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 thesearmsarerob wrote:
http://www.iii.co.uk/news-opinion/richard-beddard/games-workshop-agm%3A-relentless-profit-machine

That's an excellent article, OP - thanks for linking to it! Good to see that the investors are not unaware of what GW's policies are doing to their market share / etc, even if there's no way to effect change in them.

 RiTides wrote:

 thesearmsarerob wrote:
http://www.iii.co.uk/news-opinion/richard-beddard/games-workshop-agm%3A-relentless-profit-machine

That's an excellent article, OP - thanks for linking to it! Good to see that the investors are not unaware of what GW's policies are doing to their market share / etc, even if there's no way to effect change in them.

No worries, I'm not normally quick enough to post stuff before there are already pages of discussion about it!

I don't think anyone knows that GW's market share is. There is a wide supposition that it has been falling for some years. I think this is correct but there is no un-challengeable evidence to support this presumption except for GW's own financial reports, which cannot be accurately read in a vacuum.

GW's own financial reports are by far the best indicator of it, and with other games growing hugely in popularity, for them to stay level in terms of profit (and lower in terms of volume of sales) year on year is definitely losing market share (whatever their current "share" is).

It's hard to know what the market share is without knowing the market, and presumably that's information distributed amongst distributers, GW, and various other parties.

I think we can make some estimations based on things like the number of off-brand manufacturers, counterfeiters, and bits-sellers, since those depend on market conditions to remain in business.

Yeah that's what I mean.

We can all see GW's sales revenue was roughly static for several years of high price rises (meaning fewer units sold) and has been falling for several years.

However we do not know for sure if the whole market is growing or contracting.

Personally I believe it has been growing, due to all sorts of evidence from other sources, but there is nothing like a well-founded research report I could offer as definitive evidence.

Nomeny wrote:
It's hard to know what the market share is without knowing the market, and presumably that's information distributed amongst distributers, GW, and various other parties.

I think we can make some estimations based on things like the number of off-brand manufacturers, counterfeiters, and bits-sellers, since those depend on market conditions to remain in business.

It's largely anecdotal but with a wide distribution but ICV2 runs a survey several times per year of stores that seems to mirror what we see in GW's financial reports, that WHFB fell out of the top 5 and was axed in favor of a total reboot instead of a refresh and XWing moving up into dominance.

Top 5 Non-Collectible Miniature Lines – Spring 2015 (posted in July):
1 Warhammer 40k

2 Star Wars X-Wing

3 Star Wars Armada

4 Warmachine

5 Hordes


Honestly, I'd be surprised if XWing doesn't take the top spot by the next report. So, if you assume that the same people who play(ed) 40k are interested in Star Wars, there's a strong argument for loss of market share.


Automatically Appended Next Post:

 Kilkrazy wrote:
Yeah that's what I mean.

We can all see GW's sales revenue was roughly static for several years of high price rises (meaning fewer units sold) and has been falling for several years.

However we do not know for sure if the whole market is growing or contracting.

Personally I believe it has been growing, due to all sorts of evidence from other sources, but there is nothing like a well-founded research report I could offer as definitive evidence.

Depending on how accurate you believe ICV2 to be (and it is just the US market, not worldwide), they posted the following:

even with the higher estimates for 2013, the growth rate was a robust 20%, with RPGs growing the fastest, at a 67% rate; and miniatures the lowest growth category, with flat sales in 2014 compared to 2013.

So, flat miniature sales in the US with GW raising prices just to maintain modest losses in revenue.

 agnosto wrote:

Nomeny wrote:
It's hard to know what the market share is without knowing the market, and presumably that's information distributed amongst distributers, GW, and various other parties.

I think we can make some estimations based on things like the number of off-brand manufacturers, counterfeiters, and bits-sellers, since those depend on market conditions to remain in business.

It's largely anecdotal but with a wide distribution but ICV2 runs a survey several times per year of stores that seems to mirror what we see in GW's financial reports, that WHFB fell out of the top 5 and was axed in favor of a total reboot instead of a refresh and XWing moving up into dominance.

Top 5 Non-Collectible Miniature Lines – Spring 2015 (posted in July):
1 Warhammer 40k

2 Star Wars X-Wing

3 Star Wars Armada

4 Warmachine

5 Hordes


Honestly, I'd be surprised if XWing doesn't take the top spot by the next report. So, if you assume that the same people who play(ed) 40k are interested in Star Wars, there's a strong argument for loss of market share.


Automatically Appended Next Post:

 Kilkrazy wrote:
Yeah that's what I mean.

We can all see GW's sales revenue was roughly static for several years of high price rises (meaning fewer units sold) and has been falling for several years.

However we do not know for sure if the whole market is growing or contracting.

Personally I believe it has been growing, due to all sorts of evidence from other sources, but there is nothing like a well-founded research report I could offer as definitive evidence.

Depending on how accurate you believe ICV2 to be (and it is just the US market, not worldwide), they posted the following:

even with the higher estimates for 2013, the growth rate was a robust 20%, with RPGs growing the fastest, at a 67% rate; and miniatures the lowest growth category, with flat sales in 2014 compared to 2013.

So, flat miniature sales in the US with GW raising prices just to maintain modest losses in revenue.

ICV2 only measures miniature sales through stores right? With the popularity of Kickstarter I could see overall miniature purchases being up but purchases via brick and mortar stores being flat. I know for me personally I've bought more stuff through kickstarter in the last couple years than from stores.

 agnosto wrote:

It's largely anecdotal but with a wide distribution but ICV2 runs a survey several times per year of stores that seems to mirror what we see in GW's financial reports, that WHFB fell out of the top 5 and was axed in favor of a total reboot instead of a refresh and XWing moving up into dominance.

ICV2's data is largely worthless though given that 60% of GW's sales are direct, it only has data for North America and it misses lots of sources (such as Ebay).

Kickstarter is part of the market.

The kind of challengeable evidence I mean is the amount of Kickstarters, the number of board game Meet-ups, the amount of traffic on forums, and so on.

All the indications are that the market has grown, but there is no definitive report that would prove it.

And it's founds it's way onto TacoBOLs. Oddly it's currently bereft of the usual BOLs type of comments.

 Silent Puffin? wrote:

 agnosto wrote:

It's largely anecdotal but with a wide distribution but ICV2 runs a survey several times per year of stores that seems to mirror what we see in GW's financial reports, that WHFB fell out of the top 5 and was axed in favor of a total reboot instead of a refresh and XWing moving up into dominance.

ICV2's data is largely worthless though given that 60% of GW's sales are direct, it only has data for North America and it misses lots of sources (such as Ebay).

Incomplete, but far from worthless.

It is still the best insight to the industry we have and to dismiss it is to say 'we don't know 100% of how this works therefore it might as well be magic'.

 Silent Puffin? wrote:

 agnosto wrote:

It's largely anecdotal but with a wide distribution but ICV2 runs a survey several times per year of stores that seems to mirror what we see in GW's financial reports, that WHFB fell out of the top 5 and was axed in favor of a total reboot instead of a refresh and XWing moving up into dominance.

ICV2's data is largely worthless though given that 60% of GW's sales are direct, it only has data for North America and it misses lots of sources (such as Ebay).

Yes, I wouldn't use this data for anything significant but as trivia for US-based people, it's still not a terrible representation of what most people are seeing in the broader market here. Ask anyone, "Are you seeing more or less GW games being played in FLGSs around your vicinity?" and I believe the majority of people would say "less." More so than the UK, the US mini-gaming market depends on FLGSs as the major point of sale for products as it is not feasible for a company the size of GW to canvas the entire country, it's just too darn big.

This is all opinion and somewhat educated guestimation since GW doesn't perform market research and there's no real data to back it up from other sources. When faced with lack of data, you use the data that is available and start from that point.

 jonolikespie wrote:
And yet it was written by a fairly impartial shareholder, not a 'griper'.

It's amazing how much griping is done by enthusiasts on this site. They're not mutually exclusive.

I'd be willing to bet the story about his kid at the beginning is made up. It seems very coincidentally convenient how he walked in and saw the papers that very morning. And if it is true, why couldn't the writer be the one to play games with his kid? His excuse is he's not a modeller, yet he draws a distinction between gaming and modelling throughout the paper, sounds like a charming fellow.

The story is filled with statements and vocabulary meant to sway opinion, sometimes he's just putting words in other people's mouths:

Not for the first time that day the thought crossed my mind that Games Workshop’s management might view staff, customers, and investors as figures on a tabletop that they must manoeuvre ruthlessly to victory.

I’ve got bad news for disenchanted gamers complaining on the Internet. The company’s attitude towards customers is as clinical as its attitude towards staff. If you don’t like what it’s selling. You’re not a customer.

He has no direct quotes, only his own reactions. Even referring to GW as a "relentless profit machine" is pejorative. They're not taking food out the mouths of babies, they sell toys. And yes I model much more than game myself.

Well the article is him, an investor not a hobbyist, giving his thoughts and his opinions and his recommendation to sell or buy stock.

 pax macharia wrote:
It seems very coincidentally convenient how he walked in and saw the papers that very morning. .

How so? It's not really a stretch to think that the guy might have been looking at the paperwork in preparation for the meeting that day...

GW's insistence that its a miniature company and not a gaming company I think is the single most dangerous notion for their future. First it means they're failing to recognize any other opportunities. Second it shows a complete misunderstanding of what motivates their customers. To me it sounds like an excuse for bad business decision and rather insincere.

If this is truly how they see their business why aren't they producing miniatures for Star Wars like they did for LotR; why aren't they licensing other IP's? -Even if we accept the notion that they are purely a miniature company producing models for collectors they've failed to capitalize on that approach.

 aka_mythos wrote:
If this is truly how they see their business why aren't they producing miniatures for Star Wars like they did for LotR; why aren't they licensing other IP's?

Because in general, the return from licensed product isn't anywhere near as good as the return on your own, unique product, as you have to pay licencing fees and royalties.

GW said on several occasions after taking on LotR that as a general rule they had no interest whatsoever in taking on licences... they only took LotR on because LotR is special.

I'd buy the ratio thing about modelling hobbyists vs gamers if it were adjusted a little to say, 80% of GW's sales are to customers who are primarily interested in modelling and painting miniatures.

I think within the realm of people who consider themselves "mostly modelers", a lot of them still do play 40k games and buy 40k books and rules. For myself, each month, I paint about 100-150 hours, and I game about 12-15 hours. I think with a 10:1 ratio, I can be solidly considered a modelling hobbyist first, and a gaming hobbyist second. However, the game is really important as it gives a context with which to build the models.

I like that tanks, buildings, infantry, flyers and giant stompies can have all sorts of different loadouts, and I like spending time thinking about both "which would look cool?" and "which do I want to use in the game?". To me, one of the best features of GW models versus some (not all) of their competitors is the very wide variety of loadout configurations available to models. And I'm not always just modelling for the game: sometimes, I'll give a guy a heavy bolter or heavy flamer or power fist just because that makes the squad look the way I want it. Other times, I'll give a guy a grav cannon because I want a grav cannon.

Game rules are also useful in the context of army building: in an imagined battleforce, should you have 30 infantrymen for every giant robot, or 5? Should there be 1 tank or 10?

And, of course, there's the opportunity to actually game with them, which is a real treat.

I my thinking, as the prices of Games Workshop products go up, so does the target age. After all, not many 15 year olds can afford a thousand-dollar game, but this isn't really a problem for many 35-55 year olds. To a point, as people get older, they have fewer financial commitments and more money to spend on random stuff that makes them happy. If you're in a happy, long-term relationship of many years (or decades), you also tend to spend less money on other stuff, and more money on your hobbies.

On the other hand, the people in that demographic, I think, simply have less time to game, unless they're actually retired. If you have kids, a family, an extended family, house stuff... gaming and organizing long games is just a lot harder to do. Money becomes less an issue and certain types of time are more of an issue. Hence, you'll get some folks like me, who just paint and model more than they play, not necessarily because that's their preferred ratio of modelling vs gaming, but because it's just easier to sneak in time here and there than to coordinate big chunks of it to play tabletop wargames.

So anyways, back to my point: I'm not so sure that 80% of GW's sales go to people who don't play 40k or AoS **at all**. However, I suspect a large chunk of those sales go to people who spend a proportionately small amount of time gaming.

This is actually a pretty smart group to target, because they tend to be less price sensitive. On the other hand, they're also harder to make new customers of, because by that age, they've already found things they enjoy doing, and they tend not to pick up as many new hobbies as in their youth. Who starts skiing or fishing at 40, right? But someone might have started skiing or fishing in their youth, and then gone back to it as they had more time and money. So infusing "new blood" is pretty important if GW wants to make miniatures forever and ever.

As always, it's just speculation on my part. I have no proof of any of this, and I take no offence if you consider it ramblings of a madman

You know, I honestly bet there is more bare plastic sitting out there, possibly even unassembled bare plastic than built and painted models worthy of display. Almost like the operative imperative of the majority is to play with the models regardless of the status of their completion.

Insaniak had it right, they pivoted their marketing lingo to suit the chapter house case because they don't want to be seen as a toy company. That's also why they can look at the success of x-wing and still have no intention of releasing pre-painted/assembled models because that's what a toy company would do.

And I mean, people play with toys. We all know we congregate here on dakka to discuss the time honoured tradition of collecting lol. Gaming is a silly thing for kids afterall. It's sad that dropzone commander never really took off in my neck of the woods, perfect example of a company AND game I really like, but without a groundswell of people playing it I can't really justify simply "collecting" their models as fantastic as they are. As fewer and fewer people keep playing 40k, it affects my perceived investment in the game. But maybe that's because I've never been pretentious enough to consider myself a collector.


They also really should have just gone by citadel miniatures if they wanted people to swallow the tripe. They're freaking called games workshop, like for feths sake guys lol

It wasn't being the best miniatures that made me drop my hard earned on what to my eyes were fugly models (devastator centurions) it was that they had good rules, in so much as they were very effective in game. Period. That doesn't mean I haven't bought a model primarily because it was cool without seeing much merit in it's potential effectiveness in the game no one plays. On a side note, I see some similarities between the GW of today and scientology.

I think people are gamers first, collectors second. But really collector is just kinda pr bs anyway, consumer is less glamorous but more accurate, for every beautiful army or collection on display you've got boxes worth of stuff piled up in a darkened room or closet. Now if you'll excuse my I'm going to go collect as many chicken wings as my stomach can temporarily display.

 jonolikespie wrote:

 Silent Puffin? wrote:

 agnosto wrote:

It's largely anecdotal but with a wide distribution but ICV2 runs a survey several times per year of stores that seems to mirror what we see in GW's financial reports, that WHFB fell out of the top 5 and was axed in favor of a total reboot instead of a refresh and XWing moving up into dominance.

ICV2's data is largely worthless though given that 60% of GW's sales are direct, it only has data for North America and it misses lots of sources (such as Ebay).

Incomplete, but far from worthless.

It is still the best insight to the industry we have and to dismiss it is to say 'we don't know 100% of how this works therefore it might as well be magic'.

The other problem with ICV2 is it's extrapolated data and can be wildly inaccurate. I mentioned this in a thread a while back....

"I noticed in their 2014 sales report (the one that came out most recently) they had to revise one of their estimates from 2013 from $75M to $100M.... that's a 33% "correction" If they can't even get within $25M/33% on one of their estimates I'm not sure I trust any of them."

I think ICV2 is dodgy enough to say: "well, this is probably true, but I'm not going to stake my reputation on it".

 agnosto wrote:

So, flat miniature sales in the US with GW raising prices just to maintain modest losses in revenue.

Except that GW's Independent NA sales grew 7.5% in that annual report. They weren't flat. GW store sales grew 4% in NA, but that supposedly isn't part of the ICV2 calculations.

 Talys wrote:
I'd buy the ratio thing about modelling hobbyists vs gamers if it were adjusted a little to say, 80% of GW's sales are to customers who are primarily interested in modelling and painting miniatures.

I don't think so, I think it's more like...

80% of GW's sales are to customers who spend more time modelling and painting miniatures than gaming

That's be a more accurate representation of what I've seen. People who WANT to play the game but never get past the army building stage, I know plenty of them. Or people who enjoy gaming more than modelling but the modelling aspect consumes all their time so they don't get to play many games.

Wargaming can be a very deceptive hobby in that many people don't realise the time and effort required to put together an army before they start. Even if they are told the number of hours possibly involved, but the time they've finished Guardsman number 30 or Marine number 10 they are no longer enjoying the modelling aspect.

I reckon those sorts of people make up more of GW's sales than actual enthusiasts like you or me.

@Crablezworth: why is pretentious to be a collector???

i love the worlds created by companies like GW, PP, CB, and others for settings like 40K, Warmahordes, Infinity, Helldorado, and so many more...
it is awesome that i can have 3-D representations of the inhabitants of these worlds, and build them and paint them to a standard that is worthy of being considered a work of art, and have them displayed as such...

i have never been a gamer, and have no interest in playing a game, because that takes away from my painting time...
i don't mind being considered a consumer, but i don't see why it is pretentious to be purely a collector of these beautiful little sculptures...

cheers
jah

I don't know where GW gets its 80%/20% numbers when they don't do market research. I think it has to be coming from a flawed rationale. In their mind everyone who buys their models are going to collect and build an army... of those it is only a subset who play. That is sound, but the disconnect is their failure to understand "why" people buy the models. In GW's mind because everyone collects and builds they're all "collectors" and "hobbyists," and I can only imagine this 80/20 ratio comes from the fact that you have to spend so much time buying and painting before you can play and ultimately spend more time in a week hobby-ing than gaming.

 insaniak wrote:

 aka_mythos wrote:
If this is truly how they see their business why aren't they producing miniatures for Star Wars like they did for LotR; why aren't they licensing other IP's?

Because in general, the return from licensed product isn't anywhere near as good as the return on your own, unique product, as you have to pay licencing fees and royalties.

GW said on several occasions after taking on LotR that as a general rule they had no interest whatsoever in taking on licenses... they only took LotR on because LotR is special.

Star Wars isn't special? -GW has the sort of market position that other IP's would love if they approached them for a license. FFG with their X-wing Miniature game has doubled their revenue by virtue of that game. That was a missed opportunity for GW to have the large rebound after the loss due to declined LotR interest.

I know IP's are expensive, my question was a leading question. In my head this is the more important part... "-Even if we accept the notion that they are purely a miniature company producing models for collectors they've failed to capitalize on that approach." Yes its pricier, but the consequence of not selling licensed miniatures, is a failure to expand on who is collecting and it is a failure to maintain market share. My point is that GW's assertion is insincere because what they are doing fails to follow their stated rationale to it ultimate logical conclusion. They may have higher margin, but their volumes are growing weaker. I'm scrutinizing GW's inconsistent rational that is funneling them from being a dominant presence into being a niche within a niche.

LoTR is special to GW because Tolkein is a Brit, and LoTR is the inspiration for a lot of fantasy worlds, including Warhammer Fantasy. Star Wars, as awesome as it is, just doesn't hold the same place in their hearts, I suspect.

 aka_mythos wrote:
Star Wars isn't special?

Sure. But it's not LotR, which is the one IP that GW considered special enough to invest in.

My point is that GW's assertion is insincere because what they are doing fails to follow their stated rationale to it ultimate logical conclusion.

Well, yes, that was my point earlier in the thread as well.

I just disagree that not taking on licenced properties is proof of that. Taking on licences is expensive and risky, and to a certain extent rather limiting, since you're constrained by both the licence and the universe you're going into as to what you can produce for it.

It's entirely possible that a company could want to set themselves up as a purveyor of high-quality collectible figurines without ever even considering the possibility of taking on licenced properties.

The bigger giveaway that GW aren't sincere about setting themselves up as a purveyor of high-quality collectible figurines is the lack of any high-quality collectible figurines in their product range.

It was special to them because it was a cash cow for them but they didn't handle it well (milking it with a new ruleset each movie rather than sticking with their system, which was by most accounts quite good).

Most people don't paint most of their models - it's fantastic to see otherwise but that's the case. Without games to build towards people will buy less. Jah's painting one beautiful space marine a month doesn't make up for the gamer who buys 6 wave serpents (or a dozen drop pods) because they're playing the game and want to equip their army the most effective way.

 RiTides wrote:
It was special to them because it was a cash cow for them but they didn't handle it well (milking it with a new ruleset each movie rather than sticking with their system, which was by most accounts quite good).

There wasn't really a problem with the ruleset. The existing 40k and WHFB rulesets weren't well suited to the heroic style needed to portray the movie scenes. It also wouldn't surprise me if they had licensing constraints to not use their existing systems.

I think a lot of people don't like that LOTR came out in a different scale and different rules to 40k and WHFB, but that's the way it needed to be and IMO it was for the best.

If GW made any mistakes it was probably being foolish and not realising it would drop off after the end of the last LOTR movie and expecting The Hobbit game to do as well as LOTR when the boxed set was much more expensive. There's no reason LOTR couldn't continue on as a main game with the proper support from GW, but any fool could tell you it was going to have to declinewith the movies. The goal wasn't to stop it declining, it was to let it decline to a sustainable level.

 jah-joshua wrote:
@Crablezworth: why is pretentious to be a collector???

The word collector I find pretentious, collecting is fine, but it more often resembles hoarding. I know more people who collect than people who build and paint and display. It's all hoarding to me at the end of the day.

But ya, this is what I picture when someone tells me they're a collector: