40K Deep Thought: Do GW Financials Really Matter?

GW Financials 1

The answer is not an answer at all, and the one we don’t like to hear…it depends!

Depends on what you ask?  Well, it depends on who you are.  The choices in this commentary are Shareholder or Stakeholder.  Perhaps this is a “happy or glad”  distinction, so I will clarify.  I will define shareholders as those who have a financial stake in the company; owners of Games Workshop stock and those employed by the company.  I will define stakeholders as those of us who have invested time and money, in many cases a great deal of time and money, into this hobby.  Moreover, we are the ones who play the game by choice, not by vocation.  Those at the castle in Nottingham may enjoy playing the game, but their livelihoods depend on it; ours do not.

GW Financials 2

So, what about those shareholders?  If I was such a person, I would be pretty concerned.  Actually, I would be pretty pissed off.  Despite the assurances of the the new CEO, let’s look at the latest numbers (2014).  Gross profit is down 12%.  Net income down 50%.  Both despite a decrease in expenses.  Dividend growth down 14%.  Revenue down 8%.  Earnings Per Share down 51%!  What are the GW executives looking at that tells them all is well?  Maybe that cash flow is up by 7MM GBP.  Of course the fact that they paid 13MM GBP less in dividends might have helped.  Maybe the fact that a Financial Times analyst has recommended that folks purchase equity in the company, and predicted a stock price of 680GBP may have helped.  But seriously, from a strictly financial perspective, the share holders can’a actually be thrilled by what the future appears to hold.

GW Financials 3

Now let’s shift to our perspective.  This past year saw the release of a bazillion new toys and products.  Box loads of models and codices.  Stacks of dataslates, campaign supplements, mountains of backstory and rules.  More formations that we can count!  Also, unlike previous releases, we are finally getting a respectable heads up from GW as to when the stuff will arrive.  We seem to actually be to the point where many players are asking for a slow down just to give our heads and our wallets a chance to catch up!  This is all good stuff.  Stuff that many of us have asked for.  The quality of the models is still high, and many boxes come with multiple build options.  So from a hobbyist/player perspective, it appears to be a good year.

GW Financials 4

What about your actually tabletop gaming and hobby (build/paint) experience?  Have you played more or less because of what is going on financially with the company that creates all this stuff? Have you stopped building and painting models, reading backstory or rolling dice because GW stock prices have plummeted?  Of course these are rhetorical questions, as we both know the answer…of course not!  The things that matter to us, at least so far, have not been affected by GWs Financials.  Has my codex been updated?  Did my army get new models and/or formations to use them in?  Is there new backstory for me to read and enjoy?  Are there new armies/products that I might be interested in purchasing, building and using?  These are the things that matter most to us.  Of course we love to commiserate about our hobby.  It’s one of the things brings us together as a community.  Whether or not we agree about an issue, we still enjoy talking about it.

GW Financials 5

The point of this discussion is what then?  To admit that I am as guilty as the next guy at showing interest in the financial condition of the company that produces the rules and models for a hobby that I enjoy.  Will it ever matter to us?  IMO, no.  Even if, and this is a big if, GW falls off the financial cliff, someone will most certainly buy them and life will go on.  Will the hobby change?  Of course it will.  But think about how much it has changed since 1st edition those many years ago.

Visit me at Shadows of Prometheus

Do you really care about GW’s finances, or is it all about the toy soldiers?

  • Dlatrex

    Personally I do not have the business acumen to prognosticate GW’s future based on these quarterly and annual summaries. Many authors have been kind enough to summarize for us lay people, and for that I am grateful, but the nature of business and expected pitfalls continue to elude me.

    That said, anything that would inhibit the ability for GW to produce or write about toy soldiers would be a great bummer, and as long as they are able to continue in that capacity I will be happy. =)

    • Muninwing

      pretty much.

      actually, half the people who get all uppity and argumentative about the “meaning of the quarterlies” don’t actually have any idea what they are talking about.

      a major international business with limited smaller competition and a major marketshare works on different principles than a mom-and-pop, a consultant, a business student, a large company with fierce competition, etc.

      it’s like people who love to comment about education and how business principles should run education — when they work on major, fundamentally different principles that make the two inapplicable to each other. or how sports teams should be run in certain specific ways because somehow sitting on a couch at home for years is equivalent to intricate insider knowledge about the complicated dynamics of such an industry…

  • James McKenzie

    Ok, for me,

    Costs aside, there is too much going on. Codex’s, yes. Supplements, yes. Formations, detachments, some dataslates, no. There has been a shift since 6th where we went from having a dozen codex’s to a dozen codexes and a bunch of random info in 200 places. That’s a lot for people to keep track of, especially if they have to purchase each one of these.

    Now, for the costs. They do matter. Just yesterday, some savvy consumers were looking at the cost for the new Harlequin kits in various countries. Guess what? Exchange rate is completely ignored and GW charges what they think they can get away with. Why? Well, to over simplify;

    They started selling kits for $1. They used to sell 100 kits a day, and made $100. One day, due to rising costs and such, they had to raise the cost to $2. The customer understood this, so, they still brought and the company now made $200 per day, or double what they used to make. Unfortunately, the company got made public, and now they want to impress the share holder with good dividends. So, now they charge $3 per miniature. But, the customer knows they are getting ripped off, some stay, some go. Now they only sell half the models, and only make $150 per day. Seeing that they have now dropped in incoming money, they attempt to fix it by raising the cost again, reasoning that “if we still sell 50 models per day, at $4 each we will get back to $200 per day.” Unfortunately, they neglect that the customers will drop off again, and now they only sell 25 models a day, making them $100. They are now shipping less product, have the costs they had when they found $100 couldn’t support them, but are back to earning what they were before the first price rise. This is GW.

    • Matt

      I can’t think of single company that wouldn’t prefer $100 on 25 items rather than $100 on 100 items. Two separate strategies: make more per customer with fewer customers or less per customer with more customers. Rolls Royce does the first, WalMart does the second, both are iconically successful companies. You are building a straw man argument.

      • Consumers love the wal mart approach much more 😉

        • MikeHollstrom

          and die hard hobbyists love the Rolls Royce!

          • Benderisgreat

            Yeah, but very few have Rolls-Royce wallets, and those that do are smart enough not to spend $200 on a kit that sells on eBay for $40.

          • Paweł Wiszniewski

            Not true. Maybe a die hard collector does. But die hard player doesn’t. If I like RR because I know other people with RR to race against, I will be less happy if there will be fewer and fewer people buying Rolls Royce. Because maybe soon I will have no one to race against. And then I will just have few tons of a car in by garage, which is not really worth for me personally as much as I payed.

            In other words – many of us pay because we can play and not because we want to own. We would prefer more people to play with us, we don’t care how many people just “own”.

        • Matt

          Not if you want quality you don’t. I don’t buy furniture at Walmart. I don’t even buy my hobby paint there.

          • we live in a world where quantity > quality though… which is how wal mart rules the roost.

          • Matt

            GW is not for sale in Walmart for a reason. They are niche product, like a Rolls Royce. Walmart sells Fords.

          • Right – and thats why there are so many people up in arms on forums. They want it to be super cheap and sold in a walmart.

          • Matt

            They do sell plastic army men in Walmart. 😉 Not ones I want though. The new harlequins I do want. They are superb models and I gladly shell out the $$$ for them. I’m sure I could have hundreds of the Walmart jobs for the same price I paid for the 12 that came in the two boxes I bought.

          • As my response to the article said – most of what gets talked about here is entirely emotionally driven.

            Consumers want as much as they can get for as cheap as they can get it.

            There is always comparisons to warmahordes or infinity etc because the scale of those games is that you only need a fraction of the models a 40k game does, so for $500 you can get either one 40k army or 3 warmahordes forces.

            Of course to someone like me, I’m not into skirmish games and I’m not into the combo chaining playstyle of warmahordes, so I don’t care if warmahordes models cost $1 each I still wouldn’t waste my money on it – but to many people they will play warmahordes simply because they can get more forces for the same money.

            Then there are the people that feel a plastic model shouldn’t cost more than $5 and if they had their way, things like land raiders would be $20 and a box of 10 tacticals would be $10.

            My own opinion is that i will pay for what i want to play. 40k is my cheapest hobby. COnsole gaming is more expensive. My music hobby is 10x more expensive. My drumset is worth 15 full 40k armies and that doesn’t count recording gear, microphones, my guitars, etc so I compare all of that to my 40k hobby and go meh.

            However I realize I am in the minority.

            Most people want wal mart prices for everything and will jump up and down screaming until they get it or find another version of what they want at wal mart prices instead.

          • Matt

            My bad. I thought you were supporting the rage against GW b/c they aren’t selling at mass produced Walmart prices. We are on the same page. We actually are the demographic they are shooting for so I guess the might know what they are doing after all.

          • Yeah I’m just playing devil’s advocate. This discussion has been going on for over a decade now. Well into 15 years actually – since it became a hot topic when land raiders were brought back as a plastic kit costing the rage inducing price of $45 in 2000 🙂

          • James McKenzie

            I remember when they went from 4 model white metal blisters to 3 man but also went from A level prices to B? Doesn’t matter the model, this happened in whfb and 40k, that must have been 15-17 years back. No?

          • I’m not sure exactly. I started in 1998, and I remember as I played undead that 3 ghouls came in a blister to start, then they went to 2 ghouls in a blister (the skeletons and zombies were plastic box set at that time)

          • James McKenzie

            Yeah, that’s about the right time frame, would have been, maybe 4th or 5th edition vampire counts? Either way, boy, did that get some nerd rage flowing.

          • Yep I remember. Though the internet was fairly young then so there weren’t many places to read all of the rage like there is today.

            That was 5th edition. Vampire COunts had been a book for a year before 6th came out and invalidated the army book.

            I remember the flames of anger of that too.

          • Yep I remember. Though the internet was fairly young then so there weren’t many places to read all of the rage like there is today.

            That was 5th edition. Vampire COunts had been a book for a year before 6th came out and invalidated the army book.

            I remember the flames of anger of that too.

          • James McKenzie

            I remember when they went from 4 model white metal blisters to 3 man but also went from A level prices to B? Doesn’t matter the model, this happened in whfb and 40k, that must have been 15-17 years back. No?

          • Ben

            Walmart sells Kias, not fords. That’s insulting ford. I owna Kia so I can say that in confidence

          • RexScarlet
          • Matt

            OMG! You’re right. RR is in trouble because they aren’t selling for KIA prices!!! Please. RR can be substituted for Rolex, first class flight, Tiffanies, Brooks Bros, Mercedes, etc, etc, etc, The point wasn’t the company, it was the quality of the product.

      • James McKenzie

        Ah, but Matt, you missed the point there, they raised the costs because $100 per day wasn’t enough to keep them floating. Now that they are back to that figure, they are actually losing money despite earning less. I know this from my own business. Yes, I may earn more for doing less, but if my net income isn’t more, I haven’t made a profit.

        • James McKenzie

          Oh, also, add the fact that you will drop even more customers with the ‘screw you tactic of less miniatures in the same box AND combined with a price rise. Good way to lose customers.

        • Matt

          But if you cut your production costs so you are only making 25% of the product you were then $100 should be a massive increase in profit.

          • James McKenzie

            You may lower the production cost by making 25 models, but you’re still paying for the molding machine, the staff to run it, the staff at your store. You would need to be making so much fewer models for their production costs to actually offset the rest of your expenditure.

            Edited as I had some typos.

          • Matt

            Cost per model = cost of production + cost of raw material + cost of distribution. Any company that can’t make a significantly bigger profit on the same income selling 75% less product deserves to go out of business. Your example actually proves the opposite of what you wanted to prove.

          • James McKenzie

            See, the problem is, the product is actually cheap. The machinery to make the product costs a lot. Let’s say, the product costs 0.50c to make. Let’s say that it used to cost$50 to make the miniatures. Now, they can get away with just $12.50 production costs. However, the labor cost is $20 per day, the factory costs $10 a day in rent, $20 per day in insurance, maybe $10 per day to pay for the new die in the machine, $5 per day to maintain, $15 for their sales (storefront sales) and $10 per day in rent. These are just rough costs, of course, but the product is cheap, plastic is cheap, so these are reasonable. $90 per day is what it costs to run this company, in theory.

            So, originally, when they went to $2 per day,,they spent $50 on production and $90 on the shop. This left $60 profit.

            Now, they are doing it for $102.50. But they only bring in $100. Their production costs are down, but they are still making a negative.

            Sure, these are made up, but you get the idea. Cheap product, with expensive machines, lots of staff and overheads means that producing less models doesn’t equal increased revenue.

          • James McKenzie

            Btw, the math is more like:

            Sales per day- Cost of material+ cost of production+ cost of upkeep+ cost of wages+ cost of insurance+ cost of facilities+ cost of rent, cost of storefront+rent+wages, cost of management+ cost of advertising+web page+cost of expansion+ Research+development =profit.

        • Samuel Sanchez

          Profits are down however GW has never had a black mark on profits. They never lost money. Your entire premise was based on conjecture. You neglect to mention any of the long term cost saving measures they put into place the last two years such as long term plastic molds replacing high cost metal. So in actuality thier cost long term goes down. Costs of gw Minatures are expensive and on the upperend of similar minatures howver they are still within the normal prices of competitors pricing. This hobby has always been expensive and if anything even with falling profit margins somehow the amount of releases and quality of products has increased. Want to know when to panick? When gw starts reducing the number of models and types of armies it produces for 40k. That’s panick mode for a company. That’s what’s happening with wfb that’s what happened to the specialist games and that’s what happening to McDonald’s. 40k is extremely healthy game. It is the largest minaiture game by sales. The largest minature game by profits. There is a reason financial anlysts say gw is a buy stock. It’s actually undervalued but it’s stock portfolio is an extremely healthy with lower cost of operations. I like the constant introduction of dataslates, fornations, and campaign detschments this is the entire reason why it’s easier for gw to freshen up a codex without resorting to constant coded updates. Without dataslates new units like the ones tyranids recieved would not exist. Without fornations and detschments new campaigns wouldn’t exist. Even the campaigns from 3rd edition contained new army lists such as speed freaks, steel legion, etc. the worse part about these detschments is it becomes hard to find the rules or locations. This needs to be solved by gw with a better online interface showing what and where to find these. It also wouldn’t hurt if they had more sales for them.

          • James McKenzie

            Well, lucky I added the phrase ‘to over simplify’ when making my brief analogy about their business practices. Yes, they have cut prices, but at this point, their stores are open less, they have less staff, the produce less miniatures (with the the removal of sp diarist games, the toning down of fantasy), so yes, they are saving money, but I don’t think they can continuously repeat these saving measures, many of them are at there maximum effectiveness.

            It’s one thing to add new factions to the game, which is where supplements shine, but it’s another to have locked in formations and detachments where the force org chart is effectively ignored in order to place more models. It’s a stupid design to add without overhauling the mechanics. As for dataslates, I didn’t say they are all bad, just some. Where new units are added, fine, but where an existing unit is changed or becomes a detachment, I despise them. This is personal preference, that’s why I kept that section small.

          • Samuel Sanchez

            Dataslates have nothing to do with formations or detachments. Think of them as an update to a codex that adds an entry into it without having to reprint the entire book.

            There is no such thing as a FOC it doesn’t exist. Detschments for all intents and purposes are FOCs.
            Think as detschments as a codex specific FOC. Every army has their own detschments with in effect is their own FOC. There is a generic BRB detachment called a cad that is similar to the old generic FOC however people have been asking for army specific FOCs for as long as I can remember. Heck some old supplements in 3rd edition had a bunch of FOC shenanigans such as the Orc speed freak list basically making most of the Orc fast atk into troops.

            And all a formstion is was a preset detachment that requires you to take certain units. No unit is every changed in a formstion. There is however additional USRs or army wide rules for taking a specific formation. However no unit entry in a codex is ever changed. Most of your problems seem to come from your misubderstanding of what these things are based on your prior experience of the game. You may also be confused or overwhelmed by the choices other armies have. I do believe gw can do a better job of organizing and listing fornations and detschments for factions. IMHO there should be a list for them in the faq and errata section. They don’t need to list the rules there but should at least show the faction, units involved and location of the rules.

      • Knight

        Hey Matt, in the quantity vs quality argument you have to remember
        this is a social game. From a social point of view, its better to have
        100 people playing it for 1$ than 2 at 50$. The more people playing the game the better it is for the customer, they talked to each other hype things for new items, they look forward to new opponents etc.

        You might have the best game on the market but if none of your friends are playing it, it’s highly unlikely you will.

        This is the spiraling downhill GW is going.

        Raising prices = less peopleCancelling events = less people

      • Knight

        I’m always baffled by who is GW target audience? Mainly males from the age range of 13-30, the next question is how much disposable income does this age range has?

        GW should know but they refused to do market analysis.

        From my experience being a college student and buying 50$ codex is a big expense.

  • Chumbalaya

    The only effect their financials have on me is inspiring hope that their downward spiral will force them to fix the game and hopefully fix it enough to get me interested in playing again.

    • Maybe…but re: GW does not care what you think

      • confoo22

        News flash: Nobody who plays 40k should care what Chumby thinks anymore.

        By his own admission he hasn’t played seriously since Orks came out (I’d argue longer from what I’ve heard on Heroic 28’s), he almost never contributes a useful thought to any discussion beyond saying “meh,” the times he does say anything beyond that it’s to beat the drum that GW drove him out of the game, his podcast doesn’t even cover 40k anymore except in a vague “we might talk about them” sort of way, and he’s more concerned with being a wise-a$$ than he is about having an objective conversation.

        • Well if yer gonna hate on Chumba for that reason you should roll in a couple others like Rex..and whoever else ( I don’t really pay attention to names that much), but in the end they are entitiled to their opinion as pointless (aren’t all of our comments pointless realy??) and unhelpful as they are.

          • confoo22

            I hate on Chumby because he ruined one of my favorite podcasts with that garbage and now he’s taking his act on the road to comments sections and dakka. Other people who do it are annoying, yes, but Chumby is worse because he was on a show dedicated to 40k even though he barely played and pretty much just talked trash constantly. It was extremely hypocritical and would have been laughable if it hadn’t also been a little sad.

          • Chumbalaya

            I’m sorry you feel that way. 2014 was really the year that broke me. I had a blast playing in various events, NoVA’s narrative in particular, but after that I pretty much done. I think we discussed this on the big announcement episode, but I had let Kenny know beforehand that I was considering taking a break from the show because I really didn’t enjoy 40k any more and it made no sense for me to keep talking about it. He said he was feeling the same way, which is why we made the announcement in the first place.

            Again, I’m sorry if that upsets you, but we all decided that taking a break, diversifying topics or something had to be done. Podcasting is as much a part of the hobby to us as playing or painting, and we’d rather have fun talking about stuff we do like than forcing ourselves to talk about something we aren’t having as much fun with.

            There will be 40k talk out of The Heroic 28s at some point. Kenny and Uncle Buck are working on something themselves. Plus, once event season starts up for us fun will be had and fun means good content. I’m probably only playing in one 40k event this year and that’s Alamo, so you bet I’ll be jazzed up to talk about it afterward.

            In the meantime, maybe give X-Wing and the Kessel Run a try? We’re also starting up a Malifaux podcast. Otherwise, I appreciate your support for the show and hope we can give you something you’ll enjoy more in the future.

          • confoo22

            When I say you ruined the show for me, it’s not because the show went in a different direction. I get that completely and have no problem when others leave 40k for a different game. I personally am not interested in either of those games (and I have done a few test games of both, they seemed fun but not for me), so the show is dead for me unless I see that you guys are having a 40k discussion since I still watch the FB page.

            My issue with you is that when there was 40k talk going it felt like you did everything you could to knock GW and the game. Almost as if you were playing a part and were more interested in being the GW hater than you were in talking about what was actually going on or what could be done or how to work in the system or anything positive at all. You weren’t right or wrong since it was your opinion, but it’s really difficult to listen to any show purported to be dedicated to a game when there’s one person on the show who so obviously does not enjoy the game in any way. Do I need a constant GW love-in on every podcast I listen to? No, there’s plenty there to critique and massive room for improvements, but I also listen to podcasts to help me enjoy the hobby and you did the exact opposite for me.

            So the fact is, I don’t think you should be taken seriously as a 40k commentator. I feel like you’re either too far gone to ever enjoy the game without massive changes and restructuring, or you’re too dedicated to being Chumbalaya the personality to be objective about it. Either way, your opinion is tarnished before you even make it as far as I’m concerned. Maybe it was nasty of me to say so in the comment boards like that, but there it is.

          • confoo22

            When I say you ruined the show for me, it’s not because the show went in a different direction. I get that completely and have no problem when others leave 40k for a different game. I personally am not interested in either of those games (and I have done a few test games of both, they seemed fun but not for me), so the show is dead for me unless I see that you guys are having a 40k discussion since I still watch the FB page.

            My issue with you is that when there was 40k talk going it felt like you did everything you could to knock GW and the game. Almost as if you were playing a part and were more interested in being the GW hater than you were in talking about what was actually going on or what could be done or how to work in the system or anything positive at all. You weren’t right or wrong since it was your opinion, but it’s really difficult to listen to any show purported to be dedicated to a game when there’s one person on the show who so obviously does not enjoy the game in any way. Do I need a constant GW love-in on every podcast I listen to? No, there’s plenty there to critique and massive room for improvements, but I also listen to podcasts to help me enjoy the hobby and you did the exact opposite for me.

            So the fact is, I don’t think you should be taken seriously as a 40k commentator. I feel like you’re either too far gone to ever enjoy the game without massive changes and restructuring, or you’re too dedicated to being Chumbalaya the personality to be objective about it. Either way, your opinion is tarnished before you even make it as far as I’m concerned. Maybe it was nasty of me to say so in the comment boards like that, but there it is.

          • josh dunn

            I agree. Negative thoughts drag a show down. That’s what happened to 40k Radio…

          • Ah see there is your problem right there…you care aboot what knobs say/think. I realize this is easier to say than do but, just try to laugh when you read the comments and take nothing a faceless person on the interwebz has to say to heart and trust me, you will be happier.

          • Hahboo

            Only person getting knobby here is confoo.

          • Ah see there is your problem right there…you care aboot what knobs say/think. I realize this is easier to say than do but, just try to laugh when you read the comments and take nothing a faceless person on the interwebz has to say to heart and trust me, you will be happier.

        • Matthew Trent

          That’s quite the narrative you’ve forged.

      • Chumbalaya

        Oh, I am aware. It sucks for me that I don’t enjoy the game that’s been a part of my life for over 10 years. All I can do is hope things get better.

    • Mordrot

      I buy less because it costs more. I’m willing to pay more for their models because they are excellent but there is a give and take that is not equal. They give me sweet new models like deathwing Knights and chaos dragon ogres but charge me $60 bucks a box where 40-45 is appropriate and fair. Or independent characters who are $26 when all things considered 18-20 would be fair. If the prices were lowered roughly 20% at their own stores and a further 10 or so at independent retailers I would have close to twice as many models as I do. Do the math GW. Perception affects consumer attitude.

  • For me – I do not care how the company is doing financially. I care that I can enjoy the product. If I do not enjoy the product, I move on.

    I know for others, there is this desire to only play what is #1, where #1 is determined by sales. This can be for many reasons, from being afraid that the company will die, to a perceived popularity where you don’t want to struggle to find opponents, to just wanting to associate oneself with whatever is #1.

    The same debate goes on in the RPG world, where there are regular threads debating if D&D is more popular than Pathfinder for much the same reasons. For many people, it just simply matters a lot that their chosen hobby company is also #1, and when their chosen hobby company is no longer #1, they move on for any number of reasons.

    With GW, we cannot gauge other companies’ health since they do not post their financials, but it is safe to say that GW is still selling a lot, and by the dollar/pound probably pull the most in revenue, but because their sales numbers drop from year to year they are projected to die any day now (since 2004).

    One thing I see the financials used quite a bit for is as a gimp stick to beat down the point that GW is losing money to other companies – correlation / causation indicates this is obviously because whoever is holding the gimp stick at the time is not having their needs met and GW is losing money as a direct result of the holder of the gimp stick not having their desires met.

    Another thing I see the financials used quite a bit for is to justify another person’s favored game. Favored game’s company has increased sales, and GW is losing sales – erego favored game is obviously superior.

    Another thing I see the financials used quite a bit for is as a boogy man used as a recruiting tool for people to get people to play their favored game. GW is losing money, which means any day now they will go broke, or sell out to someone else, but regardless, GW games will no longer exist so you are wasting your money so come play my favored game instead!

    Conclusion for me: i will play what I enjoy. If its battletech, i will play that. If its xwing I will play that. If its some RPG that five people have heard of and thats it, I’ll still play that. I will play 40k and whfb until a better alternative that meets what those games support in terms of sale and background comes out.

    I don’t care about the financials, largely because I don’t care, and secondly because none of the other companies produce their financials for us to compare against so the discussion devolves into an emotionally charged argument based on emotional desires which is of course circular without end.

  • MikeD

    I’d have to disagree here with the assertion that they don’t matter. They affect the way GW does business. If they’re more consumer friendly (reasonable prices, low(er) barriers to entry, friendly and helpful staff, well stocked stores, etc.) then then the game will grow, we will have new players entering our hobby and we all win. If fewer people play, either no new people entering or people giving up due to the policies dictated by their bottom line, we all lose.

    The company’s strategy will always reflect what is in the best interest of the stock holders which is profit. The two are directly linked which is why it is important to watch their financials.

  • Shaddn

    First: Sry for my bad English.

    Second: I understand your
    opinion but I think this is maybe not correct. Please let me give an example.
    There is a big rumor that the Lizardmen get “killed”. And the answer on: “Has my codex been updated?“ is just “no”. And maybe it won’t be updated because your race do not exist anymore.
    This will of course lower my motivation cause I love this race and if they do it I am 100% sure that the reason is money.

    • Red_Five_Standing_By

      This is the problem with GW’s business model when it comes to future releases. Most companies will tell you 6 months or more in advance what is coming down the pike. They then generate a lot of excitement for those future releases with teasers, adverts and sneak peaks.

      GW, on the other hand, holds everything close to their chest and reveals nothing until the week prior. This has opened the door for rumor mongers “with an inside track” to proliferate rumors (be they true, untrue or some where in between). If a rumor is wildly wrong, it is still treated as a potential possibility (i.e. Lizardmen being squatted) even if GW has no intention of actually doing that.

      Being open with your customers is always preferable to not being open because it minimizes the potential for a public relations disaster.

  • Brendan

    Dont you answer the question just by asking it?

  • chris

    The impact of their financials drives their decisions on what to charge. Too high or too low and they lose customers. Losing customers means I have fewer people to play a game with.

    I picked up 40k because it was very popular. I’ll deal with the various rule problems etc as long as I can find other players. However the prices have had a negative effect. If fewer people are playing then my motivation for expanding my armies drops. At some point, not quite there for me but getting closer, my motivation disappears entirely.

    So, yes, their financials are important. At least in the form of how it impacts their decisions going forward.

  • nurglitch

    Shareholders are the owners, the people that own shares. The stakeholders are the workers who produce the product, the consumers who use the product, and the companies the license the product.

  • NO. Not now…not ever. GW does not care what you think so why do you care aboot the company status, unless like stated elsewhere, you want it to get bad enuff that it hopefully becomes more economical to play.
    On the up side, its quite funny to read the comments, especially when you have someone that understands them goin against someone who doesn’t but tries to pretend they do, funny stuff.

  • GW financials impact the hobby quite a bit. WHFB’s End Times did not happen in a vacuum, after all.

  • Gridloc

    The financials didn’t effect my game, the game effected the financials. I played for over a decade, i’ve seen the bad and the good. Yet as prices went up and model count down, rules become flavor of the month, game mechanics became arguments with friends, the company turning its back on support, I decided to see what else is out there…

    I found out there are tons of other games that I enjoy more!

    Sorry you lost me GW, I don’t want to see you fail, but really won’t help you survive anymore on my dime…

  • Gridloc

    The financials didn’t effect my game, the game effected the financials. I played for over a decade, i’ve seen the bad and the good. Yet as prices went up and model count down, rules become flavor of the month, game mechanics became arguments with friends, the company turning its back on support, I decided to see what else is out there…

    I found out there are tons of other games that I enjoy more!

    Sorry you lost me GW, I don’t want to see you fail, but really won’t help you survive anymore on my dime…

  • Dennis Harrison

    GW’s financials aren’t bad.
    GW’s financials aren’t bad.
    GW’s financials aren’t bad.

    You cannot look at one company in an industry or one annual report and claim that a company is failing. The thing frustrating to me about getting financial information from a gaming blog, is you aren’t getting the whole picture. Why don’t you analyze the rest of the London Stock Exchange? Compare and contrast the annual reports industry wide.

    But no.. I want clear and consistent rules. I want FAQ’s that answer the questions I have been asking. I want new models that interest me. I like Games Workshop and will continue to support them.

    • GW’s financials are absolutely bad. 50% drops in profit, especially in years that see so much in the way of new product in an impulse-buying business, are bad news.

  • Sure

    Why does the financial condition of the company matter? I suppose it has to do with being able to rely on the game remaining stable. Just look at WH Fantasy. The company is doing poorly and that product has not been performing well. So what are we looking at: End times followed up with some big change in the game world, the factions, and the range of models and how they are organized. In other words, they are reformulating a failing product and is slowly dying because making such a risky move is now worth losing the customers who will not tolerate this change. Tho goes beyond the IP issue. In 40k, the biggest money maker for them, they deal with the IP issues by giving new labels – “Adeptus Astartes, Astra Militarum, etc”. They have made changed but they aren’t tearing it down to build something new. However, if things get bad enough that could be in 40k’s future. Bso that is how the financials can give important information to the non-shareholding customers.

    • ChubToad

      While I can agree with you on giving information to customers, knowing how to read that possible information and properly interpret it, is key. This does not happen over the internet so in that regard, all we have left is oppinions of things that actually have more depth than the actual information shows. In the end all we have is speculations on things we, as customers, will never actually know.

  • petrow84

    Aff khorse they matter; the purchase of my 7th Bentley hangs on the revenue of those plastic-crack shares! Thou shalt not let me down; buy all those shiny stuff, or I’ll be forced to use one of my exorbitantly luxurious cars twice per week!

  • ReveredChaplainDrake

    GW financials could be very well suffering the effects of factors that a lot of foreigners (that is to say non-UK residents) might not immediately notice. I had the three closest GW game stores to my house (including a store that at one point was the GW US headquarters) just up and die because the property taxes in my state are completely ludicrous. Regional problems account for a lot, too.

    Financials mostly matter so as to justify why GW did stuff. It’s commonly bandied about that Space Marines sell more than every other product GW sells put together. This often gets used to excuse why loyalists get solid, versatile codecies while xenos and traitor factions have to either find a pet author to make them OP or go pound sand until somebody makes a play test oversight large enough for one accidentally competitive unit to make it to print. So in a large sense, if Space Marines really are that overwhelmingly popular, GW financials have quite a bit to say about how well Space Marines themselves are faring.

    Financials are also one of the few tea leaves us players actually have for what GW is planning. Rumors are not what they once were. With whole edition rehashes essentially amounting to $85 erratas every couple years or so, some find it hard to justify the investment. In fact, if I hadn’t found somebody who was selling off their core rulebook for $25, I wouldn’t be playing 40k now. I was planning on playing Warmachine until GW released 8th edition. Why buy the core 40k rules when they’re just gonna’ get completely rehashed in another two years anyway? GW ticked a lot of people off by cutting 6th edition down to 2 years. Was that just a one-time thing? Will 7th edition also last two years? Will 7th last 4 years, like 5th? Will 7th last one year? Nobody knows! These are unpredictable times, and financials are really the only assurance we have to ensure that our purchases will remain valuable next month.

    • Porty1119

      Which state would that be?

      • ReveredChaplainDrake

        Maryland. Lost the Glen Burnie Battle Bunker. Lost the Arundel Mills GW. Then, from what I’ve heard, we either lost the Lake Shore store entirely or the really cool guy who used to run it got replaced by a complete tool. Oh, and the Bowie Bunker was downsized from a couple dozen gaming tables to about four, though I live too far away to confirm or deny that.

        I get why they did it. Cost-cutting. The problem is that indy stores did *not* abandon the region in a mass exodus and are making a killing in GW’s absence. The store I go to even took up residence where the old Battle Bunker used to be. And is even being run by one of the guys who helped run said Bunker before being downsized. I’m amazed people still play 40k there, but it’s a far cry from 15 years ago, when you could make Forge World purchases by literally going next door.

    • generalchaos34

      I wouldnt blame it on edition change, it was something that was needed since 6th was very much of an experimental edition. Hopefully it will not be another 2 years turn over, but compared to the 6th ed to the 7th edition books I found to have a lot more value for roughly the same price. While it was an annoyance I think 7th was well worth it in terms of rules and in terms of quality.

      • ReveredChaplainDrake

        I don’t really hate 7th edition. (Except Maelstrom missions. Those can go straight to hell.) In fact, 7th is probably a microcosm of GW as a whole. It’s hurting pretty bad right now, and it’s certainly not objectively good. That said, it’s doing about as well as one can expect, given the baggage involved. 7th just gives me the feeling of an edition that wouldn’t have had to exist at all if somebody had done 6th edition right the first time.

        Take it from a software developer. Customers don’t pay money for the developers to ‘experiment’ with things. Customers pay for functional products that justify their cost by adding immediate value. Leave experimentation to R&D.

    • Red_Five_Standing_By

      The quick turn around from 6th to 7th was obviously precipitated by a dire need to fix a bleeding player base. Could the game have been fixed by an errata? Sure but that would not have drawn people back into the game.

      GW really should have offered a deal on the rulebooks considering the fast turn around.

      Back in 2003, WotC did something similar with D&D (going from 3rd edition to 3.5 Edition). It was a good move that improved a lot of the game but the changes really were more errata-based than anything else. It cheesed off a lot of people and helped squash all of the good will WotC had from creating 3rd edition in the first place (which was a welcome change from 2nd).

  • Malevengion

    To me, the question is, “How will GW’s financials look after they have updated all the 40K codices?” Are their earning low because of rapid fire development and release expenses or are the being boosted by constantly having something new on the market? When 40K 7th ed is fully updated is when we’ll see how the company is holding up. If GW is lucky, the global economic malaise will have passed and disposable income will be a thing again. (I’m sure that the End Times WFB campaign has helped too but I feel that 40K is the make or break money maker for them.)

    • Porty1119

      Rapid-fire development would, in theory, harm profits (because of increased costs) but have a positive impact on sales. Sales are down; the new release model is not performing as GW may have hoped.

      • Malevengion

        Good point. Still, I wonder if a 12% reduction is gross profits is all that bad against the industry standard. Unfortunately, I haven’t seen the records for any other gaming companies to know for sure. I suspect many of them are down too.

  • GiftoftheMagi

    The financial situation does matter to me as a player and hobbyist. It speaks to me of the competency of the company in whose continued existence will allow me to play this game, and help forecast the direction the game will go to in the future.

    This is a niche industry, which means collapse is a very real thing. No matter how big you are in a niche, that gives you no protection. Just ask TSR. At the moment D&D was at its peak, its owners and creators turned their backs for a bit on the financial part of things and suddenly in a few years the company fell apart…to be bought up by a card game company and it never fully recovered. We got lucky it did not disappear forever. You can look at other examples like VOR to see what can happen so quickly.

    I feel like if the company is having troubles, it needs to make changes. These changes may be a bit painful to us (and I don’t mean price-wise) because this may mean major changes in the game itself and what we have to play with, but that also means we still get to play.

    • Ben

      Agreed. Seems to me The End Times In Fantasy is GWs attempt to do the painful changes you suggested. If it does manage work, I’d expect 40k to get a similar “adjustment.”

  • benn grimm

    I think the only thing I care less about than this is; ‘when will Madonna release a new record…?’

  • ted1138

    To me it means one thing, will they do something new to acquire some new customers, or will they just rely on squeezing ever more money out of their existing customers.

  • ted1138

    To me it means one thing, will they do something new to acquire some new customers, or will they just rely on squeezing ever more money out of their existing customers.

  • Nathaniel Wright

    To the average joe? No. It means nothing. To the people that hate everything about 40k? It means nothing. To the people that want to shell out the money? Well, so long as they keep wanting to shell it out, they’ll provide whatever it is.

    Too many people with too little business sense put too much stock on their too ignorant opinion.

    • Some people that hate 40k because it does not cater to their playstyle use it as a drum to beat on to further the causation / correlation fallacy that because their desired method of playing is not being catered to that 40k is losing money.

      Still others use it as a drum to beat on to recruit for their preferred game.

      So to them, the financials mean everything.

      • Porty1119

        The demise of GW would likely be a good thing for 40K. We’d see a lot of smaller companies producing models, likely at lower cost, and rules development would be handled by players. Look at how Epic is doing even after support was dropped.

        • Perhaps. Player-driven rules are like a shotgun blast. Scattered. Some of it good, some of it awful.

          I can’t comment on the state of EPIC because I haven’t been able to get a game going since 1999 so I’m not sure what the player base did to it.

          If the player-base turned it into a game like warmachine, or some skirmish system, I would consider that a bad thing since that is not what I want out of a game (or else i’d play those skirmish games).

          • Chris. K Cook

            Community fractures, One group wants to run the last official rule set and the others want to run the fan wank.

            Net epic is stupid and fidly.

            I hate the fact that every time I want to play epic I have to negotiate what edition.

            “development would be handled by players”

            Who produce biased, slapdash awful rulesets.

            Have you never read any fan made stuff?

        • GiftoftheMagi

          Unfortunately you may also see the quality of the models go down, and you will also lose players that simply have no interest in the other games. Most Warmachine, Infinity and such players I know don’t or have ever played 40K…and while they are decent models those companies still have not reached the general level of quality GW has. Worse overall is that model per model, their prices are relative to GW.

      • Hahboo

        To me it’s more of a “This company has shown their incompetence in growing a company during a time of growth for every other company in the industry. This company must be losing money for a reason.” Which is evident in the widespread dissatisfaction shown on every internet medium involved with the game.

        Does this fact get used as a recruiting tool? Of course, as it should. When the leader in the industry is unable to grow while having with a dedicated and eager fanbase it’s a bad sign.

        If GW was a company worth giving your money to it would show in the financials.

        • How can you use that as a gauge of comparison when none of the other companies that make up their competition display their financial data to compare against?

          When GW had forums back in the late 90s and early 2000s, when they were at the top of the mountain and financials were good, the internet was still screaming with dissatisfaction.

          “If GW was a company worth giving your money to, it would show in the financials”

          It does in that they make millions in revenue.

          • Hahboo

            Right, year over year their revenue and profit has shrunk and for a company as big as GW is, with as big of a global foothold as they had, with as dedicated of a fanbase as they have/had, why the hell aren’t they able to grow? I don’t need to see other companies financials to understand that at their size, GW should be a growing and commanding force in the industry .

          • I think that if GW in 1995 existed today in 2015 that the same result would have happened.

            Why?

            When GW in 1995 existed there really was nothing else out there.

            Today there are a ton of choices.

            If those choices existed in 1995, GW would have had to deal with the same thing.

            The gaming industry is very crowded today. In 1995 it was barren. In 2005 it was mostly barren. Things like kickstarter have allowed tiny operations to become viable operations, and those tiny operations can subsist off of pennies to the dollar compared with a big publicly traded company can.

            The gaming population of today is also vastly different, I’d say worlds different, than what it was in 1995, and very different from what it was in 2005. (speaking from a person that started gaming in 1987, I’ve watched the culture shift radically over time)

            So again – if one’s expectation on a company is that it needs to always grow or you’re going to pull out from it – that’s not a common thing i have ever seen. If one is pulling out of a product because the product no longer meets their needs – fair enough.

            The correlation / causation fallacy runs wilder than the strawman fallacies on the internet as a whole. Until you can actually get the numbers from everything involved, everything is assumption and falls under correlation / causation.

            GW is losing money for a variety of reasons and will likely continue to lose money for a variety of reasons. To those that hate GW and hate that they don’t cater to them anymore – this is sweet. The thing is, those people are largely catered to by the other games, so they shoudl stick wtih those games and not worry about GW any longer instead of trying to get GW to be a clone of every other company out there (and lets face it, the game companies today are largely cloning each other in what they are producing with minor variations here and there)

          • Hahboo

            “So again – if one’s expectation on a company is that it needs to always grow or you’re going to pull out from it – that’s not a common thing i have ever seen.”

            It’s not that I look at the growth of a company as a deciding factor, but the fact that a company fails to grow is usually a symptom of a larger problem (Such as rules bloat, price bloat, etc) that may lead me away.

          • Rules bloat, price bloat, etc could lead to a company failing to grow yes.

            So too could the fact be that there is a lot of competition today that didn’t exist before which may provide a game that someone would have loved to play ten years ago that simply didn’t exist then which would have guided their hand ten years ago had it existed.

            Ten years ago largely the only game in town was GW. If you wanted to play wargames you had 40k/fantasy, a smattering of warmachine, or historicals.

            Today that has been exponentiated a few times over.

          • Hahboo

            Yes there are other companies available, but that doesn’t mean people automatically jump ship to a new game because it’s a new game. New products may cater to different tastes but there’s nothing stopping them from playing multiple systems.

            If it was simply the fact that more games systems existed, I wouldn’t see the pervasive and hostile attitude a sizeable portion of the online community has towards GW. Could more offerings available be a factor in their failure to grow? Certainly. Could a disgruntled playerbase upset at the business practices of GW be a factor in their failure to grow? I think certainly as well.

          • The disgruntled nature of the internet community is so scattershot though that identifying any one thing is impossible.

            Privateer for example could up their costs by double and the tourney competitive guys would still pay because privateer caters to page 5 and smashing your opponents balls, and gw does not.

            Those same players were smashing balls pre 6th 40k too paying the cost because the system catered to them.

            Many of whom claim that gw will go broke because they arent being catered to any longer. Causation correlation.

            Costs have always been raged against, balance was always raged against, but the liquid hot magma of contempt didnt begin until 2010 and then 2012 when both systems opened up to allies and forge world and away from esports format.

            The companies that picked up that desire of course picked up those people.

            The inference that that is the vast bulk of a niche player base though is without proof.

            Those players paid the cost for years so while the practices may be a part of why i dont think in many cases its the true reason

  • miniwar monger

    If their Financials indicate that they are loosing customers it of course matters.
    I doubt they will catch up big time. The market is getting crowded, the competition looks good, plays well and sometimes does a hell of a good community job.

    And you got it all wrong : I didn’t stop spending money on GW because their stock dropped, their stock dropped because I stopped spending my money on their stuff.
    And so did tens of thousands of fellow players and collectors. We vote with our wallets and GWs financials just assure us that in the end its us people who decide what woks and what doesn’t.

    • Hahboo

      Exactly. It’s not that I don’t want to give GW my money but I just don’t trust the rules anymore.

  • Trey

    Mord pretty models, more bad rules.

  • Gray_Hunter

    I don’t think it matters at all. They have spent the last 18 months or so reorganizing their business model (from each codex being redone every four years or so, to getting everything up to roughly the same level today). Pivoting is always expensive, hence the bad numbers on their financial reports lately.

    Now, if the new CEO sticks to this plan, the company is in a good spot. Virtually all of the codices are up to date. This means two things: (1) All of us who like to buy all of the codices but financially couldn’t keep up with the release rate over the last year can catch up, and (2) GW can release single models/units and dataslates for each army whenever they want to.

    The former is good for the company because they will see a return on the investment that they’ve put into 40k over the last year or so (i.e., they won’t spend much more money designing codices, but people will be buying them).

    The latter is good for everyone. Every so often EVERYONE gets a cool new toy to buy, instead of waiting years and then having to buy an entire new army’s worth of cool new models. We’re happy to have new stuff to paint/play with, our wallets don’t get overwhelmed, and GW gets a consistent stream of revenue. In addition, the designers can fix game balance issues as needed (e.g., release new Mutilators with a dataslate containing updated rules, GW. For the love of Nurgle!)

    Just my two cents. I think they’ve done a great job reorganizing themselves. I hope that their bottom line shows the benefits of that this year.

  • BrianDavion

    I suspect a biiig part of it is GW’s market share is shrinking, Warmachine/Hoards, X-wing etc is making a dent, before those games came out warhammer was HUGELY dominant on the market. but that dominance has been reduced. and logicly we’re seeing the result

    • GiftoftheMagi

      They are also grabbing new potential players that look at the massive range of GW models and the huge armies…and decide they want something smaller and easier. X-Wing and such appeals to players that don’t want to model or paint at all, and Warmachine for players that want small collections of models thinking that will be cheaper. Hint: it’s not.

  • JP

    It amazes me that the GW bean counters have not yet scraped enough functioning brain cells together to figure out that they need to be competitive in their pricing in order to turn this around. I have a very hard time believing that they would not benefit from discounting their products and selling in larger quantities to make up the difference. It’s such a basic concept of business yet they cannot seem to grasp it.

  • Azrell

    A small investment in better rules quality could see a massive increase in sales. But that would also have to accompany a actual budget for consumer research. If i had to guess much of GWs current financial problems are caused by the insane idea that you cant just ask the customer what they want then make if for them.