Wednesday, 21 September 2011

Is it time the Games Workshop split itself in two?


Well after yesterday's tough love (and it was love) for Games Workshop, today I try and offer what I think would be a sensible way forward for them. You see I've been thinking now, pretty much for years that Games Workshop was a really bad business model, not necessarily in the sense of purely making money, it seems OK at that right now, but I always felt it might have a tendency to go stale or be susceptible to shocks. I thought it was weak in other areas when I worked part time for them while I was paying my way through university and I've continued to think it to this very day. Yesterday as I said I posted a blog about whether the Imperium was becoming a metaphor for the Games Workshop itself and indeed whether the Imperium was Games Workshops ultimate destiny. I'm not going to go over old ground again because you can read it all here, plus I think it upset a few people so why try and upset them some more?

Lets be clear though, Games Workshop must be doing something right otherwise we wouldn't all be talking about them and we wouldn't have purchased their products in the first place now would we? However that's not to say their isn't room for improvement; in any business there is always room for improvement. So today I want to pick apart why it is that I think Games Workshops various wings and departments are quite frankly getting in each others way and screwing each other over and suggest ways in which the various parts of the company should be split up and broken down into its constituent parts. Then re-modeled and reshaped to do their individual functions far better than they are currently doing them right now and maybe even get them thriving again. Maybe what you're about to read are the ramblings of a nutcase, but this nutcase is quite good at systems analysis and right now looking at the Games Workshop as a system its clear to see that at some points its broken and has got itself into a toxic cycle.

Retail

Often cited by those close to the company as the 'drain on resources', or 'the problem'. I don't see it that way entirely and although I think there are problems with Games Workshops retail department and model I think there are bigger issues at play. Its often said that the retail arm of the Games Workshop struggles to support it's three core game systems and I hold my hands up, I've been guilty of this blisteringly dumb oversimplification myself at times. I think if you look at it as a rational system it can't be true that retail is struggling to support the core game systems. Just think about it for a second, when a business struggles, auditors never say 'well HMV was struggling to support DVD sales and console sales' do you? Its farcical, no the product range is unable to support the retail business and its structures.



So its the other way round, HMV is in the wrong business, its selling the wrong things, or just not enough of them to be able to afford its current structures. So there are two ways of looking at the problem, either find a way to shift more product, either the same stuff or different things or reduce your structure costs. There's another UK retail chain I'll come back to to prove another point later on, but for now I think I'll stick with the point that its not normally the job of a retail arm to support a product's existence, its the other way round. For a sales based business to work the product has to support the retail business otherwise you're just left with dead shelf space and a load of product you can't shift and a doomed shop or business. Its really not a difficult concept, Lord of the Rings, Warhammer Fantasy Battle and Warhammer 40k are not good enough to support the current retail chain the Games Workshop has. They know this and its one of reasons they moved to single man stores, but that didn't remove the biggest cost, the rent or the business rates in some places, it also initially hit profits if this report is to be believed I guess we'll see at the end of this fiscal year if it was a blip. Is the size of the retail chain an issue? Its part of it but not the whole story.

Now to solve this problem I think Games Workshop needs to grasp the nettle here and accept that there are two things that need doing:

  1. The one man stores don't work, they're pointless and quite frankly too expensive and the idea that you can somehow maintain market dominance in this day and age through high street presence alone is utterly dumb. Especially if your manager is off sick that day and there's no way to cover the store opening. Games Workshop need to focus their retail chain down into a smaller number of better staffed and stocked stores. Closing the periphery stores down and focusing on providing a good level of service in larger stores in major towns and cities. Here in the West midlands conurbation alone we have 6 Games Workshops, why not focus that down onto two really big stores that can do a much better individual job? Retaining most of the staff as well to support those stores, people will still travel if they're in good central locations. You see I strongly believe that all they've done by opening so many new stores is dilute the customer spend between more stores meaning turnover has stayed stagnant and costs have risen.
  2. This second point is a more radical... Games Workshop stores can not continue to survive only selling Games Workshop product. In all honesty the biggest waste within Games Workshop as a business is that they are not using their high street presence to snaffle up the majority of growth in Malifaux, Infinity or HoMachine. Shops are there to make profit and the decision to sell only the Design Studio's products is hampering the retail arms ability to realise its profit earning potential. In other retail or sales lead businesses the team doing the selling gets to pick the product they want to sell to their consumers, taking this choice away from Games Workshops retail arm is crippling them. They should start stocking other peoples products again like they used too when they were system agnostic, its what made them successful in the first place. Yes I realise the decision to go exclusively home grown product is what gave the Design Team the opportunity and time to make Warhammer Fantasy Battle and 40k awesome in the first place... but I think that job has been done now, it's time to see if they can ride the bike without the stabilisers!!!

Yeah that's right I'm advocating people being able to walk into their local Games Workshop, pick up an Oniwaban, maybe a new Malifaux gang and grab the latest Horus Heresy novel from the Black Library. Am I mad? No I don't think so, its what they used to do and the reason they became so popular is because their shops were so welcoming and friendly. More importantly though this would actually give the Design Studio an idea about what products people like genuinely, rather than those they are force fed via the stores. They'd have to become leaner and smarter about the product they developed. Will it happen? Probably not because they're so wedded to the idea of the current set up, lets be blunt up until now its served them well. Thing is past performance isn't always a guarantee of future success and they need people at the top of the company who are willing to take bold steps to get the various divisions of the company back on track. Retail needs more than just the three core games it seems to support them, surely bringing in some of the Fantasy Flight Games 40k and Fantasy themed product would be a good start though?

However if they were product agnostic as a retail chain again it would solve some of the short sharp shocks they have had in the past. Anyone who worked for the company during the Pokemon craze will remember with dread and fear what the hell that was like. Literally over night the kids we usually saw in store on Saturday and Sunday disappeared and it suddenly became really apparent to many of us that aiming the core games at young kids was a very risky business. You see, yeah its easier to sell products in many ways to children, so sometimes you can get a lot of quick wins with that market. However conversely its also pretty darn easy for someone else to come along and steal that revenue stream away from you as Pokemon did... but if they were product agnostic they could have sold Pokemon cards themselves briefly, and ridden that wave. they'd have still had people coming into their stores spending their money with them, and they could then sell them their other wares too, because getting the customers through that door is the first major hurdle and once you've achieved that its nearly battle won! Maybe I'm being too simplistic about it, but it seems a plausible business direction to me.

One of my favourite miniatures ever
Design Studio

So its these idiots with their rubbish games then causing all the problems, right! Right? Well no its not their fault either. You see its a symbiotic relationship that they could well do without as well right now. Because the fact that the product they produce is having to support this huge high street retail presence the company has all on their own is colouring very much the sorts of product the Design Studio is producing. They're not necessarily designing product we as consumers want, they're designing product the retail chain needs to make the business plan stack up and seem viable. Its like a vicious cycle as far as I'm concerned because what we have is a Design Studio whose product is predominantly sold by the retail chain, their biggest customer if you will, without them they would struggle to exist. Killing off all of those independents doesn't seem so wise now does it? I think that's a fair comment. So what we have is a Design Studio that is in the business of making games that mean their retail chain can pay for itself and the rest of the business, a very big ask. When I say Design Studio I mean Citadel, the games design and probably White Dwarf too, the part of the business responsible for developing the product if you will.
Yeah I hate it on the table but it looks cool

To my mind that's why we've seen a scaling up of both Fantasy and 40k, the retail chains need us all to buy more miniatures and stuff to make it all work and pay out some profit too. They needed us to do bigger armies. Did they ask anybody whether or not we wanted bigger games of Fantasy and 40k? They've never asked me and I've been hanging around the hobby scene a long time. This argument could be taken further to explain the phenomenon known as codex creep (perceived or real you decide), or just why the hell they thought a Dark Elf War Hydra is only worth 175 points... perhaps they were afraid they wouldn't sell enough if it was pointed fairly!!! You could make that argument and it might be plausible, but realistically without being at Lenton Lane when the decisions were taken you'll never know for certain and its just conjecture. You could easily make the contrary argument that they do these things without realising and they would never intentionally make something more powerful because that would harm sales of current product... except of course you might already own that current product. So they might be making it necessary for you to buy their new toys. Look its complex topic and I'm not going to try and go through all of the possible permutations there are, it'd fry my tiny little brain. However its fair to say I have my suspicions.

I love a good cup of tea (I'm British)
So now I'm going to bring in Whittard Teas, OK look, to my American readers I'm sorry, it's a British thing. We love our tea and I personally love my Whittards teas. In many respects the Whittards model is very similar to the Games Workshop model insofar that the only real place you could get Whittards teas was from their own stores and indeed the only things they sold were Whittard products. Whittards used to have a very small number of shops here in the UK and then during the late nineties and  early naughties they decided to expand their retail chain to every city and town in the UK and to be honest it looked to be working for a while. However it became apparent a few years back that the expansion had either gone too far or that the product itself wasn't good enough to support the retail chain. To combat this Whittards initially stopped selling some of its product via other sources such as Supermarkets so people could only buy Whittards teas from their shops. Next they started opening smaller stores everywhere, with fewer staff to try and increase their exposure to the marketplace. Its not a perfect analogy for Games Workshop but there are parallels to what the Games Workshop management are doing now.

Obviously just because Whittards failed it doesn't mean that Games Workshop will follow suit. However I don't want the Design Studio coming up with their version of Whittard teas Liquorice and Peach tea. Yuk!!! Because here's the thing Whittards started producing more weird and wonderful teas that you could possibly ever drink in a desperate attempt to get us all to buy more tea... how many flavours of Space Marine do we have now? Here are the reasons why I think divorcing retail and the Design Team would be good for their products:

  1. Break the link with retail, and make games that are designed to support just the games studio and allow the retail arm to find ways of supporting itself via more varied product. This would allow the Design Team to develop and mature their core systems without the fiscal pressures, explicit or implied of supporting the company as a whole. Allowing them to design products based on consumer desire.
  2. Opened up to wider competition the design team would be able to see clearer what the marketplace actually wants and if they responded in a positive way to this challenge given their relative strength I have no doubts that the product they currently produce would be much better given fairer and more open competition.
  3. Ironically it might actually allow them to start supporting or producing more specialist games. Free from the requirement to produce products that support the retail half of the business they could be free to produce products that fit with other retailers desires and needs. A return to Games Workshop board games like Warhammer Quest and Space Hulk might be better for the hobby as those products can be sold in a broader range of stores as they're self contained. Also without having to worry about the stores being able to support such specialist games via gaming and shelf space a direct mail order service for bespoke and specialist product could be developed.

because I've been WFB biased with pictures here's a pretty Dark Eldar

I think its fair to say that 40k is the biggest single wargame in the world today and that Fantasy isn't far behind it. I also think that the Design Team if given the chance to could design and support more product than it currently does as well. Because if it was sold via other retail channels and models than just their own stores it would open up other possibilities for them. I don't think Games Workshop should fear open competition I think they should welcome it with open arms because it'll only make them produce stronger product, which would be better for them and better for us.

I love it and I it very nearly got me hooked on spikey dwarves
Forge World

I'm a self confessed fan of Forge World, I love the miniatures they produce and most of the miniatures I like nowadays for 40k and Fantasy seem to be produced by Forge World. I was very nearly tempted into doing a Chaos Dwarf army as I love the look of that stuff... but I digress. I find it slightly odd that there seems to be a degree of separation between the core design team and Forge World. I think they should allow Forge World a greater degree of freedom in choosing what they develop for Games Workshops core games, with the simple remit of it being luxury products. Not too dissimilar to what they do now, excepting that I think they should be allowed to make versions of Citadel miniatures if they want to, meaning that as a consumer if I choose to spend say £30 on the top of the line Forge World version or £15 on the Citadel version there is a clear choice there and again this will help focus both the Design Studio with its Citadel line and help them understand what consumers want from their product line as opposed to what consumers want from a luxury line. Although to be fair I don't see much wrong with the current set up. I also think with the nature of the Specialist Games they produce being so niche, that the Forge World model of production based on demand is the perfect vehicle for supporting these sorts of line with smaller runs of miniature casting. Why shouldn't Forge World bring back Man-o-War, Necromunda, Mordheim and yes... Blood Bowl? Isn't that exactly what a small scale response producer is designed to achieve? More bespoke product?

The black Library

Who doesn't love the Black Library? I mean its the Black Library and its awesome. I love the stuff that they produce and as far as I'm concerned it should be left the way it is, getting good novelists in to write awesome back stories for the universes we love so much. So why change the one thing I think the vast majority of fans are happy with? Should it be a standalone company separate from the Design Studio? Nope I don't think it should, I actually think its should be more integral to their business because the rich and vibrant stories they produce only serve to enrich the worlds and settings for the wargames they produce.

Conclusion

You see I think the constituent parts of Games Workshop could all be damn fine individual businesses, each with a pretty vibrant and successful future if they just stopped arsing around and getting in each others way. Sure its a pretty good mix in terms of profits right now, but there is discontent out there, should they ignore it and carry on? Are my suggestions realistic or viable? Well I don't know unless I saw the books in their entirety and did some proper market research, but I think its plausible, if bloody unlikely. However the retail chain would have done a roaring trade when Pokemon became so popular and that would have brought fresh blood into their stores rather than taking customers away from them. Also conversely if individuals like myself decide I want to play other things, why shouldn't Games Workshops retail arm sell them to me and retain me as a customer? I mean I like their stores and staff. Also why should the Design Team carry around the extra burden of supporting the huge retail chain on its own? Look I know its pie in the sky but its how I'd do things, I'd create a small parent holdings company that retained controlling stakes in the two companies, possibly 3 if you sent Forge World off to float on its own and free them up to do what is best for their own individual business needs. Retail is hampered by only been able to sell one companies product and the studio is stunted creatively by having to come up with product that supports the retail arm. Yes together they're strong but divided I actually think they could be stronger. Peace out!

29 comments:

  1. heh , you have done it again, I simply must insist that you sever the mind-link you must have implanted in me .....

    Though my own take has some differences I'm sure you'll find interesting.

    More to talk about ;o)

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  2. Heya matey, I think I can't have been the first person to have suggested it. I'm always interested to hear what other people think.

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  3. A mixed article. On the one hand you show how Games Workshop could become far more pragmatic, friendly and successful and I truly, truly hope that this could happen. On the other hand, I know deep down that, realistically, it probably won't. GW's hobbyists are outnumbered by its businessmen and fanboys. But there is always hope.

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  4. Omg...so much...awesome.
    Just finished reading yesterdays massive piece o' awesome and now THIS....

    Where to even begin...
    (I must mention at this point that the Slaanesh pic from yesterday is seriously sexy, and needs to be tattooed SOMEWHERE on me)

    ...I am completely with you when I say it's my sadneess over seeing what GW has become that drives my rants....not anger- sadness.
    GW bought me here, and now it's like I'm...leaving the nest?
    It's not betrayer, per say...it feels more like...
    Heck I don't even have the words.

    But once I SAW what was out there...that nest started looking...kinda wacked, actually.

    GW isn't helping with their insular, egotistical 'stance' on VIRTUALLY EVERYTHING that other companies are EXCELLING at right now.

    The Internet, with it's Chaos Gods, is really twisting the knife over the last year or so...and I don't see it getting better.
    It's only getting WORSE, it seems, thanks to the 'blackout policy.'

    Uh, yeah- you go ahead, you believe you can DICTATE what your customers want, and when and where they'll even see it.
    Lemme know how that works out....

    Right now, as I type this, I have a package sitting here.
    It contains over a hundred and twenty dollars (which I honestly couldn't really afford) of Flames of War stuffs.
    A year ago GW would've gotten this sale.

    However, seeing as I was able to 'shop around,' view pictures of the products and compare prices at multiple sources, thanks to the wonders of the Internet (stupid Tzeentch), not only did I get the best prices, but it was in my greedy lil' mitts almost immediately.
    I LITERALLY ordered this stuff YESTERDAY morning, dude...
    0_o

    The grass is so friggin' GREEN over here....
    I don't even wanna SUGGEST this...but I'm kinda tempted to...not go back.
    *sad panda face*

    I wanna run naked through fields of pure hobby coolness, I wanna roll around with my new stuffs, touching it in an intimate manner, I wanna...I wanna....

    What I don't wanna do is deal with the old fuddy-duddy that GW has become.
    That's...not good.

    Maybe if, oh I don't know, I could actually purchase GW products from someplace OTHER than GW without resorting to...virtually clandestine methods, or SOMETHING...

    I dunno, but your suggestions for a little 'switch-up' on GW's parts are a fair place to start.

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  5. @GoldenKaos its total pie in the sky, I do think it could work as a strategy and business direction. I'm sure there are plenty of reasons people can come up with reasons why it wouldn't work or point out how simplistic my argument is, and trust me I know it is, but fundamentally they're not making the most of their retail presence at all right now. I also feel genuinely that the very same retail presence is harming their games. So to me the logical thing would be to split the two things.

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  6. urrr...typo- I meant 'betrayal'...
    Sorry...back to my corner.. (typos make me nutty)

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  7. @SinSynn I'm so glad you finally decided to break that abusive relationship mate. Doesn't it feel good to feel truly valued again as a customer? Isn't it great to get speedy and courteous customer service and aren't other games frigging awesome? Welcome to wargaming my friend, its wide and wonderful place full to the brim with great and varied product, the GW is just one small part of this world.

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  8. Just wanted to stick my head in and congratulate you on another excellent article. You have a gift for cutting to the heart of the matter.

    I think congratulations are in order for SinSynn as well, for daring to take that leap. The grass is indeed a very lustrious colour over here, isn't it?

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  9. Simply simple which begs the question if you know it, I know then they must know it so why are they not changing their plans

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  10. Thank you Martin, coming from you that genuinely means a lot. Also read your blog on Infinity. Top stuff again mate, made me want to get a game in and Ive arrange 3 games for tomorrow evening.

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  11. @Ishibei, I know from experience it can be very difficult to see the problem from inside an organisation. You get sucked into the process and you sometimes can't see the woods for the trees. Organisations become entities in and of themselves and take on personality all of their own, its called organisational hegemony.

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  12. Yes working for a major business I see that daily but there is also a level of zealotry from a large portion of the staff which does not help matters

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  13. @Ishibei, ah yes the zealots!!! I know them well, but corporate think eats it way into your head and can govern how you think as much as you are part of a company the company becomes part of you sometimes.

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  14. I disagree with the thinking of splitting Gw up. I think they have 2 areas they really need to focus on and change.

    First up is the internet. They are simply loosing money to internet retailers. Retailers selling at 20% discount are selling a ton. Gw could make more if they ran monthly sales on their website. example, what if they ran a tactical squad of marines at 40% off for a two week period via their online site. Market it with a rhino sale at 20% off and they would make more than they do now.

    Second part they could improve on is the old Outrider program. Bring it back! It was the reason I got into GW games. It's free and they could get them to run games in their stores, effectivly increasing manpower for free. Kick them some minis at cost or something and get new people excited.

    My 2 cents on GW.

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  15. @Inquisitor_Dunn it doesn't matter who sells their product. Never has and never will. Do you think Heinz think christ we can't have our ketchup sold via corner shops or online discounters and we must ensure its only sold via Walmart or for those of us in the UK Tesco's? No they develop a product and then sell it at a cost that makes sure they at least wash their face with a little profit on top. Ironically there are many fiscal reasons as to why getting others to sell your product is a good call. You yourself as a company don't have maintain the retail distribution network yourself and the costs that it incurs, that's somebody else's worry.

    As for the discounting, I couldn't disagree more. I often chuckle when I see companies constantly discounting things, yeah we have another sale on this month... like last month... and the month before. Pretty soon you end up in a situation where your consumers are waiting for the next sale and your sale prices actually become your defacto sale prices. I don't know what sofa stores are like in the USA but here in the UK one particular chain DFS seems to be having one big constant sale!!!

    Is cost an issue for entry into the hobby though? Yeah I think it is and its not just the GW that face this problem either, although I do think they're systems are the most expensive out there. Would reducing the cost help more people enter the hobby? Possibly, theoretically cheaper prices might mean more people coming through the door, but that doesn't necessarily mean increased revenue or indeed profits. I think the GW will need to take some radical steps at some point soon. What those are I think will shape the company for the coming decade.

    As for the outrider program... yeah that's a no brainer really. I think there are examples from other companies that have copied and improved on the original Outrider concept. However running the program and ensuring that all 'Outriders' were 'on message' I know proved a problem and I'm told it was a logistical nightmare for them. Why it is for them and not PP or Wyrd I don't know. Perhaps its because they are control freaks and don't like it if people stray slightly off script whereas other companies don't worry about that so much... who knows. As always though, thanks for your thoughts!!! :D

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  16. Absobloodylutly bang on sir. I work for a company who's biggest customer is... Itself. Becuase it works as semi-separated business units under a group umbrella, it keeps any one part sharp in costing, service and delivery, otherwise the business goes to the competitors. This is not the same as a theoretical GW 'group' as such, but freedom in business units would definately be a good thing IMO.
    Oi! Kirby you idiot! Bugger off and let someone fix your mess!

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  17. @Farmer Geddon, do you think I should send them my CV? ;)

    I too have worked in a group structure before and we had awful problems when I first turned up. We had departments 'buying' services off of others because they had too and because of this both departments had become over reliant on each other and were supporting each other while dragging each other down at the same time.

    It was partly my job initially to help sort that bloody mess out. The first thing I did was force the department buying the 'services' to look to the market place via a tender to see if they could get the work done elsewhere better. This made me about as popular as a pork pie in a synagogue... but at the same time I worked with the other department to improve their business practices and policies and procedures. My name is still mud with some people there though even though the work I helped do improved turnover and reduced costs. It also meant the services department were in better shape to tender for work from other organisations as had always been the original intention, they won a fair few contracts too and actually grew into new business areas. Meanwhile service to our internal client got a lot better and they started to get improved KPI's and end user satisfaction results from customer surveys... sometimes it just takes a fresh pair of eyes looking at the situation to be able to point out what's wrong because if you're in the organisation you can get too close to be able to see the bigger picture.

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  18. @Frontline Gamer, feel free!
    While you know as well as I do that it wouldn't happen, there's dozens, if not hundreds of accountant/gamers or managerial/gamers out in the warp/internet who could do a better job than the current HQ oligarchy.
    Kirby probably wouldn't know tactical dreadnought armour if the power fist was wrapped round his balls... He's a vanilla CEO in a company that needs an understanding of chapter gamers.

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  19. @Farmer Geddon it certainly seems that way doesn't it? Never met the man personally and from those who have they seem to say he's rather unremarkable, which given the size of the company in comparison to other PLC's isn't a great surprise that they can't attract a charismatic leader type. Plus in corporate terms the GW is a backwater and a relatively safe one at that. It also pays bloody well if the last year accounts are to be believed so why would he want to move on? He's on a cushy number being paid as much as his peers as much larger and more stressful companies. He's got it made.

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  20. GW sells more volume through trade than it does in its stores. In places like the US it is probably over 60% trade by now. GW should definitely be experimenting with more options in its retail arm since their is zero chance that given the CEO's background in retail is going to go away. They of course have multiple markets to work on different models with and see how they do.

    I would first look at expanding the product offerings to include all GW IP based products. Videogames, Black Library, and FF RPG, Card, and Boardgame products. Nothing overboard but some additional options to show customers. In the states I bet a good number of random people entering games workshop stores are actually looking for video games. Currently they just now have to try to sell people on something they do not want but with those products in stock they could point them into the IP which may get them interested in the main line stuff at some point. Of course since the stores struggle to make a profit when paying 40% MSRP on GW stuff they will probably not make much when they have to pay a more normal wholesale level like 60%. If you spun them off and took away their 40% wholesale price they would be toast with no profitablity without expanding into tons of lines and gaming retail is not a business you can build on. Just look at the continuous chain of closed gaming stores around the US. Pretty much every physical gaming store that I have bought product from in my entire life is closed currently except for one that recently survived by colocating with a toy store. It is not an easy business and not one that the street would like GW to try to support a large retail arm in.

    Unfortunately GW is sort of stuck. Closing the retail arm now would drastically crash sales value at least 25% if you assume that all kits moved in retail would shift to trade. There is no way they can do that and not have the investors up in arms. They might be actually more profitable after a year or two of adjustment since probably greater than 60% of their corporate costs are tied up in the retail arm since they have like 5 times the number of people in sales and in production and all those store leases. Plus with could cut the admin side also.

    If you look at their numbers you can see that the Sales side did like 15M operating profit last year but that number includes the 20% of MSRP or so they make on every trade sale since the overhead on those is much lower.(My numbers indicate that about 15M is the intake to sales for the trade side after paying production for product) Remove that and add in the 10M they list as Logistics and Stock Management as a group cost which is really a sales cost and I doubt that retail made any money.

    Now they will claim is that the game is only so popular because of retail which is true in the UK but certainly not true directly in the States with such low store penetration. This system is like someone telling you they can more than double your sales and it will only cost 70M but your current sales are only 50M. If it only doubles your sales it is not worth it so you would have to say no.

    GW has got itself in a nasty cycle of price rises to support the retail chain, driving down sales volume, requiring more price rises. They are in a volume manufacturing business (plastic molding) where the incremental production costs are tiny and they keep decreasing their volume.

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  21. @eriochrome, I agree with much of what you say, but here in the UK I do think their retail arm is a little different to that in the US. Personally I think they have too many stores and many of the smaller stores that they have aren't exactly in High Street locations, there back and side streets mainly well of the beaten track. The argument that these shops suck in passing trade is nonsensical to me, because many of them get zero passing trade because of there awkward (and cheap locations).

    Reducing these shops down into a smaller number of better located larger stores with better product range and staffing would be beneficial to the shopping environment and also there customers. I actually do think they could support a smaller better focused retail chain IF they took in other products. Its got to be worth a go because a quick glance back through their books shows that something has got to give sooner or later because the trends are only going one way.

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  22. The problem with the retail chain is that its management seems to constant redine its goals. They talk about it as a recruiting and marketing tool but then move to a one man store model which clearly does not support those goals since one guy clearly cannot talk up customers, run demo games, and run the til at the same time. If an area cannot support a real store which can be open about the 7 days, 60 hours a week you would want trade sales should work closely with a local store to make GW games the best they can be for that owner.

    Here in the states the stores started in the high street locations but have generally moved down to strip malls and similar since . My local area had 4 stores when I moved here 4 years ago but now has like 1 in a tiny strip mall location which does not even face the main street but a side one. You have to know it is there to find it. Ofcourse you do not find any gaming stores in high street locations in the US or even many malls. Most are strip mall based.

    I wonder if in the US they could use a model like 1-2 good sized stores located like 45 minutes to 1 hour apart and then some Mall kiosks that just show off demo games and try to sell starter boxes and very limited selection. They kiosk could move from mall to mall after having been at one for a couple of months.

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  23. I've spoken about 'road shows' or on the spot gaming demo's before and I think you're right something like that could actually genuinely work. As for the one man stores, yeah I agree the division of labour is none existent and its an impossibility for a single staff member to achieve the aims and ambitions the higher management seem to want to place on them. Just as an example of how utterly dumb it is, stores in the UK have to have a WFB intro board, a 40k intro board and a LotR intro board... but one staff member... please explain how that's a good use of space when a single store manager can only run one intro at a time. Their refusal to allow managers to remove these tables during games nights seems utterly dumb as well because that reduces the amount of customers your store can service in the evenings for games and when word gets out means people are less likely to turn up because they fear they won't get a game. The whole system is broken and decisions seem to be made in isolation from other business concerns. In short they might seem perfectly reasonable decisions on there own but when viewed as a whole seem massively contradictory to their overall aims. Its a mess.

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  24. Good article, and I think you're right. I read the previous one as well.

    Here in the states, most of the shops I've been to are NOT a GW only store (with the exception of one or two). They do Magic and Pokemon tournaments. They have small, friendly staffs and good communities. Many carry the full line of GW products, but they also sell D&D books, other miniature lines, and a few even have clusters of gaming computers. They are true "hobby shops" and seek to serve as wide an audience as possible. They do alright, and they usually don't disappear, because they are diversified and fill a niche in the community.

    I've been playing on and off since 2001, and Necrons were my first army. I picked up the game again about a year ago and realized Necrons were nigh unplayable. I played proxy Ork armies since (Orks are more my style anyway) and finally this month got around to getting real, WYSIWYG models. I spent $190 (the most I spent on 40k since I dropped $500 on my Necrons) bought Black reach (because it was very reasonably priced) and four of the newer models (which I could not easily find on ebay). I wanted to support my local store, so I bought the stuff through them. Three weeks later, it has finally all come in. The guy at the store said that had I bought it direct through the GW online store, I would have had it in a week.

    I like their game. I thought that the 5th ed set of rules was beautiful, fixing most of the major problems of 4th while simultaneously making the game simpler and more stream-lined. But I'm too cheap to buy their overpriced models. I'll scratch-build my 3 battle wagons, two trukks, dreadnoughts, and kans. I'll save myself $400. I bought most of my orks used on ebay. I can get stuff there for 1/2 price or less at times compared to GW sticker prices. As long as there is a steady stream of people leaving, I'll be able to continue to buy stuff used and have as little to do with GW as possible. If they were to cut prices by ~30%, I would have bought a lot more stuff new from them instead of from the resale market, which I'm pretty sure would have been more money in their pockets.

    Also, one angle you haven't really covered is their computer games. Dawn of War was one of the better RTS games when it came out, and "Space Marine" seems like it will do pretty well.

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  25. @][mmortal I think you just described the sorts of stores I think the GW should be. Whether they'd be anymore financially viable I don't know. All I will say is that most businesses rely on incremental sales. You know people walking into a shop on a regular basis and making regular smaller purchases as opposed to large one off purchases. The GW business model has forced their hands somewhat on game design and they've gone down this business cul de sac whereby they've turned aall of their game systems into these massive games that require some significant investment. That puts people off spending money, and apart from paint and Black Library there are no impulse purchases in their stores anymore. I used to walk into GW's and want to spend money, I don't get that feeling anymore. We all like spending money, especially us geeks so its strange that I don't walk into the GW anymore like a kid in a candy shop. I did an article a while back about being a bit of a faction whore:

    http://thefrontlinegamer.blogspot.com/2011/08/confessions-of-faction-whore.html

    I no longer think the GW tap into this part of a geeks psyche. Spending £6 in either Infinity or Malifaux can totally change my gaming experience with my force. Spending £6 in GW will get me feck all unless I'm after two paints... two paints!!! Feck me gently with a sledge hammer its got expensive as a hobby. If I walk into a shop with £1 or £1000 then they should have something for me to drop my money on. Walking into hobby stores like the Maelstrom or Firestorm Games I'm constantly having to fight the urge to get the credit card out... in GW's I'm fighting the urge to leave it in the wallet. For somebody like me that's just wrong, and should worry those at Lenton Lane.

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  26. Brilliant. My major issue with GW has been that the business model is stale and massively out of touch with the reality of 21st century business. well said!

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  27. @Vomkrieg, I think they just struggle with the concept of doing things differently. I've been told they had a consultant in who told them if they shut their stores down the hobby would die within 6 years. Yeah, I don't buy it either. Funny thing is Whittards did something similar and concluded Tea would disappear or something silly. Consultants 9 times out of 10 tell you what you want to hear. They have gone for this insane one man store expansion. So now those poor bastards in those stores are on their own all day, having to psyche themselves up, having no face to face human contact with another staff member maybe for days on end... and when they do, it's probably an area manager telling them they haven't sold enough core games. Demoralising isn't it? So now they've expanded their shit service to more towns and shops... I bet it still hasn't affected the amount of stuff they selling here in the UK because I think with 60 or 70 stores they'd be a t saturation point, in terms of reaching their core market. I'd be surprised if the potential wargamer market was 1% of population I really would.

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  28. Someone just linked me to this series now so forgive the late comments.

    Ironically at 27 years old I now spend more money on Pokemon than I do on GW products (discounting Black Library) and the days of that craze was my initial exposure to GW while I didn't care about Pokemon back then.

    Your points are very clearly correct accross the board but I think you didn't quite emphasise the internet angle enough. As ][mmortal mentioned above, you can be fully involved in the GW hobby these days without ever buying new product.

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    1. Hey don't worry about commenting on older posts. This isn't a historical archive it's a Blog, if you want to comment on something comment away. I'll be glad to revisit some of my older topics, it's sometimes good to come back to things after some time has passed any way.

      On the topic of Pokemon... ahem... hopefully no one is listening. I have a huge collection of cards, it's actually a really fun game to play, and occasionally I still do!

      I think I felt I'd hammered the Internet angle enough in the previos days article ;) ... but you're right. GW is in a weird position in terms of the rest of the market. Simply put I think they're the only company within the hobby that are actively competing with themselves and a vibrant second hand market on eBay. Sure I can get the odd bit of Warmachine etc... but genuinely I can probably find whatever GW product I want to buy somewhere second hand on the Internet.

      Thanks for stopping by and making me read all this again, it's sparked a few new thoughts off in my crazed brain.

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