Do you think Games Workshop profits will reduce this year?

[SirSalabean]

With the reduced disposable income in the UK (unsure if it’s worldwide or not) due to the increased utility costs and no increase in wages to compensate.

 

Do you thing that there will be a hit to Games Workshop income due to this and the ever increasing price of entry?

 

Personally I left the hobby last year and have been thinking about coming back but I’m not going to be able to as soon as I want due to the extra £40 a month I’m paying for electric as it is.

 

What’s everyone’s thoughts?

[Joe]

... yes? I was under the impression the last investor report indicated as much.

 

They flagged a number of issues that'd contribute to a drop in profits; raw material costs going up, shipping costs going up, staffing costs going up and so forth. None of these can be avoided, however they are still intent on maintaining that profit margin as much as they can where possible.

[Rik Lightstar]

Much as we may grumble about GW (or other wargaming) prices the reality is that it isn't that expensive for the amount of time you get to spend doing your hobby.

 

Where as the costs for other "nights out" such as Cinema, Bowling, Restaurants are likely to go up dramatically.

 

To put it in context I recently booked bowling for 5 adults and it cost just under £25 each for 3 games, if we have a meal and a few drinks on our Friday night then we'll be lucky to come out of that having spent less than £50 each. That's for one night out.

 

A "Combat Patrol" box would set me up for a new Kill Team for most factions with loads of conversion bits to make my guys unique. The latest Season of Underworlds is around £130. Two boxes of any Bloodbowl team (which makes a full team with all positional options) is £63. All at RRP and they'd give me more evenings of play. 

 

Rik

[SirSalabean]

These are some really fair points. It was more a questions of whether the economy would after the amount of people buying and continuing the hobby as apposed to whether prices should be as high as they are. Obviously they are making a profit so I’m sure they could afford to take the hit however it’s a business so it’s t unlikely that would happen unless sales completed plummeted.

[WrathOfTheLion]

Energy and fuel costs negatively impact a lot of things, with a cascading effect (i.e., further increases of other items). So disposable income will take a hit as well, and it'll depend on the individual how much they started with, and where they decide to make cuts.

 

As Joe mentions as well, it also squeezes them from the other side by increasing their cost to do business as well. Much of these occurrences are obviously outside of their control, and they won't be the only businesses affected.

[Captain Idaho]

Honestly? GW maintains it's profits by raising prices and there's a substantial number of people who accept those price rises and continue to purchase. Soon or later GW wil have to reach a point where the price increases don't cover the decreasing sales from disenfranchised consumers. But that isn't today.

 

I firmly believe, going by recent trends, GW will just up their prices again and maintain their record profits.

Edited March 14, 2022 by Captain Idaho

[SirSalabean]

Yeah that would be a big shame. Even going off the discounted stores it’s still pricey. I’d like to support my local gw store but I can’t justify spending the extra 20-25% when I have other commitments.

[Axineton]

Much as we may grumble about GW (or other wargaming) prices the reality is that it isn't that expensive for the amount of time you get to spend doing your hobby.

 

Where as the costs for other "nights out" such as Cinema, Bowling, Restaurants are likely to go up dramatically.

 

To put it in context I recently booked bowling for 5 adults and it cost just under £25 each for 3 games, if we have a meal and a few drinks on our Friday night then we'll be lucky to come out of that having spent less than £50 each. That's for one night out.

 

A "Combat Patrol" box would set me up for a new Kill Team for most factions with loads of conversion bits to make my guys unique. The latest Season of Underworlds is around £130. Two boxes of any Bloodbowl team (which makes a full team with all positional options) is £63. All at RRP and they'd give me more evenings of play. 

 

Rik

50 quid for a night out is a cheap night out for me lol I’ve not spent less than that on a night out since the early 90s 

[Rik Lightstar]

 

Much as we may grumble about GW (or other wargaming) prices the reality is that it isn't that expensive for the amount of time you get to spend doing your hobby.

 

Where as the costs for other "nights out" such as Cinema, Bowling, Restaurants are likely to go up dramatically.

 

To put it in context I recently booked bowling for 5 adults and it cost just under £25 each for 3 games, if we have a meal and a few drinks on our Friday night then we'll be lucky to come out of that having spent less than £50 each. That's for one night out.

 

A "Combat Patrol" box would set me up for a new Kill Team for most factions with loads of conversion bits to make my guys unique. The latest Season of Underworlds is around £130. Two boxes of any Bloodbowl team (which makes a full team with all positional options) is £63. All at RRP and they'd give me more evenings of play. 

 

Rik

50 quid for a night out is a cheap night out for me lol I’ve not spent less than that on a night out since the early 90s 

 

 

That was very much my point, a "quiet" night out for some bowling, a reasonably priced meal and a couple of drinks will be over £50. If there are any poor decisions made after that then it's going to be increasing rapidly from there.

 

Rik

[Captain Idaho]

I'm not sure we can fairly compare the 2 though. GW sells products, whereas a night out is an event. Most people won't do one or the other.

 

The only way we can compare them fairly is if people use GW products as a replacement to their socialising or nights out.

 

Oh. Wait...

[Dark Shepherd]

Slightly better chance of finding the Ulrika to your Felix on a night out Edited March 14, 2022 by Dark Shepherd

[Lord Marshal]

Much as we may grumble about GW (or other wargaming) prices the reality is that it isn't that expensive for the amount of time you get to spend doing your hobby.

 

Where as the costs for other "nights out" such as Cinema, Bowling, Restaurants are likely to go up dramatically.

 

To put it in context I recently booked bowling for 5 adults and it cost just under £25 each for 3 games, if we have a meal and a few drinks on our Friday night then we'll be lucky to come out of that having spent less than £50 each. That's for one night out.

 

A "Combat Patrol" box would set me up for a new Kill Team for most factions with loads of conversion bits to make my guys unique. The latest Season of Underworlds is around £130. Two boxes of any Bloodbowl team (which makes a full team with all positional options) is £63. All at RRP and they'd give me more evenings of play. 

 

Rik

 

The average GW diehard wasn't going on a nightout anyway.

[SirSalabean]

Yeah I pretty much only buy from third party now, whereas before I mixed it so I could support my local store. My bills have risen around £40-60 per month which may not seem like much but it’s a decent bit of money that used to go towards warhammer

[BLACK BLΠFLY]

The stock is down 33% from the past three months.

[SirSalabean]

Damn that’s rough

[Karhedron]

I'm not sure we can fairly compare the 2 though. GW sells products, whereas a night out is an event. Most people won't do one or the other.

A squad box is similarly priced to a new PS/XBox game. Both provide a fair amount of long term enjoyment (assuming you both assemble and play with your minis).

[SirSalabean]

 

I'm not sure we can fairly compare the 2 though. GW sells products, whereas a night out is an event. Most people won't do one or the other.

A squad box is similarly priced to a new PS/XBox game. Both provide a fair amount of long term enjoyment (assuming you both assemble and play with your minis).

I always see tools and paints as the console cost as generally once your set up it’s just the odd paint pot. Then the models are a game here and there.

[tychobi]

I think they are going to take a sizeable hit in overall income. 

[techsoldaten]

GW is especially sensitive to oil price shocks.

 

They manufacture everything in Nottingham, ship it on big container ships, and have storage facilities that need power. Along with a chain of retail stores that need electricity to operate and product that needs to be shipped to stock on shelves.

 

Wrote a post on the topic the other day, describing how some changes to the board may foretell what's coming.

 

http://www.bolterandchainsword.com/topic/373544-last-chance-octarius-and-charadon/page-2?do=findComment&comment=5804062

 

Could be completely wrong, but I expect to see some combination of the following trends over the next few years:

 

- Products will only be available as long as they are profitable, then GW will cease to make them. This will apply especially to non-core products such as campaign books.

 

- Increased emphasis on digital products, such as apps, video games and streaming. 

 

- Manufacturing in-country. UK, EU, US, Australia, CN, wherever else there's a demand.

 

- Materials changes to models. Instead of using high grade styrene designed to last forever, they move to something that degrades over the course of 5 - 20 years. There are some advanced materials capable of degrading into water, my bet is we start to see those.

 

- More time between releases in order to exhaust existing inventories before engaging in additional manufacturing.

 

- Reduced materials used in the finished product (i.e. 5-man, single sprue boxes.)

 

- Optimized pricing across collections. So maybe the troops you need cost per model than an HQ and this creates the perception it's not so bad.

 

- Increased prices overall. I expect price increases over the next 2 years to be equivalent to increases between 2008 and the present.

 

As far as profitability goes, they will take a hit. The question is whether the hit they take will be larger proportionately than other companies. My guess is lower.

Edited March 14, 2022 by techsoldaten

[Captain Idaho]

To be pair, I was being a little joyfully facetious about warhammer socialising... Edited March 14, 2022 by Captain Idaho

[MegaVolt87]

Like I said in the other thread, the material change will be a disaster for the company if miniatures degrade. I would not pay the current or increased prices for something to break down that isn't a utility/ necessity. Sure, replace the HVAC that breaks in my home/ investment property that lasts 5-20 years, gas, wiring etc not my space soldiers. I already got GW mini's over 20 years old that are as good as when I bought them, the way it should be. Hopefully its just corpo spin on mats change, thats like the lowest thing that should be even considered when so much more could be done instead. Companies say one thing and do the opposite very often. We see unknown lobbyists with no direct ties influencing politicians in the background not to change, while on the front end a company wrings its hands and says its not possible at the moment, forever kicking the can down the road.

 

Realistically, additional production capacity will happen in China vs another commonwealth country like OZ. Chinese production could meet the demand of the OZ/ NZ market, Asia and US on its own while existing GW production can service UK + Europe, along with large depot for product in each country which would be vastly cheaper than setting up production + paying manufacturing staff etc. 

 

GW should move to having an online store only and trade accounts to LGS, their retail operations are a money pit. Or, they setup a separate subsidiary that purchases and holds retail real estate, they rent shops from said entity, thus building equity + assets and re-cooping the rents. Another middle ground would be to only have a flagship store in each state capital city, with all the bells and whistles- big store with a sea of tables, the entire GW product range in store etc. 

 

Not to mention a smarter implementation of digital products, their digital/ entertainment products etc. Messing with the winning "coke recipe" is pure stupidity with GW's plastic miniatures. 

[Gederas]

Regarding the materials:

GW could do what Bandai is doing, and try out Limex?

 

Bandai has already released twp kits in the material:

Edited March 14, 2022 by Gederas

[Cactus]

GW know that their market is collectors so I feel the idea of using a material that turns to water after x years is pure crazy. However an alternative material with styrene's properties and less environmental impact, like the Limex example above, seems inevitable at some point.

[MegaVolt87]

Lime stone is still a stone. Because we are savages, this will be mined via open cut mining, which also isn't ideal from an environmental standpoint.

[Rik Lightstar]

@MegaVolt

 

GW Retail locations don't have to turn a profit* for the same reason that an Apple store doesn't need to. They exist primarily as a marketing exercise and they get new people into the hobby. As long as a particular location is getting enough footfall and selling enough "core game" boxes they'll keep them on.

 

*Obviously there's a "reasonable margin" that an individual store has to stay within. But that is determined by other factors too, so the stores in large shopping centres in the UK for example have much greater leeway than a tertiary location store in a small town.

 

Rik