Sunday, July 3, 2016

Games Workshop and Chicken Little Syndrome (or not?) - Part 3

In Part 1, I gave some back ground as to why I'm exploring this topic and what the big problem is in trying to figure out the state of things.  Part 2, I offered some data and analysis.  Here, in part 3, I hope to finally be down with this topic.  I'm bored with it.  LOL

Conclusion:  Based on the chart from Part 2, we can see using the points of references I picked that GW's consumer base has fallen by no more than 20%.  While I don't think that this by any means is "good" it was quite a bit better than I was expecting.  And I'm sure, even though they wouldn't admit after seeing this, the Chicken Littles would have guessed much much more.  I think the new attitude of GW demonstrated over the past year can stabilize this decline and maybe start a new era of slow growth.  Why?  Because they seem to be doing all the things now that people have been crying the loudest for and bringing back things people cried the most over loosing.  And they are doing this having not suffered the amount of attrition "we" seemed to think they did.

Yes, I know people may have issues with my "method" and even cringed that I called it a method.  But I've attempted, without any dog in the fight, to try to bring some analytical analysis when all that others offer is anecdotal evidence.  If you take issue with this and need to get that off your chest or dispute this, then please do the same.  Otherwise, just ignore it.  My feelings wont be hurt.

Danger, Danger:  Now I will also offer a few additional points that I think strengthen my stance on GW's position.  These start heading toward anecdotal but I don't think ever reach that line.

Despite as stupid as I and I'm sure many of you think GW management has been, I don't think you can ever assume they have tolerated to loose money on a product line for a continuous amount of time.  So in light of that, just how successful do you think this company is that has the following:
  • A dedicated printed magazine(s).  Privateer press is the only other manufacture I can think of that has a dedicate print magazine.  A couple of others have E-zines, mostly given away for free.  Yet GW charges money for this and is apparently somehow making money off of it.  Yes, yes some defunct companies once upon at time also had dedicated print magazines but those companies aren't here anymore...
  • A dedicated fiction publishing house.  WTF!?!?  Again, Privateer press I believe has some kind of fiction publishing arm.  And yes, Rackham did publish a novel (just one I believe).  Anyone else?
  • If you count their FFG licensing, significant product lines for RPGs and board games.  Not quite as unique in this regard but it is still pretty elite company.
  • A separate specialist house for producing low production counts, of highly specialized miniatures that for a long time weren't even allowed in any tournament scene.  Sometimes not even having rules!
  • Video game licensing...  I'm not sure anybody comes close to comparing in this regard.
  • Dedicated retail stores throughout the world?!!?  Ok, FFG has a store at their headquarters, along with a few others but...
  • Oh yeah, not only have they licensed out their IP for board games; they are making their own in house too.
  • Hell, they even made an animated movie!  Yes, it sucked but...
  • Lastly, highly anecdotal, but from my perspective there has been an HUGE increase in the number of commission painting studios in the past 10 years.  And at least here in this US it is my perception that most of these studios are making their money painting GW armies.  So it's hard for me to imagine that the sky is falling on GW given the success of this side market.
My point is that all these things (that range from uncommon to rare to unique in this industry) are all somehow making them money (except for that last one).  Indicating to me, they are pretty successful as a whole because no one else is pulling all that off or even imagining a lot of it.  

Parting Blows:  There are a few remaining comments and nags at the back of my mind that I can't leave unanswered, even though I feel they will take away from what I've offered (analytical vs anecdotal).  
  • "Why would "we" turn to or return to GW with all the alternatives on the market?"  This hobby is mostly driven by the game sub-aspect of it.  And like it or not, gaming is a social endeavor:  It requires the participation of others.  If the only other people you can find to play with are GW players, then you are either going to have to play GW or not play.  Pretty much end of story.  Just because there are alternatives does not mean there is opportunity to play them.
  • "They [GW] are trying to pull/lure players from the same pool as everyone else/they now have to deal with competition."  Yes and no.  They fish from the same pond as Privateer Press, Wyrd, Prodos, Spartan Games*, Hawk Wargames, Mantic*.  But, like the couple listed with * and FFG, they also have alternative ponds they fish from because of their licensing and their general market penetration.  See GW has other ponds they fish from too because of their proliferation (often cited in the previous section) into different markets.  Just like FFG fishes in a Star Wars pond as well as the general industry pond everyone else does.
  • "But other game systems are better!"  See the first point in this part and then realize I just spent 3 blog posts trying to prove to you that the attrition rate from GW was no where near as bad as we thought.  Better rules don't matter as much as you may think and don't matter at all if there isn't at least one other person to play them with.  GW rules are shit yet despite this they are doing ok IMO...
  • "Obviously something is wrong at HQ, look at how desperate they are."  Listen, I kind of know what you are saying but you are reading too much into it.  ANY good business should be desperate to grow their business.  Why wouldn't you try to grow your business?  Yes, they made decisions once upon a time that seemed like they were deliberately trying to kill their own business, but again I just spent 3 blog posts showing the repercussions weren't as bad as we thought they were.  
Don't get me wrong, I don't think the way GW has done business is how business should be done.  I have no love for this company.  And I have no interest in being a consumer of their products.  They also completely failed to capture, it would seem, any momentum from acquiring the Lord of the Rings license.  But to me it's hard to argue with, in my eyes, the continued success.  They aren't going anywhere and I think it will be a long time before anyone catches up.  Yes, the ship got off course but it looks fixable to me. 

And lastly, although the inspiration (so to speak) for this post was ignited by my buddy they are not directed at him or any one single person.  These are common questions I've seen, heard and even asked myself.  And this was my opinion in regards to them (with some fuzzy math trying to back up my opinion).

Amendment:  So my buddy has some issues with my assumption that the average spending of the GW consumer is fairly constant year-to-year.  While I stand by the assumption, it's is a weak point in the argument.  That being said, here is something to ponder if you think the average spending is more variable year to year:  I am fairly confident that the Chicken Little's would claim from their anecdotal evidence, GW consumers are spending less each year because of dis-satisfaction with the company.  But if I was to factor that in (for which I don't have a basis, but let's say I did) then you would actually see it would result in the number of GW consumers GROWING (relative to the calculations I provided previously)!  Just saying...


  1. " would actually see it would result in the number of GW consumers GROWING..."

    Not necessarily. Depending on the downtrend in consumption relative to revenue, the curve could still show a downward trend, just with a less negative slope. But, hey, splitting hairs -- point taken.

    I'm still a pessimist with regard to the future of GW. That's because I think in terms of "lead" and "lag". I think the damage that previous GW management has inflicted on the company is still ingrained in the company and especially still ingrained in the consumer base. We have yet to see the full impact of previous decisions play out in the market.

    In the meantime, GW is offsetting that inherent negative bias by shifting business practices towards the positive. At the same time, the competition is honing its collective acumen.

    How will these positive and negative forces play out? Who knows. Anyone's crystal ball is as good as anybody else's. So now that we're reduced to the lowest common denominator of "hunches", my hunch is that GW will slow its decline, but the decline will continue.

    I have two opinions that contribute towards my hunch.

    One, 40K is inaccessible to new players. It is a bloated monstrosity. GW has introduced a viable counter to this flaw. They have introduced starter boxes at a reasonable price point, and they are introducing this product line to mainstream outlets. Smart move.

    Two, Age of Sigmar has fragmented a significant player base. Much like D&D splitting its community between 4.0 and Pathfinder, GW has splintered its player base coincident with splintering the the Old World into new "realms". Wizards of the Coast eventually conceded the mistake, and the company returned D&D back to its roots, resulting in arguably the strongest version of the game ever. Maybe Sigmar has the ingredients to grow a new, dedicated player-base and thus find a different trajectory than what we saw with D&D.

    Maybe the key to all of this is the point you and Derek both bring forward: the deciding factor is ultimately, towards what *common* game is the community going to gravitate? At odds with the view that the two of you have, I think players have adjusted to a new world order in the hobby. Where we have a plethora of games to choose from. Yes, I think we'll have a shake-out. But I don't think GW will be the dominant industry player left standing. I think players have adapted to a new status quo, and players are willing to seek out fellow players for the games that is that player's preference. Certainly, plenty of gamers will take the path of least resistance and play whatever the communal tribe decides is "the chosen game". But I think there's just as much group-think now for "let's play the game that is right for our small group -- don't worry what they're playing down at the game store".

  2. Oh don't pull a FOX News on only give a partial quote: "relative to the calculations I provided previously" completes it. Probably should have worded it better, but what you said is what I intended with that part. ;)

    For the rest, yes we will just have to see how it all plays out. I obviously don't want a world were GW is the only game in town, I just believe they are loosing ground as badly as a lot of people think. After all, 150M pounds in revenue in this industry seems like a shitload of money.