GW: Half-Year Financials OUT!

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Games Workshop’s Half-Year numbers are out – Get ready for a bumpy ride!

GW half yearly 1-8-2016

Kevin Rountree, CEO of Games Workshop:

We have made some good progress on our strategic initiatives all focused on delivering long term growth. Whilst we are disappointed with the decline in return on capital reported in the period, we are all confident that we are focused on delivering the necessary changes to address this decline.

In the period we launched some great new products and our new visitor centre has performed well.

December sales were below expectations across the Group. At this stage in the Company’s financial year, the Company’s internal projections indicate that pre-tax profit for the year to 29 May 2016 is unlikely to exceed £16 million. A further update will be made when appropriate.

via GW Investor Relations

We’re going to take a quick look at the report for now in a “just the facts” manner – We’ll take a deep dive in the days ahead.

Games Workshop Half-Yearly Report (Six months to November 29, 2015)

Half-Yearly Report (Full Report)

GW half yearly 1-8-2016 Highlights

Sales Reported sales fell by 2.2% to £55.3 million for the period.

On a constant currency basis, sales were up by 0.7% from £56.5 million to £56.9 million;

Sales Channel Split:

Retail: £23.0 million (2014: £23.4 million)

Trade: £22.3 million (2014: £22.0 million)

Mail Order: £11.6 million (2014: £11.1 million)

Excerpts from the CEO:

Retail

This channel showed growth in non-core retail but was offset by declines in our core retail business. However on a constant currency basis sales were broadly in line with last year. We opened, including relocations, 22 one man store format stores and three multi man format stores in the period. We also started our trial of four multi man format stores in high footfall locations; Sydney, Munich, Paris and Copenhagen. After closing 13 stores, our net total number of stores at the end of the period is 430.

The key priority is store manager recruitment. On 9 November 2015, I appointed an expert in recruitment to my management team. This person will ensure we have a constant supply of retail store managers and trade recruiters and account developers. She will also work with me to review our global people strategy.

Trade

All key territories were broadly in line with last year. In the period, our net number of trade outlets increased by 61 accounts. To broaden our core trade product reach, in the period, we have designed a small new product range and are at present actively signing up distribution agents to sell this product into North America. We continue to work on other product formats to optimise other opportunities.

Mail Order

Sales in our online shops were up 5.3%.

Non-core

This includes licensing, digital, export, the visitor centre, non-strategic trade accounts, book trade, magazine and mass-market opportunities. Non-core sales were down by 2.5% from £7.8 million to £7.6 million due to declines in sales in digital, export and the book trade offset by growth in visitor centre and non-strategic trade sales. In the period, royalties receivable from licensing increased from £0.7 million to £1.5 million.

Operating Profit

Core business operating profit (operating profit before royalty income) fell by £0.8 million to £4.7 million (2014: £5.5 million). On a constant currency basis, core business operating profit increased by £0.1 million to £5.6 million. The net impact in the six months to 29 November 2015 of exchange rate fluctuations was a loss of £0.9 million. It is not the Group’s policy to hedge against foreign exchange exposure.

Operating expenses increased by £0.3 million due to an investment in sales facing activities relating to new retail store costs. Costs remain a key area of focus.

Projects

We have three major projects being implemented currently: European ERP system replacement (enterprise resource planning) – on track. Forge World mail order store – this store was launched in August 2015 on time and within cash limits. Mail order warehouse system replacement – complicated project currently postponed until after the busy December trading period.

What’s your take? Numbers don’t lie but try to keep it civil!

  • Oh good. We need our regular 6 month “gw is failing any day now” thread. I was having withdrawal.

    • weeble1000

      To be fair, the trend line has been consistently downward for like 5 years now. GW isn’t going away tomorrow, of course, but these reports are starting to be as formulaic as Obama’s mass shooting speeches.

      Same in, same out year after year. As the market grows, GW shrinks. AOS, Horus Heresy, Board Games, Shovelware…down, down, down.

      • Xodis

        Revenue at constant currency went up, the only reasons Revenue went down is because the British Pound is so strong, this was announced last month that we should expect to see this.

        • An_Enemy

          By such a small amount that blaming it on the strength of currency in the later part of the reporting period is a laughably weak excuse.

          Personally, I got Sigismund in the mail yesterday so none of this matters to me. I’m too busy staring and giggling.

          • Xodis

            How is a fact “laughably weak” and even an excuse?

            Retail profits went down .4 million
            Trade Profits went up .3 million
            Mail order profits went up .5 million
            Thats an increase of .4 million, small when you think of it in terms of an international business, but still an increase. Even more exciting when supposedly AoS “failed” and doesn’t sell at all.

          • Local Ork

            AoS was sandwiched between 40k related stuff. Sadly, we have no numbers per system so can’t say how good/bad it was.
            I suspect it was to 6th edition of 40k, since AoS was shunned by community for similar things.

          • Xodis

            Ok, assuming AoS did fail, that means that the 40K products STILL caused an increase, so much of an increase as to cover AoS’s failure and then some. Which is different than GW “failing” or losing profit, or anything else that always gets thrown out there.

          • Local Ork

            Only if you believe in “constant currency” being relevant (it isn’t.). All that matter is actual value at the end of the year, not some estimations “if blue moon would appear”.

          • Xodis

            It is relevant, but even if its not but someones standard, the data showing sales increasing is most certainly relevant and when calculated shows a .4 million increase in overall sales.

          • Local Ork

            Actually (mind the pun) they’ve lost 1,2 million.

            Dollar You’ve got year ago is worth as much as one got today, even if You had to work harder for it.

          • Xodis

            That’s in Revenue at current Currency not Sales. I know everyone like to blame GW for everything, but blaming them for the strength of the British Pound seems a bit much.

          • Local Ork

            Except people forget two can play that game, both companies and customers.

            So constant currency is just a way of making investors feel good (an Boardjob, if You will).

          • Xodis

            Not really, it just goes to show you that a lot of sales are made outside of Britain.

          • Xodis

            Thats totally incorrect when dealing with multiple currencies.

            The US dollar GW has can mean quite a lot of different things over a year when you compare everything to the British pound in your hand

          • Axis Mundi

            We were given both figures, so we know the difference that adjusting for currency represents. The pound has continued to strengthen against both the Euro and the Dollar. You can pretend that’s not a thing, but it is. What’s disappointing for the stock market is the lack of growth, and the cutting of the dividend. Cutting the dividend will give them more cash to invest this year though, so its good to see the new CEO taking that position.

          • blackbloodshaman

            funny how these guys factor in currency fluctuations but not inflation

          • vlad78

            Space marine codex.

            Betrayal at Calth.

            Do I need to say more? ;p

          • Sutr

            30k that was released at the end of the year where sales didn’t reach the expected value?

            Please tell me more of your insights.

          • Xodis

            See I thought BaC would cause a lot more revenue too, but with “Dec sales being down” I wonder if stock was too low or not as many people grabbed them since HH is already a big thing and people have been buying FW for so long.

          • jonsgot

            BaC It was priced too high for what it is. It could have been a box set that moved 40k players to 30k, instead it was just a good but too expensive board game, I suspect the assassin game had a big negative impact on it’s sales. It sold, but should have been a must have purchase for Soace Marine players, 1/4 of space marine players in my group got it, but 4 of us would have bought it if it had been priced for market penetration rather than creaming.
            The Space Marine codex was a very poor move from GW. It’s the 1st one I haven’t bought, ever. It was release too soon with too little changing. A smaller Space Marine formations book with updated rules for the two extra weapons in the new codex would have sold a lot better.

          • blackbloodshaman

            there was no increase sales fell 2.2 percent its in the report

          • Xodis

            Sales increased .4% at constant currency, meaning that if the BRP wasn’t so strong all of their foreign sales would count for more. Hate GW all you want, but you can’t blame them for this.

          • blackbloodshaman

            Well, I mean you can tell yourself that all you want (notice how they forgot inflation btw),but accountants and investors don’t really care about constant currency (GW stock dropped 8.9% today), accounting rules for reporting this stuff dont care about sonstant currency. But if it makes you feel better, you can keep telling yourself that it matters.

          • Secundum

            In the London Evening Standard today, they had an article on this-apparently, since AoS came out, Fantasy sales have slumped, with their new fantasy releases making up less than 10% of total fantasy sales.

          • An_Enemy

            You’re ignoring all the other releases this year. Their numbers should have been much higher considering all the Space Marine releases.( both 40k and 30k). Not to mention the non-SM releases.

            When you release all that and your numbers, even after adjusting for a late quarter currency rise, are anemic then it’s not something to be lauded. That said, argue with someone else now.

          • Xodis

            Possibly, but you’re also forgetting the major competition released this year by StarWars alone. The Starwars IP is big, and no one can prepare for that, much less compete with it. So thats an obvious point were sales SHOULD have been down, also with AoS’ supposed “failure”. So many rather large obstacles in their way and they still managed to increase sales…thats impressive and far from anemic.

        • Axis Mundi

          And sadly no one will pay attention to this. Given that they axed WFB and replaced it with the “flop” that is AoS, I’m quite impressed with these results. Either WFB really did sell nothing, or AoS has kept up its numbers despite being widely reviled. Interesting.

          • Spacefrisian

            Or 40k players bought AoS models to spice up there collection.

          • TheNickelEye

            It’s true AOS seems to be coming close to holding serve on WFB’s numbers(assumptions since for all we know AOS is down and 40k is way up). But, a company doesn’t launch a completely new product line replacing an old underperforming one with hopes that it will do the same amount of business.

            If AOS isn’t doing significantly better than WFB, then it is a failure from a business perspective because of it’s low return on investment(all of the development, marketing etc that went into the creation/launch of AOS is a new sunk cost that needs to be recouped).

          • Xodis

            Honestly, I dont agree at all. Assuming GW leaders are slightly competent, they knew there would be a major backlash due to the destruction of a classic IP/world, complete change in game system (not the tweaks we get edition to edition), and change in game format from WAR! to Skirmish. Finally because its GW, everything they do is garbage anyways lol.
            3/4 things AoS had against it, before it ever released, and none of the problems a completely new game has. Its success (even if only minor or on par with WHFB) shows that that its alive, which is a major fear of a lot of players, especially when we all know angry internet users are a lot louder than happy internet users.

          • TheNickelEye

            Don’t get me wrong. I’m not bashing AOS, and there is no reason to believe it is going anywhere. But, if WFB sales were flat then there is no way GW would want to invest the money and time creating a brand new replacement out of whole cloth just to remain flat. That doesn’t mean they won’t continue to grow AOS which will make it healthier than WFB in the long-term, but if we assume it is flat with WFB in its launch year that has to be a disappointment.

            Of course all of this is assumption on our part. For all we know AOS was a giant success and Battle of Calth was a disaster. With these macro numbers all we know got sure is as an investment GW isn’t very enticing, but as the largest miniature wargame company in the world they will continue atop the market.

          • Xodis

            I didn’t think you were bashing AoS honestly, sorry if it came across that way. I think they just knew that selling AoS as a game, and not as a 40K conversion line, was going to be an uphill climb. Their previous comments about being “happy” with current AoS sales, probably means that its doing better than they actually expected, but then again that was a few months ago.

          • Ucheny .

            There is a thought – The main AoS starter went crazy good – as the new product – many bought it due several reasons, and there were motivation for this.
            That is also supported by page-visits/search results for AoS – big bang at the start and fast decline.
            So apparently they were pleased with the launch status.
            But then (and this is a collective opinion of many wide-spread retailers) sales went down dramaticly.
            I personally would like to see the september numbers. I belive there is some kind of wastes proving that AoS is a failure.

            But that is just thoughts.
            What really show The decline – is other wargames like warmachine that growed up in communities. There is no such a vivid proof as the people chosing another game.
            And there is no competition at all – AoS (as a game) can hold up so little WHFB audience that it inevitably loose all the players and therefore – customers.

            It’s just so much harder to fight for a new customers and grow a brand new customer base than doing some tweaks with the old ones.
            And it’s a niche product so basicly there is not so much new customers.

            But in other words – if this buisness strategy fails them for this long – maybe it’s just a s*** strategy as everybody says?

            If they doing this year as they done in last year with WHFB why bother with AoS?
            If AoS didn’t accelerated their growth – it failed, not counting the investments they been doing last year.

            There is an opinion that “Oh it’s just vocal minorities, other 80% silent collectors and hobbyist thinks different”
            Well that proves nothing – those silent is silent most of the time whether it’s good or bad occasion.

          • DeadlyYellow

            If it’s a matter of product pushed the how could AoS fail? It has the new designated sets and piggybacks off the old WFB kits. Any noticeable jump in sales post release could be reasonably attributed to it despite reasons.

            And it’s not like the game isn’t played, it’s more that the louder forum-goers are too engrossed in these circles of negativity to really notice.

          • Knight_of_Infinite_Resignation

            any jump in Fantasy sales was probably down to people scrabbling to finish their armies before they are squatted or replaced with round bases and smaller boxes.

          • blackbloodshaman

            “Whilst we are disappointed with the decline in return on capital reported in the period, we are all confident that we are focused on delivering the necessary changes to address this decline” Translation: AoS wasn’t just a flop, but a costly one.

          • Sutr

            And yet the bottom line stays the same.

            Thank you for your speculative insight.

          • blackbloodshaman

            declines slightly right?

          • Sutr

            Sales are slightly up, revenue is slightly down due to currency fluctuation.

            Care to explain how you get that not only is AoS a flop but a costly one from that report?

            In fact the variation is so small on these values it’s preaty much a maintenance.

          • blackbloodshaman

            wait, sales are revenue are the same thing, and they are down.

          • Painjunky

            Sales Reported sales fell by 2.2%…

          • blackbloodshaman

            So given that sales are down, it is speculative obviously but if their revenue is down, in the second 6 months of the year something had to perform worse. Is it likely to be 40k/30k or AoS?

          • Sutr

            Speculate all you want but please use the figures provided. Sales are slightly up, not down.

            And please, when you speculate don’t make it look like it’s “the truth”. You sendo the wrong message to those that read your words.

          • Sutr

            Maybe there’s something being lost in translation from my part not being a native english speaker.

            They sold slightly more product but due to the poundeurodollar fluctuation it provided less money than in the last period reported.

            I know that the preaty pictures chosen to be posted here don’t show that but if you read the full report it’s preaty obvious it is so.

            Also, for speculative purposes i could say (not that i am doing that) that from the reported lower sales in december than expected, what floped was BaC and not AoS.

            See how easy it is to speculate the other way? That’s why one shouldn’t speculate without access to the numbers.

          • blackbloodshaman

            Out of BaC and AoS which one do you think is more likely to be a flop?

          • Sutr

            I wouldn’t know. I’m not a divination psyker myself, nor do i care about that to play my games.

            Timing does seam akward thou.

            I’ll just keep playing games, you feel free to speculate. Just make sure you let people know when you’re doing that to preventiva looking like a hatefull fool.

          • blackbloodshaman

            I’m just examining the evidence before me. And calling someone a fool, makes you seem like the hateful one.

            What is preventiva btw?

          • Knight_of_Infinite_Resignation

            and yet the one thing they won’t change is the thing which affects them most- the basic game experience. FAQs and Balance would fix the game and help keep old players and recruit new ones.

            Communicating with customers would help mend the brand.

          • Knight_of_Infinite_Resignation

            I expect Space Marine Codex, Skitarii and BaC and the new Knights propped up sales.

            They are playing their A Game and still slowly losing ground. Not good really.

        • WellSpokenMan

          That’s financial doublespeak, the Pound is down against the dollar and up against the Euro. Constant Currency evaluations are known to be used to fluff profits.
          GW was profitable, that should be enough. Modern investors only want growth though, whether that makes sense or not. So companies fudge their numbers as much as the law allows.

          • Xodis

            Yes, but Currency changes constantly, more constantly than GW prices even change and that’s saying a LOT.
            The fact is, we were given all the numbers (except AoS and 40K sales which would be interesting), and shown that both Sales in trade and Sales through mail increased, the only sales to decrease were retail (which isn’t so surprising in the world of online orders at your fingertips).

          • WellSpokenMan

            I’d have to see their sales breakdown by currency, but if the dollar’s rise didn’t help them out, then they aren’t selling enough in the US.

          • Axis Mundi

            I think it’s there, in between the lines, that sales in the US probably have been dropping, possibly for the last few years?

          • Gridloc

            Us Americans are a troublesome bunch! A nation of consumers and the market for our hobby cash has exploded.

          • Xodis

            OMG yes! lol Between amazing kickstarters, Disney and its domination of literally everything, and brands like FFG and a lot of other games hitting stores like Wal-mart and Target, it really is a crazy time.

          • Axis Mundi

            Yeah – you seem to be spending it all on X-Wing! 🙂

          • WellSpokenMan

            That’s the impression I get too.

          • Xodis

            The dollar is still weaker though so it would need a major increase in sales, or better yet, the pound to quit being so strong lol.
            I’d put my money on a major shift in US sales from GW to Starwars though, the hype is unbelievable here, and any movie to spawn a religion is probably going to do well in all sales.

      • Local Ork

        2012 was pinnacle of GW and WH40k

        Can You remember what happened in 2012?

        Nobody gives about AoS, Hobbit or shovelware. If GW screw up 40k, they get their hands burned.

        • Cergorach

          2004 is GWs best year, guess why? LotR! From 1991 to 2004 every year was better then the year before, then things went downhill, 2007 was their worst year, they threw around the rudder and 40k was doing very well.

          2007 GBP 111 million
          2014 GBP 119 million

          At the current rate of decline GW will go below that GBP 111 million in a year and a half (1 June 2017).

          But the main difference is that GW is still generating a decent profit and paying out dividends. So the situation isn’t the same as in 2007 (a couple of million loss)… Yet…

      • Darren Richardson

        Indeed, with more publishers, the rise of Kickstarter and some very strong IP licenses out there (IE X-Wing) and GW is no longer the number one go to company for Fantasy and Sci Fi Tabletop gaming.

        I feel the main reason for that was the abandonment of the old stand alone games and specialist games to solely focus on the mass tabletop market.

        As a result, they were in no postition to take advantage of gamers smaller budgets during the past few years of recession, which is why other companies have risen instead to dominate.

        • Red_Five_Standing_By

          I think GW wanted to position AoS to fill that void, what with the free rules, an app and the focus on smaller games. The problem was that their models were still beautiful but expensive. People on budgets cannot afford to buy the Varanguard.

    • Spacefrisian

      Lucky you, now you have 2 of those.

    • Agent OfBolas

      Kodak was also ultra confident that it’s Alpha Male status is going to last for ever. Sounds like GW for me.

      • Sutr

        Kodak was also surpassed by technology wich does not apply to this case.

        • Knight_of_Infinite_Resignation

          3D printing. Pirated rulebooks. Pirated miniatures now in plastic.

          • Sutr

            While 3d printers might be an issue in the future it’s costs nowadays are still too high for mostra people. You are correct concerning books and i’d say that’s why they’re slowly changing the rules to free and chineses recasters, while an option, are still too unreliable, special with customs and whatnot.

            I’ve bought some sniper Drone temas once from recasters. Lets just say i learned my lesson. Took 9 months to get them, had to send them 3 times from customs issues, came all twisted and had a bad cough for a couple weeks after assembly. 😬

          • jonsgot

            Someone in my gaming group has a 3D printer. Still getting to grips with it at the moment. It’s not going to make any space marines, but might knock out a Titan or two.

          • Knight_of_Infinite_Resignation

            its not so much the ability for individual customers to 3D print minis, but rather the fact that 3D printers makes the computer designing of minis for casting masters rather than sculpting possible even for small companies. So we see the explosion of niche miniature manufacturers.

          • Red_Five_Standing_By

            Considering the fact that there are a lot of RPG companies that give their rules away for free and still have whole swathes of their player base buying the books, I would have to disagree with you about the pirated PDFs.

            The reason there has been a spike in those downloads for those products is because there are so many codexes out there now and each one costs so much. If the pricing were cheaper or there was a greater value seen in what the books provide, then pirating would decrease.

          • Knight_of_Infinite_Resignation

            I think the books are too expensive for me to consider buying a ‘utility’ copy when I have them for free on my tablet. If they were half the price they are I’d consider it.

        • Agent OfBolas

          The deal with technology is that – it’s unpredicable. It’s like with 3D printer you can have at home … Something unbeliveable few years ago, now it’s something normal and more popular with each day.

          Kodak almost failed and dissapeared not because technology itself, but because they were too confident and ignored what competition could do.

  • ChubToad

    Brace yourselves! “I told you so” and “GW sucks, don’t listen to customers, it’s their own fault, prices are to damn high, etc. ” comments incoming!

    • WellSpokenMan

      To be shortly followed by the lovely GW white knights who will insult those commenters. Then they’ll move on to insulting the people who play other games, people who aren’t infatuated with GW, and, of course, the poor.

      • benn grimm

        Lol, yeah, he’ll turn up any moment now, ‘specially since you mentioned the poor…;)

        • Knight_of_Infinite_Resignation

          Paging Mr Tweetlebeetle!

          • benn grimm

            Oh no, you’ve said it aloud! Say it twice more and like Candyman, Beetle Juice or the Notorious B.I.G, he’ll suddenly appear to terrorize decent folks! 😉

          • Knight_of_Infinite_Resignation

            He’s already been, I found him lurking lower down in the comments.

      • ChubToad

        As Opposed to those haters that respect everyone’s opinions and don’t call those who like GW, fan boys.

        • WellSpokenMan

          I don’t believe I’ve ever called anyone but TB a fan boy. There are people who aren’t infatuated with GW who aren’t haters.

          • ChubToad

            Never said you did. But others certainly do.

      • nurglitch

        I don’t think you’re Hitler.

        • WellSpokenMan

          thank you, might be the best compliment I get all day.

          • Xodis

            Honestly can their be a better compliment?

    • Gridloc

      I think many people who post, comment on the failings of GW, most are actually critiques of the business model and direction compared to other gaming companies. But like anything, if people are fans of something, those critiques feel like attacks and as such spark downward conversations where it does come down to ‘GW Sucks’ and ‘GW rocks’ arguments.

      Then there are those who just hate GW and take it out on their customers…

  • Joseph Boyd

    Decline in December. Nooooo!….Its because you don’t listen to your customer base, shmucks!

    • WellSpokenMan

      People just didn’t get as much GW stuff for Christmas this year. GW doesn’t listen, they tell you what you want. It’s been working pretty well for them over the years. This year, not so much.

      • Xodis

        How so when sales increased? Revenue went down, but only because the British pound is so strong, shown by Revenue at constant currency having an increase as well.

        • Joseph Boyd

          IN DECEMBER SALES WERE DOWN. says it right up top.

          • Xodis

            No it actually states that sales in December were lower than expectations, but my comment about “How so when sales increased?” were in reference to WellSpokenMan’s comment about “This year, not so much.” which is a good question when sales for the 6 month period show an increase.

        • blackbloodshaman

          Revenue and Sales are the same thing.

          • Xodis

            No, similar but not the same thing. Revenue is the amount of money a company earned after paying all the bills; Sales are the actual transactions that lead into paying all the bills that build Revenue. While it seems simple with those explanations there is actually a lot more to it once you start discussing a company with international sales, currency conversion rates, etc…

          • blackbloodshaman

            no it isnt

          • Xodis

            Well the very definitions of the words says otherwise, but sure ok.

          • blackbloodshaman

            You are wrong, you are confusing revenue and profit.

        • Painjunky

          “Sales Reported sales fell by 2.2%”

          They cannot make it any clearer than that. If you don’t want to believe it thats your problem.

  • Il Produttore Signor Brandolin

    IMHO the most important indicator of GW worsening situation is tht dividend per action from 36p to 20p is almost the half, is not enough?

    • Gridloc

      that’s a big flag for investors. A string of bad financial reports is another, they aren’t in bad shape making the money they do, but if investors start pulling out the company can turn for the worst quick.

  • benn grimm

    Well this is clearly the fault of the collectors. What you doing guys? Get down there and get spending, otherwise us 20 percenters won’t have a game left to play…What do you mean you need that money to eat? Don’t be such cry babies, this is capitalism baby and GW needs that money more than you do…Git, go on, git! 😉

    • Spacefrisian

      They could eat the minies maybe, i wonder how they taste better, cooked, fried or baked.

      • benn grimm

        Edible mini’s would be a dream come true for gw, you’d have to buy a new army after every game.)

        • weeble1000

          Gummi Wars

          • Da Masta Cheef

            +1

        • Ben

          That’s not actually a bad idea,… Some Gummi marines for little Timmy…. Get em while their young I say!

    • Joseph Boyd

      hahahahah! I love it!

  • Michael Dangelo

    So Betrayal of Calth couldn’t save December? That’s very bad news IMHO.

    • TheNickelEye

      I agree. Despite the controversy AOS was the launch of a new main system for GW. They may be able to build the user base over time, but it will never have a second chance at making a huge splash and fudenmentally change GW’s financials.

      BOC is the first step in “mainstreaming” 30k. That seems the safest way to expand 40k, their main pillar. If a whole new system launch with AOS and the first step in a major expansion to you core business results in a slight downturn, you have major problems.

      Specialist games may be able to lead to sugar highs on the financials in the future, but after the hype of a couple months, Necromunda isn’t going to transform their business.

      • Axis Mundi

        Yeah, but were they really expecting that? They don’t advertise, so any new product they release has to grow a user base – you don’t get a “splash” without marketing, not these days. They may have hoped that the current WFB players would stick with it, but equally they wouldn’t have factored in them actually spending any money – after all, that’s why they got rid (allegedly) of WFB in the first place. The fact that they just gave us all the warscrolls for the old armies says a lot – they actually couldn’t be bothered trying to get more money out of us!

        Maybe BOC did amazing, and made up for poor AoS sales – maybe they just both did okay, and hence the meh results. Maybe the growing sense of stagnation that hangs across 40K is the actual problem, and the new product lines are doing fine – we’ll never know! I love these 6 monthly bun fights! 🙂

        • Michael Dangelo

          I hear ya, but the other article from the Guardian tells of a bad December. These 6 month figures AND a bad December with AoS and BaC are really bad signs…not end of the company bad, but just a carnival of bad ideas out of Nottingham.

    • Erik Setzer

      BoC was released in early November. Most of the sales for it would have almost certainly been up-front, not in the second month. I don’t think it did *quite* as well as they expected (still copies available everywhere), but I think that’s more that they assumed people would buy like five copies each or something, not that it didn’t perform well.

  • Crevab

    Dividends dropped? Wow, Kirby really isn’t in charge anymore. :p

  • James Camerons Blue Fetish

    Well if they let overseas independent stores sell online like they do in UK they would make more off Trade at least. with the stores most are too small with a gaming table at the front window which people wont play on since its not fun to play in front of the people of the towns.
    Thirdly the website isn’t too bad its just that their strategies are 20 years too old for the information age. They forget we ALWAYS find out anything about everything eventually.
    Fourthly 😛 The prices are high I guess but compared to other companies for what you get it is cheap all things considering.
    Fifthly it may be slow but you have Miniwargaming, front-line gaming and others with growing fan bases getting people back into the game, so we will see a resurgence i bet but not a large one.

    • Erik Setzer

      4. “Cheap” is NEVER used to describe GW. The best people can muster is “it’s comparable to modern prices for some WM/H stuff.” Compared to a lot of stuff it’s rather expensive. Only the highest price stuff is equal. GW isn’t “cheap” compared to anyone.

      5. Others are leaving it behind. Torrent of Fire admitted their writers are tired of 40K and having no fun in it, so they’re aiming their site and software at other games. So that counters any help there.

      • Red_Five_Standing_By

        GW is comparable to every other wargame that requires you to build and paint your models. The difference is that those other games are not on the same scale as GW in terms of the number of models needed to play.

  • Dave Scammell

    “We have made some good progress on our strategic initiatives all focused on delivering long term growth […] we are all confident that we are focused on delivering the necessary changes to address this decline.”
    Translation: “Whoopsie! It’s okay though guys, more Heresy and Specialist stuff to come! You guys like that, right? Right..?”

  • Crevab

    Here I’ll try to be helpful instead of snarky for once.
    Since folks’ll be quibbling about currency exhcange:
    http://www.xe.com/currencycharts/?from=GBP&to=USD&view=10Y

    • Erik Setzer

      It’s funny that the whole time GW’s been using the excuse of exchange rate, the pound’s been getting weaker versus the dollar (which actually helps make FW more affordable for those of us in the US). But it’s kind of like them continually saying that they’re *always* working on some long-term plan that’ll totally start paying off any day now, guys.

      • Knight_of_Infinite_Resignation

        they have cut staff numbers and frozen their pay. What else is there to change? Only the product.

  • Gridloc

    So with HH out and AoS, not to mention SM release, those are the big releases. What are they going to do in next 6 months to boost sales?

    • Xodis

      CSM will probably be the big 40K release, its probably safer than SM releases anymore.

      • benn grimm

        Fingers crossed! )

      • Gridloc

        Maybe a specialist game too. Though those could take longer than 6months as they just announced it not long ago.

        • Xodis

          Yeah, I’m sure a good specialist game would help, just not sure they would have the impact that 40K does.

          • TheNickelEye

            I think a specialist game release, especially around the holidays could lead to a nice sugar high. It may not have long legs into the future, but it could lead to a big qaurter or two.

          • Xodis

            I agree with that as well, just seems like the perfect time to release them, that and something during the summer.

      • JP

        If they release CSM as the last codex of 7th and then immediately announce 8th, I will be more than happy to fly all the way to England, punch one of them in mouth, and get arrested for it.

        • Xodis

          I cover your bail lol

        • Knight_of_Infinite_Resignation

          I’ll pick you up from the airport and drive you to Nottingham!

    • Baldrick

      Released codices with more ridiculous rules and show customers just how bad codex creep can get, all with no game testing……add more options to get free units into the force organization chart, release another rules supplement……..

    • KILLDOZA

      ….Re-release HH, SM, and a ‘Grand Battles’ supplement for AoS? 😛

    • Red_Five_Standing_By

      The Space Marine launch did not come with any new or cool units, just ways to run more units in the same FOC slot.

  • Testar

    So is this a time when GW learns that all you have to do is just release some good old stuff and new Sisters of Battle to literally swim in money?

    • Da Masta Cheef

      GW? Learn???

      lol, quitting trolling…

    • Emprah

      And lo, GW was saved by 100 grognards as they bought a new army made for them!

      They are already trying the “old stuff” , as desperate as it is, they just don’t think the poor sisters would sell well enough to warrant the development cost.

      You should rather feel lucky that harlequins got it.

  • frankelee

    Good to see a brand new tabletop game and starter set + Space Marines vs. Space Marines the Game managed to keep pace with the no big releases of last year. But there’ll be much talk about the strength of the British pound by people who can’t keep a checkbook straight. Good for GW though, their market share is shrinking, their future identity will not be as gaming’s lone superpower, but they can keep on selling as many space marines and things that kill space marines as they can and last forever.

    • Axis Mundi

      It’s a market awash with cool stuff in the £50 – £100 range, if you are looking to get a new game. I think we’ve seen the end of a time when GW could launch something like BOC and watch the cash flow in. I suspect they know that themselves though – lets see what new things 2016 brings…

    • Erik Setzer

      “No big releases?” Do you not remember this thing called “End Times?”

      • frankelee

        I thought that was mostly the first half of 2015. And they let it be known through the grapevine that WFB sold less than GW brand clippers. So no, I wasn’t counting End Times as being equal through that time period, right or wrong.

  • Richard Mitchell

    I hate being the guy who looks at financial reports and has no idea what I am looking at. Time to just nod my head and pretend I understand the conversation.

    • nurglitch

      You could go learn how to read a financial report. It’s not a secret.

      • Richard Mitchell

        Ya sure cause I don’t have a family, work, and professional development. Dude I am lucky I can take time spend time with my son’s development, paint models, and get four hours of game time in every other week. I don’t know if you know how societies operate. You 1)perpetuate the species 2) contribute to society as a whole by specializing in something 3) and if you’re lucky you get enough time to maybe enjoy your life before you die and become a debt to your family. This is why I trust on people who have specialized in learning corporate finances to give me thoughtful opinions on corporate finance.

    • Michael Bradbury

      Bottom line is pre-tax profit is the same as this time last year. Now you either see that as a positive because its halted a downwards trend, or a negative because despite many changes to the company and its product the effect on the profit has been nil.

      Personally I see it as the former, but obviously this year could just be a blip and the next report could drop again. I think they have taken some positiver steps over the past few months.

      My main problem with GW continues to be price points for some of their product. I actually think a lot of the stuff is priced OK, but there are many products (books, single minis) that are way overpriced.

      I also hate the trend towards larger (and more expensive) models, but that’s just personal preference.

      • Xodis

        As a GW customer and fan I agree with you. I see some larger kits and think they could up the cost and I would still buy them, but then I look a the lone $30 Hero model and I think it’s CRAZY to be that high. They can probably adjust the prices of most of their models to make a LOT more sense to their customers without sacrificing any profit.

    • Just compare the numbers from 2014 to 2015. See how they were all higher the previous year? That’s a bad sign, because the year before that had higher numbers, and the year before that had even higher numbers…

  • standardleft

    Maybe just less and less people play tabletop games these days. We are quite the anachronism after all. I don’t really see many kids play a lot of tabletop games, they rather stick to videogames.

    • Michael Bradbury

      Possibly. We’d have to see these figures compared to the industry as a whole. We have seen the rise of boardgames sales over the past few years, though I’m not sure if that has spilled over to tabletop games.

      • Red_Five_Standing_By

        Board Games are becoming popular because people like nerdy enterprises and pursuits but do not have the patience or money to invest in a game like 40k, X-Wing, WarmaHordes, etc.

    • An_Enemy

      We’re actually well into a cultural nerd renaissance. GW’s just utterly failed to capitalize on that and nearly every other game producer(young and old) have stolen their lunch.

      GW’s status as “35 year old at a college party” has never been more glaring.

      • standardleft

        I’d certianly agree that 20 somethings are playing more boardgames and tabletop games, but I really don’t see it translating to younger people.

        I can’t really say Im the most informed, so its just what I’ve read/seen.

        Xwing might get kids into the hobby. It doesn’t really have much of the craft side of the hobby though.

        • An_Enemy

          Mmm my personal opinion is that GW priced themselves well out of the children’s market. They should be marketing towards millenials and older with their current pricing structure. By marketing I mean…outside of White Dwarf.

          • standardleft

            I think thats what the new starter army boxes are for.

            They are still very expensive though, so I don’t know.

        • Knight_of_Infinite_Resignation

          20 somethings are younger people!

    • Emprah

      We need Dawn of War 3 and Space Marine 2 way more than new codexes and such!

    • Xodis

      Which is a thought of mine as well. As I get older I see all the competition that Wargames have, every other IP, Game, etc.. trying to convince my children its so EASY and CHEAP and FUNNNNN!!!!! Wargaming is just so commitment heavy with time to model, time to paint, time to set up, time to play, cost to buy models, cost for tools/paint to complete models, cost for terrain, dependence on finding players in your local area, etc… Its fighting an uphill battle for sure, and I also think X-wings success is part of that problem. The starter set gives you painted model ready for immediate use, terrain (as does each expansion), all the rules, etc…

      • standardleft

        Give it 20 years time there will be a tabletop golden age, as there is with boardgaming now.

        Boardgames give face to face social gaming that video games used to (but now don’t). Hence the rebirth

        When tabletop gaming, provides us with something unique to the hobby and absent from other gaming, it will have a resurgence.

        • Xodis

          I hope so, just remember that Tabletop WARgaming has so many other hurdles unlike a boardgame where you punch out the cardboard tokens and get to playing, Tabletop Skirmish might be the only choice in the future.

          • standardleft

            Thats true, but I think thats a plus.

            The craft side of the hobby sets apart, maybe when we get more digital integration/crossover, it might rise again.

            I really think we need a game like Warhammer total War, but with intuitive moddable that content could transfer the hobby online.

  • Marky

    If the numbers don’t go up when they re release Necromunda and bloodbowl then it’s time for them to worry 🙂

  • TweetleBeetle

    The numbers show very little change, but most people on the internet can’t read correctly, so…

    GW spent more, and there was a greater return on royalties, but the operating profit was a bit smaller than expected. The key there, however, is that it’s still profiting. It didn’t shrink, it didn’t lose money, it’s still profiting. And given that they are making an effort to condense books (see: AdMech) instead of continually spreading them out, while also adding a Specialist Range division bodes well for the future. It will cost a lot up front, however, especially with how fast they pump out content.

    • Knight_of_Infinite_Resignation

      tell them we need FAQs and balance Mr Beetle. New players aren’t sticking with the game or taking up X-Wing instead, the rules of 40K are a sprawling mess and the game balance is offputting.

      GW seem happy to change all their operations except one- the actual game they make.

  • shauni55

    They have the resources for a new ERP and WMS, so, as they said, they’re expecting to make up

  • Alhazred TheMad

    I remember buying Heroquest in the store, right by flipping monopoly. I know that was because of an agreement with Milton Bradley, but it got me into the hobby. Why are they not pursuing mainstreamn stores with intro products? A cheaply made fifty dollar two person starter will move far more product then some weird cramped one man operation with expensive minis ever will

    • Gridloc

      It may have to do with distribution, Walmart has so many stores, and would require X amount and to ensure they get that much and would probably want them at way less than most FGLS get for. In addition, if they didn’t sell, GW would be left with so much product they would be out of business fast.

      But i do agree that its strange that many of these games out there don’t see main stores…

      I do believe some online stores (Amazon) had some AoS starters. So its not to far off.

      • Knight_of_Infinite_Resignation

        I see X-Wing for sale in bookshops in the UK so FFG seem to manage that sort of distribution.

  • blackbloodshaman

    “Whilst we are disappointed with the decline in return on capital reported in the period, we are all confident that we are focused on delivering the necessary changes to address this decline.” Hmmm interesting, I wonder if what this means is they invested heavily in age of sigmar, and are disappointed with the results? And I wonder what “we are all confident that we are focused on delivering the necessary changes to address this decline.” then means

    • standardleft

      I think it could be the lower model count, cost of entry, and possibly changes to their own model making (cost saving/ easier to assemble/more cad work/some super secret 3d printer techs).

  • Stan

    Well on the bright side it is good GW is aware that recruitment of sales managers is their most pressing problem (SARC).

    And I’m sure their new Suzy social worker in human resources knows exactly what to do to develop the right image for “Warhammer”.

  • Sutr

    It’s just so wonderfull seeing so many people so literate on GW finances on information that hasn’t been released.

    Bottom line GW didn’t grow or tanked, it stayed exactly the same.

  • Agent OfBolas

    So the sales on repacks from models that no one want to buy went wrong?

    Surprise.

  • Carl

    Shock and horror, another British company shafted by the strong £. That’s the reason profits are down – not AoS, not a lack of sales. As GW themselves state: “The net impact in the six months to 29 November 2015 of exchange rate fluctuations was a loss of £0.9 million.” So what we have here is simply a company affected by economic factors beyond their control.

    This isn’t a concern as, on a constant currency basis, the company saw increases.

  • Erik Setzer

    Hmm. So how long are they going to keep doing “long term projects” that work as an excuse for revenues sliding downward? When do they see the payoff for all of that?

    And if you’re a hobby company and December isn’t kind to you, well… you might have a slight problem.

    One move that’s paid off some is the spreading around of their IP to anyone who’ll pay money. Those royalties brought profits back up so they didn’t take a dive, but at the end of the day, that’s still relying on other companies to make money off your IP to help you remain steady, which doesn’t seem like a favorable long-term plan. I mean, it could work, sure, but it’s not a good look. In the short term, letting people make everything from garbage mobile games to solid PC/console games is at least netting them some extra change that they sorely need to keep the numbers up. It’s not a pretty strategy, but hey, it works.

  • Painjunky

    Sales Reported sales fell by 2.2%

    Blaming it on the currency is a weak excuse.

    When sales are actually up you don’t hear companies whining about the currency.

    Even space marine dex and 30K cant turn around long term declining sales trend = Big problem.

  • dave long island

    Plastic crack, plastic crack.. If GW falls, who will supply me with fresh plastic crack??

  • Jake Torsney

    Tbh I dont see this as a decline at all, but I really cant tell if this post was to make gamers think that or not. They are making profits, small yes but still profit. Any business that makes profit is a successful one. In any event at this rate we wont see gw dissapear for a very long time. In saying that it would be interesting if just for a year they dropped there rrp by say, 20-30%. and see if there numbers do go pup or down. Ofcourse 20-30% subjected to certain regions and differing economies. I believe if GW products were seen once again as more affordable then there would be an influx of buyers coming back from not only other games systems they were ‘forced into’ but also alot more second hand buyers and china forge buyers would come back into the fold.

    Anyway thats my opinion, probably never gonna happen anyway haha. And end of the day as I said I really dont think its even close to doom and gloom for GW.

  • Rob

    The facts are simple. Revenue from selling GW products declined by nearly 1mm. This loss was largely covered by their revenue from licencing their products (read all those GW video games popping up) going up by .8mm. Sales of their core product declined. Period. To be honest I expected a bit bigger of a decline but I am a pessimist on GW. I suspect that AoS was able to deliver a small bump as people have probably bought some of the models because they are pretty cool. I think the next year is going to show the real trend. Either they are a model company and people will continue to make there way in trying to use their models for games in which their sales will continue to be flat. Or they are a failing game company hat will be swallowed by their competition because people by models to use in games and less people are playing GW games.

    On the investment side I notice that their dividend decreased, and say what you want but even flat growth factoring in constant currency is generally not something investors want to hear about. GW benefits from a lot of their outstanding shares seem to be locked up in a couple of their executives pockets and they do not seem to be interested in selling them so it supports the price but that support may wane as dividend income falls and price pressure downward increases.

    Personally I would start shopping this to Hasbro (they own WotC) they have the cash to buy a majority share of GW outright. The IP alone is probably worth the price.

  • Erik Setzer

    Also interesting to note, the December sales aren’t included in this report. So this is just the June to November sales that are slightly behind.

    That *does* seem to indicate that AoS did absolutely nothing to lift the fantasy line… unless 40K suffered a slide, which is not great given that it’s “the” game for GW these days. That’s not to say AoS fell flat on its face and stank up the place, merely that it did absolutely nothing to lift fantasy, so basically they wiped out Warhammer for no real gain. Oof.

    • Axis Mundi

      Well, no gain in the first 5 months of it’s existence – but when you kill off a product and replace it with something completely different, so alienating most of your current customers, and then have no marketing or advertising (beyond sending out 10 or so review copies to podcasts…), then why would anyone expect a massive success? AoS will be a 3 to 5 year project for them – if it’s cleaning its face at the moment, then I imagine they are quite happy with that.

  • Captain Raptor

    Another half year without growth. That’s gotta be concerning considering the Betrayl at Calth set that was fantastic in terms of miniatures and a decent price, aimed squarely at space marine players. I had actually thought that the BaC set would prop up profits easily. I guess there’s just not that many of us who are crazy about 30k.