determine that.
Like I said, I'm happy to entertain alternative narratives; I just think that it's most likely that Fantasy and LotR have shrunk a lot, and 40k has grown, but not enough to make up the difference.
2015/06/27 19:52:12
Subject: Re:What Keeps GW Financially Alive and Why do they not Tank?
I'd argue 40k has also declined, though not to thr extent of wfb and lotr. IIrc, fantasy was 8% of their earnings. Space marines on their own sold more than all of wfb in better times. 40k has not grown, it has just grown in importance as everything else has shrank more.
It's the constant price hikes, constant churning of codices and editions and the whole dlc malarkey thst is masking and making up for a more severe decline across all their lines. If that's what you mean by 'grown in sales' you are right, but if you are arguing that more people actively play 40k now a opposed to ten years ago, then I can't agree with you.
2015/06/27 19:57:49
Subject: Re:What Keeps GW Financially Alive and Why do they not Tank?
Deadnight wrote: I'd argue 40k has also declined, though not to thr extent of wfb and lotr. IIrc, fantasy was 8% of their earnings. Space marines on their own sold more than all of wfb in better times. 40k has not grown, it has just grown in importance as everything else has shrank more.
It's the constant price hikes, constant churning of codices and editions and the whole dlc malarkey thst is masking and making up for a more severe decline across all their lines. If that's what you mean by 'grown in sales' you are right, but if you are arguing that more people actively play 40k now a opposed to ten years ago, then I can't agree with you.
I hypothesize 40k revenue dollars have increased between 2005 to 2015 -- with no conclusion drawn as to the change in playership or volume.
Maybe the number of players is down (though I have nothing to support this); and maybe volume sales are up or down (but I have seen nothing to support this either). I don't think the price increases are enough to entirely counter the decline in Fantasy, but again, I have no evidence to make an argument either way.
And as I've said, it's entirely possible that superfans are buying boatloads of stuff and hording it away on the shelves; which might be ok for GW's bottom line, but does nothing for the community or hobby. Or there could be lots of new players or returning players too. Who knows; maybe even GW is unclear, though I'm sure they could make a better guess with the data they have than us.
The problem that we have in this thread and other threads like it is that there's an echo chamber for both sides of the argument, and most folks have made up their mind, so either you hear something, and you say, "Amen!" or you hear something and say, "This person is delusional." It's like the Democrats debating the Republicans in Congress.
Personally, I've made my opinion clear. I'm more than willing to consider that I could be wrong, but until I see actual evidence of that, I don't think I can be convinced (though I'll listen).
This message was edited 2 times. Last update was at 2015/06/27 20:04:29
2015/06/27 20:15:16
Subject: Re:What Keeps GW Financially Alive and Why do they not Tank?
Now, here's a thing, putting aside the revenue graph for a second, in the past ten years, their indirect sales haven't altered (point to point, I agent checked intervening years) yet their direct sales have increased and their stores have fallen.
This essentially means they've spent £4m on a website to get sales they'd already got..
We find comfort among those who agree with us - growth among those who don't. - Frank Howard Clark
The wise man doubts often, and changes his mind; the fool is obstinate, and doubts not; he knows all things but his own ignorance.
The correct statement of individual rights is that everyone has the right to an opinion, but crucially, that opinion can be roundly ignored and even made fun of, particularly if it is demonstrably nonsense!” Professor Brian Cox
@Az - If that's the case, I would surmise that Games Workshop would be pretty happy. Having worked with quite a few companies who have both Internet and (many) brick & mortar sales, every one I've worked with far prefers internet orders. Even with free shipping, the profits are better, there's virtually zero shrinkage (employee or customer theft), and very importantly inventory can be centralized.
Now, in GW's case, I'd argue that Internet sales are a lower quality sale (despite being more profitable), because people aren't in the store playing and all that. Plus, if FLGS revenue is down, they'll be inclined to treat GW in as valued a way as they would otherwise. And at independents, they buy chips, candy, pop, and non GW stuff that become lost sales (if people are playing in their basements). Though Costco and the grocery store will be happier
Sorry for bad English, tapping away on cell phone while in brutal long Ikea lineup
2015/06/27 21:19:16
Subject: Re:What Keeps GW Financially Alive and Why do they not Tank?
Deadnight wrote: I'd argue 40k has also declined, though not to thr extent of wfb and lotr. IIrc, fantasy was 8% of their earnings. Space marines on their own sold more than all of wfb in better times. 40k has not grown, it has just grown in importance as everything else has shrank more.
It's the constant price hikes, constant churning of codices and editions and the whole dlc malarkey thst is masking and making up for a more severe decline across all their lines. If that's what you mean by 'grown in sales' you are right, but if you are arguing that more people actively play 40k now a opposed to ten years ago, then I can't agree with you.
I don't know if you're pulling these numbers from historicals, but GW stopped reporting what % of each game system contributed to their revenue.
---
I also noticed this Trading Update that was posted on GW's Investor Relations on June 8th (emphasis mine):
We expect the Group’s profit for the year to 31 May 2015 to be broadly in line with market expectations.
Over the year we have seen modest sales growth, at constant currency, in our core trade and mail order channels. We saw a small decline in our own stores due to continued difficult trading in Continental Europe following our restructuring last year. We saw expected declines in some non-core activities that are grouped with core activities in our reporting. The effect of these non-core activities and the continuing effects of unfavourable exchange rates mean that our reported sales are likely to show small declines in retail (c.5%) and trade (c.3%). Mail order growth was c.5%.
This Trading Update statement implies that overall, we will see an overall decline in sales volume and revenues due to a greater decline in their non-core channels compared to the growth in core channels, however, the focus here should be on that their core channels has seen growth this year.
With this in mind, looking back at their financials for their sales channels from the last year, we have seen a year-to-year increase in "Export" and "Other" (look up the financials for full definitions of what these cover) with a decrease within the regional groupings. This implies a shift of focus from selling in their brick and mortar stores to selling direct to distributors, FLGS, and mail-/web-order, which as Talys has mentioned, carries a low cost-of-sale. It is further commented on in a December 8 Trading Update as follows that operating profits dropped due to the "continuing strength of sterling... against the US dollar and euro" (emphasis mine):
Games Workshop Group PLC announces that trading in the six months to 30 November 2014 at constant currency has been broadly in line with the Board’s expectations and 2013/14 first half performance.
The Company has been exposed to the continuing strength of sterling, particularly against the US dollar and euro in the period reported. The adverse impact in the six months to 30 November 2014 will result in operating profit at actual rates being approximately £1 million lower than 2013/14 first half performance.
Also, right after the most recent Trading Statement, the hedge fund Ruffer LLP (majority shareholder) increased its stake from 9% to 10.1% in the company. Take this how you will, but if I were a hedge fund manager with this much already invested in a company, I'd be dumping if the sales/revenue decreases overall were an ill-omen.
Is GW doing poorly compared to past years from a raw financial point? Yes. Does this mean the hobby is going to end? No. Their decrease in revenue is going to stabilize (and possibly even reverse) once their non-core channels even out, and if their core business channels continue to grow.
This message was edited 2 times. Last update was at 2015/06/27 21:20:21
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