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We are never really going to know the exact breakdown of how well AoS is doing so we are always going to have to interpolate between the information we have. I think it's more useful to discuss the information we don't have and how that might influence the figures.

I for one would like to know how AoSQ was accounted for in the doing better than Warhammer figures (my suspicion is that it is). The reason is that AoSQ was a boxed set that could be sold to the whole of the AoSQ community and hence its market capture is broader (and also to those who remember WHQ too). Comparing to sales with more limited appeal is likely to mean that sales for AoS appear higher than Warhammer. However WFB never had it's own equivalent set in the last few years; hence to be a fair comparison you'd need to exclude these figures (remember there was a massive push by GW on retailers to stock up on lots by giving more significant discounts).

So we really need to look at the other data (rather than soft wording that could mean anything without the context).

We do know they have stated that 30% of sales is on new releases, but we also know that overall revenue is slightly down (circa 1%) but core profit is massively down (27%). Now some costs have gone up, retail in particular but they have made more savings from their internal processes such as probably more efficient stock management for example (which is why we see items out of stock more often now). However for the most part costs are fairly steady. As such we can probably infer that new models are recovering their capital costs at slower rate than they use to and this gets even worse if the "Getting Started" sets are considered 'new releases' as they are in the majority old models. In effect people are spending most of their hard earned money on the more cost effective models not the new models which have the high capital costs to recover. So is there any evidence that this is actually what is happening? Well possibly, both the latest Ogre, VC and Savage Orc releases have expanded the unit types from a single box set - the ogre large now can make 5/6 unit types from the one box and we had the new (buy)morboys unit. This would imply that GW are recognising that sales of capital new models aren't selling as well as they hoped and are trying to offset this by encouraging people to buy more of the older cost effective sets more often.

Naturally this strategy only works if people are buying for AoS in the majority. If a significant number of people are just filling out the last of their armies for 8th/9th then the risk is that this income will dry up as the new armies become more prevalent (which is something else we don't know in how much the last chance to buy helped overall this years profitability, as they were capital neutral so mostly all profit minus manufacturing costs which would have been accounted for in previous years for the most part). As a note I expect the same strategy to apply for 40k in the future, as I fully expect them to make smaller, but larger numbers of, factions, its just that in the last year new models have been AoS dominated. I fully expect next year 40K will get a lot of love and that is one reason we haven't seen a lot of 40k this year (other than 'expansion sprues' for existing models).

However overall I still don't think GW fundamentally know what is happening and they are throwing everything at the wall to see what sticks. Effectively consumers only have so much disposable income per month on average (say £150). That in reality if it's not staying the same is going down as a wider range of things grab the attention or if living costs increase. However GWs policy is to increase new models by approx. 3% each year regardless of market conditions. This inevitably means you drive consumers to the cheaper, older models. Hence you have less sales of the capital intensive new models - in essence your capital costs increase but you are recovering less of this and only propping it up from sales of older models where the capex has already been paid off. Effectively your revenue stays the same but your costs increase relatively hence profit slides which is exactly what they are seeing. On top of this as the very older/cheaper models disappear leaving the more recent expensive ones you push a few more people out of the GW market and revenue declines slightly. GW then increase prices to compensate and the cycle repeats.

hobojebus wrote:But GW has called themselves a post growth company.

Which, to be honest, is a bit strange for a company operating in a niche that's seeing year-by-year growth.

Bottle wrote:@f2k

I understand everything you're saying. My "a lot better" didn't mean a lot better than WHFB but a lot better than AoS at launch.

Now of course, (going by your example), AoS could have sold £124 in the first half and £126 in the second which as the grueling conversation with AllSeeingSkink points out may mean one couldn't really say "a lot better" because "marginally better" could also be true. But with the sources stating AoS had a bad launch, and is now doing better than WHFB (by whatever metrics they are using, granted), I feel like saying AoS is doing a lot better than it had been is going to be a roughly accurate assessment.

Ahh... Now I see where you're coming from.

Problem is, in my mind anyway, that Fantasy did really bad in the years leading up to Age of Sigmar. In effect, it had already been shut down and received little (if any) support. Given that, it's not hard for Age of Sigmar to do better after a year of dedicated support.

So yeah...

A lot better than it did on launch? I can accept that - though I frankly admit to being highly surprised.

But a lot better than Fantasy? That's where I have a few issues...

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 Bottle wrote:
@f2k although WHFB had support right up to the very end. Lots of support in that final year. 5 campaign books, 4 giant centre piece models (Nagash, Glotkin, Thanquol and Bloodthirster) as well as numerous more kits for Chaos, Skaven and Undead Legions. Many of which made it to the top selling kits of 2015 which GW released.

Endtimes had support, yes. Fantasy didn't...

For those who weren't interested in having the Old World torn apart, Fantasy had long been dead with some armies having languished in limbo for years.

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 Bottle wrote:
@f2k although WHFB had support right up to the very end. Lots of support in that final year. 5 campaign books, 4 giant centre piece models (Nagash, Glotkin, Thanquol and Bloodthirster) as well as numerous more kits for Chaos, Skaven and Undead Legions. Many of which made it to the top selling kits of 2015 which GW released.

You'd have to compare how many releases there were for WHFB in 2015 to AoS in 2016. If they're not similar, saying AoS outsold WHFB is meaningless.

And I still don't trust how they calculated their finishing the year at a higher rate than WHFB had done for several years.... that's way too open to different calculation methods which would bias the results. From the wording, they easily could have taken the last 6 months of AoS (with its high release density) and compared it to the average sales of WHFB over the past 4 years (which had very few releases).


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 Bottle wrote:
End Times supposedly sold well, and now GW are reporting that AoS is selling better.

1. We don't know for sure how well ET sold. 2. GW aren't reporting that AoS is selling better than ET, simply "Warhammer" for the last "several years" whatever that means.

AllSeeingSkink wrote:
I highly doubt the white is of any significance

I thought the same thing, frankly -- I figured that the reboxing, new artwork and faction names was (like Lizardmen to Seraphon) was just silly. However, I saw it with my own eyes -- before there were Start Collecting Seraphon, the Seraphon boxes flew off the shelves while the same models with the same sprues in Lizardmen boxes sitting right beside them -- on sale for 15% less -- did not move. It really did not / does not make any sense to me.

Once, I even pointed out to a guy in line that one of the old boxes of the same model he had in his hands was still on the shelf at 35% off (keep in mind that the new box was around 20% off), and he just shrugged it off, saying that the one he had in his hands was "nicer". It's kinda baffling, because I mean, does anyone actually keep the boxes after they build the model?

Personally, if I could get an extra 5% discount, they could give me all my models in plain the plain white weborder boxes... or FW Ziploc bags, lol.

That just sounds weird. Are you sure it wasn't just the 1 crazy person buying heaps of Lizardmen? I mean, sometimes you get that, I've seen people walk in to a store and walk out with 6 or 7 boxes of one army leaving nothing in stock.

Maybe he really loved AoS and wanted the round bases without having to go online and buy them, they aren't super cheap and you have to wait for them to come in.

For me I'd pay 10% extra just to get square bases seeing as how that's about how much it'd cost me to buy them separately.

New is a powerful thing. The bases thing is a very real practical consideration and white packaging can be very appealing (ask Apple.)

Even knowing a fair bit about retail merchandising etc, I still get suckered myself from time to time.


Automatically Appended Next Post:
I've even handed a customer product in new packaging because I've found it more visually appealing in circumstances where the customer wouldn't have known there was new packaging!

Purely anecdotally I think the new white Tau packaging and livery looks cheap, nasty and rushed.

Back to AoS. I bought two Seraphon starter sets for the discount that someone mentioned earlier. (Get a Carnosaur plus 20 other figures for the price of a Carnosaur.) I ordered from the GW web site. I didn't see any pictures of packaging. I didn't see any old Warhammer Carnosaurs being discounted massively.

I'm not going to use these figures for AoS, but they count in the GW sales figures (for AoS, known only internally.)

 Kilkrazy wrote:
I'm not going to use these figures for AoS, but they count in the GW sales figures (for AoS, known only internally.)

I know I'm biased on this, but I reckon there's still a very large portion of sales going to legacy WHFB and KoW players. Most people I know buying "AoS" kits are people who had been building armies for years or were half way through an army in 7th but put it on hold during 8th and AoS prompted them to finish off their forces lest the models disappear.

Whirlwind wrote:
We do know they have stated that 30% of sales is on new releases, but we also know that overall revenue is slightly down (circa 1%) but core profit is massively down (27%).

The core sales are 5% down, 5.5M£, as the license income has increased 4.5M£ while overall sales decreased 1M£. The 5.5M£ drop of miniature sales pretty much explains why the pre-royalty receivable is down 27%, or 4M£.

So, the 5% loss of sales is quite a big one, but was saved by increase in license income.

smaxx wrote:

Whirlwind wrote:
We do know they have stated that 30% of sales is on new releases, but we also know that overall revenue is slightly down (circa 1%) but core profit is massively down (27%).

The core sales are 5% down, 5.5M£, as the license income has increased 4.5M£ while overall sales decreased 1M£. The 5.5M£ drop of miniature sales pretty much explains why the pre-royalty receivable is down 27%, or 4M£.

So, the 5% loss of sales is quite a big one, but was saved by increase in license income.

I addressed this a couple of pages ago. The "revenue" they list doesn't appear to be "total revenue" but rather "sales".

AllSeeingSkink wrote:

 Kilkrazy wrote:
Total revenue fell despite a massive boost from Total War:Hammer. This means that revenue from games fell more, about 4.7% in fact.

Actually this had me confused. It seems to me that the "Revenue" listed on the first page isn't actually total revenue but rather sales, it seems that figure doesn't include revenue from royalties. If you scroll down to page 9 where they have a better breakdown. They list

Revenue: 118,069
Cost of Sales: -37,438
Gross Profit: 80,631
Operating expenses: -60,710
Royalties: 5,939
Operating Profit: 16,860

Adding it up, Revenue - cost of sales - operating expenses + royalties = 118069-37438-69710+5939 = 16,860 = operating profit

So that means the income from sources other than sales, including royalties, is not included in the "revenue" on the first page.

Which does make it look not as bad, that means they only lost 0.9% actual sales to customers and 0.8% if you take it at constant currency.

I'm not sure why they wouldn't list total revenue, as that would mean total revenue is up by 2.8%.

AllSeeingSkink wrote:
I addressed this a couple of pages ago. The "revenue" they list doesn't appear to be "total revenue" but rather "sales".

That's weird

I automatically understood the Revenue as Turnover, Total revenue, or whatever. Because that's what I'd expect to see...

In Accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.[1] Revenue may refer to business income in general, or it may refer to the amount, in a monetary unit, received during a period of time, as in "Last year, Company X had revenue of $42 million." Profits or net income generally imply total revenue minus total expenses in a given period. In accounting, revenue is often referred to as the "top line" due to its position on the income statement at the very top. This is to be contrasted with the "bottom line" which denotes net income (gross revenues minus total expenses).[2]

smaxx wrote:

AllSeeingSkink wrote:
I addressed this a couple of pages ago. The "revenue" they list doesn't appear to be "total revenue" but rather "sales".

That's weird

I automatically understood the Revenue as Turnover, Total revenue, or whatever. Because that's what I'd expect to see...

Yeah, I thought the same, "revenue" usually inludes all streams of income, the only reason I noticed they meant "sales" was because some of their statements didn't make sense so I added up the numbers myself, lol.

I wonder if they have changed the reporting format this year. I don't recall this problem in previous years' figures.

 Kilkrazy wrote:
"Sales" of course is units * price, and FW are notoriously expensive though in recent years the rapid increase of standard GW kit prices has brought many of them to a similar level.

It gives the impression that GW/FW are making a lot of sales to hardcore veteran customers.

FW is generally cheaper than GW itself in a lot of places round the world, and is actually cheaper than GW proper for some lines in the UK as well.

It'd be good to see a breakdown of FW sales - I assume there's a lot more Marine characters than the £90+ centrepiece kits.

That said, with the release of BaC (is it GW or FW sales?) I imagine sales of the upgrade kits have gone through the roof.


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Whirlwind wrote:
However GWs policy is to increase new models by approx. 3% each year regardless of market conditions.

They say that the new item price rise is equivalent to a 3% price increase across the board, so new prices are going up by about 9% (since they make up 30% of sales).

 Bottle wrote:
@f2k although WHFB had support right up to the very end. Lots of support in that final year. 5 campaign books, 4 giant centre piece models (Nagash, Glotkin, Thanquol and Bloodthirster) as well as numerous more kits for Chaos, Skaven and Undead Legions. Many of which made it to the top selling kits of 2015 which GW released.

And by the time skaven book hit interest vaned a lot when people realized FB was going to be dumped. That basically killed interest to start any new projects for a lot of people. Why start new army for game that's going to be gone?

Not to mention models already diverged from FB look...


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 Azreal13 wrote:
New is a powerful thing. The bases thing is a very real practical consideration and white packaging can be very appealing (ask Apple.)

Bases are how? As it is getting new boxes with round bases is inferior move...Since in AOS bases are irrelevant you can have them in square bases and use same models in MULTIPLE games. With round bases issues comes in ranked games.

Square bases=ultimate flexibility. And as per AOS rules bases are irrelevant.

I would like you all to meet my Bloodthrister. His base is a small magnet on each hoof.

tneva82 wrote:

Bases are how? As it is getting new boxes with round bases is inferior move...Since in AOS bases are irrelevant you can have them in square bases and use same models in MULTIPLE games. With round bases issues comes in ranked games.

Square bases=ultimate flexibility. And as per AOS rules bases are irrelevant.

They may say bases don't matter but in reality they do; everyone measures from the base, and everything GW produces for AoS shows round bases.
Some as simple as the "new" bases being in the box can give the impression of the whole box being new or better.

I don't know why white packaging is better though.

The point of round of the round bases is firstly to make the game centred on individual models rather than units, then to allow the figures to be more ornate and dynamically posed, in order to justify higher prices. This allows a unit to be smaller than a WHFB unit while costing the same.

I don't mean there isn't a market for such models, in fact the concept is based on the supposition that there is such a market.

One benefit to GW is that it's cheaper to design, mould and stock these smaller units, so the profit per box sold should be higher. In fact we have seen that GW improved their COG from about 25% to about 20% over the past few years, reflecting the introduction of new models designed according to these new principles.

 Kilkrazy wrote:
One benefit to GW is that it's cheaper to design, mould and stock these smaller units, so the profit per box sold should be higher.

They have been going for slightly larger models in smaller numbers for new releases recently, but there's no reason they couldn't have put them in 30mm or 40mm square bases. And for whatever reason with reboxes they've actually increased the box sizes on some kits (Savage Orc Boarboyz gone from 5 to 10, Savage Orc infantry have gone from 10 to 20, Saurus from 16 to 20), so it's not really consistent to think they are trimming unit sizes.

AllSeeingSkink wrote:

 Kilkrazy wrote:
One benefit to GW is that it's cheaper to design, mould and stock these smaller units, so the profit per box sold should be higher.

They have been going for slightly larger models in smaller numbers for new releases recently, but there's no reason they couldn't have put them in 30mm or 40mm square bases. And for whatever reason with reboxes they've actually increased the box sizes on some kits (Savage Orc Boarboyz gone from 5 to 10, Savage Orc infantry have gone from 10 to 20, Saurus from 16 to 20), so it's not really consistent to think they are trimming unit sizes.

Anybody thinking GW is aiming for smaller game sizes is kidding. Just look at all the pictures with bazillion models and battle plans requiring big piles of models.

GW aims to sell models. They ain't reducing number of models they aim to sell per player.

They are reducing the amount of models per kit.

Look at the new Made For AoS kits that have been released since launch. All of the Sigmarines are a maximum five figures per kit. Fyreslayers have a single 10 man kit, the rest are all much smaller. Ironjaws have one big kit, the rest are all much smaller.

The old kits like Skinks that have been re-released in AoS branding may have increased or decreased numbers, it depends on the number of figures per sprue and the number of sprues included, but that is irrelevant to my argument since these kits were not designed and produced for AoS using the modern technology.

The base size and shape is irrelevant to the manufacture of the kit. The bases are mass produced separately.

Herzlos wrote:

tneva82 wrote:

Bases are how? As it is getting new boxes with round bases is inferior move...Since in AOS bases are irrelevant you can have them in square bases and use same models in MULTIPLE games. With round bases issues comes in ranked games.

Square bases=ultimate flexibility. And as per AOS rules bases are irrelevant.

They may say bases don't matter but in reality they do; everyone measures from the base, and everything GW produces for AoS shows round bases.
Some as simple as the "new" bases being in the box can give the impression of the whole box being new or better.

I don't know why white packaging is better though.

This is all about beng cutting costs.

A 25 mm round base needs less material then the 25 mm square one.

The white boxes uses less paint.

I am might be wrong but these are my thoughts.

Yes, you're likely wrong..

The cost of the plastic is so little in relation to the overall cost that it's quite conceivable that the difference between square and round bases is barely measurable, certainly in fractions of a penny.

AOS is a game played on round bases, therefore any boxes with square bases are inherently 'wrong.' You only have to scan through any of the discussion boards to regularly to see how reluctant people can be to deviate from the mandated GW standard, so it's quite possible that there's a not inconsiderable number of customers who will go to some effort to conform to that standard. Especially those who play in GW stores or exist solely in the GW hobby ecosystem.

White packaging isn't cheaper. The cardboard is grey. White ink costs money too. The psychology of white in Western culture carries almost entirely positive connotations. Clean, bright, fresh, new etc etc. White has been the most popular car colour for three years in the Uk according to some sources, and there's no doubt a halo effect from Apple and other desirable tech brands using it extensively. For whatever reason, white is currently very fashionable with consumers.

 Azreal13 wrote:
Yes, you're likely wrong..

The cost of the plastic is so little in relation to the overall cost that it's quite conceivable that the difference between square and round bases is barely measurable, certainly in fractions of a penny.

AOS is a game played on round bases, therefore any boxes with square bases are inherently 'wrong.' You only have to scan through any of the discussion boards to regularly to see how reluctant people can be to deviate from the mandated GW standard, so it's quite possible that there's a not inconsiderable number of customers who will go to some effort to conform to that standard. Especially those who play in GW stores or exist solely in the GW hobby ecosystem.

White packaging isn't cheaper. The cardboard is grey. White ink costs money too. The psychology of white in Western culture carries almost entirely positive connotations. Clean, bright, fresh, new etc etc. White has been the most popular car colour for three years in the Uk according to some sources, and there's no doubt a halo effect from Apple and other desirable tech brands using it extensively. For whatever reason, white is currently very fashionable with consumers.

You got me on the packing, part but I would counter on the bases. Now that all GW uses round bases you dont need to change the machinery to produce square, since "The hobbit", 40k and AoS uses round ones. With this you spare time to change out moulds. Also you dont need extra moulds for square bases to produce and maintain.

I might be wrong again, but this seems logical for me.

It's logical, you're just overestimating what the savings would be.

There is one thing that is very different about this annual report compared to those from the Kirby years.

They are investing more capital in the business. Their revenue and profit are mostly flat, but their return on capital is down because they are actually investing it back in the business.

And their dividend payment was relatively sane and might actually be sustainable. Unlike Kirby's looting of the company savings to pay more in dividends in a year than the company took in.

It looks like GW might be able to find the right combination of store locations and sales people to make their products work at a very high price. I've been of the opinion for quite some time that Forge World and Australia show what people can be willing to pay. They just need to find the subset of their potential customers who will pay it. It looks like they are at least partially succeeding at it.

Still no real plan to return to growth though. Just more treading water. We won't see if the increased deployment of capital will bear any fruit for a year or more, but it certainly can't bear less fruit than the nothing they were doing under Kirby. They actually have a person who's the head of marketing now. What a crazy idea.