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GW Editorial: The (Financial) Empire is Burning!

4 Minute Read
Aug 24 2014

GW’s financial records have been out for a bit now and it looks like the Emperor is hurting in the wallet. What does this mean for GW and their competitors?

In the futile effort of pretending I’m fiscally responsible–usually after the sting of Miniature Market sales–I’ll crack open the dusty stock app and pretend I know what I’m doing. I happened to type in Games Workshop just for giggles and was surprised that they had consistently been down for a couple weeks. Then I had heard from some person that frequents my store that GW’s financial record had come out a few weeks back.  Games Workshop being a publicly traded company has to publish financial records, which usually comes with some fantastically editorialized preamble from the CEO. Again, I’m usually not one for numbers,”market shares” and all the jazz, but I figured I’d give it a look-see.

Houston We Have a Problem

If their stock wasn’t any indication, GW’s financial records show that both revenue and profits are down since last year’s report–GW’s finical year is from July to July. The “executive speak ” laden preamble does it’s best to account for the downturn. Here’s my internal dialogue with this preamble:

GW:  “Games Workshop has had a really good year. If your measure of ‘good’ is the current financial year’s numbers, you may not agree.”

Me: Uh, so you didn’t have a good year?

GW: Well we lost money! But we did some cool stuff that costed money! Remember that super sweet website update? That costs money!

Me: Okay, but not THAT much money..

GW: We also shifted stuff around internally. That costs money!

Me: But you closed more GW stores, cut the employees to one person and had more releases now….



Reading Between the Lines

After reading in-between the fancy charts, it’s apparent that GW is losing customers. In GW’s 2013-2014 fiscal time period, they had more releases than any other year: a new rule-book, new codexes, tons of new models. Yet, on the heels of these releases Games Workshop reports losing money? I already had the inkling that they were hemorrhaging customers when they raised the prices of their products and still reported the same roughly the same numbers. Are people finally done with their silly practices and jumping ship? Who knows, but it’s clear that if the trend continues GW could be in trouble.

Now this isn’t to feed the rumors that GW is going out of business. They are still a huge company, and companies have their off years. It could be possible that GW is just a down-swing and could turn it around in the future. But, if my gut feeling is right–and not I’m just hungry–GW is losing players and could be facing a real problem. In such a niche market, every lost customer could potentially be a sale for their competition.

So what can Games Workshop to do turn it around? 

Follow Privateer Press’ release structure for one. GW currently releases models sporadically, and in bunches with the new codex comes out. This potentially leaves players waiting months or years before they see something new come down the pipes. Privateer Press, on the other hand, releases a new rule-book and a wave of models that attempts to tag every faction with something new. The key word here is new. A new rule-book doesn’t mean re-sculpts of old models, but new models that put new and older players on the same playing field. Then, after the book is released they begin putting out either re-sculpts or re-boxed models to satiate the palate of the older players. Nobody has to feel shafted or wait for their models; everybody is on the same page. Games Workshop also has an atrocious policy on organized play, being that they don’t have one. I understand the rationale: “Why spend money on major tournaments, if somebody else will do it and I’ll still sell models?” Still, from a retailer standpoint, the lack of organized play support savagely hinders the amount of both variability and staying power of the play in stores.  From a player’s perspective, I want to go to Lock and Load because it’s pinnacle of competitive Warmachine play, or you want to play in the LCS because it’s the height of competitive League of Legends play. Games inherently have communities, but it adds credence and fire to those communities when they feel legitimate. Playing at a Game Day event for Magic the Gathering feels more official than playing in a non-sanctioned event with the same prize pool. GW needs to look at avenues of player retention and not player rotation. I want to feel wanted and not like dollar signs.

But, we’re going to play a game! Since this got me thinking of all the things that could happen if GW does go bellyup–again, unlikely but we’re living in magical Christmas land here. So here’s the game: in the comments section put your top company you’d like to see purchase GW and why. Again if you want to see more from me, click here


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