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 Sqorgar wrote:
GW just reminds me of the comic book industry before it crashed. Everything is a limited edition #1 with 14 covers, while the quality of the product is not increasing in line with the prices. And with a 2 year lead time on new products, GW doesn’t have a lot of mobility to respond to changing market conditions.

And GW’s main audience is over 40. Won’t be long before they are over 50, then over 60. They still going to be buying expensive miniatures when their eyes go bad, their hands shake, and they start caring more about colonoscopies than the Tau? If they don’t bring in new, younger players, they are working on borrowed time. And they aren’t going to bring in younger players when their boxes cost as much as a game console.

GW is making record profits, but that’s covering up for an extremely unhealthy business. The comic book industry isn’t the only thing it reminds me of. It also reminds me of Warmachine at the height of its popularity.

I remember telling people that Warmachine was in a really bad place. It was openly hostile to new players, with poor quality control, and a bloated product line. And people told me, Warmachine is more popular than ever - heck, they are about to release a new edition!

It’s easy to see a toxic situation after the damage has been done, but it is when the profits are high that the damage is becoming malignant. And I’m telling you, GW is not in nearly as good a place as it looks right now. GW is like the Horus Heresy series - great for people who got in when it was less than a dozen books, but the series is getting old and new value us not being translated to people who haven’t read multiple dozens of book.

Man, gotta admit the fact some folks somehow see the doom on a robust report.

Lord Kragan wrote:
Man, gotta admit the fact some folks somehow see the doom on a robust report.

Well, I think the point is more that a "robust report" doesn't necessarily mean that current business practices are long-term stable.

It also doesn't mean that they are not. In the end, the report only tells us what the report actually says, that currently, financials look "good." That could turn around. Or, not.

Cronch wrote:

But what happens when GW stops bringing in new players because the prices are too high?

Why do you think half of GW's product line today is skirmish games like Necromunda, Kill Team or Warcry, or Aeronautica?

Also, literally everyone knows whales are profitable, I bet most of the money GW makes comes from 40-50yo's who spend thousands of dollars a year on new projects, not the kids orresponsible hobbyists who maybe spend a few hundred a year.

Ha! Good one!

GW has been declared dead or their death has been deemed as "impending"/"Any day now" for...a long time.

I wouldn't mind them getting a wake up call on certain things, particularly their ridiculous pricing and 'conversion' rates, but I don't think it is coming...soon?

Glad to see GW won't be going under anytime soon. I enjoy 40k and don't want to see it go into dumpster.

I think GW has some staying power. They have been expanding their lines, and they are now putting out board game product that isn't war gaming. BSF for example? I've got friends who don't like D&D or 40k, but they love to play board games.... BSF has them hooked. Hooking into different customer bases is what will help them long term, and looking at the product line you can see it happening.

There are also people who buy the product just to paint/model. As mentioned before, you now have small entry points - like Kill Team.

While I really dislike the rising costs of the hobby, I do see an improvement on product. The quality of models between say the Assault on Black Reach and Shadow Spear is very noticeable. Not even close to being worth $300+ tho.

Good on 'em. They seem to be making the people still into 40K and AoS happy with their new methods and community outreach/engagement. They were headed to bad places if they didn't change *something* so they did, and fair play for any boost in success that earned them.

I'm still not coming back, though. During the years they pushed me out into the wilderness, I discovered a world of 30 minis for $35 boxes and rulesets that I just think, personal opinion, are better written and more fun. In my more cynical moments I want to snark that a lot of people have been mistaking a better 40K for a good game, but honestly that's probably just down to my personal tastes.

I guess I'm trying to say that while I don't understand the massive appeal this turnaround on everything except pricing has for so many, I'm glad it does. A strong GW today tends to help bring in more of tomorrow's general wargamers.

 H wrote:

Lord Kragan wrote:
Man, gotta admit the fact some folks somehow see the doom on a robust report.

Well, I think the point is more that a "robust report" doesn't necessarily mean that current business practices are long-term stable.

It also doesn't mean that they are not. In the end, the report only tells us what the report actually says, that currently, financials look "good." That could turn around. Or, not.

The industry is in a weird place. In many regards, its more popular and larger than its ever been. The problem is, the means of getting products to customers is kind of a complete mess. If you try and get something from a local store that isn't on the shelves without preordering it, you're probably out of luck. Distributors don't care about reordering product anymore so everything is shifting to launch week and direct sales. GW seems to have adapted to things well, but I do wonder how long they can keep up with the pace that's being demanded. I think contraction is inevitable and while I think its ridiculous that when a boats a bit over capacity half the crew abandons ship, but I've also largely given up on pretending like the crowd won't react in the dumbest way possible sooner or later.

 H wrote:

Lord Kragan wrote:
Man, gotta admit the fact some folks somehow see the doom on a robust report.

Well, I think the point is more that a "robust report" doesn't necessarily mean that current business practices are long-term stable.

Pretty much this. Business models, all of them, I don't care what service is offered or product manufactured, ALL business models are based on infinite growth. The reality is, infinite growth is impossible. A downturn in sales will eventually come, it's inevitable, the question becomes how significant will it be.

Currently everyone I game with and a lot of others I see comment online are experiencing "GW release fatigue".

There is too much, too quickly coming from GW that people are just tossing in the towel; giving up. Not leaving the hobby, just done buying new stuff. Myself included. This may eventually show up in GW's 2020 or 2021 report, who knows. But they cannot continue at this pace. The proverb is "The flame that burns twice as bright, burns half as long." The meaning behind this is one of longevity; pace yourself. That's what GW needs to do. Consistent, steady growth over a long period of time and not keep saturating the market with product to point that there's no one left to buy it or existing customers are bled dry.

We're already starting to see the negative affects of this. To sustain sales GW has to invalidate old product and replace it with something new (e.g. Primaris Space Marines).

To sustain sales GW has to invalidate old product and replace it with something new

That is inevitable in any collection-based hobby or game. it's what killed WFB (to some degree, there were many issues with it)- people had close to 20 years of collections worth, and only needed to add one or two units every edition to keep them up to date. That's ok for a cottage-size company of two, not so much for a big fat corporation.

Another big issue might be, especially for 40k, rules bloat. I know people have been saying 8th ed is amazing, but to me, not having played actively for close to 10 years, it's an arcane, byzantine mess of books, stratagems, doctrines and whatnots. That and the soupening of lists (as far as I understand) makes it for very beginner-unfriendly experience.

 H wrote:

Lord Kragan wrote:
Man, gotta admit the fact some folks somehow see the doom on a robust report.

Well, I think the point is more that a "robust report" doesn't necessarily mean that current business practices are long-term stable.

It also doesn't mean that they are not. In the end, the report only tells us what the report actually says, that currently, financials look "good." That could turn around. Or, not.

This. Their reports during the Lord of the Rings boom would have been incredibly robust.


Up until the point where the boom ended and they weren't, which preceded the long decline under the Kirby regime.


Automatically Appended Next Post:

Cronch wrote:

To sustain sales GW has to invalidate old product and replace it with something new

That is inevitable in any collection-based hobby or game. it's what killed WFB (to some degree, there were many issues with it)- people had close to 20 years of collections worth, and only needed to add one or two units every edition to keep them up to date. That's ok for a cottage-size company of two, not so much for a big fat corporation.

This is only an issue if you are failing to bring in new players.

This is only an issue if you are failing to bring in new players.

Wargaming is a niche hobby. GW is already the biggest company in that niche. The pool of new blood always was and always will be limited. That's why, I think, they adapted the strategy of making very focused battletomes of 10-15 units max (save stuff like Stormcast or soups like Skaven) to entice existing players to cross-collect. You can finish 2000pts of Idoneth fairly easily, so why not start an orruk army that's equally easy to "complete collection" of?

Cronch wrote:
The pool of new blood always was and always will be limited.

I mean, only if people have suddenly stopped reproducing.

 EnTyme wrote:

Cronch wrote:
The pool of new blood always was and always will be limited.

I mean, only if people have suddenly stopped reproducing.

Out of the limited population of human beings on this earth, the population that is interested in scale modelling AND boardgaming at the same time is very limited. Considering the fact that fewer children get born now than in the past, and those children now have many more options for entertainment, yes, the pool of new players is limited.

That's . . . not how trends work.

Good for GW!

Sadly, they have largely priced me out of their games. It is not just the ever increasing price of their kits but it is also the subtle way that they decrease the points costs of models, which forces you to buy more product to have a complete army.

Even then, I would probably still be playing 40k regularly (with the massive amount of models I have already) if not for the fact that I do not find 8th edition to be a very rewarding game. It is so focused on alpha strikes, which is not really fun for the guy alpha striking or the guy losing before he ever gets to play. Then there is the issue with how CP is generated and the way it forces many armies to add a Battallion of cheap men just to get extra CP, which I also find distasteful.

Honestly, I look forward to 9th edition, hopefully that will refine 8th edition and make it a better game, after all I I was not a fan of 3rd edition but I did like its refined versions (4th and 5th).

 EnTyme wrote:
That's . . . not how trends work.

I'll be happy to hear where I am wrong in my thinking.

I can see GW being in a good place considering their branching out into different lines.

It certainly doesn't mean/feel 40k is in a good place. I feel they are letting that particular ship sink a little bit every day. My warp sense is telling me 40k end times will be upon us sooner or later for that sweet sweet reboot $$$$..

Removed

This really is getting pathetic now. Will see all you doomsayers here again next year with even more profits reported! hahahaha!

Lord Kragan wrote:
Man, gotta admit the fact some folks somehow see the doom on a robust report.

I think this is probably GW's peak. Like, the amount of stuff they are releasing at the prices they are releasing them at, I think they've turned a corner in the past few months where they've pushed a little too far, and I think the players have been maybe milked about as much as they can be milked. I've been seeing a lot of people say that GW has priced them out (myself included). This morning, Miniature Market had 65 copies of Necromunda: Dark Uprising available, and now, five hours later, they have 65 copies available.

This good news represents how well GW did before, but GW has really lost their mind since Blood of the Phoenix. The effects of this new pricing strategy, mixed with Brexit and a general over-saturation of the market, will not be felt for months, or even years. Making money off your current customers is great - awesome, even - but with an aging audience and a failure to bring in new players, it won't take much to lose all of it in a very short time. Like Warmachine, 40k might be one bad edition change, or one economic downturn, away from disaster. 40k won't collapse completely, but it will shrink considerably. It has to. It can't really get much bigger.

And I don't think GW is in danger, as a company. I think they've got tons of money and a strong IP. But I think their profits are going to start shrinking soon, and I think people are starting to leave GW for alternatives, as they've been priced out of participation. I think a return to the Kirby-era GW is almost inevitable. In short, GW is at the tip of the peak, it's all downhill from here. A lot of decisions they are making now are going to end up hurting them for a while, and they should've been spending the past year or so trying to create sustainable product lines instead of flooding the market with expensive limited editions. They've traded short term profit for long term viability.

The tinfoil hattery in this thread is quite amusing.

 Inquisitor Gideon wrote:
The tinfoil hattery in this thread is quite amusing.

It's the same every time the financial numbers are released.

Sqorgar- what alternatives are you thinking of? A lot of small companies have collapsed in the last year, and the medium-weight players in the industry are making their own dumb decisions.

Competition-wise, GW seems in a better position now than it was five years ago.

I will say they are seriously pissing off the competitive crowds. When you release new and updated SMs, and each month you release an even more powerful meta chaser, it forces people to radically alter their lists month to month.

I'm pretty sure there are a lot of black space marine models with Blue, white and black on their armor, which then became black and silver.

I agree that GW are in much better position, and it is the change of mentality from the Kirby era that is leading the way. Long may it continue.

I am glad they are more of a Games company as well as a miniature company too.

Thing is, even GW confirm in their report the current boom cannot possibly last. Because ultimately it’s true.

However, last time around it was their first venture into big time licensing. LOTR brought in a lot of money. And when that bubble burst? They had no real plan to settle it.

Yet, in a bizarre way, the cuts it lead to in staffing numbers and underperforming stores meant when the global crash hit a few years later, they’d already done what other high street retailers suddenly had to do. And with minimal borrowing.

And as I’ve said time and time again, it’s borrowing ( or gearing in the lingo, apparently) that does for other companies.

See, when you borrow money to fund expansion, whether rapid or conservative, you’re exposing your business to risk.

When times are good, refinancing is usually an option. You can negotiate a lower interest rate over a longer term. The bank ultimately makes more, but it’s sustainable for your income,

During the crash, the banks were of course risk adverse, and weren’t lending. And so those companies in the UK at least that had borrowed heavily could no longer service the debts, despite being otherwise nominally profitable. Big high street names, such as Woolworths went they way of the dodo.

But GW has typically taken a ‘cash in hand’ approach to expansion and product development. That in turns mean they’re quite well insulated against financial shocks, regardless of where they stem from.

If profits slide (and they really need to slide fast and hard to hit a loss), they’ve relatively benign options open to them. This could be laying off some staff from multi-staff stores, to reassessing where their stores are, and perhaps reducing saturation in given areas (rough example for illustration, reducing from 6 stores in a 50 mile radius to 4) without particularly impacting availability.

Then there’s their manufacturing side. They do the vast majority in-house, barring certain scenery kits which are made in China (for reasons I don’t know. Perhaps someone can throw a bone there?). So they’re not at the mercy of a manufacturer going under, and affecting their supply chain.

Finally, as others have pointed out, they’ve seriously diversified their offerings over the past three or so years. Proper skirmish games are back. Underworlds in particular is seemingly doing well. It’s incredibly affordable, even for GW. On the face of it, that should make the game unprofitable. But, when you’re selling fixed warband, people will want a new challenge fairly quickly. And at £17.50 to £20.00 each, it’s fairly easy to sell most if not all Warbands to most players.

For now, the future looks pretty rosey. Yes prices are going up, but hey that’s capitalism for you, and nothing unusual in the wider world. And I don’t think they’re in much danger of tickling the wider price ceiling for some time.

After all, it may cost say, £600 for an army. But if you use that army for a year? It’s £50.00 a month. That’s....that’s not bad for any hobby. No?

I believe the outsourcing to China was to help continue to keep up with all the new kits they were producing, they simply didnt have the number of machines at home to work on making all those kits in the same amount of time. China is also very cheap when you compare its plastic mold production to elsewhere (including domestically)

Honestly, they probably just wanted to start developing some external partners to help with temporary needs for output. Basically contractors who can produce extra for peak times or if there's some kind of local issue that are easy to cut when things drop off. The mercenaries of toy production and all.

The Japanese prices are seriously nuts. I think Dark Uprising was already over 40,000 yen and I have yet to encounter a store offering anything close to the discounts we get elsewhere.

That's almost an extra hundred dollars tacked on for no apparent reason.

It sucks there aren't many other options for small scale tabletop models in Japan.

 Mad Doc Grotsnik wrote:
Thing is, even GW confirm in their report the current boom cannot possibly last. Because ultimately it’s true.

However, last time around it was their first venture into big time licensing. LOTR brought in a lot of money. And when that bubble burst? They had no real plan to settle it.

Yet, in a bizarre way, the cuts it lead to in staffing numbers and underperforming stores meant when the global crash hit a few years later, they’d already done what other high street retailers suddenly had to do. And with minimal borrowing.

And as I’ve said time and time again, it’s borrowing ( or gearing in the lingo, apparently) that does for other companies.

See, when you borrow money to fund expansion, whether rapid or conservative, you’re exposing your business to risk.

When times are good, refinancing is usually an option. You can negotiate a lower interest rate over a longer term. The bank ultimately makes more, but it’s sustainable for your income,

During the crash, the banks were of course risk adverse, and weren’t lending. And so those companies in the UK at least that had borrowed heavily could no longer service the debts, despite being otherwise nominally profitable. Big high street names, such as Woolworths went they way of the dodo.

But GW has typically taken a ‘cash in hand’ approach to expansion and product development. That in turns mean they’re quite well insulated against financial shocks, regardless of where they stem from.

If profits slide (and they really need to slide fast and hard to hit a loss), they’ve relatively benign options open to them. This could be laying off some staff from multi-staff stores, to reassessing where their stores are, and perhaps reducing saturation in given areas (rough example for illustration, reducing from 6 stores in a 50 mile radius to 4) without particularly impacting availability.

Then there’s their manufacturing side. They do the vast majority in-house, barring certain scenery kits which are made in China (for reasons I don’t know. Perhaps someone can throw a bone there?). So they’re not at the mercy of a manufacturer going under, and affecting their supply chain.

Finally, as others have pointed out, they’ve seriously diversified their offerings over the past three or so years. Proper skirmish games are back. Underworlds in particular is seemingly doing well. It’s incredibly affordable, even for GW. On the face of it, that should make the game unprofitable. But, when you’re selling fixed warband, people will want a new challenge fairly quickly. And at £17.50 to £20.00 each, it’s fairly easy to sell most if not all Warbands to most players.

For now, the future looks pretty rosey. Yes prices are going up, but hey that’s capitalism for you, and nothing unusual in the wider world. And I don’t think they’re in much danger of tickling the wider price ceiling for some time.

After all, it may cost say, £600 for an army. But if you use that army for a year? It’s £50.00 a month. That’s....that’s not bad for any hobby. No?

How dare you bring logic and reason into this sir..
People will brand you a GW apologist and white knight.. The cost one is a long-running sentiment and its getting old to hear. It's not that they are pushing customers out of the hobby its that they are pushing the complaint mongers out of the hobby. At the end of the day, don't like don't buy it. I never understood this complaint. If something is clearly overpriced I just won't buy it period or get it from eBay and bide my time... Its not just GW. High-quality minature are expensive...The hobby supplies arent cheap... If you want some sub-par quality stuff, then you have suppliers for that also.

Well done to GW, happy to see they continue to make a crap tone of cash, really enjoying what they are producing at the moment, a genuine second golden era . The numbers will be even higher next half year with the sisters on the way