\"Sales Woes For GW\" -Really Intreresting!

[bayrodney]

Posted On Another Forum
Nothing real surprising here, but I thought people would be interested to see the year-end report from GW. This is not meant to foment flame-wars or such, just informational.

From Lifestyle Extra: http://www.lse.co.uk/ShareNews.asp?ShareNews=GAW&articleref=Y6J0N0T2B2P2&news_headline=games_workshop_warns_on_full_year

War gaming model specialist Games Workshop warned today that full year sales and profits are likely to fall short of market expectations as the Lord of the Rings \'bubble\' continues to deflate.

Pre-tax profit for the six months to 27 November sank to £0.1m from £7.7m a year earlier on revenue down to £57.1m from £71m in 2004.

Sales for the five weeks to 1 January 2006 show a year on year decline of 17%.

The situation has been made worse by the continued reduction in sales to independent toy and hobby retailers, notably in the US, it said, where many smaller independent operators are closing down.

The group said it has tried to mitigate the impact of these difficult conditions by working closely with stronger outlets to help them through their current problems and by generating healthier performances from its own Hobby stores.

Chairman and chief executive Tom Kirby said, \"We can now see that our full year sales, and therefore profits, are likely to fall short of current market expectations. This is why we have brought forward the timing of our interim results announcement this year.\"

\"Whilst recognising that at present our levels of trading are below last year, the directors firmly believe that the prospects for the business remain very good.\"

The interim dividend of 4.95p is maintained.

And now for a reply, which in my honest opinion has hit the nail in the head about GW

Reply On Same Topic
It\'s the product, stupid.

Like Hyundai, make your dang product better and you\'ll sell more of it.

GW has gone to great lengths to decrease the value and quality of their product, so of course they sell less. Let\'s look at all the things they\'ve done in the past few years:

1. Eliminate all discounts. Full price all the time is their policy.

2. Intentionally drive experienced gamers from their stores. While they\'ve reversed this policy of late, for a very long time they simply didn\'t want anyone but newbies in their stores.

3. Continuously drive prices through the roof. A 35-45% increase in your product in less than 5 years should be a clue that you\'re digging your own grave.

4. Refuse to support a tournament environment. They pulled the plug on GTs, and even before that refused to run them with the appropriate resources. And they\'ve intentionally made sure they\'re rules aren\'t tournament worthy, and at every avenue stress that their product is inferior in this respect and not designed for something their competitors do so easily.

5. Marketing only one line at a time. If you play dwarves, guess what, it\'s a banner year. But if you play orcs and goblins, or empire, go pound sand (or buy warmachine). And when they say they don\'t have anything to sell you, they mean for the next 3 to 4 years. GW simply does not want your business if you\'re an [insert army not on the soon to get redone list] player. This is, by FAR, the biggest problem GW has. Every other game company has a method to continue to produce revenue from existing customers. GW does not, or rather it doesn\'t have a particularly effective one. Once you buy an army, they have nothing to sell you unless you want a different army.

And unless they realize that no amount of greasing the sales wheels will fix these types of problems, GW is mere months away from drifting into the realm of unprofitable.

Or it could be this LotR bologna they\'re feeding their investors. Tom Kirby, you need to pack up your army, if you even own one, get your rear on a plane and come over here and play with my locals for a while. Then, hopefully, you\'d have a clue as to why you are getting so little of our money.

Whats your thought on this??
I for one totally agree with the Reply, especially 2 & 3, There should be a way that new gamers can smoothly come into the game without any troubles.

This is a bit of a Rant. Nothing that would get this Post Blocked please (I Hope i haven\'t already broken any rules)

Thanks

 

[Chern Ann]

It\'s a mix of both high prices and clamping down on Internet sales. In this day and age, Internet users do expect discounts and convenience. Their online site is not the easiest to navigate, and now with much stronger alternatives in the market, it\'s a mistake for GW to ignore the attraction of a one-stop store where buyers can get several lines at the same time. All their competitors are taking advantage of their lack of web presence to enter their space. It\'s a huge, huge mistake.

 

[bayrodney]

Chern, Can it be fixed?

Or are GW doomed??

 

[Sand Rat]

Ok, here\'s my two cents worth on the argument.

I just started buying GW\'s stuff. I\'m going to run my armies in the WFB universe based around a core of GW figures, but will incorporate other manufacturers figures if I feel that they will work - for example, early last year I bought the Lizardman Battalion - and will use them for the core troops in my Lizardman army. However for my Kroxor, I just purchased 8 Sebeki from Crocodile Games, since 1. I feel they have more of the \"Brute\" look to them, and 2. Including shipping they still cost me less than 3 Kroxor from GW. Now, I know that these will never be playable in an Official GW Sponsered tourney, but since I play for fun, and paint for fun, who the f cares?

In the same vane, I\'ve purchased Reaper\'s Warlord Dwarfs to use as Dogs of War for my Empire Army. And I\'ll prolly eventually build a Dwarf Army, I\'ll use mainly Reaper figs - because of the look.

What it boils down to is that after 25 years of doing this I\'m going to decide how to spend my money - and I feel that GW has put themselves behind the 8 ball here through all the above listed behavior. You can only milk the cow so long, you know?

 

[frenchkid]

The easy way to see the effect of the LoTR sells would be to compare those stats with the stats of the year before LoTR started.
As for GW, I whent into my store yeasterday, and even though I definetly didn\'t feel like staying in there any longer then I had too, it was packed full of people buying. So I don\'t see why they shouldn\'t increase prices if people are still buying, that what all buisnesses do. And I\'m not even going to try to explain what GW should or should not do, because in my opinion the people runing it are much more knowledgable about there entreprise then I am and they definetly know much more about finance then me.

 

[Modderrhu]

Well, the rebuttal post started as an yet another anti-GW flame, but brought up some good points.

And when they say they don\'t have anything to sell you, they mean for the next 3 to 4 years. GW simply does not want your business if you\'re an [insert army not on the soon to get redone list] player. This is, by FAR, the biggest problem GW has. Every other game company has a method to continue to produce revenue from existing customers. GW does not, or rather it doesn\'t have a particularly effective one. Once you buy an army, they have nothing to sell you unless you want a different army.

This is the big one for me. I wanted a Wood Elf army, and the redo was due - overdue. Everyone got excited at the prospect of the Wood Elves being next, and what did GW do? To the utter dismay, horror and anger, of many players? A new army - the Ogre Kingdoms. Well, that was the best way to alienate a whole lot of existing customers, now wasn\'t it? Screw over the existing customers. I never did buy that Wood Elf army, and never will. In fact, it allowed me to broaden my search for a new fix, and I found a shop that sold Rackham, Warmachine, and a whole bunch of other manufacturers. I\'ve got Dark Elves and Tomb Kings, and I don\'t want any more of GW\'s armies, except for maybe Brettonians.

Since they did Dark Elves, a long time ago, they\'ve brought out exactly one new thing - the Manflayers. And even then, you only buy one unit, never more. I\'ve also got some Tomb Kings, which have had nothing new since their release.

I have been buying some Necromunda minis, but that\'ll be nowhere near the money they\'d have had from me if I had bought a new Wood Elf army.

Or it could be this LotR bologna they\'re feeding their investors.

I don\'t think it\'s bologna. I think GW invested in a line that truly had a limited life-span. LotR minis have been around for many, many years. They\'re only popular now because of the impetus GW put into a new line of LotR minis, and even that is riding on the back of the films. Well, the films are over, they\'re history, and are unlikely to produce new customers for GW. This is quite the opposite of the previous quote.

It\'s funny, GW are continuing to produce new LotR stuff, for whom they only have an existing customer base. Yet they don\'t provide the same to the customers that got them where they are today.

They\'ve been betting on the wrong horse, and that IMO is where they\'ve gone so horribly, horribly wrong.

Originally posted by frenchkid
...in my opinion the people runing it are much more knowledgable about there entreprise then I am and they definetly know much more about finance then me.

And right you are! That\'s why I say nothing about their price increases, or anything like that. But since we are a part of GW\'s potential market, we can definitely talk about customer alientation.

By the way, DRINK!!!.

 

[bayrodney]

@Modderrhu:
From your post i have realised
- Ogre Kingdoms, Was a mistake
- LOTR should have been produced and sold in another direction (ifyou know what i mean)
- There should be an order in which armies are released, not the \'drawn from a hat technique\'

@FrenchKid: I often go to GW and can hardly move my self through the store because of the amount of customers, but i notice one thing, they are all very familiar faces, Every so often i will see the odd \"newbie\" come into the store, play a tutorial game with the staff, which is all well and good, but 9/10 of the times, those \"newbie\'s\" are one off, unlike a few years ago where at least half of them would return (I for one) Have GW lost \'their Touch\' with new customers??



And another point, in my opinion, If GW lowered their prices, in the Long Run they would gain more money, not everyone has the money.....
Sorry for the 10000th GW Rant, but it wouldnt be a Forum if we didnt Rant

 

[Spacemunkie]

GW are in the shit big style. 6 monthly profit of 119k? When your turnover is 57 million, that\'s pretty desperate. Their huge chain of shops will throttle them if you ask me.

Rackham\'s profits have doubled in the same period, and apparently PP\'s have quadrupled. Flames of War has taken off massively as well. The truth is that GW are suffering from a combination of their own ineptitude, price hikes and competition. It\'s no coincidence that their turnover has dropped 20% from around the time that they whacked all their prices up either!

I\'m sure Tom Kirby doesn\'t give a shit. He\'s lined his pockets for the last decade and can pass on a blackened husk of a company with a smile on his face.

 

[bayrodney]

Originally posted by Spacemunkie


I\'m sure Tom Kirby doesn\'t give a shit. He\'s lined his pockets for the last decade and can pass on a blackened husk of a company with a smile on his face.

He\'ll Just leave when he realises he is losing money from his OWN pockets, not the buisness\'

 

[Ebonbuddha]

It doesn\'t surprise me that this is happening. People will not be duped forever.

Here is a thought; GW has succeeded in roasting their own nads. Now that this has happened, will the other manufacturers who raised their price and following GW\'s lead now start giving more discounts and perks for their customers or are the manufacturers just lemmings going over a cliff?

 

[Trevor]

I\'m not into the GW bashing. I think their current woes are easily explained by

1) LOTR bubble - burst.
2) Comparative expense. Its much cheaper to start many other games, and often the minis are cheaper. Where they are not cheaper, they tend to be better looking (just look at the beautifully painted and well sculpted rackham unit minis).
3) Competition. I know when I started I really didn\'t like the look of Grenadier and Ral Partha, GW just looked waaay better. Now there are a number of companies churning out as good or better looking minis, not to mention the smaller guys like Hasselfree, Spyglass etc. This is hurting both the mass gamer and single mini painter markets. Before I\'d by a GW for display, now I\'m more likely to go with one of those smaller companies, they offer things I simply can\'t get at GW.



They will still sell LOTR stuff, but not at anything like the lvl they did during the films. A hardcore will continue to buy their new LOTR product, but it will be much smaller base.

I still think GW are churning out some of the best looking minis they have done in ages, and their plastics are great, but there is so much more competetion now.

I think they need to promote a more tiered approach, offer everything from skirmish to battle and spread the support around a bit, rather than spamming dwarfs for 3 months then forgetting about them for 4 years.

Still I don;t think GW are going anywhere, but they could do with changing their attitude a bit, lets see more support gamers and less buisness crap*.


* I\'m thinking about the push back in the late 90\'s by the suits to stop gaming in store ... I mean how bad a grasp of your customers does that show?

 

[Ritual]

Originally posted by Spacemunkie
I\'m sure Tom Kirby doesn\'t give a shit. He\'s lined his pockets for the last decade and can pass on a blackened husk of a company with a smile on his face.

That\'s the problem with the type of people that become CEOs nowadays. They are recruited from a group of \'professional\' CEOs. They don\'t have any interest in the companies they run! They run a company for a year or two and then they move on... No matter how badly they do their job they always get new ones, because they have friends and people just like themselves all over.

And to respond to Arthur\'s claim that these people know so much about finance... Yes, in a way they do... They know a lot about stock market value and that\'s what they have in focus. They use the current stock market value as a guage of how well the company\'s doing and the share holders demand a good value. But strategies to uphold a good current stock market value can be, and often are, contra-productive in the long run. This is something these people don\'t seem to know, or at least don\'t care about. But, since they probably run another company in a couple of years, maybe they feel it\'s unimportant.

 

[bayrodney]

Originally posted by Trevor

* I\'m thinking about the push back in the late 90\'s by the suits to stop gaming in store ... I mean how bad a grasp of your customers does that show?

Whats this??
Did GW attempt to stop gaming in stores?

 

[Infidel Castro]

For my money the firm has lost all personality. Plain and simple. Apart from some of the second-string games (Necromunda, Mordheim) there is no marker to show what or who they are any more. The humour used to be fantastic and there were lines of interesting figures for Talisman, WHFRP and what have you. All you have now is limited choice and even more limited fun.

 

[bayrodney]

Originally posted by reverend
All you have now is limited choice and even more limited fun.

I don\'t think you have \'limited choices\' as such
more like...To many choices
But thats not a good thing.
They are all the same, just different colours or background.
The limited fun is coming from the small amount of \'range\' in the way the customers collect. People dont want old, weak models. People like the new stuff, and GW re-do their armies on Popularity, so you will see the same armies all the time. if GW had a lesser choice of the armies but more variety between them that would attract people collecting different armies, provoking more fun.

- If that makes sense

 

[Infidel Castro]

I\'m saying that the limitation to only wargames and skirmish stuff is what puts off people like me. I want character, one-offs, situation pieces, individuals made for no other reason than collecting to paint. A human rat-catcher, a dwarf bounty-hunter, a goblin thief...silly fun stuff. It\'s all about shifting large units, volume rather uniqueness. I\'d rather trawl ebay for an old classic than pick up what looks like a generic army piece. That\'s why I hate going to GW.

 

[bayrodney]

Ok, Sorry didnt understand what you ment before. now i do!
I agree with you Rev, i love seeing the one off Rackham mini\'s. GW should release more of their \'limited edition\' models, i loved the Archaon model, The limited edition Space marine models with your GD entry, these should be released more. You dont see these models on the table, but you will find them in a lot of customers Cases

They are great models

More, More, More...Please?

 

[Infidel Castro]

Limited edition = reason to hike prices even higher up the scale.

A pack of 5 Ratling Snipers cost me £6. Two Space Marine Veterans cost me £7. What a con! Those were some of the more interesting pieces to my mind though.

 

[bayrodney]

Originally posted by reverend
Limited edition = reason to hike prices even higher up the scale.

A pack of 5 Ratling Snipers cost me £6. Two Space Marine Veterans cost me £7. What a con! Those were some of the more interesting pieces to my mind though.

Everybody likes them though...

 

[Ritual]

Originally posted by bayrodney
Everybody likes them though...

Ehh... No!