The One Ring :: View topic - GW share prices down 24%

And they aren't particularly good.

Turnover down 12% like for like, Operating profit down 38% like for like.

Link: http://investor.games-workshop.com/wp-content/uploads/2014/01/2013-14-Press-statement-final-released.pdf

While turnover has been declining in cash terms since 2005, I think this is the first really definitive fall in cash terms that I have seen.

Quite a milestone!

Which goes a long way to explain the somewhat frenetic 40k release schedule in the last 6 months - to try and bolster sales from their most reliable market, I would contend.

So the problem for them is whether to sell less at a higher margins, or sell more at lower margins. Currently they're going for the latter, but they haven't tried the latter.

Creaky: Indeed it does.

I have tried to make the below measured and reasonable discussion of GW's failings, rather than a bashing session.

It's quite simple really- if you increase prices but takings are down, you are haemorrhaging customers.

It's a complicated business. Many self appointed pundits on the net love to point out that the reason GW is loosing business is because of the continuous price hikes. I'm not so sure. i think, in fact, the price hikes are a coping mechanism to maintain the same profit levels from a smaller customer base.
The price hikes are /because/ of the lowering customer base.

Interesting to hear about the Tyranids "deal". That's the first time in a LONG time that they've offered any sort of discount. When I was a kid they used to run in-shop promotions, sales, 3/2 on blisters, etc.

The fact is, every big company has an adversarial attitude towards their customers. That's just a fact of life. Businesses want your money, and they don't really care what they have to do to get it.

However, most other businesses know that it's sensible to hide it a little better than GW manage. I don't mind getting shafted as long as they whisper the odd "sweet nothing"

Nobody wants to see them fail. But I'd like to see the management sacked and some less short sighted profit gougers installed in the top seats. It would be nice to see them eat a bit of humble pie.

let's be honest, we can speculate until the Ent-wives come home.

Author:	Pindergorn [ Fri Jan 17, 2014 4:54 am ]
Post subject:	GW share prices down 24%
Sounds like the brown stuff has hit the fan. From a long discussion over on Dakka Dakka. Osbad wrote: And they aren't particularly good. Turnover down 12% like for like, Operating profit down 38% like for like. Link: http://investor.games-workshop.com/wp-content/uploads/2014/01/2013-14-Press-statement-final-released.pdf While turnover has been declining in cash terms since 2005, I think this is the first really definitive fall in cash terms that I have seen. Quite a milestone! Which goes a long way to explain the somewhat frenetic 40k release schedule in the last 6 months - to try and bolster sales from their most reliable market, I would contend.

Author:	hollowcrown [ Fri Jan 17, 2014 8:06 am ]
Post subject:	Re: GW share prices down 24%
The obvious dilemma GW have is that at the moment they're selling an expensive, luxury product. Most kids will be wanting the new consoles coming out, there's obviously a lot of unemployment about, and their prices are higher than ever. So the problem for them is whether to sell less at a higher margins, or sell more at lower margins. Currently they're going for the latter, but they haven't tried the latter. Yes I know oil is expensive but it still bewilders me how a plastic kit of little men can cost £25 under their new prices. Licensing fees, cut of sales to WB, payment of the guy sculpting, a team to cast it and put it on a sprue, team of people to make it, and designers making the box art....comes to the same cost as a similarly licensed videogame which in all honesty is a much larger undertaking. Another thing I think they should stop is the "leaking embargo". Finding pictures new models and putting them online is effectively internet people doing their advertising for them. This embargo in which they can only be seen in WD until pre-orders go up is strange for me.

Author:	Gandlaf the Grey [ Fri Jan 17, 2014 9:00 am ]
Post subject:	Re: GW share prices down 24%
This shows that the world wide economic climate is affecting GW as much as others. They are in the luxury market and will be the first thing than many people cut back on, it is a natural action and how they come out of this is dependant more on the world financial position rather than any strategy they have or create. There are signs of things recovering though it is tentative and the true recovery could be a year or two away. There are still more cuts to come in the UK and peoples pockets have not been fully stretched yet so I only hope that we can all live throughthis time and still have our GW on the high street.

Author:	Lord_of_the_nine [ Fri Jan 17, 2014 9:01 am ]
Post subject:	Re: GW share prices down 24%
hollowcrown wrote: So the problem for them is whether to sell less at a higher margins, or sell more at lower margins. Currently they're going for the latter, but they haven't tried the latter. Lol you mean they are doing the first. Anyways I think it was only matter of time until that happened. Since they refuse to listen to their customers and are continuing this dead end policy by wagging war to all retailers and trying to be the only ones out there that sell these products and keep everything for themselves. I think their board has confused the tabletop wargaming business with other kinds of busineses like the oil industry and they are trying to follow the same plan well somebody has to tell them that tabletop wargaming is NOT a monopoly market. One interesting thing I read in their announcement is that they will essentially centralize their business even further to each geographic area that might bring them a short term profit but thats about it. I think GW is gradually evolving to a vulture company trying to get whatever they can from a market and then when that market has no more money to give them they would leave that market and migrate to the next.

Author:	Harfoot [ Fri Jan 17, 2014 9:03 am ]
Post subject:	Re: GW share prices down 24%
I guess we are not surprised by this, very sad in away. I guess we will see alot of major changes this year. Its started already with White Dwarf. I just hope they keep LOTR/Hobbit. Can't see a good marketing plan based on the 2 core GW ranges (40k and fantasy). Also the Table Top Games market has evolved other resent times, look how many fantastic miniatures are available from new companies with good rule systems, there is just more competition in the market place

The One Ring http://gbain.powweb.com/

GW share prices down 24% http://gbain.powweb.com/viewtopic.php?f=27&t=27498	Page 1 of 3

Author:	LordoftheBrownRing [ Fri Jan 17, 2014 9:31 am ]
Post subject:	Re: GW share prices down 24%
They dug themselves a hole with their company policy. I personally dont care. They are clearly still releasing lotr miniatures so Im not worried on that account. If they get rid of the LOTR permanently, yeah, it will suck but to be honest where Im at its impossible to have a convenient game. So all that that means, is that I will save money in the future. Furthermore, Im buying all the stuff I want now and Im sure there will be the waterfall of figures there has been in the last half a year on ebay for the next 5 years till I complete what I want. You reap what you sew. Just like with any company in any industry.

Author:	mertaal [ Fri Jan 17, 2014 10:24 am ]
Post subject:	Re: GW share prices down 24%
I guess you can't get away with giving your customers the finger forever. My hope is that they take a reality check and behave in a less adversarial way, and start to inject some of the fun, creativity and life back in to their ethos. But I don't hold out great hope i'm afraid.

Author:	Creaky [ Fri Jan 17, 2014 10:37 am ]
Post subject:	Re: GW share prices down 24%
Much as I'd love to say "Oh, great - maybe they'll learn that astronomical value for money and a willful ignorance of competition in a niche marketplace was probably a bad idea, and move to lower prices, increase value, etc.", I don't think that's going to be GW's first port of call. From what I understand of their finances (which is admittedly a very little amount), their store chains are like an anchor dragging them down, and I'd expect them to go unless things improve, becoming an internet only business then. (Although, if that did happen, GW would have to cut prices, surely, because on the internet EVERYONE is "just five minutes down the road to get me paints...oh is that a new box set?") I want GW to learn something from this, but I want them to learn the right thing - not just cut LotR and WFB wholesale as some were predicting prior to even this. Apparently WFB brings in only 8% of their total revenue, and presumably we bring in a fraction of that. Interesting times ahead, though, surely. Oh, just had a thought - considering they've just had a new edition of 40k (best selling game), Space Marines (best selling product), and a very rapid product output on all fronts - doesn't that make these numbers even more terrifying?

Author:	mertaal [ Fri Jan 17, 2014 11:19 am ]
Post subject:	Re: GW share prices down 24%
Creaky: Indeed it does. I have tried to make the below measured and reasonable discussion of GW's failings, rather than a bashing session. It's quite simple really- if you increase prices but takings are down, you are haemorrhaging customers. It's a complicated business. Many self appointed pundits on the net love to point out that the reason GW is loosing business is because of the continuous price hikes. I'm not so sure. i think, in fact, the price hikes are a coping mechanism to maintain the same profit levels from a smaller customer base. The price hikes are /because/ of the lowering customer base. The reason for the smaller customer base is that there are a lot of other games and products out there, and GW engenders SUCH a lot of ill will amongst its customers that it makes it very easy to switch games. They feel as though gamers, after a certain period, stop being "good" customers, and are therefore not worth pursuing. I think that's a grievous mistake. Just about every wargamer I know is, at heart, a secret GW fanboy who isn't willing to be overcharged and insulted, and so has wandered off elsewhere. Furthermore, they're all guys in their 20's and 30's who have good jobs and plenty of expendable cash. They spend money. If GW aren't getting a good share of it, it's because they're doing something wrong. Probably 5/6ths of my LotR stuff has come from eBay. That's not because I don't like the Hobbit products- I love them. I'd just rather splurge £100 on eBay and get a stack of models than do so in GW and get 4 boxes of mirkwood elves… which don't even make 4 full war bands. Do I like the product? Yes. Do I want it? Yes. Can I afford it? Yes. So why have I only bought a modest amount of Hobbit figures instead of just splurging on the whole range? Because whether I can afford it or not isn't the point- I don't like being treated like a mug. Their PR team makes Genghis Khan look like a parable of moderation and restraint. Eventually people notice. Nobody's impressed when they bully Beasts of War or issue independent stockists with takedown orders. Nobody likes them for their heavy handed approach to their IP (which they have every right to protect) or their refusal to engage with the industry media. Let's not even go in to the fact that they categorically refuse to publish the sorts of online and free "starter rules" that are now an industry standard, and exclusively write scenarios involving a ludicrous expectation of expenditure. Certainly, Hobby articles, terrain building projects and conversion articles don't earn them a penny. But it does create an environment in which people want to spend money. They used to have a GREAT sales strategy- built it and they will come. Now they've penny pinched their way in to decline, because what they make just isn't that interesting any more, despite how cool the models can sometimes be. The atmosphere is gone. In short, I think that long ago they lost the concept of "good will".

Author:	cuchulain84 [ Fri Jan 17, 2014 11:38 am ]
Post subject:	Re: GW share prices down 24%
@Mertaal: Great post. Totally agree with you about the change in atmosphere. The new tyranids had a nice big box deal which worked out as around £1 per mini, so maybe they are finally realising that price increases doesn't always mean increased profits. Unfortunately the codex is supposedly a massive disapointment so it still might sell poorly. I really hope we see something positive come out of this though.

Author:	Harfoot [ Fri Jan 17, 2014 11:43 am ]
Post subject:	Re: GW share prices down 24%
There is talk of this new "core range" coming out, value boxes of lots of figures at reasonable prices. Overheard 40K players at my local games club on Wednesday also saying how disappointing the new Tyranids Codex is.

Author:	mertaal [ Fri Jan 17, 2014 11:59 am ]
Post subject:	Re: GW share prices down 24%
Interesting to hear about the Tyranids "deal". That's the first time in a LONG time that they've offered any sort of discount. When I was a kid they used to run in-shop promotions, sales, 3/2 on blisters, etc. The fact is, every big company has an adversarial attitude towards their customers. That's just a fact of life. Businesses want your money, and they don't really care what they have to do to get it. However, most other businesses know that it's sensible to hide it a little better than GW manage. I don't mind getting shafted as long as they whisper the odd "sweet nothing" .

Author:	cuchulain84 [ Fri Jan 17, 2014 12:30 pm ]
Post subject:	Re: GW share prices down 24%
Here it is. I haven't looked as whether if it's much cheaper than buying individually but either way it's priced very reasonably imo. http://www.games-workshop.com/gws/catal ... od2340100a

Author:	hollowcrown [ Fri Jan 17, 2014 12:35 pm ]
Post subject:	Re: GW share prices down 24%
mertaal wrote: Creaky: Indeed it does. I have tried to make the below measured and reasonable discussion of GW's failings, rather than a bashing session. It's quite simple really- if you increase prices but takings are down, you are haemorrhaging customers. It's a complicated business. Many self appointed pundits on the net love to point out that the reason GW is loosing business is because of the continuous price hikes. I'm not so sure. i think, in fact, the price hikes are a coping mechanism to maintain the same profit levels from a smaller customer base. The price hikes are /because/ of the lowering customer base. In all honesty it's a vicious circle. GW 10 years ago got a massive influx to the hobby with LoTR. However after the films ended, for whatever reason they cut back on the LoTR releases probably to get people into 40k/WHFB as that's their own IPs. Meanwhile the 10-11 year olds who had started the game were growing up, using their money on other things and getting less money to spend from their parents due to the economy issues. That was pretty much the reason I stopped. In response GW raise their prices to compensate for the loss of customers (for whatever reason, not just my personal reason as above). In response to GW, more people quit as it's becoming more expensive. In response to that, GW hike prices more. etc. etc. It's a vicious cycle that GW can't get out of because they have shareholders to appease, and the fanbase just moves elsewhere. So really GW have to take the initiative and do something before they become a thing of the past. mertaal wrote: Interesting to hear about the Tyranids "deal". That's the first time in a LONG time that they've offered any sort of discount. When I was a kid they used to run in-shop promotions, sales, 3/2 on blisters, etc. The fact is, every big company has an adversarial attitude towards their customers. That's just a fact of life. Businesses want your money, and they don't really care what they have to do to get it. However, most other businesses know that it's sensible to hide it a little better than GW manage. I don't mind getting shafted as long as they whisper the odd "sweet nothing" . Yeah this is true. Look at Steam. They have great deals on games they sell but it's because of cutting the prices. I own loads of games I may never play because the prices were just so low I couldn't say no. Similarly, GW could do a 3 for 2 or boxed sets or blisters or whatever. So someone coming into the store to buy a blister might end up buying 2 because they get the third one free, and that's 1 sale and they've made that they might no have so it's money in their pocket.

Page 1 of 3	All times are UTC
Powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group http://www.phpbb.com/

Author:	JamesR [ Fri Jan 17, 2014 12:53 pm ]
Post subject:	Re: GW share prices down 24%
As much as GW has frustrated me over the past few years, I do hope they pull through. I do quite love this game, I've given up almost every other "luxury" to continue it, and I hope to see it continue for at least a few more years. However that's not the only reason, as much as we all dislike GW's decisions about how to run their company that doesn't extend for myself to writing ill for those who are employed by the company. There's enough unemployment out there already, let's not add more to it

Author:	mertaal [ Fri Jan 17, 2014 3:36 pm ]
Post subject:	Re: GW share prices down 24%
60ml a year companies don't fold overnight because of a drop in their share price. They're still only recording a 12% drop in turnover- they're still very liquid. The shares just aren't as good an investment as they used to be. Judging by their track record though, they seem to meet adversity with gouging and cost cutting rather than improving their service and sales image. They go for margin rather than volume. I wonder if they'll see their recent difficulties as hitting the ceiling of what people are willing to put up with, price wise, or explain it away in some other fashion. I think they've had a hugely short sighted policy for a long time, and that simply must be due to failings in their strategic planning and industry analysis. If they're that out of touch, what will change this time around? It'll be an interesting one to watch. Nobody wants to see them fail. But I'd like to see the management sacked and some less short sighted profit gougers installed in the top seats. It would be nice to see them eat a bit of humble pie.

Author:	whafrog [ Fri Jan 17, 2014 3:44 pm ]
Post subject:	Re: GW share prices down 24%
I moved this topic because the "News" section should be related to the LotR/Hobbit portion of the hobby: models, releases, etc.

Author:	Gilcris [ Fri Jan 17, 2014 5:23 pm ]
Post subject:	Re: GW share prices down 24%
mertaal wrote: Nobody wants to see them fail. But I'd like to see the management sacked and some less short sighted profit gougers installed in the top seats. It would be nice to see them eat a bit of humble pie. I'm just glad that the most basic economic principle applying to luxury goods has been proven true here today: high elasticity.

Author:	Dorthonion [ Fri Jan 17, 2014 6:37 pm ]
Post subject:	Re: GW share prices down 24%
Quote: high elasticity Is that something to do with underwear? Twaaaanng!!! Whatever happens, and let's be honest, we can speculate until the Ent-wives come home, but we do not know for certain what the ultimate outcome of this negative financial results may be, I hope we get the chance to see (and perhaps buy) all the minis from The Hobbit first.

Author:	mertaal [ Fri Jan 17, 2014 6:40 pm ]
Post subject:	Re: GW share prices down 24%
Dorthonion wrote: let's be honest, we can speculate until the Ent-wives come home. Nice euphemism .