You probably already know that GW posted lower profits and revenue this half year, and as a result lost 24% off their share prices. There are lots of rumoured and confirmed changes too:
- White Dwarf is changing significantly -going to a weekly release, and monthly Warhammer Visions is going to be more models. #confirmed
- WFB is losing about 4 army lines #rumoured
- GW are hiring a 2 year consultant to reinvent the customer experience #confirmed
- Lots of stores and HQs are changing or closing #confirmed
- Imperial Guard Catachan and Vostroyan lines are to be axed #rumoured
- Finecast is being axed #rumoured
Before we start jumping up and down, lets look at the facts. Last year GW released 6th Edition of their flagship product, and the year before was their 25th anniversary of the same. This year? Well, its business as usual. Sales were always going to drop, especially on the back of a tight economy and increasing competition.
They are still pretty profitable, and for the first time seem to be shaking out of their complacency, changing their legal counsel after some embarrassing moves and hiring someone to improve the experience in their stores. The strength in their value tends to have been more in solid dividends than their growth in value, so I don’t think this drop will see any major changes in who holds their stock (I think – don’t quote me on this!).
In terms of model lines, they have some difficult decisions to make. As a company, you don’t produce goods that lose money and stay in business …. unless that actually gains you more money elsewhere. In addition, current model sales of a line don’t necessarily reflect future sales – new rules and new models can totally invigorate an army. Having said that, the current vogue in fantasy fiction is a fairly good indicator of the popularity of a line – and heroic knights and wood elves aren’t that popular right now. Its gritty fantasy which suits most of the Warhammer world down to the ground. Brettonians and Wood Elves don’t quite fit, especially with the LotR/Hobbit lines sucking away anyone interested in more heroic fantasy.
In terms of 40K, Cadians sell by the bucket load. Catachans have a dedicated, but small fan base. Vostroyans? Even smaller. I have a load of Valhallans and they’ve been largely ditched despite a very popular series of books (Ciaphas Cain) featuring them. Only keeping Cadians, and possibly selling a few conversion kits would make sense, even if its not popular. Its not good for people with those armies … but its possibly a very smart move for GW.
Axing Finecast is a bit of a U-turn, but actually a very good move. Individual plastics have been very successful, while problems with Finecast models must cost them a lot – I know people who have had 3 or 4 of the same model before receiving an adequate one. I feel they though they had resin casting resolved for a larger scale … but they discovered they hadn’t!
The main strength of GW is in their rich intellectual property, which is pretty ironic in many ways, given the way they grabbed so much from so many sources when they first created Warhammer and 40K, especially from authors like Heinlein, Moorcock, the 2000AD lines and so on. Years of evolution have led to a solid and pretty unique mythos, and their work with the Black Library breaking into bestseller lists has improved it further.
Other areas are the sheer quality of their miniatures, particularly plastics, and the range of hobbyist options, particularly Forge World – which seems to have become the bastion of the dedicated adult hobbyist. Their paint range is fantastic, and their people generally are some of the most enthusiastic gamers around. In addition, their electronic line is doing fantastically well, with seriously reduced production costs.
Thats a pretty strong base to start from, so why the doom and gloom?
The single greatest problem they have is customer engagement. I think we can summarise the major complaints here as:
- Staff in store are too aggressive for sales, pushing new stuff, especially expensive options.
- Prices are too high, and don’t reflect the manufacturing costs. It feels greedy, especially international costs in the USA and Australia.
- Costs of a standard starter army are so high its very difficult to enter the hobby.
- Lack of long term support for models and armies – models are axed to increase sales or remove competing models from other manufacturers, which is very frustrating.
- The games system is “broken”, especially the points system.
- White Dwarf is just a sales catalogue
I hear very few complaints about the experience of playing the games, the quality of the models (with the already discussed fine cast exception), or support from GW with any issues with the models or internet orders.
It still seems a pretty strong position – I’m curious about Dropzone Commnder, Infinity and Malifaux … but I love 40K enough that I’m not likely to drop it. Can they improve? Obviously. I think the fact they are altering White Dwarf is potentially very positive! Hiring someone to improve the Customer Experience, reporting to the CEO? Well, thats potentially brilliant and in a position to enact some real changes to many of those gripes. Having WD available weekly in your FLGS? If they start reaching out to third party sellers more, instead of forcing people purely to their own stores, well, thats good too!
From my perspective, the GW world isn’t ending. They’ve had a wakeup call, are actively working to make changes, and its a strong position. Some of the moves might be unpopular with lines that don’t make money in the short term.
I’d like to see:
- Cheap starter sets and gateway games.
- A way of supporting lines that aren’t making money – reducing the lines into a “mercenaries” or combined “old world” book, supporting them through WD or electronic only formats or even (shock/horror) formally licensing “wood elves” out to someone like mantic to produce and accepting them at GW events.
- Restructuring points to focus on unit effectiveness, not box shifting
- Rewarding staff enthusiasm – perhaps include online sales from an area around stores towards a stores profit/loss, for example, and reward positive feedback outside of sales figures … which in turn would lead to a less aggressive focus on box shifting (probably leading to more long term sales!)
- More working with third parties, instead of treating them like a necessary evil at best!
I think its actually a very positive time for GW – they’ve had a wakeup call, they’ve shown they’ll make changes, and they have a fantastic line. I think they can still throw it all away if they go on with just business as usual … but it very much feels like its down to them to throw more opportunities away rather than a desperate last stand.