GW Financials: “Source of Extreme Frustration”

Stock-Exchange

Professional Investment writer Richard Beddard is back with more thoughts about GW’s financial reports.

If you’re not familiar with Richard Beddard he is a writer for Interactive Investor. We’ve featured some of his work before. There was this piece about GW’s strategy and also this video interview he did discussing how he has gone from supporting GW as an investment to questioning it’s value.

Now Richard is back with another write-up of his thoughts towards GW and it’s clearly messing with his head! Read the full article below:

Can we trust the board of healthy Games Workshop?

“My frustration starts with page 1, which summarises Games Workshop’s performance in the year to April 2016. The table reveals that revenue has fallen marginally. Profit derived from that revenue has fallen 27%. Games Workshop sells fantasy miniatures, collectibles and models for its Warhammer universes, which people assemble, paint, collect, and use to play wargames.”

RB games workshop 4 Aug g1(S)

Mr. Beddard goes on to list his four major issues with Games Workshop:

  • Poor Explanations
  • Ignoring Threats
  • Is [Kirby] Worth it?
  • Source of Extreme Frustation

Poor Explanations

“On page 6 a single sentence explains the fall in profit. The company spent more on opening new stores and the depreciation charge on its new HQ, which doubles as a kind of theme park for hobbyists, also ate into profit.

Inevitably profitability has fallen. A chart on page 8 of the annual report shows return on capital fell from 40% in 2015 (and a high of 59% in 2013) to 27% in 2016. All of these numbers are impressive, particularly since the profit measure used in the calculation excludes royalties.”

Overall, the sales dipped and overall profit fell and Mr. Beddard isn’t happy with the single sentence explanation in the drop in profit. The main thing that helped GW turn a profit this year was the Royalty income (which he warns later may not be stable or sustainable).

Ignoring Threats

“I’m not confident about Games Workshop and the reason isn’t, specifically, one of the putative challenges put up by naysayers over the years: the emergence of competing model and game designers, videogames, the availability of counterfeit models on the Internet, or the possibility that in future modellers might print their own miniatures using 3D printers.

I don’t usually assiduously note page numbers in annual reports, but the information I need in Games Workshop’s report is split up among pages that either rebut critics or extol the company’s mission. These sections read like propaganda to me. Perhaps 90% of chairman Tom Kirby’s statement, which opens the annual report, is a broadside against institutional shareholders who voted against motions at last year’s Annual General Meeting.”

It’s not just the external threats Games Workshop isn’t acknowledging that bother Richard, it’s also the perception of fear the management has towards it’s own stakeholders. Those stakeholders are customers, sharholders and employees. The claims from gamers that price hikes and rules changes forcing them out are falling on the management’s deaf ears. It is Mr. Beddard’s impression that the game drives new modellers and not that “the core customers are modellers who never play the game.”

Is [Kirby] Worth It?

“[Kirby] says: “In my opinion the greatest risk is the same one that we repeat each year, namely, management. So long as we have the right people in the right jobs we will be fine. Problems will arise if the board allows egos and private agendas to rule. I will do my utmost to ensure that this does not happen on my watch.”

It’s the emphasis that’s so odd. The whole annual report, like previous ones, is didactic, giving the impression of a company run ruthlessly from the top down. Games Workshop brooks little criticism and I wonder how long an organisation[sic] run that way can remain healthy.”

One of the major issues Richard has with the upper management at Games Workshop who view their own employees as the business’s biggest risk. When your report gives “the impression of a company run ruthlessly from the top down” and reads “like propaganda” to a professional investor you may want to check your tone. Something about the communication isn’t jiving well with the reader.

Source of Extreme Frustration

“This is the source of my extreme frustration: 2016 was a relatively bad year for the core business, yet Games Workshop is healthy. A share price of just under 490p values the enterprise at just over £200 million, or 13 times adjusted profit (including royalties).

Though I have learned instinct is usually a poor way to judge an investment, my gut feeling is so strong I’m finding it difficult to suppress. Games Workshop isn’t just making an enemy of me, it’s putting me at odds with myself!”

For all the missteps and frustration Mr. Beddard’s greatest pain comes from the fact that GW is putting him at odds with himself. The fact is that the core business (selling fantasy miniatures, collectibles and models for its Warhammer universes, which people assemble, paint, collect, and use to play wargames) is down. Royalty revenue pulled GW’s rump off the proverbial roast worries Richard because he doesn’t think that it’s a long term sustainable source of income. He also has trust issues with the Board.

But in-spite of all that – it still “scores highly” as an investment opportunity. No wonder he’s wrestling with himself on this one.

 

Go read the article and let us know what you think in the comments below!

Editor’s note: Mr. Beddard’s opinions expressed are his own. This article is not intended as investment advice but meant for information and discussion purposes only. Interested investors should seek investment advice from qualified investment advisors.
  • This is also what frustrates the internet since 2004. That every year revenue appears to be bad, which becomes a preaching point for why you should go play warmachine or kings of war or xwing, but every year they still remain profitable and “healthy” when they should be dying “any day now”.

    • Xodis

      How dare you use logic, this is the internet, there is no room for that!!

    • OldHat

      😀

      • Matthew Pomeroy

        Taylor Swift went Ultramarine! oh he$$ naw, she is clearly a Iron Hand 😀

    • Charon

      When you are a shoe shop selling shoes and every year you sell less and less shoes but you remain profitable because most of your income is not generated by shoes but by icecream and softdrinks, your business might be in trouble despite the numbers.

      • I know at least for me, I’ve never said GW wasn’t in cautionary territory.

      • Eric Buchanan

        Please tell that to Marvel.

        • Tzompantli

          Marvel is an excellent example.

          Remember, despite the strength of the brand, licensing their IP, etc. they went bankrupt in 1996.

          Its current financial success is due to Marvel (not some other studio) making its movies – and of course being bought by Disney.

          So the point is not that GW isn’t making its money from stuff that isn’t miniatures games, its that they are relying on licensing their IP as opposed to making the stuff themselves. While the stuff that GW does make is declining in sales.

          • Eric Buchanan

            Your kinda mixing up the timeline I think.
            Disney didnt acquire marvel until 2009, when both the Xmen and Spiderman franchises were already established global box office leaders (and the reason that Disney has the license to neither, though Sony is letting disney help make the new spiderman movie)

            Disney would have never bought Marvel without the Spiderman and XMen movie series being so wildly popular and showing them they could make comic book movies from now to infinity.

          • Tzompantli

            Sort of – since the mid-2000s, Marvel has been trying to get all of its film rights back. A shift from licensing out the movies, to making themselves. No doubt inspired by the $$$ made from Spider Man and X Men.

            The first entirely in-house movie by Marvel Studios was Iron Man. The licenses for Spider Man and X-Men are still out (despite Marvel’s wishes otherwise), but an agreement was made with Sony to bring Spider Man into the Marvel universe films.

            The plan to take back the licenses and make their own movies was in place prior to the Disney acquisition.

          • Eric Buchanan

            Yes, i skipped the step where Marvel got the funding to make their own movies, but the fact remains, without those initial IP deals Marvel likely would have never seen the market for their own produced movies.

            And in the context of addressing the OP “Shoe stores making most of thier money off not shoes” it still applies. Most of Marvel’s revenue is not from publishing comics, despite being a comic book company initially.

            I also appreciate you regurgitating half my post back to me about the rights. Everyone needs a lil reassurance.

          • vlad78

            And part of the licencing concerns a setting they dropped (which is totally hillarious)

        • Charon

          Funfact: Marvel went bankrupt.
          They did basically the same. Their core product did no longer sell well and they relied on their income from royalities because they had a strong IP. And it made POOOOOF.

          The current success is their movies… which was possible because well… Disney.

          • An_Enemy

            Marvel went bankrupt because the 90’s comic book bubble burst. Retailers were ordering many more comics than they could sell as comic costs rose because of the trend at the time to make every book with ten different foil/holographic/ashcan variant covers. Comics were valued at hundreds of dollars on day one of release because of…well…price guides that literary meant nothing and weren’t based on any actual data.

            Marvel was still profitable at the time of their bankruptcy iirc, but they were killing themselves with high production costs and the retailers that sold their products because these issues often didn’t sell through. That finally caught up with them when stores started closing in droves.

      • ZeeLobby

        THIS. 100X THIS. People just don’t get it. While I enjoy GW IP video games, I don’t want GW to just shovel IP for their income.

        • DJ860

          I feel similar. But, when you have shareholders and people who have a vested financial interest in GW making the $$$’s it’ll be difficult for GW not to fleece the IP for all it’s worth. Provided they do it with some taste and we don’t start seeing Ultramarine lunchboxes and Horus/Emperor rock’em sock’em robots.

          • ZeeLobby

            Haha. True. I’d argue about half of their game IP investments do more to hurt the franchise than help though. That said they did have some solid games released in the past year.

          • nicklinc

            Ultramarine lunch boxes would be fantastic, a simple way to hook a new generation on 40k.

          • amaximus167

            From what I have read in the comments section on BoLS, Age of Sigmar is basically Rock’em Sock’em on the tabletop…

            😛

        • Cergorach

          There are some good GW video games, but recently many, many are not.

          The CGI movie wasn’t a success.

          The RPGs, CCGs and boardgames are quite good. Mostly thanks to Chris Pramas, Black Industries and FFG. It looks like that FFG won’t be renewing the GW license…

          They are going back into comics…

    • Balodek

      The main point of the article, which is worth a read because Adam hasn’t represented it very well, is that GW maintains that it is a miniatures company. Looking at their numbers show that the miniatures aspect is in decline and they are being propped up by royalties. This is the main source of frustration for the analyst, that they appear healthy but there are warning signs.

      • adamharry

        “For all the missteps and frustration Mr. Beddard’s greatest pain comes from the fact that GW is putting him at odds with himself. The fact is that the core business (selling fantasy miniatures, collectibles and models for its Warhammer universes, which people assemble, paint, collect, and use to play wargames) is down. Royalty revenue pulled GW’s rump off the proverbial roast worries Richard because he doesn’t think that it’s a long term sustainable source of income. He also has trust issues with the Board.”

        Pretty sure I had that covered. But thanks for the feedback.

        • Balodek

          My main objection to your article is you just quoted the original author and then posted almost exactly what he said but in your own words. I wasn’t even sure what he was going on about until I read it as written. Once that was done I went back to what you had written and only then was your article clear.

          So, you are welcome for the feedback.

          • Bigwebb

            Dude learn to accept feedback, or you will never get better. Take what uou will from it and learn, but critizing someones constructive feedback is very unprofessional. I say that as a person who has been conducting After action reviews for 20 years.

          • Bigwebb

            Sorry posted in the wrong spot

        • Bigwebb

          Dude learn to accept feedback, or you will never get better. Take what uou will from it and learn, but critizing someones constructive feedback is very unprofessional. I say that as a person who has been conducting After action reviews for 20 years. Cheers

    • Gridloc

      Think problem is less from a gamer (and those anti-GW gamers) as from an investor stand point.

      As an investor, you are putting your actual money in to get money out so seeing profit is great but each year the other numbers look like magic tricks and curtains covering problems. You have to weigh decisions off those reports.

      As gamers, we buy models so we have a product after our interaction with GW, its just we tend to feel entitled which leads to anger when GW does things we don’t like. If they go out of business or stay in we still can game. Plus as gamers we tend to be a bit more trollie in nature 🙂

      • Yes that and when choosing a game of choice, cost is always a factor, and for some people cost is the primary factor, so when a GW exists that costs more than someone’s threshold of wanting to pay, AND it takes players away from the cheaper games that that someone would rather play, it creates friction.

        • Red_Five_Standing_By

          I know when I started playing Bolt Action and Antares, I was blown away by how cheap those games are by comparison to GW (and PP, to a lesser extent).

          Sure the models are not as fancy or amazing but they are perfectly serviceable and good looking for what they are – gaming models.

          • Thats also a point of contention for some people.

            I game more for the storytelling and visuals than the game, so the gaming models mean more to me than just pawns on the table.

          • Hawt Dawg

            I am right with you. There is a reason I am still with GW games.

            I was appaled by the pack of quality when I started Warmahordes. Good rules and skirmish supreme kept me playing it.

        • nurglitch

          Selling games is a difficult business, particularly miniature games. Board games, as a market, are expanding horizontally at the moment, while miniature games are expanding vertically. I don’t think it’s unusual for some gamers to have a Warmachine collection and a Warhammer collection and an Infinity collection. The problem is that if there’s nothing new to collect, then people tend to lose interest in a game. It seems to me like there’s something to providing new toys to veterans to keep them interested, and affordable entry-points to noobs to get them started up the ladder.

          • WellSpokenMan

            That’s one of GW’s weaknesses in my opinion. They let factions sit for a long time without releases. It makes it easy to get distracted by competitors.

          • nurglitch

            Maybe. Regarding Kirby’s previous comments about how research in a niche is “otiose,” I think it’s reasonably evident that GW doubles-down on stuff that people are buying, with a dash of redoing existing armies, and creating new ones if they happen to have elements of existing, successful product lines/armies. Space Marines have been their most successful line, so under those conditions it’s hard to disagree with the way they’ve neglected some poorly selling lines in favour of selling more Space marines.

          • WellSpokenMan

            I imagine that how you feel about GW is directly related to how much you love Space Marines.

          • nurglitch

            Maybe? I like my Tyranids and CSM best and most people hate them.

          • ZeeLobby

            Most people love them. That’s the issue. It’s hard to love the poor rejected droppings.

          • nurglitch

            No, I mean I really like what GW has done with them. I don’t consider them “poor rejected droppings.”

          • ZeeLobby

            Possessed dinobots? Ill admit the new chosen are solid. But design wise they took a lot of the flavor out of them with the removal of legion options. Compare them to their good counterpoints and they’re severely undeveloped.

          • Ben

            Chicken or the egg argument really. Space Marines get love because they sell well. They sell well because they get love.

            Imagine if Bretonnmoa/Fantasy got the similar love. I get the corporate mindiset, but the narrowing down product lines needs to be a susden move. Kill it and not draw it out. Keeping people’s hopes alive that they are going to fix things just ends up settling fans up for frustration

          • Kevin Buesse

            Except it’s not chickens and eggs. Lines like DE and Ad much show if you make something good looking and fun to play product will flock to it. DE was a huge success which GW proceeded to mismanage and drive into the ground again.

            If they could stop focusing so hard on SM and give other factions the love they deserve they’d see profits from it. There has already been proof of this in previous releases.

            The other part is actually understand your business model. They aren’t a miniature company despite their fervent wish they were.

            The game sells models, better price points sell the models, when those things are off they suffer.

            The game has been off for a few years now and the price poi ts for much longer. That’s why those packaged deals like storm cloud sold like hotcakes in my FLGS.

          • Shawn

            I agree with you Kevin. I love what they’ve done with space marines in recent months: Angels of Death, exclusive minis, a good solid codex, but they should take a page from PP’s business model: All factions get an update at once with 1 or 2 new models/units each with updated fluff and rules. Then put it all in one book. Kind of like what GW did with DftS. All factions got an update. It failed though in comparison to PP becuase only one faction, Space Marines, got a new flyer.

          • Kevin Buesse

            The Pp model has been something they’ve started to emulate with warzones and the campaign’s in the last year. The problem is the universe is so spread out there’s no through line to use to push models for all.

            13th black crusade is the best example, Tau and Nids don’t really enter into it so u less you create a sideline just for them they’d get nothing.

            Not that such a thing is a huge lift, but GW is in the milk it with minimal effort mode. Until they figure out a set or two and a clam pack or two every few years is not worth it we’re stuck.

            Also it still kills my faith in them they missed using ET elves release to create an avatar for Eldar and the elves. It was the perfect time to do it, and they could have created an excuse to give it to the DE as well.

            It’d have fit their whole huge monster aesthetic, and they could have gone wild and added extra weapons. If they can’t seize that chance how can they get the rest of it in gear.

          • nurglitch

            Bretonnia and Fantasy in general just aren’t that popular though. Take DE for example. They were revamped, but aside from a fanatical following driving up prices on the bits market, they’re just not popular enough to keep pushing.

          • Kevin Buesse

            Really, because when they launched and we’re good my CW I went to at the time was constantly selling them. Then sixth took a bit of wind out of them and made regular Eldar the go to. Then seventh and the new Dex put them in the ground hard.

            They are minimally better with the supplement but still lack numerous utility items.

          • nurglitch

            Probably best not to mistake local popularity with a broad appeal.

          • An_Enemy

            Take your own advice. GW has been on record saying that the profitability of the DE revamp exceeded their expectations by leagues.

            And then yes…they stopped releases and killed the range with the latest book.

          • Valourousheart

            Did GW really go on record saying that they stopped releases and killed the range with the last book? Link please.

          • nurglitch

            Maybe it exceeded expectations, but didn’t meet the expectations of other lines such as the Necrons and Space Marines.

          • RS TROUT

            Long live the Lady!

    • Hawt Dawg

      I did go and play Warmachine but not because of GW.

      I still play those games as well.

      Eat the cake and keep it.

      • rtheom

        Yeah, I’m always confused why people say “I left GW games and now I play these other ones.” because you didn’t need to leave GW games to play those other ones. There are no police that burn your minis as soon as you try a different game out. :p

        • WellSpokenMan

          Hobby time is limited for some of us. (I know GW’s target demographic is the idle rich, but some of us work for a living.) I never meant to abandon 40k. I stayed strong for a while. Eventually though, the siren song of eBay got to me. I still have my IG, but there was just way too much cool stuff out there for me to keep models I don’t use anymore.

          • Hawt Dawg

            Hobby time may be limited, but there seems to be an abundance of GW hating time on the internet.

            I’ll bet if haters cut down on the latter, they would paint like an army a month…

          • Beefcake the mighty

            I use the hate to fuel my painting. 3 armies and counting! On square bases!

          • Hawt Dawg

            Ha ha ha… You made smile. 🙂

          • ZeeLobby

            I think people are just disappointed. GW basically threw out the game developers that made the game that a lot of players loved. It’s hard to watch it waddle this way and that sometimes, so the internet is a place for them to let out their frustration (which I do as well).

          • rtheom

            Venting frustration is fair. It would just be nice if the internet wasn’t so hyperbolic all of the time.

          • ZeeLobby

            Haha. Yeah. It’s never really the sane-ist of places.

          • Hawt Dawg

            They really should get over themselves. It’s been years since they quit GW games and they are obsessed with threads regarding anything GW. I seldom, of ever, see any GW fans enter the PP forum to spew crap all over their games, but the other way around?

            Fortunately AoS seems to be gaining momentum and hopefully the constant-repeating drums of waste will end.

          • ZeeLobby

            Eh. I frequently see wibbling frequently entering PP threads simply to say something negative. I think you might just see more in GW threads simply because more people played GW games, and still play GW games. A lot of people have invested heavily and enjoy GW games. And to be honest a lot of gripes people have with GW games are valid. Sure there are some that are just extremely coarse in their comments, but many are voicing valid concerns/complaints.

            I don’t buy 40K anymore, but I want to. I’ll keep voicing my opinion on the matter (I’ve done so directly to GW as well) until they fix things (which it sounds like they’ve heard and are doing in 8th) until I get the game back that I enjoyed. I think many people feel that way and you just see it.

          • Hawt Dawg

            ON. THE. PP. FORUM!

            Still, move on!

            They should just move on.

          • ZeeLobby

            Having played a game for 15+ years, it’s somewhat hard to just “move on”. I don’t understand why that’s so hard for some to understand. GW were solid for the majority of those 15 years for many people. Only recently have they slid.

            And the main reason you don’t see haters on PP forums is because most people who invested in PP games still enjoy them and still like the company. I’ve never met a person whose never played GW games hate on GW games. Most hate because they have.

            Mods also nip big haters in the butt fast. Problem on GW based forums is sometimes those mods are disgruntled for the same reasons.

          • Hawt Dawg

            The latter is quite true but the first? Really?

            You spend days on end whining about every thread GW because it is hard to move on? What will that accomplish Except making you look like a bitter little kid without candy? I just don’t see how it adds to the gaming community. It just always the same thing, over and over again. In each and every thread with GW in them.

            The reason I do not see GW fans on the PP forums is because they are busy on GW forums. I will disagree on you with that one.

            And YOU does not mean you specifically but the others who are much less interested in GW games but still need to add their 2 cents for the gazilliont time.

          • ZeeLobby

            The reason you see it in every thread is because it’s true. Whenever GW does good things you see a positive response. The problem is they’ve been doing bad things for years. People complain about prices, because quite honestly, they’re overpriced. There are tons of people who still purchase things they consider overpriced every day. Just think about any other product.

            I mean heck, go to any video game forum and look at all the people complaining about EA. Or Activision, etc. It’s not like this is some unique phenomena. Why these people get a pass yet GW shouldn’t be complained about is beyond me.

            As for me, I comment on almost every article BoLS posts. If you only go to GW and PP articles then yes, you’ll see me post positively of one or the other based on the article. I don’t come to BoLS to just to prop one or poo on the other. As for the people who come to GW threads and post bad things, I know plenty of other people who just simply still play GW games only because their group or local gaming meta simply doesn’t play anything else. GW is still top dog in a lot of markets. For some it’s play 40K or play nothing, so I can understand their frustration. It’s also true right now, at least for 40K, that if you play one of the favored armies you tend to see little that’s wrong with the game, and find it hard to sympathize with the DE player who has loved the faction for 15 years but has only experienced playability for one or two.

          • Hawt Dawg

            Because it is true? And I see a positive response?

            I see plenty of posts from the Hateful Few Crew, that has nothing to do with being true or ever being positive.

          • ZeeLobby

            Maybe I’ve learned to ignore them. Most tend to have a point. There’s a ton in this article that do. I see very little “GW sux” posts.

          • Hawt Dawg

            I do!

          • ZeeLobby

            Lol. Honestly? Count them up. The majority are legitimate statements. Maybe it’s not that there’s tons of them. Maybe it’s that you look at the comments and only see those. You’ve become the tunnel visioned protectorate knight of GW! (Haha, JK).

          • Hawt Dawg

            No really, the one Loling is me.

          • ZeeLobby

            Well as long as you find joy in your mission that’s all that matters :D.

          • Hawt Dawg

            Thanks! I Owe you one.

          • zeno666

            So true

          • nicklinc

            Our bosses would notice the distinct lack of “click-clack” typing, and would definitely notice our paint trays!

          • rtheom

            It’s funny how everyone assumes they’re the only one that actually has to work hard for a living…

          • nurglitch

            I don’t work hard for a living. 😛

          • WellSpokenMan

            My comment wasn’t directed at you personally. I work with lawyers and judges. My wife works in an operating room. My father was a bank executive. I think I have a better idea than most that how hard you work is not at all related to how much money you make. 40k is just the most demanding game in terms of time and money. If they could balance the game at a lower model count/price point, I’d probably play again. It would help that I’d be able to fit a whole game in on a weeknight, which I cannot currently do.

        • V10_Rob

          But previous GW purchases gathering dust don’t generate revenue. Generally speaking, everyone has a limited hobby budget, and if you’re making regular purchases in other game systems, you’re spending less (or nothing) on GW.

          Supporting GW in spirit doesn’t pay for shiny new statues outside of the HQ.

        • Mira Bella

          Not burn my dear. That’s only funny once and someone already did that. (funny because they weren’t mine) Selling them is much more reasonable. 🙂

    • Red_Five_Standing_By

      We don’t have anyone else’s numbers. Which also causes problems.

      • Indeed. I often comment that I wish we could see the numbers from everyone else too.

        • Hawt Dawg

          I am fairly sure PP has felt a sting in sales because to me MK3 feels like it is mainly geared towards new players. Unlike GW however, they seem to acknowledge the danger of internet whine (they didn’t avoid it, though not near the GW hate level), so the new edition works well with veterans.

          I am sure other “major” players that do not run pre painted may be on a slope. Smaller ones, kickstarters etc. fills the market like never before and the industry is booming. Not sure the big oldies are booming with it though. It almost feels like we are reaching a point where there are too many options and only the smart and small survives.

          Just a thought anyway.

          • ZeeLobby

            I think PP’s biggest asset is their community involvement. Something that GW is trying to get back into. The problem is that the community wants GW to develop a better game, but to do so they have to actually pay developers. Something they’ve avoided doing since the layoffs in the 2000s. Instead of development being driven by a game system, and offering balanced options across the board, it’s now driven by what sells. “The deathwatch board game sold well, so we made more of those”.

          • Hawt Dawg

            Being kind does not put food on your table or park a dope car in the driveway. It will keep people happy, and for a while they will buy. But only for so long. Hence MK3.

            GWs biggest flaw at the moment are the top dogs in the company. They chose a business model just fit for newcomers. Luckily that is changing.

            I like both companies and the products they sell

          • ZeeLobby

            I never said PP were kind though. Many times they defend their design choices and ignore the outcry of the whiners (sloan haters). Sometimes they get proven wrong, but when they do, they make changes to fix it. For a loooong time GW has simply assumed they know what’s best for their consumers. They still do to a degree. They have this real lack of humility. Getting them to admit that anything was done in haste and was poorly conceived is a challenge. Mostly because they fired a lot of the thinkers and hired a bunch of yes-men. They hired someone cheaper because they assume anyone can design a game, and it’s depth doesn’t matter because they decide what good depth is.

            Things look like they’re changing now, and I’m patiently waiting, but they’ve basically gone through 3+ years of this mentality, and it’s something I’ve found quite ignorant, imo. I don’t see how being too dog should ever be a problem, thinking that you’ll always be too dog regardless of what you do is the issue. Google may be the most valuable company in the tech world, but they invest billions each year on ideas (most of which don’t pan out) to stay up there. Not saying that they’re directly comparable, but being top dog doesn’t mean stop trying.

          • Hawt Dawg

            That is something I can sign on.

            Agreed!

    • Crevab

      When has anyone ever used GW’s revenue as a reason to switch?
      Not sure if Trolling or gone Full Fanboy

      • Its a regular daily preaching point since like 12 years ago.

        So neither trolling or full fanboy.

        “You should stop playing GW… they are going out of business anyday now and EVERYONE has migrated over to Kings of War/XWing/9th Age/whatever system I’m trying to push”

        Hell that was the first post I read in the Age of Sigmar Fans facebook page this morning (well it was a reply on someone complaining that GW tournaments require GW-only models)

        • Crevab

          Uh-huh. Would you happen to have a link to this daily occurence

          • Lol are you serious?

          • Crevab

            What? You said you had an example from an AoS fan page just this morning

          • zeno666

            GW fanboys never need to post proof of their made up numbers or posts…

        • SYSTem050

          12 years? I remember GW was “collapsing” back in 95. Thing is though just because you cry wolf doesn’t mean you won’t eventually get eaten.

          Personally think they will continue on

          • True. The land raider coming out in 2000 sparked a ton of “theyll be bankrupt soon” protests on tje gw forums (because $45 was obscene for a model)

        • Mira Bella

          They went public 2006. There was no sales data available 12 years ago.

          • Yep. But warmachine was out and that was what started the “gw dies anyday now” circa 2004.

            Going public just gave that phrase wank fodder.

            You can go back to 2004 on portent archives and see it start.

          • Mira Bella

            Why do you participate in this whole debate Auticus?
            I’m on this site long enough to know that you basically post the same kind of comment under any article reguardings GW’s financials.
            I just wonder why? This is not intended to be snarky remark. I have nothing but respect for you.

          • Hawt Dawg

            He is a beacon of light in all this dark madness.

            He is actually correct.

          • I guess the same reason that the people that post the same opposing comments post them.

            Because I like giving counter points. Otherwise the forums just turn into an echo chamber, kind of like warseer turned into a few years ago, and thats not a good thing either IMO.

    • vlad78

      And naysayers where right every year as the situations kept getting worse. They only underestimated GW capacity to keep running by a long run.

      Seeing that only licences for 40k and for a world which does not exist anymore keep them afloat should worry you much much more. They won’t making hits with video games each year while the decreasing trend of their sales has lasted for years.

      • I’m not really worried. If and when GW does finally conclude its business cycle, I will either find something else to do or if I’m lucky another game system will be out that captures my imagination.

    • Cergorach

      More like 1994… Ever since it stopped being a company run by fans and being run by investors.

  • Viratin

    I’ve read both the annual report from Games Workshop and the article put forth by Mr. Beddard. As a Business major with a focus in Information and Analytics, I’d say that there’s nothing to be worried about from GW, and Beddard is following in a long line of naysayers following GW around. This company has been operating for several decades now, and their current business practices are more nimble and productive than they’ve been in the past decade.

    What am I getting on at? Firstly, the company’s spent a lot of its focus on making its IP more available, particularly for video games. This is a brilliant move, and I’m quite happy with them on this. Why? Royalty money is basically free money; the investment in designing the IP is already done, and the profits gained from royalties are done pretty much without expense. This greatly helps to cover costs of opening new stores and creating new models. And because the Warhammer IP is a rather well known one, and most of us who buy the models also are video game players, it’s an easy, easy market to hit.

    Speaking of creating new models, did you know new models are expensive to design and cast? It takes about 18 months for the company to pay off new models (may need to fact check this, it was something I read from a previous quarterly report), and in the past year, GW has released an amazing amount of new models and products. Not all of them have been great hits, mind you, but a large portion of profits goes there, and it always has.

    By the by, anyone else been enjoying those fantastic deals with the Get Started Collecting! boxes? I sure have. I think I’ve bought five or six of them in the past year. That also has a major effect on sales and profits: those bundle boxes are fantastic deals, and we’re largely buying them instead of a lot of core boxes separately. That has an obvious impact on profits, as we’re buying more from GW at a lower price. But hey, isn’t that what we’ve been begging for for years now? GW’s price increases have been on new products, and has only increased the overall price-point of their products by 3%, as opposed to the 15% or 20% hikes we saw five or so years ago. Gotta love it when a company starts delivering on what you want and then there’s something new to complain about based off of it, yeah?

    • Frank Krifka

      Indeed. This annual report is also referendum on the companies activities for the past year. I think this next year will see big changes in the report as many of the more well-received initiatives hadn’t really been implemented or had just started.

    • rtheom

      I was also thinking that, as someone with no real background in business and financial statements like these, how similar their statement and actions are to other large corporations. It’s easy to look at their statement and declining profits in a bottle and say “Look! Drop equals failure!” but for all most of us know, their actions are sound investment strategies practices regularly by other large corporations. Sure, their statement is a bit haughty in tone and eager to praise their core employees and attack their detractors, but I’m willing to bet that that is 99% of financial statements like these; documents meant to shore up concerns and give people a reason to keep letting you do what you’re doing.

      • Mira Bella

        A drop is still a drop.
        You really have to be very creative to see something good in a drop in profits. (third year in a row btw)
        There might be reasons but that does not make it good. 😀

        • ZeeLobby

          It’s amazing how people gloss over this fact again and again. Nokia’s profits kept dropping, and guess what, they crashed and burned. Every Microsoft fanboy was like “they’re just turning things around, they’ll be strong with MS” and then MS gutted them with a horrible idea, and left them to die…

    • Charon

      The issue with royalities is, they can just dry out. There have been an awful lot of GW games this year. And most of them were… well… awful. As long as people by them because it says “warhammer” everything is fine. As soon as “warhammer” games have a bad reputation for beeing unfinished and cheap games that just try to fish customers with the IP, royalities will start to tank too.
      And if royalities are gone, they are in deep trouble.

    • nurglitch

      It’s pretty interesting to see how it works in the context of their previous actions and statements. For example, as much as we all hate it, GW are married to Kirby’s commitment a few years back to an aggressive pricing structure. As in, he promised that they would never reduce prices. And neither has Rountree, now that he’s leading the company, but what has happened is that we’ve seen new SKUs selling at a fraction of the cost of baskets of existing SKUs despite containing the same components. It’s something of a stealth price decrease.

      It also seems like GW is working on not wasting warehouse space on models that aren’t moving, as we’re seeing many SKUs in the online store go out of stock, only to be renewed later, presumably when they print a new, shorter run.

      I know a guy involved in the casting of plastic miniatures, and his company is moving to aluminium tooling from steel tooling for several reasons, not the least of which is that the cost-benefit of demand in the realm of 10,000s instead of 100,000s means they might as well go cheap on the tooling rather than hope they can market their product to 10x as many people. I’d imagine GW has already made this move.

      Then, of course, there’s rules back in White Dwarf, they’re producing boxed games again, they’re starting to host official GW tournaments, and they’re releasing stuff that people have supposedly wanted for years (Mechanicus, Genestealer Cults, FAQs).

      The problem with the IP royalties is a bit two-fold. On one hand they’re getting their IP out there in the public eye, and doing a much better job of integrating it with their products, and on the other there is the risk of having Warhammer associated with shovelware, which was what it typically was before Dawn of War showed that you could have a good 40k video game. The Warhammer: Total War could offset that somewhat.

      • Neal Laxman

        You better not be calling Dark Omens shovelware, that was a great game!

        And yes, that’s all I got from your well thought out post! 😉

        • Hawt Dawg

          Dark Omen sucked!

          I played it through four times. That is how much it sucked.

    • Inquisitorsz

      You seem to be missing a few main points though.

      Royalties are not a consistent income. GW happened to have 2 very popular games come out recently. Next year there might not be any (I believe Deathwing is coming out but it’s hard to say if it will make as big of a splash as Total War). So at best, royalties revenue for next year will be 30%-50% of this year’s.

      Secondly, Even with Start Collecting boxes, a whole brand new line (AOS), great bundles and tons of new releases, they still had a decline in sales and profit. So while it’s great for customers, that hasn’t translated into good results for the business.

      I find Beddard’s analysis very informative and unbiased. He’s not a hobbyist so he has no specific love or hate for the game.

      I can’t believe that anyone with the slightest business experience can read that annual report (especially the flat out offensive preface from Kirby) and not have serious questions about GW management.

      We’ve seen some great steps lately, especially new marketing employees, a return to social media etc… But at the top, we still have a 66 year old, out of touch Kirby running the show.

      I’m not saying GW will die tomorrow. I never have. But GW has been fairly stagnant (business wise) for the last decade. That’s not a bad thing, but it’s not a good thing either.
      The problem is that the war gaming, modeling and board games market is constantly growing, while GW isn’t.

      Hopefully the new specialist games department fixes that.

      Your last sentence just proves you’re just another guy in the fan boy vs naysayer war and not looking at things objectively. Because if you were objective, you would see that it’s possible to give the customers everything they ever wanted, but that doesn’t automatically mean the company becomes profitable.
      There’s a lot more to running an international business than selecting the right price point for little plastic dudes.

    • No-one Special

      I think you’re ignoring a big issue with the your position on this.
      The problem with relying on royalties is that it’s only sustainable if the things you are granting licences to are then channeling customers back into what the IP was based on in the first place. Otherwise the interest in those royalty streams dies off as the interest in the company itself dies off – and the company can no longer rely on those royalties to prop up it’s financials.

      The figures show that their core business of making models is shrinking – that’s bad whichever way you look at it. Previously they were able to hide the drop off in customers by simply increasing prices for it’s die hard followers in order to maintain sales, but this has reached the tipping point where it’s killed the new starter uptake as fewer people can afford the hobby and so now they’re losing money at the other end of the hobby spectrum.
      GW seem to be slowly be coming to this realisation, shown by new pricing strategies (not increasing prices on old kits and instead using new releases to gradually roll forwards prices) and the release of better value products, such as the Get Started kits you just mentioned (no comment on AoS) – which funnily enough are targeted at getting more people into the hobby.

      To tie back to your comment, yes royalties are a good thing, but not at the expense of what the royalties are based on. I’ve seen Marvel used as an example by a few on this thread, can anyone tell me if Marvel have experienced an upsurge in comic book sales that has coincided with their success in films? I’d be very surprised if they hadn’t, and if they have it would put GW’s situation very much in perspective.

  • Admiral Raptor

    GW’s been doing a fair bit better over the past little while in my books, but they still have a huge ways to go. Quietly disappearing Kirby would be the best thing for the business in the long run.

    I’m not sure what the biggest problem for GW is right now. The awful state of 40k or the ever present insane prices. It’ll be interesting to see how the next year plays out.

    • Red_Five_Standing_By

      Kick Kirby to the Kurb 😉

  • Hawt Dawg

    Time to melt my minis.

    The end is nigh!

    And yes, Kirby should be removed, and the author of this article should keep playing Kings of War.

    • Beefcake the mighty

      Everyone should play it. It’s fantastic🙂

      • nurglitch

        Can I play with individual models on round bases?

        • Beefcake the mighty

          No it’s a rank and file game . But as long as your units have the correct footprint you can use any models, stick them on a tray or a piece of cardboard and your golden 🙂

          • nurglitch

            I don’t want to play a game with trays. One of many reasons I kicked WHFB to the curb in its 6th edition.

          • Beefcake the mighty

            I see. Never mind then. Frostgrave is quite fun too.

      • Hawt Dawg

        While I like a good jest as the next man, that will never happen.

  • Koschei

    All this because they refuse to produce new Sisters models?

    • ZeeLobby

      Here here!

  • ChubToad

    So do we have a new date for GW final demise?

    • euansmith

      I think it is like 40k; it is always 11:59.

      • ChubToad

        What if GW decides to advance the clock, say to 12.10. After GW has been sold to Privateer Press and Mantic…. :p

        • Hawt Dawg

          Only on the internet is Mantic big.

          • Matthew Pomeroy

            Its a matter of geography, its popular some places, not in others. In my local store its warmahordes and xwing.

          • Hawt Dawg

            Irrelevant to size.

          • Matthew Pomeroy

            not at all, especially since you are claiming its only big on the internet, when it is the dominant system in an area, its big enough for a small company.

          • Hawt Dawg

            What does that have to do with Mantic being able to buy GW?

      • Fore Shame

        No, that’s the actual date, 40,000.

    • ragelion

      It’s next year as always.

    • Horus84cmd

      Well I spoke to Eldrad last night and he said he knew a guy, that knew a guy. In fact, Eldrad said it was the same guy that said Slaanesh, whose crazy wicked fine FYI, is “deffo deffo” going to die in the Rhandra Danda. The guy he was like he heard from his brothers, girl friend sister that is was like sometime after lunch – and she’s always in the know.

      http://cdn.meme.am/instances/500x/66105904.jpg

    • Hawt Dawg

      Yes it is called Age of Sigmar!

  • An_Enemy

    The fall of Rome was a gradual process right up until it wasn’t. Then Rome’s citizens woke up with knives to their throats.

    I love hearing what basically amounts to “GWs too big to fail” arguments to counter the consistent trend of dropping profits.

    It’s every report guys. Their company is propped up by HOW OTHER COMPANIES HANDLE THEIR IP. Tell me again how healthy that is.

    • WellSpokenMan

      My favorite analogy for GW is the auto industry. GM in particular made crap cars for 30 years before they finally needed a bailout. For most of that time they were still the largest automaker in the world. GW isn’t going to fail. Not for a long time.

      • Mira Bella

        No they won’t.
        But if they will by 2036 tweetlebeetle will show up to tell us that it was our fault because we didn’t buy enough models. :-/

        • ZeeLobby

          LOL. I miss that guy 🙁

          • WellSpokenMan

            Trust me, he’s around. He’s got a few new accounts.

  • WellSpokenMan

    GW financials get released. GW fans snarkily tell everybody that this stuff is too hard for anyone who isn’t a financial analyst understand. Investment article comes out with slightly negative take. GW fans tell everybody that they understand this stuff way better than the professional investment writer.

    • nurglitch

      I’m not sure anyone here is saying they understand it better than the financial analyst. He’s not wrong to say that in terms of the fundamentals GW is a buy-opportunity, but that the financial reports are unusually obfuscatory and indicative of risk, even for financial reports. How they’re saying it is as important as what they’re saying.

    • zeno666

      Haha, very true. You just can’t say bad things about GW 😉

      • Hawt Dawg

        Looking at your combined comments, I politely disagree!

        • Mira Bella

          Looking at your combined comments… He has a point.

          • Hawt Dawg

            Not really. You guys don’t criticize, you hate hoping that the hate fuel others.

            Age of Sigmar will break you.

          • WellSpokenMan

            I don’t hate GW, but I’m not fond of the fanboys. I’ve considered playing Sigmar, but I’m not sure I want to spend my free time around that many people who have a persecution complex. I have a teenager for that.

          • Hawt Dawg

            You just made my argument even stronger.

          • WellSpokenMan

            As have you Tweetle.

          • Hawt Dawg

            I doubt that dude played Warmahordes and other games like me. Including GW games.

            You see, one can do that and still be happy.

            Also Age of Sigmar will be your undoing.

          • WellSpokenMan

            How exactly will AoS undo me?

          • Hawt Dawg

            One day, you will see someone or maybe a photo online of grown ups (pick your own age between 25-50 years of age), having fun and playing AoS.

          • WellSpokenMan

            And that will undo me? I’ve seen people playing AoS and having fun. I’ve considered playing it myself. I worry about the community though. AoS players don’t seem to be particularly welcoming group. Normally fans of an up an coming system try to bring new people in. For AoS the number of people who have tried to talk me into playing is dwarfed by number of people who have called me a hater for not really liking the aesthetics of Sigmarines. The community seems less interested in new players than in arguing with people. Until that changes, I don’t see AoS undoing me.

          • Hawt Dawg

            Wow, that is a first for me.

            Around here it is actually the other way around.

    • Mira Bella

      Every time.
      It’s quite amazing actually. Amazing and a bit sad.

    • Aezeal

      As long as there is profit I just do not care since it means GW will be around.

  • Dan Hermod Anderson

    I thought mr Kirby had taken a more… “silent” role on the board, rumours have said his attendance is no longer desired on boardmeetings etc and that he had been effectively replaced by Mr Roundtree. The company has taken alot of turns in the right direction seemingly, aos seems to be picking up with the new start collecting boxes and the generals handbook aswell. A lot of big releases for 40k in the last year. I have a good feeling about the next report

    • ZeeLobby

      The problem is more-so the 3+ years of neglect. We’ve been shown FAQs before, that were never updated. We’ve seen codex receive balance, that was then quickly turned to trash. The problem is more-so their inconsistency than anything else.

  • rtheom

    My favorite part about all of this is how invested we all are in these financial reports when really, should GW fall, it will have little to no real impact on most of our lives. :p

    • Hawt Dawg

      I have a tight rope with GW engraved on it.

      Just in case…

  • Horus84cmd

    It seems, people also like to magically isolate GW from high street retail. Which by in large is still struggling no matter what product you’re selling. The UK, Europe and the World are still in the midst of economic stress – it inching on the up, but could so easily fall of the cliff again.

    Also as others have already mention. Nobody really know how well other miniature wargames manufactures are doing, since we don’t get to see their financials.

    Take Mantic Games for example, how many of their products are driven by kickstarter campaigns? Does that seem like a company in healthy financial shape? Rather than going to a bank for a loan or using profits and instead asking joe public to drop money on a product before knowing what is like? Hey maybe Mantic and others are doing fantastic or perhaps not. Who knows?

    • ZeeLobby

      Asmodee is publicly traded and killing it. PP seems to be pushing out new editions and models without sweating. I agree high street retail is struggling, but only GW really sell miniature games at high street prices. There are plenty of game systems out now which are affordable to most individuals. Many of my friends have jumped on board cheaper games because of this.

      • Hawt Dawg

        I just have to add something here… PP without sweating? No, they are not. Lots of models are behind, not Minions thankfully, and their editions are far between each release (which can also be a blessing). Don’t get me started on their digital support. They ace with War Room 2 but are so behind GW when it comes to everything else.

        Mmm… Imagine a game with PPs War Room and GWs Interactive books. 🙂

        • ZeeLobby

          Releasing things fast isn’t always a good thing. PP has a very consistent release rate. I personally know people who play GW games who would have bought two GW factions if they didn’t release at such a constant rate. PP also relies heavily on following the meta to rebalance the game. This is dang near impossible if the meta is never allowed to settle. Add to that the clear resource advantage GW has, and I don’t think rates of release are any clear indicator of financial success for either company.

          I do think the AoS app is a good first start for GW, among the others they’ve released. But the fact that they still don’t have a list builder that works is kind of insane imo. I think they have enough trouble themselves following the thousands of ways you can build a SM army these days, I’m not sure they’d be able to get it right.

          • Hawt Dawg

            Well when discussing PP you really do not need to add GW each and every time.

            PP can stand on its two legs without being compared.

            They are that strong.

      • Horus84cmd

        Huh learn something everyday. I was under the impression is a board and role-play game company and don’t do any miniatures. Firmly putting them in the board-games market not the nicher miniature-wargames market? As, then is becomes a hard comparison.

        Just because a company is pushing out new editions and models “without sweating” is purely anecdotal, of not a lot. It could mean they are doing well it could equally mean they are not substantial of any success, and attempting to reinvigorate sales. Nobody knows this except PP. themselves. For example commodore computers carry on release systems well into the 90’s but end up collapsing.

        • ZeeLobby

          Er. FFG is owned by Asmodee and X-Wing is definitely a miniatures game. Not to mention board games are just as much of a niche commodity as miniature games these days. Video games are the norm, both the others are exceptions as far as home game entertainment go.

          • Horus84cmd

            So one miniature game supported by the IP of the one most successful franchises in history means they can be classed as part of the miniature games market? Extensively Asmodee is a board game publishing and distribution company. They have hundreds of board games and card games compare to miniatures. As a company they are a very different beast to GW, in terms of what they do.

            I’ve a brief look into to, so maybe I missed it. But I can’t find any evidence Asmodee is a public company – can’t find any share on the stock exchanges. Neither have they seem to have published results in the last two years. The last I found where figures pertain to the deal with FFG, but these weren’t full result either – more like information released for press release of the merger. Again this implies they aren’t a public company.

          • ZeeLobby

            Ah, I stand corrected. I thought they were publicly traded. Maybe it was just the trade reports I had read earlier about Eurazeo, who is their primary investor. I concede that it’s nothing but anecdotal evidence I have then, based solely on sales numbers locally. I still find it hard to believe that every company is struggling like GW. I mean they had a pretty significant drop in operating profits, and a continuous slide in sales. I find it hard to believe that every other gaming company is experiencing the same exact thing when my local stores are doing so well with games like X-Wing and Infinity. So maybe I’m just biased in this case.

          • Horus84cmd

            And that in a nutshell is the biggest problem with “community discussion” – personal bias.

            Your example is perfect. In your gaming area other companies products are the one being played and bought in the majority. Whilst somewhere else it could easily be the other way around in some other companies favour – but that personal and not equivocal as bench mark.

            With GW being the only Wargames Miniature company publishing results, we (the community), as outside observers, really can’t say in any meaningful way how well GW is doing compared with a equivalent competitor or vice versa. There is certainly place for saying GW core business is not where it should be (or I’d hazard were GW want it) – shrinking the results figures indicate that.

            Are GW REALLY in the “dire” trouble or struggle “the community” paints them to be? I don’t know? Again it’s hard for “the community” to say either way.

            If I were to put my money on it then; no that they are not. I say this because, if they were, we’d be seeing: net store closures, not net openings; fewer physical releases. I’m not talking about cutting ranges here – that a different inventory management issue and sadly a little bit of cut throat one from a gamer’s perspective. I’m talking a the number of new plastic frames introduced; we wouldn’t be see the investment into the head office site to make it a world class mecca; we wouldn’t see the investment into the various digital player aids/products etc*…There is a lot going on right now in the way GW is behaving and acting that screams a company making to changes to combat the decline – albeit with the caveat that it’s maybe a little slow in the implementation when bearing in mind the last few years of results.

            The better question in all this is whether the changes coming through: more community engagement, store branding, revival of old IP; reboots of the core products etc… is going to be enough to stem the decline and point the core revenue in the right direction. At this point in time only time will tell. The next few years of result will be interesting.

            *I’d also add here the GW made a market warring they expected end of year profits to be lower than expected after the half year result at £16m. They actually ended up being higher at £16.9. Which means in the second half of the year, something went well, as £0.9 extra is not a small amount of money.

          • ZeeLobby

            Well the dire straits is always a joke. They have so much capital it would be years and years before they folded. The only way it would end abruptly is if they were bought out and liquidated, which even successful companies can have happen. One of my friends fathers was actually high up in the GW org, and now heads up another gaming company (trying to keep it anonymous) and he definitely doesn’t think GW is going anywhere. That said, posting constant losses is not a sign of good company health in anyway.

            That .9 boost near the end is almost assuredly due to the start collecting box sets. After bad holiday sales, they started releasing them, and they are a great deal.

            In the end, a struggling GW doesn’t mean a struggling industry. Gencon had record ticket sales and attendance this year yet again. Ofcourse gencon is more than just one genre of tabletop gaming, but it’s pretty indicative of a growing popularity and community. To continue downward sales in a period of industry growth is not something to ignore.

            But yes, anyone who says GW is over is a fool. Even if they do drive it into the ground, it’ll be a slow death.

          • Horus84cmd

            and here I can wholly agree.

  • Konrax

    As a professional investment advisor that manages tens of millions of dollars… I wouldn’t touch this stock with a laser pointer. As a long time 40k player, it makes me sad that they still don’t get it.

    • Hawt Dawg

      And I flew to Mars.

      We are both doing fake things on the internet.

      • Konrax

        Because I need to lie on the internet to support my ego otherwise my self confidence will spiral into oblivion. Sorry to say it but it’s not a lie, nor do I care if you believe me. How was mars btw?

        • Hawt Dawg

          It was just as interesting as your as your day advising Bill Gates what to do with today’s revenue.

          And you do care. You replied.

          • Konrax

            So what fake thing do I do on the internet then?

          • Hawt Dawg

            You know, making up stuff so you can gain internet cool points and win the day.

            And you are damn good too son.

          • Konrax

            Never heard of internet cool points, but if you need to call people out to feel better about yourself then good luck. Now that markets are closed and I’m home from the office I’m going to go get some painting done. Good luck with your pointless trolling

          • nurglitch

            There’s no point in claiming credentials even if you have them. Just explain your reasoning.

          • Konrax

            Typically major companies in a luxury good such as GW spend huge amounts of money performing market research to help them target specific demographics and customer segments. This also help companies understand their past successes and help them to emulate fornulas to help them generate offerings that resonate with their customers. GW has admitted they peform no market research what so ever and this makes wanting to invest in them scary as it shows a blatant disregard for understanding how they actually generate the revenue that they do have. Although they have hired a marketing specialist from an external source, which in itself a great sign, their role so far seems to be more on the public relations front. They do sorely need better community management and such but this has yet to impact the value of the brand. Given that GW has conplete control of the supply management, it leaves a lot to be wanting when it comes to market penetration due to their alienation of local non-GW retailers, many of which are choosing to no longer offer their products. Given that GW chooses to maintain brick and morter stores selling products that only generate revenue once, and thus taking on rent and recurring expenses of maintaining lhysical locations, it forces them to have to always be pushing for consistent monthly revenues or risk losing locations and even further reducing their market penetration… I can go on and on but this is just a few of the things I see that would prevent me from wanting to invest with them. Other options like bank stocks and realestate investment trusts which have more stavle stock values and better dividend yeilds makes it a no brainer. Please forgive typos, doing this on my cell

          • Hawt Dawg

            This!

          • Hawt Dawg

            Thanks! I am off to park my space ship beside the Delorian (Doc hates when I do that).
            Say hi to Bill for me!

          • RS TROUT

            You are special, aren’t you?

          • Hawt Dawg

            Define special son!

          • zeno666

            Good, don’t feed the troll 😉

          • zeno666

            Looks like you didn’t get the memo that you don’t get points for every post you make.
            So you can stop spamming now 😛

          • Hawt Dawg

            Remember! Every post not GW bashing is a post you fail in the eyes of your Hateful Few Crew.

            I should have been a rapper.

          • zeno666

            Please get some new material, you keep repeating yourself.
            It was entertaining for a while, but not any longer.

          • Hawt Dawg

            Coming from you that is high praise indeed!

  • David Leimbach

    GW’s success or failure all depends on the kids. If they can get new players into modelling and hobby then they stand a chance. All us old guys that are supporting this company are aging and dying off.

    And the challenge will be to compete against video games, VR, pokemon GO and newer cooler stuff out there.

    • nurglitch

      I don’t feel like 40k competes with video games. I play those too, but it’s in owning, buying, painting, and building that the miniatures games in general offer their own hobby. I do like 50k, bit it’s less about the game than video games.

      • JP

        Not to YOU maybe. But kids are typically attracted to glowy fast moving things. Sit a kid down between a box of Space Marines and Call of Duty and see which one he goes for. I can tell you 9 out of 10 times which one they’ll grab.

        • nurglitch

          Yeah, and that leaves millions of that 1/10 enjoying some nice, quiet hobby time.

          • JP

            If GW had MILLIONS of kids doing that, these reports would be VERY different.

          • nurglitch

            They certainly have room to expand their market, yes.

    • An_Enemy

      Warhammer is not a kid’s game. It hasn’t been for a long time now. It’s too expensive and it involves too much commitment.

      GW should have been marketing towards the 20-36 age bracket that typically has disposable income and was embroiled in a nerd renaissance for the last decade or so. Oh wait! GW doesn’t do marketing. The only commercials or print ads people have ever been exposed to are for video games made by other companies using their IP.

      They missed that entire train. They should have been face front at every comic con. Every gaming convention.

      That’s why GW is a big fish in a tiny bowl. No one outside of a very small niche market even knows they exist let alone sell models. We tend to forget that because we are all part of that very small niche market.

      • Thatroubleshootah

        Here here

  • frankelee

    So they’re a bunch of idiots sitting on top of an inherited product that is so good, even they have yet to derail it despite their best efforts. Give them enough tries though, they’ll succeed by blind luck sooner or later.

  • miniwar monger

    I feel their IPs are getting old. I wish them to do some fresh things and yes, take the game aspect more serious.

  • aka_mythos

    Mr Beddard has written on GW several times now, but something tells me GW has either never read any of it or has ignored it after the fact. He has consistently laid out and supported his view about what GW is misunderstanding about its customer base.

    On Kirby’s view of “egos and agendas” it sounds like a paranoid king. It makes me think of this quote: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” – Steve Jobs. These are diametrically opposed views on how to run a company. It was in this time after Kirby joined GW that we have seen a long list of talented game designers forced out of GW… where the views on “ego” don’t even allow artists and writers get due credit for their work anymore. I don’t know about the day to day, but when it comes to “agendas” in other places they call the stakeholdership and owning what you work on, investing yourself…. its how you get things like Battlefleet Gothic, Horus Heresy, and a whole bunch of other product lines.

  • doughouseman

    I have to giggle a bit, GW is a miniatures company, and their IP to them is the miniatures.
    BUT…
    The licensing is almost all about the fluff (also IP) and the game system (abstracted of course) in video GAMES.
    There is not enough of a following to make a movie franchise work (ala Marvel or DC Comics)…so video games will have to suffice for now.
    Video games tend to have a life cycle that is reasonably short, and requires regular refresh of the game and additional new content, similar to what GW has done with their rules over time.
    Marvel, Disney and others play to their consumers, GW does not. Another issue I worry about. Disney runs regular focus groups and surveys.
    Disney writes great annual reports that are all written in a very positive tone, they are clear on goals and objectives and acknowledge issue in a straight forward fashion (see this year’s annual report on ESPN issues).
    GW is small, management has been around for a bit and is entrenched.
    They need to wake up and smell the coffee, or they may become over the next decade irrelevant and when they do, the licensing revenue will fall quickly. Right now they have a couple of top notch games in the market. In 2 years those games will be passé. I am not sure if the game companies will gain enough revenue to invest in new versions or new games. Only time will tell.

  • AX_472

    Everyone seems to be missing several points.

    First the article this article is about is talking about the investment potential of the company. They aren’t saying the company is dying their saying its not a good investment at the moment as your stock will more likely decrease in value than increase.

    Secondly and Kirby could have admittedly said this in the report, GW has made less money from selling models in large part because they have been releasing a lot of cheaper models than usual. Largely AoS models to try and get people to buy in to the new game but also several boxed sets that sell for less that the models in them with out accounting for rulebooks and such. Kirby is trying to increase profits long term by fixing the one big thing thats always stated as the main problem with collecting GW models, the cost.

    Honestly with GW’s recent trend of better cheap models I’d invest in them if i could. They’re trying to play a longer game than an annual profit report can easily depict. Kirby’s comment about not letting management get in the way when you have the right people for the job is a great example of how he’s running the company. Trying to make it a hobby company again instead of a shameless merchandising machine. Even the plan to reformat white dwarf again is aimed at moving it back to a hobby magazine instead of an advert.

    Basically the sky really isn’t falling.

    • nurglitch

      You mean Rountree?

    • An_Enemy

      Everything you just said would be true in a world that doesn’t supply anyone with Google an easy method to see just how long GWs profits have been consistently dropping.

      Hint: it was before “start collecting” boxes.

      • AX_472

        Thats not what the revenue graph above shows. it shows fluctuation not a constant drop. And yeah the numbers have been trending down here and there which is why they are trying to change direction. The issue is the financial year leading into 2016 in which they have spent a lot of money cutting new molds for models that sell for less that their usual price. Surprisingly that leads to lower profits. My point is the managers plan seems to be to bring people back by making new “entry level” sets that are affordable. Which yes means profit will continue to trend down for a while on the gamble to bring in more customers.

  • JP

    Translation – GW is a Ship of Fools.

  • Boondox

    I have a business degree and none of the financial reports I’ve ever read have Kirby’s level of arrogance. He sounds a lot like Donald Trump…

    • ZeeLobby

      He does suffer from a serious case if denial. GW spin has always been massive as well in their reports. A lot of it falls back to their firing of their entire design team, who then went on to create the competitors GW has today. I imagine they’ll go to their grave before they admit that it may have not been the best idea.

  • Mike X

    Honestly, Adam, you could’ve just put the blocks of quotes on the page. There’s no need whatsoever for you to paraphrase what the guy said, when he said it in layman’s terms to begin with.

    • ZeeLobby

      Lol. So true.