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Post by jackedup on Jan 9, 2014 10:38:24 GMT
Tom Kirby (GW CEO) seems to be kicking off the planet. Particularly in his recent preamble:
"We have also had a shift in the balance of our owners.For three entirely different reasons each of our largest holders has done some selling. This has allowed those who have wanted to own us for a while the opportunity to buy. The fact that we have been paying a lot of surplus cash out as dividends hasn’t put them off! We’ll see what happens when we have a bad year and stop."
The biggest shareholders are selling, in spite of GW's good dividends. That is a significant event. And as a CEO, Mr. Kirby decided to address this with a flippant remark.
"I have written a great deal over the years about the ‘greatest danger’ facing Games Workshop. It has usually been in response to the expression of some fear of imminent doom. When will the world tire of miniatures? (It won’t; these are not fashion items,they are hobby collectibles.) Won’t all your customers moveon to computer games instead? (They didn’t; most of our current customers weren’t born when the Atari ST came out.) How about other games like Pokémon or role-playing games?(Who can remember them, now?)."
Why tell your investors that RPGs have no longevity, when you are producing an RPG? And the assertion about no one remembers Pokemon suggests how out-of-touch Tom is getting. A niche business should not point fingers at a mutli-billion dollar industry, and claim it's a model they don't WANT to follow.
And existing customers may not move to computer games, but computer games are seizing (potential new customers much faster than the miniatures market. No one is asking about GW's vaunted customer rentention strategies. We're asking about customer ACQUISITION strategies, which aren't addressed here.
Some OTHER worrying things in the annual report:
"Recessions. Our customers are, on the whole, middle class and well placed in times of economic hardship. We cannot pretend that recessions (or booms) have no effect at all, but be cause we are a niche hobby they have less of an effect than for mass marketers. So long as we retain tight controls of our costs we can ride occasional rough weather."
No. Customers are, on the whole, upper middle to high income earners. And why is cost-cutting the solution, as opposed to actually trying to earn more money? Budgeting is a method I'd expect from a guy who runs a grocery store, not a large corporation.
"Product quality is the best defence. Our miniatures are of extraordinary detail and have very high costs associated with their production."
So the defence against copyright infringement is to make the product cost so much to make, no one even wants to copy it. And then to foist that cost on the customer base.
"Other people will produce great games and products.The dangers lie not in these realities, but whether we keep making fantastic models and providing great services, in our management skills and just as night follows day, in our ability to find the right people to carry the business forward. This is why we put so much energy into our management training programmes and in particular how we recruit."
Okay, so the people running the Hobby Centres help to generate a lot of profit, and a lot needs to go into those hobby centres. Makes se...wait...
"...sales were up by 3.5% from £131.0 million to £135.6 million; progress was achieved in North America (+7.8%), Export (+2.3%), Asia (+10%) and in Other sales businesses (+27.2%) while sales in the UK (-1.4%), Continental Europe (-0.3%)and Australia (-4%) were in decline."
So Asia, in which there are fewer hobby centres, experienced a 10% growth. And the regions in which there were more hobby centres fell behind it. Come on Tom; are you sure you wouldn't make more money just by going through other retailers, rather than retailing yourself?
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Post by chuckles on Jan 9, 2014 21:02:55 GMT
He's deluded.
Notice again the focus on the models to the exclusion of all else. GW think that if the models look pretty they could write "I hope you get cancer" on a napkin, slap a full colour hardcover on it and stick it in stores and still see increased profits.
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Post by commandersasha on Jan 9, 2014 22:37:27 GMT
The trouble is...I don't believe that the leaders of GW are gamers.
They doesn't like distracting themselves from the boring/scary/confusing world of reality by spending hours painstakingly building and painting models, then entertaining themselves and their friends by pitting their models against each other in a balanced and tactical tabletop game.
As such, they have no idea how casually wrecking internal and external battles is angering, frustrating and disappointing. They seem to have either no connection to forum feedback, or else choose to ignore it.
A committee of The Hive could write an amazing, but fair and balanced codex, which could address the anti-combat issues 6th has, and be full of rich ideas, concepts for models, and would not only please current 'Nid players, but even gather more: everyone loves a monster, now you can BE one!
I'm a lighting engineer for concerts, and I am finding the same thing with new lighting desks: designed by lab geeks, with amazing functionality, but not enough of the designers are touring lampys. If you don't have feedback from end users, you won't end up creating products that end users will be happy with.
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Post by Geneva on Jan 10, 2014 3:47:39 GMT
Hey, how ya doin'? "Recessions. Our customers are, on the whole, middle class and well placed in times of economic hardship. We cannot pretend that recessions (or booms) have no effect at all, but be cause we are a niche hobby they have less of an effect than for mass marketers. So long as we retain tight controls of our costs we can ride occasional rough weather."
Well, that explains a lot. At least they're honest about where their allegiances lie. I've worked my way into a fairly stable financial position over the last couple years but for the majority of my time playing 40k I would not have been considered middle class. A bit naive of me to feel a bit of a sting reading it as it was always obvious but there you go.
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Post by robomummy on Jan 10, 2014 6:06:31 GMT
The trouble is...I don't believe that the leaders of GW are gamers. They doesn't like distracting themselves from the boring/scary/confusing world of reality by spending hours painstakingly building and painting models, then entertaining themselves and their friends by pitting their models against each other in a balanced and tactical tabletop game.
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Post by coredump on Jan 10, 2014 6:45:27 GMT
In the past 5 years, they stock has gone up about 500%, and they made about 16 million last year.
People are selling stock to cash out some of their profits, it isn't something anyone is worried about. The biggest sell offs happened about a year ago, and stock prices kept going up.
HOw is it that you know their customer base better than they do? Have you done studies? I know very few players that are 'upper middle class'. YMMV. And cost cutting *is* how you survive tough times, because it is much harder to get new customers during hard times. ONce the economy turns a bit, then you put more effort into expanding your base.
Why are you mad that they have high quality miniatures? Yes more detail is more expensive to make, it also tends to make for better miniatures... how is he getting slammed for this?
I don't know how you jumped from what he said about quality products and service, and training and recruiting... and somehow equated that to the number of Hobby Centers??
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Post by Overread on Jan 10, 2014 10:30:10 GMT
Hey, how ya doin'? "Recessions. Our customers are, on the whole, middle class and well placed in times of economic hardship. We cannot pretend that recessions (or booms) have no effect at all, but be cause we are a niche hobby they have less of an effect than for mass marketers. So long as we retain tight controls of our costs we can ride occasional rough weather."
Well, that explains a lot. At least they're honest about where their allegiances lie. I've worked my way into a fairly stable financial position over the last couple years but for the majority of my time playing 40k I would not have been considered middle class. A bit naive of me to feel a bit of a sting reading it as it was always obvious but there you go. All companies have specific target markets, its a big part of getting a company to function and being able to foresee how to direct the company. GW has never been a poor mans hobby. Sure its a LOT cheaper than some other hobbies, but its not a cheap hobby in itself - although the nature of how armies are built means that people can slow build armies up and some armies are cheaper to build than others (at least to get a core working force). And he is right, hobbies do generally do pretty well in a recession because people become a lot more reliant upon distraction and thus more likely to invest in hobbies and entertainment. This partly explains the huge boom that the whole miniatures market has felt over the last few years (along side things like Kickstarter allowing more smaller companies access to wider sources of investment). As for disconnection I'd remind people that the online gaming scene is tiny compared to the real life gaming scene. Even for a geeky hobby the number of people online is comparatively small and is made up often of the most elite/geeky/competitive players. This is not necessarily the same market that GW produces directly for which is why some people feel that GW is "Losing the plot" because they are not catering to their own specific needs - instead GW is catering to a slightly different market (and over time this target market might well have shifted several times). I'd also make the case that some online are simply bored of GW, but lack the maturity to just put the hobby down and shift onto something else. Instead they tend to lurk forums taking jabbing pokes at GW when they get the chance. I'm not saying GW is perfect nor without fault, just that I tend to see (esp on the much larger forums) a small group of people who are very vocal and yet seem to still be slaves to GW like a drug addict
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Post by jackedup on Jan 10, 2014 14:18:24 GMT
In the past 5 years, they stock has gone up about 500%, and they made about 16 million last year. People are selling stock to cash out some of their profits, it isn't something anyone is worried about. The biggest sell offs happened about a year ago, and stock prices kept going up. HOw is it that you know their customer base better than they do? Have you done studies? I know very few players that are 'upper middle class'. YMMV. And cost cutting *is* how you survive tough times, because it is much harder to get new customers during hard times. ONce the economy turns a bit, then you put more effort into expanding your base. Why are you mad that they have high quality miniatures? Yes more detail is more expensive to make, it also tends to make for better miniatures... how is he getting slammed for this? I don't know how you jumped from what he said about quality products and service, and training and recruiting... and somehow equated that to the number of Hobby Centers?? They made about 16 million in REVENUE (I'm assuming that amount is right btw, as I'm too lazy to pull up the report). You don't gauge performance based on revenue or even net profit alone. You gauge performance based on gross profit margins. If the cost of production has gone up (and Mr. Kirby's basically admitted that rising the quality and cost of the miniatures is their intended barrier to entry), then even a rise in net profit or revenue may imply stagnation. Maybe the reports should also explain, in greater detail, how much MORE the miniatures have cost to produce over the years. Likewise, note the figures that show declining growth in GW's home market. High profit might be coupled with declining sales VOLUMES. But anyway, since you think my FA is (please do not swear), have a look at the charts yourself. That looks to me like a key reversal top. People are indeed selling stock to cash out, which wouldn't be a worry if GW was a choice for swing trades. With a company like GW, you take a position. So the shareholders should be investors looking for dividends, and even GW touts its reinvestment programme. They shouldn't be "cashing out" in droves, as if this was some kind of penny stock. I know the customer base well enough on a local level. And considering QE has started, I doubt that the customer base will remain middle-class, even if it was at the time. So the point is moot. I am not mad that they have high quality miniatures. I am simply pointing out that the CEO subscribes to a better mousetrap fallacy. Attempting to bar competition by making the product too costly to imitate is insane; particularly since the brunt of a such a strategy is being borne by consumers. As for the comment about hobby centres, note that Asia (which has the least number of hobby centres) experienced the largest growth. I want to be honest about one thing - I AM one of the bean counters. It's just that I reserve my mercenary, bean-counting attitudes toward other companies in my portfolio, whereas Warhammer is a hobby I care about. And I worry about the future of the hobby, because looking at their reports, I wouldn't invest in GW. That's all.
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Post by Squire on Jan 10, 2014 14:32:17 GMT
As for disconnection I'd remind people that the online gaming scene is tiny compared to the real life gaming scene. Even for a geeky hobby the number of people online is comparatively small and is made up often of the most elite/geeky/competitive players. This is not necessarily the same market that GW produces directly for which is why some people feel that GW is "Losing the plot" because they are not catering to their own specific needs - instead GW is catering to a slightly different market (and over time this target market might well have shifted several times). Very true. It's something I see in many of the things I've take an interest in, maybe all of them. I was into competitive Halo for a while (H2 and 3) and there were certain things (many things in fact) the competitive community were pretty unanimous about wanting to see in future releases, but we were ignored. While the competitive scene declined it didn't make a bit of difference because for every hardcore player there are hundreds (perhaps thousands) of casual players who are far easier to please. In boxing too, hardcore supporters are a tiny minority compared with the casual fans who are also buying PPVs. Why do the promoters care if 1% complain but the other 99% are satisfied? When I look at GW products through the eyes of myself as a kid and new to the hobby, it reminds me why fanatics like the posters here are easy for GW to ignore. The casual fan base is much larger, typically far less demanding and a lot easier to cater to.
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Post by gigasnail on Jan 10, 2014 23:12:02 GMT
Wait online gamers are a.smaller.population than tabletop gamers, um, no. The ps4 has made 2.1 billion in sales from the console alone since nov 22.
Perhaps i misunderstood what you were saying.
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Post by jackedup on Jan 11, 2014 2:44:45 GMT
How can the online gaming scene possibly be "tiny compared to the real life gaming scene"?!
There are WAY more people playing WoW or Call of Duty or whatever compared to the number of people playing, say, Warhammer or Settlers of Catan.
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Post by WestRider on Jan 11, 2014 8:14:49 GMT
That's not what they're talking about. They're saying the number of people talking about 40K online is tiny compared to the number of people actually playing it.
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Post by gigasnail on Jan 11, 2014 8:17:47 GMT
i dunno that's even close to correct. how many people that you know that play 40k? how many of them don't read any sort of gaming forum? for me that number is a big fat zero. vocal, rabid minority that is the internet hate machine aside, they are at least reading the news section and checking out pics of models.
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Post by Overread on Jan 11, 2014 13:02:27 GMT
They might read the GW website and a news site, but yes they are not registering on forums and taking active part in forum communities. Thus they are not represented online because they've not spoken. They get their social hobby side from the local club where they play.
Indeed there are even those who enforce a kind of divide in the community between online and offline - with terms like "net decking" (or rather net army building). There are even those who think that online is a secret place where all the "cheats" are posted for GW games - unbeatable armies etc..
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Post by Space is pretty big on Jan 11, 2014 20:57:07 GMT
I feel that GW needs to model itself after the Steve Jobs era Apple. Miniatures, like Apple products are luxury goods. Apple products, though usually some of the better options on the market, are often over priced and rarely ever the best option. But Apple users don't care. Apple users aren't spending money on the device, they're spending on everything surrounding it. They're putting stock into the fact that all their gadgets will work together because they're from the same company. They taking solace in the fact that at any point, they can simply walk into the store and all their tech problems will be solved by people seemingly put on this earth to serve them. They're avoiding any worry about product hunting and price comparing as at any point there will only ever be three versions of any devices to chose from. Apple users never have to meet the company half way, Apple does all the work and thinking for them. Perhaps there's a reason why Apple, along with samsung, took home 90% of the smart phone profits last year. GW doesn't support tournaments. It takes forever to solve rule disputes and when it does it often forgets many of them. It hunts down those who would seek to modify or homage it's property, instead of praising that work (and then releasing it as one of its own products to make profit from). It treats its consumer base as insufferable children, instead of the brilliant, insightful, creative trend-setters they know themselves to be. This means that GW customers have to do everything on their own. From running tournaments, creating online and offline communities, to sharing ideas and generating new content. It leaves them independent, giving them the freedom to think for themselves. Only, you NEVER want your customers to start thinking for themselves, thats YOUR job as the company. Your company is there to make their lives easy, make it fun, and free of stress... which they'll pay top dollar for. Mind you, even if it's wary about naming itself a luxury brand, GW simply needs to realize that there may be some merit in the strategies of some of the most successful companies on earth. Perhaps there's a reason that Ikea designs its stores with so many other amenities, as if they don't want you to leave, but for some reason want them to stay in close proximity to all their available products. Perhaps there's an explanation as to why Amazon's shipping policy becomes insanely flexible if you start paying for a premium membership, as if they think it's worth having people continue to pay them money, even when they're not buying anything. And just perhaps, the reason that apple store is filled with so many calm, smiling teens, who never bother you with product pitches, but just wait around on beck and call to serve your needs, is why so many people seem to take the easy choice of over paying for an Apple product, when they could just as easily get a similar device for half the price from someone who doesn't even know their first name. It's just a thought.
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