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I certainly remember getting enough that I could buy a blister every time I went to GW (once a month or so). Maybe £1/week in the early-mid 90's?

Yeah but that was when you could buy a metal Dwarf for 50p or a metal Marine for 60p.

This pricing structure is the main reason I have a GW Dwarf army. I was too impatient to wait another week for the extra 10p to buy the marine I wanted rather than the Dwarf I could afford.

I think in my day the blisters were £3/4 but I agree, at that point they had genuine pocket money products.

When I started buying Citadel figures they were 25p each, compared to 20p for historical wargame figures in 25mm scale. This was the early 1980s.

In 2004-2005 I was buying Tau Ethereal blisters for £2.50. The metal Pathfinders came in packs of three. I can't remember their price. A Tau Ethereal is now £9 in Finecast.

 Kilkrazy wrote:

No, I genuinely feel that GW's objective should be to get people to buy a couple these kits, start playing rather than just building them, and then graduate to bigger games and more models. This argues for inclusion of some simple rules.

Since the kits are cheap and aimed at a young audience that won't necessarily have support in playing, the included rules need to be short and simple. An AoS style rule pamphlet would fill this role. GW could print the game stats of the models on the end panels of the boxes, as a colour war scroll.

I don't think GW is looking at these as any sort of game pieces. They're designed to capture kids' imaginations in terms of modelling, no differently than a model airplane or train or submarine or Gundam robot would. Frankly, I don't think that is a bad thing. There's nothing wrong with encouraging pure modelling.

On the other hand, I also think it would be great if they had an actual toy store or general appeal game, like HeroQuest. But it should be marketed as such, and like HeroQuest, it shouldn't require any glue to enjoy.

Herzlos wrote:
I certainly remember getting enough that I could buy a blister every time I went to GW (once a month or so). Maybe £1/week in the early-mid 90's?

Kids have gotten a lot more expensive Now they want iPhones, XBoxes, PlayStations... It's never-freakin'-ending now. Frankly, for a lot of parents I know, if their a $50 box of models every few weeks would keep their 12-16 year old engaged, they'd be very happy, lol.

By the way, in the late 80's, GW blisters here were about $10, though you usually got 2 heroes or up to 5 troops for that. I still have some with the price stickers on them

Games and gaming consoles have become cheaper compared to the nineties, not to mention PC gaming. The PlayStation launched for 299 Pounds in 1994 and games have become a whole lot cheaper compared to the early nineties.

Most parents will probably prefer the 50 bucks game, or even cheaper from the used bin at their local Game Stop, to a box five unassambled plastic toys that require further investment for any sort of enjoyment to be gained from them.

You would be surprised how often parents voice the concern that their children do too much solitary or online, passive computer gaming. It was a common theme when I worked for SCEE and we spent a lot of effort trying to find ways to dispel that image of computer games.

 Korraz wrote:
Games and gaming consoles have become cheaper compared to the nineties, not to mention PC gaming. The PlayStation launched for 299 Pounds in 1994 and games have become a whole lot cheaper compared to the early nineties.

Most parents will probably prefer the 50 bucks game, or even cheaper from the used bin at their local Game Stop, to a box five unassambled plastic toys that require further investment for any sort of enjoyment to be gained from them.

Some things never change

The PlayStation 4 is around 299 Pounds in 2016, and most of the games are in the fifty-buck range Plus DLC, deluxe editions, and other ways to fleece you after

Sure, you'll find parents buying previous generation consoles, but this has happened, well, ever since the 2nd generation consoles Kids want the new generation stuff; what they get, well, depends on the means of the family and all that.


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 Kilkrazy wrote:
You would be surprised how often parents voice the concern that their children do too much solitary or online, passive computer gaming. It was a common theme when I worked for SCEE and we spent a lot of effort trying to find ways to dispel that image of computer games.

There are three sorts of parents -- the ones that are very much, "get out and exercise", others that are, "do something cerebral", and the ones that just don't much care one way or the other, or just let their children choose their activities, within reason. Some parents are perfectly content that their children never leave the safety of the home, and would rather have their friends come over to play in the house, rather than have them get out and go kick a soccer ball.

 Talys wrote:

The PlayStation 4 is around 299 Pounds in 2016, and most of the games are in the fifty-buck range Plus DLC, deluxe editions, and other ways to fleece you after

£299 is worth a whole lot less after 22 years of inflation According to one of the calculators, £299 in 1994 is worth about £544 in 2016. So in real terms, the cost of consoles has halved. There's also a much larger 2nd hand market due to a massive uptake related to the drop in price.

DLC will almost always shaft you, but it won't bring games up to price parity.

Microsoft just released its 2016Q2 quarterlies, and I had to chuckle a little as I noticed that it's pretty much all expressed in Constant Currency -- not just the top line numbers, but pretty much every comparative with previous periods.

Also, Microsoft returned $6.5 billion to investors in the form of repurchases and dividends, on profits of $5.0 billion

Yes, yes, there are about 100 billion reasons that they're not good companies to compare with each other (around the difference in their annual revenues). But it just goes to show that constant currency and returning more to investors than earnings is not just something crazy that GW does.

If anyone's interested in MSFT, an easy summary is here -- all in all a pretty good quarter for them.

http://www.neowin.net/news/microsoft-posts-q2-fy2016-earnings-50-billion-net-income-on-238-billion-revenue

The link states the $6.5bn came from buybacks and dividends, According to https://www.microsoft.com/investor/Stock/StockSplit/default.aspx the dividend was only $0.36 per share, which is roughly half of the $0.62 earnings per share. The difference must be made up from share buy-backs, so MSFT aren't actually giving away more to shareholders than they make.

It seems to have been a good quarter because whilst the telephone space has tanked (47% decline) their Office 365 division is doing well. Diversification works

Whenever companies want to highlight that they are subject to currency fluctuations they'll put in constant currency. Especially when it makes things look better (or less worse).

As for dividend payout ratios, the reason it's been well looked into by market historians is that it's far too common for a company to crank up their payout ratio to an unsustainable level. It always ends the same though-- a dividend cut. It's mathematically impossible to pay more than you make forever.

I took a look at this Microsoft report and yeah, their dividend payout ratio was 58%. Their share buyback is part of a multi year strategy to reduce their outstanding share numbers. It's definitely part of the current corporate management playbook to have bonuses that are tied to increasing earning per share and then getting their by reducing the number of shares.

I'm sure lots of MS investors would rather see the company put some of that buy back money towards finding new ways to grow, but at least their dividend policy is sane.

frozenwastes wrote:

I'm sure lots of MS investors would rather see the company put some of that buy back money towards finding new ways to grow, but at least their dividend policy is sane.

Or at least, sustainable.

Yeah. Some of the longest standing companies have been chugging away payout dividends of 50-60% of earnings for decades. It's sort of where you expect a mature company who's not looking to take big risks to level off.


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Herzlos wrote:
It seems to have been a good quarter because whilst the telephone space has tanked (47% decline) their Office 365 division is doing well. Diversification works

This is one of the reasons GW should be getting back into as many sales channels as possible with a variety of products rather than ratecheting down to 40k and AoS. I think with the Bloodbowl relaunch and their new children's products, they're doing this. As well as their aggressive licensing for video games (which has worked and lead to increasing revenue from royalties). They need to keep going on this path. They need to reverse this idea that they have one type of customer who loves their "jewel like objects of magic and wonder" and will pay any price asked for it and realize that there are lots of different people they can get money from.

Herzlos wrote:
The link states the $6.5bn came from buybacks and dividends, According to https://www.microsoft.com/investor/Stock/StockSplit/default.aspx the dividend was only $0.36 per share, which is roughly half of the $0.62 earnings per share. The difference must be made up from share buy-backs, so MSFT aren't actually giving away more to shareholders than they make.

It seems to have been a good quarter because whilst the telephone space has tanked (47% decline) their Office 365 division is doing well. Diversification works

47% decline sounds horrible! But, they only sold 4.5 million handsets, and they lose money on every Lumia handset they sell. So, on one hand, they lost less money by selling fewer phones, and all 4.5 million phones don't add up to a hill of beans anyhow (even then, most of those are cheap Lumia 500- and 600- series phones). Ironically, Microsoft's crappiest unit (phones) was bought for more money than GW will ever be worth ($7.2 billion) I'm not sure if you're familiar with Windows Phones (I'm a big fan), but the joke is, Windows Phones aren't phones made for fans; they're made by Microsoft to shut fans up.

Almost all of their divisions did well, though. Even the ones that saw a decline mostly had some silver lining, beat the market average, or overperformed expectations.

Whether a company pays out a dollar or spends a dollar paid in dividends or buying back shares makes no difference from the perspective of "giving back more than you earn". They both equally reduce the cash position of the company and provide immediate value to shareholders -- if there are fewer shares outstanding, you own proportionately more of the company. Sure, you can't sustain it forever, but there are lots of times when it will just work out that way, or when it might be a good idea, which is all I was saying about GW.

It's certainly possible to take a 47% decline and still not lose money, if you are prepared for it. I don't know anything about Microsoft phones (they pretty much don't exist here - it's all Samsung or Apple).

 Talys wrote:

Whether a company pays out a dollar or spends a dollar paid in dividends or buying back shares makes no difference from the perspective of "giving back more than you earn". They both equally reduce the cash position of the company and provide immediate value to shareholders -- if there are fewer shares outstanding, you own proportionately more of the company. Sure, you can't sustain it forever, but there are lots of times when it will just work out that way, or when it might be a good idea, which is all I was saying about GW.

But they didn't give away more than they earned. The gave away have half of their EPS and then bought stuff with the rest.

Those shares will result in about a 2.34% yield, and can be sold again if needed (or given to staff in lieu of cash payments). The dividend didn't change so there's no expectations of higher dividends, and the buy back is presumably a one-off thing, or at least at their discretion.

With GW the money was given away, there's no way for the company to recoup any of it if they need the money. If they reduce it, the share price drops because the shareholders are used to the incredibly high yield (6.838%), so their hands are tied.

One is a smart move, and one is very shortsighted.

GW make dividend payments because they generate allot of cash from direct immediate sales and this is clearly visible to shareholders. They cannot reasonably sit on large sums of cash without good reason - i.e. contingency/risk, planned investment, expansion etc.

 notprop wrote:
GW make dividend payments because they generate allot of cash from direct immediate sales and this is clearly visible to shareholders. They cannot reasonably sit on large sums of cash without good reason - i.e. contingency/risk, planned investment, expansion etc.

If they were growing as a company then that argument about not sitting on cash would be fine and dandy. They are not. They should be reinvesting that money into the company.

While it is desirable that turnover will grow over time it would be naïve to assume that a company would not wax and wane with the market it is in, so long as the company can remain buoyant and generate enough margin to cover overhead and profit.

Now GW do reinvest but there is only so much money you can spend on plant, property and human resources (if that is even a reinvestment) without generating higher liabilities for the next period; and thereby undercutting your own profitability.

As I say GW create allot of cash (from stores/we sales) and there's only so much you can do with it (how many £4M webstores does one need? That cash will go to dividend if not used.

It's not criminal, it's not negligent or incompetent, i's just the way share ownership works within a business.

The only other thing this sort of money is used for in buying other businesses. Take a look at the way the big US firms buy everything and anything. Apple generates so much cash they have to buy more and more companies otherwise they will be paying it in tax on profit.

 notprop wrote:
It's not criminal, it's not negligent or incompetent, i's just the way share ownership works within a business.

I think it can be incompetent. I think it can be the way share ownership doesn't work (that is causes decline) in a business.

At least Microsoft spent some of their money on developing both their phone division (which isn't really working) and their tablet division (which is blowing up and doing awesome). And investing in changing how they deliver software and finally integrating the business model of an app marketplace into Windows. And their cloud services. Had the company not invested in these additional means of making money they would barely be profitable. In fact, their Intelligent Cloud division now makes as much money as business software sales.

GW has done the opposite. They've consolidated and banked on just their core business. And not just their core business, but a subset of possible customers within that core business. So now that their core business has shrunk, they find themselves in a very different position from Microsoft. Microsoft has replaced their shrinking software sales with tablets and cloud services that now combine to make up a quarter of their revenue. GW has done none of that and now just has their shrunken core business and some anemic royalties and that's it.

Yeah, GW giving all that money to the shareholders implies that they literally have nothing better to do with that money.

Like, surely there's lots of things they could do with the money to grow the company? Why can't they buy up smaller companies? Upgrading their tooling? Develop more games? Fix their existing games? Run some adverts? Host some external events?

Shareholders naturally want a company to survive and grow, which usually requires R&D or other investment, but they ultimately are interested in profiting from their shareholdings.

From a shareholder's point of view there are two ways to make money out of a company. These are dividends, or share price growth. If shares increase in price quickly enough they can either be sold for a good profit, or used as security for borrowing.

Indeed, and a company holding too much cash can actually damage its share price.

Herzlos wrote:
Yeah, GW giving all that money to the shareholders implies that they literally have nothing better to do with that money.

Like, surely there's lots of things they could do with the money to grow the company? Why can't they buy up smaller companies? Upgrading their tooling? Develop more games? Fix their existing games? Run some adverts? Host some external events?

It doesn't imply, it confirms.

Also you can't spend necessarily spend extra cash without increasing your on-going liability (extra staff, running costs, property etc). So if GW think they have the resource already to expand the SGS (or will do when/if they get in the extra bodies we have seen advertised) then the cash remains surplus so available for dividend.

Herzlos wrote:
Yeah, GW giving all that money to the shareholders implies that they literally have nothing better to do with that money.

Like, surely there's lots of things they could do with the money to grow the company? Why can't they buy up smaller companies? Upgrading their tooling? Develop more games? Fix their existing games? Run some adverts? Host some external events?

Because all of those things are otiose in a niche

Jokes about things being otiose are otiose in any situation, as I have proved.

That's otyose, actually.

 Kilkrazy wrote:
That's otyose, actually.

You don't need proper spellings when you can haz attitude!

 Kilkrazy wrote:
That's otyose, actually.

Thynk yyu.

I believe paying someone to fix their rules would be a much better use of that money than giving it to shareholders. I guess good business sense is otiose at GW HQ.

 Talys wrote:
Microsoft just released its 2016Q2 quarterlies, and I had to chuckle a little as I noticed that it's pretty much all expressed in Constant Currency -- not just the top line numbers, but pretty much every comparative with previous periods.

Also, Microsoft returned $6.5 billion to investors in the form of repurchases and dividends, on profits of $5.0 billion

Yes, yes, there are about 100 billion reasons that they're not good companies to compare with each other (around the difference in their annual revenues). But it just goes to show that constant currency and returning more to investors than earnings is not just something crazy that GW does.

If anyone's interested in MSFT, an easy summary is here -- all in all a pretty good quarter for them.

http://www.neowin.net/news/microsoft-posts-q2-fy2016-earnings-50-billion-net-income-on-238-billion-revenue

Ok- interesting.

I honestly can see how it could work well for them- but ultimately I can't see how this could possibly a maintainable strategy. I mean, Microsoft spent $1.5 billion that they didn't make, right?

If they paid out less than they made last year, I could see how this would make loads of sense. I cannot see how this could possibly be a sustainable long term strategy.

Is there a way that it can be a strong long-term strategy?