GW annual results - 'best year so far'

[Noserenda]

Ugh yeah the format change, tbh i abandoned the physical books when they started hard selling hard backs, which i loathe and the damn awkward size of the bigger paperbacks is barely better :/ 

[MegaVolt87]

Ugh yeah the format change, tbh i abandoned the physical books when they started hard selling hard backs, which i loathe and the damn awkward size of the bigger paperbacks is barely better :/

 

Yeah at the time I couldn't really afford the price change that accompanied the format change at the height of the HH. It was only recently I got the missing dozen or more books when they started doing small paperbacks again years later. I have a few large format books for basicly the same price as the smaller paperback ones. Funny how the prices are reasonable in a less controled/free market eh? GW needs to get used to free markets if they want to go mainstream to be a proper pop culture brand.

[Black Knight]

Trade paperbacks exist of 1-3 then a huge gap and start from Angel Exterminatus(23) to the end at The Buried Dagger. I prefer the larger print size but find it infernally annoying that I cannot get 4-22 in that format as they refuse to release them and I will not be buying them in another format. Whats even worse is in Germany I have found these books in the large size paperbacks but even my German wife will not read Warhammer in German, you need a spreadsheet of all the corresponding translations.

[N1SB]

I've used this analogy before, but looking at how a company spends its money is like looking at how a 40k army list allocates its points. When you see like an army list spend half of its points in Troops, it's like it's going for a Horde or Objective Securing playstyle. Consider that, if you will, as we talk about the following.

Australia

We are in a rented facility on the outskirts of Sydney. The Warhammer hobby is growing in Australia too and so we are currently reviewing our capacity limits and the need to upgrade our IT solutions. Logistics costs continue to be an area of focus. Total warehousing costs have increased by

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[Ayatollah_of_Rock_n_Rolla]

 

 

For a while a couple of years ago it was kind of hard to get a lot of BL books from GW stores which may have burnt some bridges/led to people getting them elsewhere but leads me too...could BL be losing profits (not sales) to a huge degree to Amazon? Also piracy of ebooks

 

It does feel like BL is not pushed as much as other things or as it could be.

 

Without going too off topic

 

 

 

Not at all off-topic.  This is so ON-topic, because not only are Black Library books part of GW's business ("revenue stream" if you're into dirty talk), but GW is trying to use it to build up their new Media & Entertainment division, to build a Warhammer cinematic/TV universe ("leverage" it, if you want to get kinky).  So GW made BL super on-topic.

 

The Black Library revenue includes ALL the money from the books it sold, regardless of original point of sales:

 

• Includes digital sales from its Black Library site
• Includes books you bought from a Warhammer Store
• Includes books you bought from a WH Smith or Barnes & Noble
• Includes books you bought off of Amazon, shipped to you in physical form, OR on a Kindle
• Does NOT include piracy, or if you bought it 2nd hand off a friend, or if "borrowed" it off him and never returned it

 

(...)

 

Let's do some back of napkin maths with Black Library's £2.4 million.  Let's work our way backwards to see, on average, how many readers does a BL noverl garner on average.  THIS IS A ROUGH ESTIMATION EXERCISE, the purpose of which is just to ground these big numbers into something down to Earth that we can relate to.

 

 

Isn't 2,4 million only from the trade, excluding online? As I remember from my attempts at calculation based on the annoucements, for the last 5-6 years FW and BL had sales around 4,5-5 million each. I am talking about both, because in the past they were sometimes given jointly. And did not sales for both dropped last year by 10% - i vaguely remember some GW statement about this. If yes, they would have managed to recover if you take into consideration the COVID madness and the fact that with exception of one year when FW sales rose by 20%, growth of FW and BL was rather small.

[N1SB]

Isn't 2,4 million only from the trade, excluding online? As I remember from my attempts at calculation based on the annoucements, for the last 5-6 years FW and BL had sales around 4,5-5 million each. I am talking about both, because in the past they were sometimes given jointly. And did not sales for both dropped last year by 10% - i vaguely remember some GW statement about this. If yes, they would have managed to recover if you take into consideration the COVID madness and the fact that with exception of one year when FW sales rose by 20%, growth of FW and BL was rather small.

I think you might be right about the Trade channel, but that figure has consistently been around Edited July 29, 2020 by N1SB

[Ayatollah_of_Rock_n_Rolla]

Half year report for 2018-19 under the "Online" heading:

 

Sales in our Citadel online shop were flat compared to last year and our Forge World and Black Library stores declined slightly at £4.6 million (2017: £5.2 million)

 

Sooo, double it for the whole year and add the BL retail = ca 9,5 milion Online + 2,4 BL Retail? Or am I simplifying? I am no accountant.

Edited July 29, 2020 by Ayatollah_of_Rock_n_Rolla

[Dark Shepherd]

There was a lot of milking of/stepping on the product when it came to HH with new releases being delayed in favour of special editions/fringe formats etc etc but the extra step and cost of those books between hard back and normal size was annoying as hell and offputting

 

Theres even a general issue of BL books compromising quality by feeling like they have to come in under a max page number. That and I feel theyre not letting enough authors specialise in either Sigmar or 40k.

 

Going back to sales in stores, just remembered I once replied on twitter to a BL author that if BL would ship more to GW stores I would buy more of whatever series it was, author couldnt believe it, tags in Nick Kyme and even he didnt realise it and he is or was head of BL

 

Theres been a few other silly things by BL like letting some signature series go out of print for far too long

[MegaVolt87]

@ N1SB, yeah its crazy how much they spend in store rents also. When I say comercial, its actually used as a catch all term by more than a few older/ old school real estate agents in OZ that includes traditional warehousing etc and retail shop fronts, even though not technically correct to use it in that context. Even when used in the right context, a real estate agent I know still gets shop lease enquiries, just because he deals in "commercial property", you would be surprised how many people don't properly read a company website. It would definately be better on the balance sheet to own their own commercial properties and retail spaces while paying back rents to themselves. 

Edited July 29, 2020 by MegaVolt87

[Mendi Warrior]

+++ Let's talk about Forge World a moment +++

While the main line, the "Citadel" line, has been driving like 40% growth year-on-year for the last few years (where GW's overall revenue has been like a hockey stick going up), I also do remember FW growing by single digits. And I think the mathemagic you're talking about was when we were trying to crack this puzzle, when GW let slip how much FW actually makes. GW doesn't list FW as a separate line item, it's folded into "Mail Order" or "Online" as a whole, until they mentioned this in the 2016 annual report:

The Mail Order's Citadel (i.e. GW's online store) and Forge World's combined line item was Edited July 30, 2020 by Mendi Warrior

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[GreenScorpion]

FW because of the higher prices always looked to me like the high end brand (bigger prices, lower number of sales, not necessarily better quality), so a 5 to 10% figure of the overall sales would make sense, especially since it is not typically possible to order through retailers.
From my experience, using car sales as an example since that is the sector I am in, it is typical that core lines of medium priced cars sell 80 to 90%, while the high end and the low end share the remaining 10 to 20%. Low end get lots of sales but generate less revenue per sale and high end gets few sales but gets more revenue per sale. Core lines make the most money typically because of the perceived quality versus price.

Figures may vary between business sectors, but similar effects are seen everywhere, so I guess that applies to miniatures as well.

[Happy-inquisitor]

@ N1SB, yeah its crazy how much they spend in store rents also. When I say comercial, its actually used as a catch all term by more than a few older/ old school real estate agents in OZ that includes traditional warehousing etc and retail shop fronts, even though not technically correct to use it in that context. Even when used in the right context, a real estate agent I know still gets shop lease enquiries, just because he deals in "commercial property", you would be surprised how many people don't properly read a company website. It would definately be better on the balance sheet to own their own commercial properties and retail spaces while paying back rents to themselves. 

 

In the UK at least they tend to be in shopping centres where owning the store outright is simply not an option. That is just not the commercial model for shopping centre property.

 

They could of course move but this seems to be an important part of their strategy - catching younger players who are dropped off at the GW store while parents go shopping elsewhere. Putting their store elsewhere that would not work and the fact that they are sticking to it so much really suggests that they think it is an important part of getting people into the hobby.

[GreenScorpion]

 

@ N1SB, yeah its crazy how much they spend in store rents also. When I say comercial, its actually used as a catch all term by more than a few older/ old school real estate agents in OZ that includes traditional warehousing etc and retail shop fronts, even though not technically correct to use it in that context. Even when used in the right context, a real estate agent I know still gets shop lease enquiries, just because he deals in "commercial property", you would be surprised how many people don't properly read a company website. It would definately be better on the balance sheet to own their own commercial properties and retail spaces while paying back rents to themselves. 

 

In the UK at least they tend to be in shopping centres where owning the store outright is simply not an option. That is just not the commercial model for shopping centre property.

 

They could of course move but this seems to be an important part of their strategy - catching younger players who are dropped off at the GW store while parents go shopping elsewhere. Putting their store elsewhere that would not work and the fact that they are sticking to it so much really suggests that they think it is an important part of getting people into the hobby.

 

Stores in shopping centres are a large source of rent costs, but for companies with large stock movements warehouse space is typically a big cost as well.

From previous experience, it is often the case that warehouse space near preferable production/shipping areas is often quite expensive and it is rarely the case that saving on rent outside of those areas offsets the costs to transport stuff into or out of the warehouse.

While it doesn't often pay off to build your own shops (unless you want a big one), it typically pays off to invest on building/purchasing warehouses as long term investments, as you often get the money back in less than a decade, versus the rented warehouse space.

Obviously investing in property is a risk, if warehouse space reduces because of lower volumes, you end up having a big empty warehouse, while if you rent it, you can pay for a smaller one instead.

Edited July 30, 2020 by GreenScorpion

[Firedrake Cordova]

The amount of money I have recently saved by buying The Solar War from Amazon instead of BL has paid for half the series. I just got the HB version of Saturnine for £14.50. 

Whilst I prefer physical books, I've stopped buying them for anything I'm not going to read repeatedly or has lots of pretty pictures, as I just don't have the space. :(

 

Going over to digital books means I can get them cheaply from Humble Bundle or Fanatical if they come up in a bundle (like a good chunk of the Horus Heresy series), although I have bought a few direct when they were reasonably-priced (e.g. Eisenhorn omnibus).  Audible are also noticeably cheaper than Black Library for audiobooks when using credits, compared to Black Library.  I'm not sure how much that affects GW's figures for Black Library.

 

In the UK at least they tend to be in shopping centres where owning the store outright is simply not an option. That is just not the commercial model for shopping centre property.

 

They could of course move but this seems to be an important part of their strategy - catching younger players who are dropped off at the GW store while parents go shopping elsewhere. Putting their store elsewhere that would not work and the fact that they are sticking to it so much really suggests that they think it is an important part of getting people into the hobby.

 

The other issue with shopping centres is that rent and business rates are really high - sufficiently so to turn a very profitable store outside of one into a loss-making store inside of one, despite the potential increase in footfall. :(

[Happy-inquisitor]

 

The other issue with shopping centres is that rent and business rates are really high - sufficiently so to turn a very profitable store outside of one into a loss-making store inside of one, despite the potential increase in footfall.

 

 

This particular form of vertical integration seems to be a core business strategy for GW and has been for many years. I think it more likely that they would abandon retail than that they would move it into self-owned out of town shops.

 

Cheaper out of town locations would server existing customers well enough, probably better given the lower cost per square meter, but it would not serve the purpose of drawing young new players into the hobby nearly so well. GW clearly believe that is an important function of their stores. Perhaps my experience is atypical but I do see more young (i.e. too young to drive) customers in GW stores than I do in local clubs or FLGS.

 

As a small shareholder if I saw GW make a significant move into cheaper stores outside of shopping centres I would question whether they still had a strategy to maintain and grow their customer base or whether they were taking more short term profits from the existing customers at the expense of not recruiting so many future customers. They would need to have a strong story to tell about their alternative approach to attracting new customers for me to believe that was a long term play.

[Firedrake Cordova]

This particular form of vertical integration seems to be a core business strategy for GW and has been for many years. I think it more likely that they would abandon retail than that they would move it into self-owned out of town shops.

I don't know if it's a regional thing, or if there's a misunderstanding here?  Both of my local GW's are in towns but not in a shopping centre.  From a brief skim of the shop lists, this seems to be normal for the UK.  The rents (and associated business rates) in some shopping centres are so ruinously enough as to turn a very profitable shop into a loss-making one, unfortunately.

 

++EDIT: Rent and business rates in the local shopping centre for a unit the same size as my local GW is north of £110,000 per year.

 

 

Edited July 30, 2020 by Firedrake Cordova

[Lord Marshal]

 

This particular form of vertical integration seems to be a core business strategy for GW and has been for many years. I think it more likely that they would abandon retail than that they would move it into self-owned out of town shops.

I don't know if it's a regional thing, or if there's a misunderstanding here?  Both of my local GW's are in towns but not in a shopping centre.  From a brief skim of the shop lists, this seems to be normal for the UK.  The rents (and associated business rates) in some shopping centres are so ruinously enough as to turn a very profitable shop into a loss-making one, unfortunately.

 

 

 

 

I also got the impression they (mostly) pulled out of shopping centres years ago. I know all of the ones in about a two hour radius to me were either shut down or moved into city/town centres. Mind you, some of them were so tiny that in this day and age they'd be a deemed a biohazard zone - anybody remember White Rose?

 

As Happy-Inquisitor says, I don't see them moving to out-of-town locales. Their stores have been glorified marketing campaigns for a long time, but they work. It's one of those things that ensures a lot of people don't associate wargaming with anyone but Warhammer, especially in the UK which lacks for LFGS' compared to other countries. Out-of-town locations really cuts down on that when people actively have to search you out. That GW seems to be opening more stores, especially internationally, does suggest they're not in a rush to change tact though.

Edited July 30, 2020 by Lord Marshal

[Firedrake Cordova]

Mind you, some of them were so tiny that in this day and age they'd be a deemed a biohazard zone - anybody remember White Rose?

I think that's a normal thing for them - both of my local GW shops have a smaller footprint than my house, and neither of those are "small shops" (just "normal sized") for the area ...

 

As Happy-Inquisitor says, I don't see them moving to out-of-town locales. 

For all the reasons you mention, I wasn't arguing otherwise.  Just the bit about shopping centres.

Edited July 30, 2020 by Firedrake Cordova

[N1SB]

I got a lot to say because I just did this exercise and I really need to get it out. I've raised the Black Library issue; I conclude I was wrong to doubt. IMHO, the following will directly help anyone who wants to write for the Black Library...to the point that I kinda want to test it out myself.

Executive Summary - Black Library's popularity is doing just fine, because it's riding on GW's rapid growth as a whole, and its performance is only limited by its number of new releases.

This is a wonky chart because that I'll explain because I'm not trying to show raw data; I want to show the trend. I have Games Workshop's overall revenue in

[GreenScorpion]

@N1SB: Have you considered writing inspirational speeches? Better than any Uplifting Primer :)

On a more serious note, I think those are very good advices. Anyone aiming for a career at Black Library can certainly start with good ideas.

If you like what you are doing, you will succeed eventually, but don't force things that should happen naturally.

Your idea of short audio dramas actually got stuck in my mind. I might start working on something similar after I get some things from my home, into my current location.

I had some ideas on the absurd side when I was modding Dawn of War, as I often wrote back stories for some of my crazy virtual kitbashes, some of those might work as audio dramas. One can wonder where that will lead. Obviously I can't the short story I submitted, that can't be re-released in any form, luckily there is way where that came from.

 

What you suggested might a need a thread of its own, to get more visibility.

[MegaVolt87]

N1SB writes nice business TED talks about GW, good to read in the morning while I have my coffee.  

[Noserenda]

Ooh thats a good look over things as always N1SB, i suspect BL books also contribute a lot to keeping/relapsing lapsed gamers (Who we know they want back obviously) i know of plenty of those who dont game but still buy and talk about BL books (anecdotal obviously) because they like the setting etc still even if they havent picked up a toy soldier in years.

[Kastor Krieg]

I love when one of the Frater does these microeconomics TEDtalks on GW annuals, future projections, etc.

Great reading and excellent insight into the company's clockwork. Thank you! :)

[pawl]

@N1SB: Have you considered writing inspirational speeches? Better than any Uplifting Primer :)

I've never used patreon before but I would consider it! I only started reading to see if it was worth buying back in to GAW, and now I'm considering finding out if I can write!

[GreenScorpion]

 

@N1SB: Have you considered writing inspirational speeches? Better than any Uplifting Primer

I've never used patreon before but I would consider it! I only started reading to see if it was worth buying back in to GAW, and now I'm considering finding out if I can write!

 

The issue with patreon is I have seen being used for many things, but for writing I am not quite sure how it could work. With games it is often the case that the files get released into the public regardless of the terms from the developers, imagine if I was sharing chapters in advance and someone goes and publishes it?

I don't mind doing things for free, but I do mind doing things that only others profit from and having copyright battles over something I wrote would be very bad.

It is obvious you can share other stuff like custom short stories, but I really don't want to write 18+ stuff to satisfy the fetishes of some crazy supporter somewhere

 

Naming characters after requests done by patrons would likely not go well either, trolls have money too.

A series of short stories as audio dramas could work, if I could keep up a fixed rhythm, but I would likely need to hire some voice actors/actresses for when there was more than one character speaking. I was able to get voice actors/actresses for a mod some years ago and that was free, because honestly I didn't have the cash to pay them, nor was I making anything with the mod itself, so in theory that would be feasible, but recording a few lines from audition to end can take a few weeks at best, at least until you get regular contributors.

 

I have thought about many things, as something like patreon has to have value for both parts, if you don't offer enough for the money, there is no investment and if there is investment but I am doing something that I dislike, it just feels like working a second job. There is also the issue that my manly boobs are not the right thing to attract customers :D

Decisions, decisions...