Chatter Behind The Bike Sheds - Profits Are Down

Over at Trouble At T'Mill a nice little chatter has been prompted by Mike's reporting of Game Workshops reduced profits. It's fair to say that the majority of the comments are from people rather enjoying Games Workshops troubles. Lets face it though, how many Wargames Companies would give their back teeth to be as profitable as GW is now, never mind two years ago etc etc.?

Games Workshop remains an extremely successful company who has made millions on a business model that is as clever as it's ruthless. It's worked for decades and it's possible with a little tweaking it can run for a few more. The question though is the downturn in part, or even in total down to the recent tweaks? 

One Man stores for instance could be a major factor. Of course this does not mean that only one staff member is employed, rather it's ran with just one staff in at a time. Lots of issues here. First up security for both staff and product but also customers. Games Workshop sell mostly to younger customers, these tend to be cash rich and what's more too often it's ready cash. GW sell items at slightly (cough) inflated prices. These cash rich customers have until recently been coughing up the money no problem making the stores high on the cash holding side, perfect for the walk in and demand money by menace thieves. Why not, after all it's ONE member of staff and maybe a few kids, it's not going to be a tough job. Expect them getting hit as word spreads and I suspect it will.

Another bigger issue (for profits) is that less events can be ran, less interest from the now reduced staff who's morale will be dropping as holiday cover, illness cover and all the extra duties combine to lower the will to go that extra mile. Events and energised staff sell product, they have less of both now, maybe the same number of events but they will be worse ran.

Lets not be hasty and blame it all on the madness that is one man shops. How about that decision to limit who can sell GW products, including pulling the plug on your favourite hobby store when GW come to town? Or  stopping supplying the on-line store where you got those great discounts? Hell I know, whilst were at it lets have some products that you can only buy from us? Yes GW has always cared what it's customers think of them, well they would if they did not expect them to spend like crazy for 18 months before finding girls and giving up on the hobby.

Whilst were going down the road of looking ugly in the face, figure quality V price. Yes lets look ugly! As much as you would have stood on your historical high-ground and looked down on all that Fantasy malarkey you had to give it to GW they knew how to cast even if they also knew how to charge. Don't get me wrong they still make some excellent figures with excellent quality but boy do they produce some shit! Unfortunately the price tag remains the same. Finecast has been a big PR ball drop. Whilst other companies have amazed with what you can do with resin, GW seems to amaze with what they are willing to churn out. 

The only company that can have a price war with the rest of the hobby thinking that raising the prices at inflation dwarfing rates is the winner! Linked to quality issues you can see why gamers start to look elsewhere for other options for their figures.

All these things can and will contribute to their problems of the moment and all of them could be at least to a point reversed and a turn round in sales possible. However another reason has been that the target audience is turning their backs on tabletop games in favour of the digital. Really? Are you telling me something new has come onto the marketplace? I will except that it's possible a sliver of new punters have found it impossible to find the GW shops from the glow of their consol's but no I reject that's the real reason. Can anyone say Flames of War?

The new kid on the block rocks, what's more you can get into playing for a lot less than you need to spend for any of the GW options. Of course it also is a whole in the table that you can sink a fortune into and the new gamers are doing just this. I think Dad's will also encourage this direction over Space Marines etc. for the veneer of history and Dad's memories of Airfix.

It would be interesting to see Battlefronts profit return for the last six month's, I have a hunch it's all about growth. So will GW recover their market share? I have my doubts, how many clubs the kids go to are based in schools? I bet the school on learning about FoW would be more comfortable about a WWII game than one with Orcs and dark magic - well at least till the SS start being plonked on the table  ;-)

GW needs to start looking at ways to regain those new customers who are being drawn into FoW and try and retain the customers they do have. How many are starting with GW and then being drawn into this other cool game?

Expect GW to do something WWII related, maybe Woflestien style, of course it may be five or ten years time before they start suing Veteran Associations for copyright breach for them using their old regements names or numbers, but that my friends is another chat.