Games Workshop AGM opinion piece.

[Alaric]

I feel the whole article is bs. Not because of the content in itself (the whole gw is evil Cuz they want money has been done to death. Yes. They r arseholes. We get it) but because it all seems so contrived. From the convenient conversation with his kid to just the way it was written in general. Im sure he is what he says he is but I dont buy the conversations with gw employees going how he says. Even the parting shot at the end aboot xwing was unnecessary and more like the ending to a short story. But who knows, maybe his job is to write little novellas aboot different companies for a living.

[daboarder]

Then stop buying their products, they've told you time and time again that they're not aiming their products at you, how ****ing entitled do you want to be to demand a company do what you want them to?

[Defenestratus]

One Quarter: "We proudly perform no market research of our market"

Next Quarter: "We know exactly who 80% of our customers are and what they buy our models for."

0.o

[Erik Setzer]

I feel the whole article is bs. Not because of the content in itself (the whole gw is evil Cuz they want money has been done to death. Yes. They r arseholes. We get it) but because it all seems so contrived. From the convenient conversation with his kid to just the way it was written in general. Im sure he is what he says he is but I dont buy the conversations with gw employees going how he says. Even the parting shot at the end aboot xwing was unnecessary and more like the ending to a short story. But who knows, maybe his job is to write little novellas aboot different companies for a living.

Well, a lot of times, these articles are written like stories - i.e. "the tale of the time I went to a shareholder meeting and had a pint and a half" - in order to make them easier to digest and more interesting for people to read. More interesting read means people likely come back and read more stuff.

It's also interesting to go through his history... Apparently he wrote an article about the annual report, a bunch of people commented, and it got him thinking more about the company and wanting to check out what's happening. So it's sort of an "ongoing story" for him, doing research.

This isn't someone who has an axe to grind, and if you look at his articles, he looks into investments with all kinds of companies, and digs into them. It's amazing that people are so tuned into claiming anything that doesn't praise GW is pure anti-GW trolling that even an investor writing about his concerns with the company is claims as some kind of bias or something. (And that's where a lot of my annoyance from the "GW is perfect!" crowd comes from, they attack any criticism as some kind of personal attack and claim it's completely invalid.)

And I'm sorry, but... I have to take real offense to your attitude about this, and you're showing where you and others are, in fact, the ones who are in the wrong with the "war" over criticizing GW. You're acting like a guy has no idea what he's talking about because you disagree with him, and claim he's making up BS, and act like he's anti-GW. That's quite NOT the case. If you go back through his stories about GW, he started out positive about them.

[url]http://www.iii.co.uk/news-opinion/richard-beddard/games-workshop-and-risk-within[/url]
"I hope there will always be a place for Games Workshop in the Share Sleuth portfolio. The company epitomises niche businesses run for the long-term."

[url]http://www.iii.co.uk/news-opinion/richard-beddard/games-workshop%E2%80%99s-revenue-problem[/url]
"...long-termism is one of the reasons I’m attracted to Games Workshop."

And another article, though without any really positive comments:
[url]http://www.iii.co.uk/news-opinion/richard-beddard/games-workshop%3A-testing-goose-killing-theory[/url]

If you read those in order, you get what's happening. He's looking at the company from the viewpoint of an investor. He starts out liking the idea of it, but then digs in more, and realizes that it's not as positive as he thinks, but rather, at best, more of a holding pattern.

You might not like the criticism of GW, but he's right about the attitude they show in their reports, and that it's concerning to people who might want to invest that a company's management shows an egotistical attitude, blames problems on lower level employees, brags about doing no market research (while claiming they know exactly who they're selling to), and is doing so bad that they have to freeze salaries. Their profits have been propped up by cutting as many costs as possible, and the way they're doing that won't reverse the trend of diminishing revenue. GW's management claims they're a super niche market, but don't like the lower revenue such a super niche market has. Their ideas for growth don't mesh with their consistent claims over how niche they are or who their target customers are. Telling your investors one thing and doing something different doesn't inspire confidence.

He's not saying the company is a bad investment, either, just that it's one to watch and not jump on, given that it's not really set to make someone a lot of money. That's a smart move. It's hard to tell where things are going to go right now for the company. They just blew up their huge fantasy franchise (while continuing to license out the version they blew up to other companies) because of poor sales. They're down to just two major game systems, not counting the Hobbit (which they tend to ignore). One of those is a reboot that might not catch on like they hope (it'll take about six months to know for sure how well that's doing in actually increasing sales; a lot of people on these forums are saying "I like AoS!" and playing it a lot, but they're using free rules and existing armies, meaning absolutely zero new money for GW from those people). The big thing about the WFB-to-AoS transition is that it also shows they recognize games are important, even as they say otherwise. (Quick note: If you read the comments in the article, he says that the 20% figure was mentioned in conversation, not on paper or slideshow.) So right there you have a company making a major move that goes completely against what it's telling customers. (And clearly the WFB world was interesting as a setting, because otherwise why would people pay for the WFB world license, and why would gamers buy all these board, card, and video games in that world?) But then you look at other things. Their bigger growth came when they were expanding the number of stores they had all over the world. Since then, they've cut the number of stores, and cut the number of personnel in stores (which cuts down on open hours for the stores), meaning less opportunities to make sales, which helps lead to less revenue. They can try to make up for some of that by releasing more expensive books and models, trusting the people still making purchases to keep them in the green, but that's not really a viable long-term strategy to increase revenues. (Indeed, as pointing out in one article, GW's only got a 1% average annual revenue increase for the last decade, a figure that isn't going to amaze anyone.) They seem to have recognized that they need to expand their reach to get more sales, but their targets for expanding their reach are not going to go well with a super-niche that wants to charge "premium prices for premium products." This is going to run into more of an issue when the people they'd like to stock their products want to put a discount on them, as they do on other things.

So as an investor, he hasn't said GW's a horrible investment. But it's not one to jump on, either. And as a father to a son who wants to play games, well... he's right. GW games aren't terribly great for that. Their best selling point was the number of people around playing them, and if you don't have an established group in your area playing GW games, then you're probably better off looking to get into a different set of games.

Games Workshop said in their own annual reports that they're not a game company. They make premium priced premium models for modelers. If you don't like someone pointing out that GW isn't a company for gamers, you should probably take it up with GW. This guy's just reporting that the attitude at GW HQ is indeed the same as they put forth in their investor reports.

- - - Updated - - -

One Quarter: "We proudly perform no market research of our market"

Next Quarter: "We know exactly who 80% of our customers are and what they buy our models for."

0.o

That is, though, an unofficial number. But it does seem odd that anyone would even say that. Might have been some idiot in management throwing something out to defend their business model and not realizing how much trouble it could cause the company if it got out (as it clearly would).

- - - Updated - - -

Thanks for quoting the troll.

To answer his point, I did stop buying from them. If I buy anything GW related, I tend to look for somewhere with a nice discount, and certainly not give money directly to them. But the local crowd is getting increasingly turned off by GW and looking into other games anyway, and since GW has said they don't want my money, I'm obliging by doing what they want me to and giving my money to someone else.

However, that doesn't excuse them from being complete morons for claiming their toy soldiers and games are really super-serious modeling hobby stuff. They sell games and toys. Claiming otherwise is just silly and they deserve to be mocked for trying it.

[Alaric]

I said right in the first part I didnt care he doesn't like gw. I really dont lol, its just a company. I said it seemed contrived that all these little parts of his story all came together a little too neatly. Cuz they do. But as u just pointed out, its contrived Cuz thats how it all turned out as he discovered the wonders of gw as he delved into their depths. So the whole storybook aspect begins to make a bit of sense.
The only one who actually gets bent out of shape over this crap is u Erik :P I do believe that a person who had never heard of ol gdub had read that column they would think what I thought "for a submission aboot a companies viability as someone to back on the stock market this more reads as a story of a bitter ex lover" or something. Thats really all I was sayin, im not on a crusade against gw haters, you guys are as endless as chaos.

[Caitsidhe]

The guy is a professional writer. Of course it seemed a bit contrived. That is what writers do. It doesn't, however, change the fact that his arguments are sound. I also happen to believe his anecdote about his son. I expect he orchestrated it for maximum effect, but I believe it is based in actual event. Granted, my bias is that I have been arguing what he said here for several years now. I don't happen to believe you can pretend to be a thriving business by cutting off your own arms and legs to maintain profit. If the profits aren't actually based on growth, you have a problem.

[Alaric]

The guy is a professional writer. Of course it seemed a bit contrived. That is what writers do. It doesn't, however, change the fact that his arguments are sound. I also happen to believe his anecdote about his son. I expect he orchestrated it for maximum effect, but I believe it is based in actual event. Granted, my bias is that I have been arguing what he said here for several years now. I don't happen to believe you can pretend to be a thriving business by cutting off your own arms and legs to maintain profit. If the profits aren't actually based on growth, you have a problem.

Our definitions of "professional" differ that's not a problem though. I see what you are saying, and despite what Erik (the beacon of human morality and the troll designator) says aboot it I totally agree. The problem is this: GW thinks it knows what its doin and nothing will change that short of a catastrophic year. There could be 100 snooty articles pointing out how GW hates its customers but nobody will care till the money dries up. Smart investors will look at the gains and losses and not give a damn aboot the nerds attitudes on the company, at all.

[Wolfshade]

I'm not sure I agree with the thought that GW is good in long term-ism.

Let me explain.

GW have continued to pay large dividends to it's shareholders from it's profits at the same time it is trying to self-invest and develop technology and research. IIRC GW has never failed to pay a dividend in the last 10 years. That means that all that matters is that they are pleasing shareholders. A longer term view would like them to not make (such large) dividend payouts for the next few years (especially when the UK was in recession) and use that money to invest in the company to produce better more efficient processes, retail points, etc.

But no, they don't bother. Arguably, the UK/European models are working, though not so much in the states and their new injection moulds are of exception quality and detail. Moving to digitised modelling has sped up the process of bring models from an idea to prototyping to production. So they have done some of this but as many people point out there is more that they can do, market research in the states (at least) as they don't seem to understand that market. Hopefully those would then produce a better long term prospect.

[Erik Setzer]

It's very likely the thing with his son is true, just played to maximum effect in the narrative he was writing. I don't think he went into it with preconceived notions, thinking, "Oh, good, son, I can use this to bash the company."

I also get the feeling, reading the other articles, that he thought the company was a good buy and all, so he got a boxed set for his son, and then it turned out to not be quite the right thing for his son.

He brought up a good point in the comments:

"Yep that's the worry. That they'll keep mining the same niche into oblivion."

The niche they're trying to control isn't really big enough to keep a company going, especially as more competitors pop up. I don't mean game competitors, because, well, GW doesn't think those are competitors, so let's discount them. I mean the people making figures just to assemble and paint and put on a shelf. GW's relying on the strength of their IP to sell their products, but I'm not sure that'll work that well in the long run. They blew up one IP and replaced it (though they're still franchising it, which is all kinds of awkward), so that's got them set back a bit on one of their two settings. (More damning is the point that, in replacing the setting, they actually seriously narrowed the scope of what they can do with the new setting. Something like Blood Bowl or Man'O'War isn't really possible. A Mordheim-esque game could be, though.) But with 40K, their more popular IP, how many people have really heard of it outside of existing GW customers? Most people being introduced to it are being introduced by video games... which also makes them gamers, not modelers (they can become modelers as well, of course). So the people being introduced to the IP aren't even really the type of customer GW is looking for. GW's looking for "serious modelers." Problem is, those people will also look to other companies, and other genres, not just one company. Their business model worked for a while because of a monopoly created by their games: Want to play Warhammer or 40K? You better get GW models. But when you take the games out of the equation, what's to stop you from turning to other companies' models that might be more to your style, or just catch your fancy on a certain day?

So now, you've got a company, trying to sell their products in a way that isn't really in line with the company's history, to a small part of the customer base they'd built, and cutting off ways for people to even be introduced to their products, other than through the medium of gaming (which isn't attracting the right type of customer).

It's possible they're doing stuff behind the scenes, lying to people about what they're doing even as they attempt to move in the right direction. But if you're an investor, do you want to take that risk? Do you take a chance on your money that what a company is saying isn't really what they're doing?

- - - Updated - - -

There could be 100 snooty articles pointing out how GW hates its customers but nobody will care till the money dries up. Smart investors will look at the gains and losses and not give a damn aboot the nerds attitudes on the company, at all.

But see, that's the problem... the money *is* starting to dry up. The "pro-GW" crowd likes to claim that isn't true, and say things like, "They made a profit!" Well... yeah, sure, okay. But are you looking at revenues and costs? They're shaving everything they can to keep profitable as revenues drop, and that's not a good place to be. They froze salaries. You don't do that if you're in even decent shape, because that makes a lot of employees take notice and look for better job security and a chance to advance their career and pay. They're trying everything they can to keep making money short-term, but not really putting out a good long-term plan.

I've just seen another interesting idea of theirs... Apparently they're running a contest in their stores (possibly just NA, but maybe elsewhere as well?) that the store that does the most sales in the next four weeks will get a "life size" Space Marine with the chapter to be chosen by the customers. It'll be interesting to see if people care enough about getting a giant model Marine to come back to GW stores and buy direct for the next four weeks. I think it's kind of amusing that the local manager is planning events, including gaming events, to try to also entice people into coming into the store. (Poor guy kind of needs it, though. Things have to be rough when you admit that the last nine weeks have been lackluster in sales for a store.)

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Oh, and I'm not making up that time period. Straight from the store posting:

https://www.facebook.com/GWDeerwoodVillage/posts/889359234435073
"***It is no secret that the last 9 weeks have not been very kind to our store sales and we really need to get the Deerwood store back on track. So I am reaching out to each of you in the community to come on out and help us become great again!"

Think about what happened around nine weeks ago.

You might then be able to figure out why I'm not as gung-ho about AoS as other people. The amazing thing is that it seems to have also murdered enthusiasm for 40K as well. Yowza.

[Alaric]

I'm not sure I agree with the thought that gw is good in long term.

Id love to meet the guy that said they WERE good! Lol. Its been "gw is going under any day now" as long as I have played.

Thanks for explaining, it was enlightening, some I have read elsewhere but the majority was new.

Pretend I quoted eriks last post

In regards to my post you quoted. Totally right. The money is drying up but not to the catastrophic losses necessary to facilitate (so many fancy words in one sentence) a change in their business model. More and more guys are jumping ship and AoS was defeated before it ever had a chance to gain..if that was ever possible, ive never played it so I cant comment on its merits but I did get days of entertainment watchin ya'll go at it. Id love to get you n mystery sumo suits n watch ya go at it.

In regards to the store. That saddens me it sux to see flgs go under due to big companies who won't even care. Im seeing the same thing happen to my comic store due to yet another Marvel reboot. I lost 5 titles and am only picking up 2 more when it restarts. Small potatoes in the grand scheme but income is income. I try to supplement by buying other stuff.. But I go to a comic store to buy comics not unrelated things. I guess thats how guys felt aboot fantasy and AoS but on a smallet scale.
The corporations are taking over! Shadowrun isnt far behind chummers.