Annual Investor Report 2021-2022

[Wugo_Heaving]

What are thoughts on buying stock in GW?

[twiglets]

1 hour ago, A Melancholic Sanguinity said:

I don't think you're wrong. From pages 19 & 20 of the report:

Looking at it, the 1.6 million figure for Black Library is from their Trade segmented revenue breakdown - "Trade: this sales channel sells globally to independent retailers, agents and distributors. It also includes the Group’s magazine newsstand business and the distributor sales from the Group’s publishing business (Black Library)."

That is, that's how much BL brought in from sales to distributor (think bookstore chains like Barnes & Noble in the US).

Then you look at the Online revenue breakdown - "Online: this includes sales through the Group’s global web stores, our online subscription service (Warhammer+) and digital sales through external affiliates."

If I'm understanding this correctly, anything bought through the GW web store, the Forge World site, and digital purchases from the Black Library site would fall under the Online category.

The Digital revenue comes out to 12.4 million. Obviously, not all of that are BL sales, but consider that the vast majority of new physical book releases and all special and limited editions must go through the GW web store.

 

Caveat: I am not a financial advisor, analyst, or even anything remotely resembling somebody proficient in this jargon/breaking down corporate revenue streams. If I'm wrong, please correct me; I'd love to learn!

 

It is pretty hard to read this report but I wouldn't be surprised if that's the case and BL's true revenue is obscured due to digital/audio sales and the numbers being said about their revenue in this thread are wrong.

At the very least it really looks like BL physical books, digital books, and audio books bought directly from the BL website are not included in BL's trade revenue at all.

 

 

 

Edited July 26, 2022 by twiglets

[Gederas]

1 hour ago, Mechanicus Tech-Support said:

Just waiting patiently for N1SB's breakdown

Same. That man's breakdowns of corpo financial speak I don't understand makes these threads understandable for me

[Vesalius]

I was hoping they’d address the Eisenhorn show.  It was brought up in last year’s report, saying “it was taking longer than expected”.  

[SkimaskMohawk]

7 hours ago, TheVoidDragon said:

Interesting to see that part of why Space Marine 2 is being made is that it is their "most consistently requested game".

How about a proper dow 3 lol.

Something that actually appealed to its player base from either 1 or 2, instead of alienating both. Something with actual 40k feeling multiplayer levels instead of geometry city and bubble cover. Something that didn't try to have every unit have a high-skill level ability to use to promote eSports. Something that didn't lock units, abilities and race functionality behind progression.

[excelite]

1 hour ago, Red_Shift said:

Im kind of amazed that the figures overall aren’t worst than they are though, I got the impression that the new edition of AoS flopped bad. I don’t think Warhammer tv took off either, given the repeated promotions to try to get subscribers and the implied excess of subscriber only models with the recent Warhammer community article. 

I think that’s due to the negative bias on the web. AOS new edition box got sold out locally multiple times and when you browse non-light box pics people post, those boxes are very common to be on a shelve. It’s just that the webstore didn’t sell out, but as we don’t know any numbers people were just assuming…

 

same goes for wh+ there is a lot of vocal  negativity, but quite a lot at least got it for the model… will be interesting to see next year if they can hold those that were just in for the model

[Captain Idaho]

1 hour ago, WrathOfTheLion said:

Could be possible, but I don't think that would be the factor here, given the change is between last year and this year, and both are years of the current background.

Possible. But then it does match on a timescale as the changes weren't total and immediate initially since 8th, whilst any down turn in customer retention would similarly not play out immediately either.

There are always multiple factors of course. But I'd think the simple business reason is possibly the most logical - folk ain't buying what they're selling.

[phandaal]

11 minutes ago, excelite said:

same goes for wh+ there is a lot of vocal  negativity, but quite a lot at least got it for the model… will be interesting to see next year if they can hold those that were just in for the model

We can safely say that Warhammer+ did not have a barnburner year. Observe the difference:

YouTube videos:

"In the year we delivered more rich online content than ever before: The Space Marine armouring vignette explored a seminal piece of our IP, our Kill Team trailer unveiled a range of new miniatures and propelled a new edition of our Warhammer 40,000 skirmish game to an exciting start, and the Horus Heresy trailer showcased the full spectacle of mass battle in the far future, announcing to our legion of fans that something special was coming this summer. These pieces of animated content racked up c. 9 million views on our own channels alone, to say nothing of the millions of views generated elsewhere through reposting, watch alongs etc. We think it is safe to say that Warhammer content has never been viewed more than it has this year."

Warhammer+: 

"In the year we launched Warhammer+. It is only now approaching its first anniversary and so it is still in very early development. The exciting content delivered through Warhammer+ will remain an integral part of our digital offer and how we share our IP."

[Matcap86]

1 minute ago, Captain Idaho said:

Possible. But then it does match on a timescale as the changes weren't total and immediate initially since 8th, whilst any down turn in customer retention would similarly not play out immediately either.

There are always multiple factors of course. But I'd think the simple business reason is possibly the most logical - folk ain't buying what they're selling.

But then more literally, as in, there are no books to buy as they're constantly running out of stock.

[twiglets]

22 minutes ago, Captain Idaho said:

Possible. But then it does match on a timescale as the changes weren't total and immediate initially since 8th, whilst any down turn in customer retention would similarly not play out immediately either.

There are always multiple factors of course. But I'd think the simple business reason is possibly the most logical - folk ain't buying what they're selling.

Or you are working on bad numbers as has been pointed out may be the case.

[Noserenda]

Book piracy is a non issue when people can get the product easily at a reasonable price, it might increase because people cant get physical copies or the ebook prices are high, they certainly are on a lot of the shorts, ive been interested in a few like the Kingmaker related ones but they are too much for a casual purchase.

Which is mostly why ive switched to Audible, which i signed up for BL books and previously couldnt keep up with releases but now BL is less than half my purchases just because theres nothing new/interesting to buy. 

Which is a shame because the 40k novel range is probably the strongest its been in years, which maybe isnt cooincidental, we may remember old books fondly but there was an awful lot of utter :cuss:e released alongside them! 

In any case, the report seems broadly positive (of course) but im far from an expert :P 

Oh and apparently i need to tap the "Horus Heresy as a core IP does not mean Age of Darkness is a core game" sign again :D 

[twiglets]

33 minutes ago, phandaal said:

We can safely say that Warhammer+ did not have a barnburner year. Observe the difference:

YouTube videos:

"In the year we delivered more rich online content than ever before: The Space Marine armouring vignette explored a seminal piece of our IP, our Kill Team trailer unveiled a range of new miniatures and propelled a new edition of our Warhammer 40,000 skirmish game to an exciting start, and the Horus Heresy trailer showcased the full spectacle of mass battle in the far future, announcing to our legion of fans that something special was coming this summer. These pieces of animated content racked up c. 9 million views on our own channels alone, to say nothing of the millions of views generated elsewhere through reposting, watch alongs etc. We think it is safe to say that Warhammer content has never been viewed more than it has this year."

Warhammer+: 

"In the year we launched Warhammer+. It is only now approaching its first anniversary and so it is still in very early development. The exciting content delivered through Warhammer+ will remain an integral part of our digital offer and how we share our IP."

It's hard to say. I did the math on the first 3 months of Warhamer plus subs based on that 2021 report's viewing figures and I thought they were probably doing moderately well to fund the industry standard cost for 20 minutes episodes of 2D animation.

The good word of mouth on W+ has increased greatly since those first three months and there's nearly ten hours of animation content to watch now so I wouldnt be surprised if the subscriber count has increased by a lot. 

I think the real problem W+ faces tbh is that animation is just really really really hard, and things rarely go smoothly and to plan, and for a company new to the animation scene managing so many animation projects at once is kind of insane. There's a real possibility that they actually have the W+ money ready to buy more animation, but successfully getting that animation made and out the door in a reasonable time frame is causing enormous headaches.

Edited July 26, 2022 by twiglets

[phandaal]

18 minutes ago, twiglets said:

It's hard to say.

No, it really is not hard to say. Here is the simple corpo logic: if there is something to brag about, brag about it. If Warhammer+ was doing something worth writing home about, it would get more than a blurb acknowledging that it still exists.

YouTube videos appear to be getting great traction though. Personally, that Space Marine 2 trailer gets me ready to purge some Xenos.

[twiglets]

1 hour ago, phandaal said:

No, it really is not hard to say. Here is the simple corpo logic: if there is something to brag about, brag about it. If Warhammer+ was doing something worth writing home about, it would get more than a blurb acknowledging that it still exists.

YouTube videos appear to be getting great traction though. Personally, that Space Marine 2 trailer gets me ready to purge some Xenos.

This is an assumption. Literally in this thread people are jumping all over Black Library for having gone down in flames without realising that the figures they are basing that on are probably incomplete.

If they are having real difficulty getting hold of animation that alone could be cause for conservative caution in a report even if subs are up. Or it could be that's its rumbling along as expected and there's nothing to say. Or a hundred other things. 

Edited July 27, 2022 by twiglets

[caladancid]

14 minutes ago, twiglets said:

This is an assumption. Literally in this thread people are jumping all over Black Library for having gone down in flames without realising that the figures they are basing that on are probably incomplete.

If they are having real difficulty getting hold of animation that alone could be cause for conservative caution in a report even if subs are up. Or it could be that's its rumbling along as expected and there's nothing to say. Or a hundred other things. 

This is what Games Workshop says about Black Library- "After a record performance last year, Black Library, our novel publishing division, struggled in the face of global supply disruption with many key new releases arriving later than planned."

 

That is a direct quote. From a report to investors that is meant to paint as rosy a picture as possible. 

 

So, regardless of the inventive readings trying to ascribe a meaning to these numbers that proves BL is doing great, the people who wrote the report- Games Workshop- use the word struggled. They did not say, these numbers don't reflect the actual performance of Black Library.

[Scribe]

19 minutes ago, twiglets said:

This is an assumption. Literally in this thread people are jumping all over Black Library for having gone down in flames without realising that the figures they are basing that on are probably incomplete.

If they are having real difficulty getting hold of animation that alone could be cause for conservative caution in a report even if subs are up. Or it could be that's its rumbling along as expected and there's nothing to say. Or a hundred other things. 

Have you ever prepared statements or data to provide to shareholders/investors?

"Sugarcoating" doesn't begin to cover the reality of the dark arts in use.

If GW says BL was down for reasons, it's at least that bad.

[twiglets]

1 hour ago, caladancid said:

This is what Games Workshop says about Black Library- "After a record performance last year, Black Library, our novel publishing division, struggled in the face of global supply disruption with many key new releases arriving later than planned."

 

That is a direct quote. From a report to investors that is meant to paint as rosy a picture as possible. 

 

So, regardless of the inventive readings trying to ascribe a meaning to these numbers that proves BL is doing great, the people who wrote the report- Games Workshop- use the word struggled. They did not say, these numbers don't reflect the actual performance of Black Library.

 

In reference to global supply disruption... which only effects physical books... which means that digital and audio sales could be and probably are fine as they aren't affected by that.. which means the story that that black library is going down in flames because no one wants to read it is based on only the physical drop. I'd say that paints an unnecessarily bad picture to readers of the report, this thread being the evidence of that.

Separating out BL's sales out into detailed sections and putting a big fat label over the section on physical books blaming it all entirely on global supply disruption instead of lumping it all together would have painted a rosier picture, so it's not always right to assume they are min/maxing.

I've been involved with reports at a few animation studios so I know the real picture and then read what gets written. Sugar coating happens but cautious and conservative wording happens too when things are just uncertain or there's a problem in the pipeline. It's hard to know what that would signify just reading the report.

 

Edited July 27, 2022 by twiglets

[Sothalor]

I suspect this may be GW painting as rosy a picture as possible, by referencing Black Library only in passing, with a blanket "trouble because of global supply issues" statement - very handily passing on the blame.

Note that they don't go into detail about the Online revenue - and that it's actually dropped from the previous year.

[twiglets]

17 minutes ago, A Melancholic Sanguinity said:

I suspect this may be GW painting as rosy a picture as possible, by referencing Black Library only in passing, with a blanket "trouble because of global supply issues" statement - very handily passing on the blame.

Note that they don't go into detail about the Online revenue - and that it's actually dropped from the previous year.

Maybe, but it's not like they are the only company having huge problems with paper supply, printing, and shipping. 

That is a very real problem effecting companies and will probably send many of them under.

It would be odd for digital to be hit so hard that it is somehow worse than physical while physical is in that state. Especially considering the solid year of 40k interest.

Edited July 27, 2022 by twiglets

[Sothalor]

49 minutes ago, twiglets said:

Maybe, but it's not like they are the only company having huge problems with paper supply, printing, and shipping. 

That is a very real problem effecting companies and will probably send many of them under.

It would be odd for digital to be hit so hard that it is somehow worse than physical while physical is in that state. Especially considering the solid year of 40k interest.

That is rather the point of many complaints about BL these days, among the community here and elsewhere.

The supply issues are but one facet of an overall issue with how BL does things.

There's a larger, ongoing discussion about things like: promoting upcoming works, providing release dates for titles, author retention, release pacing and density, deliberate scarcity and FOMO tactics, lack of customer engagement, poor communication about how and where to purchase their products, the general small number of print runs, lack of reprints, and ebook pricing.

My point is that all of these things may not necessarily directly and immediately affect sales numbers in the sense that yes, many physical copies right now routinely sell out, but these all have a cumulative and corrosive effect on customer goodwill. And that has long-tail effects that may currently be hidden by their practices.

As a hypothetical example, let's take Limited Editions - they sell out pretty consistently. Let's say each time they do a LE for a title they make 1,500 copies. They sell out. Great. How many people wanted to purchase a copy? 5,000? 10,000? I don't know - does Games Workshop?

But it's not a great leap to infer that each time they release a Limited Edition the way they do - with almost no marketing, very little prior notification of release schedule, exclusively available on the GW web store that requires you to be logged in, waiting, and in queue by a specific time on a Saturday morning, and it's gone within minutes - that leaves some, maybe many, customers disappointed. It disgruntles and discourages some of them. Maybe, enough so that a couple of them don't bother trying to purchase the next fancy Limited Edition. And that's not a big deal the first time. Nor the second, nor the third. Maybe not even the thirtieth or fortieth times. But people get fed up eventually. 

[MegaVolt87]

Quote

Warehousing continued

Australia Global sea freight has remained highly disrupted and this has had a direct impact upon product availability and new miniature launches with 8% of our new releases delayed. There has been a slow and gradual improvement in availability and we expect this trend to continue. We look forward to our facility based in Sydney getting back to its normal rhythm in 2022/23. Total warehousing costs have increased by £4.0 million to £20.3 million, the majority of the increase being staff costs; as a percentage of core sales they have increased from 4.8% to 5.2%.

Next OZ price rises soon lol. Would be nice to not get delayed new releases too (see- melee levi). 

OZ/NZ trade up, online and retail down. I think GW should be honestly closing more warhammer stores in OZ, and opening up the LGS trade accounts here to stock GW products more. The small one man stores suck here and see less traffic than the LGS nearby who offer discounts and game playing space with tables. I have seen LGS with bigger GW range than GW stores at this point, its insane GW thinks their small stores are a good idea in Australia. The bigger GW stores are great in cities like Melbourne, Sydney etc though. OZ/NZ and Asia region management is just completely hopeless, bordering on negligent as far as I am concerned. There is only so much growth NA can put out before it peaks and levels off. More warehouse reserve stock held in OZ would also cut their shipping costs over time also. This way, their shipping isn't clogged with existing stock replenishments, more priority can be given to ship over new releases so we get them on time. 

 

Quote

The Group is not reliant on any one individual customer

North America   169.7 (m)   145.5(m) 

I mean, when North America alone is 41% and then 44% this year of your external core revenue, likely trending up- yep not relying on any particular region, sure seems legit I guess....

BL is very much in disarray I think. So many authors leaving, duo books that need their third one as a capstone etc. It either needs to fix its output or increase its quality of what it releases. The time lag between limited editions and normal copies needs to stop. Its moronic to do it like they are doing it now. It must be making them money short term to delay standard book releases, BL seems to be caught in the "hey this looks great sales numbers X qtr" malaise many companies/ subsidiaries are falling into these days, its the only explanation I can think of why BL is like this overall. Cash pumps from limited edition books per qtr, looks good per qtr but well like this at the end of the financial year. 

Just skim read the report, but those points stuck out for me though to write on. 

[twiglets]

14 hours ago, Xenith said:

Google the Gundam Cafe, and I hope it would be similar, that was an experience, coming from the UK. 

I did and apparently the entire gundam cafe chain franchise has permanently closed down, so you may have been one of the last to ever experience that.

 

Looking into it it seems like they relied a lot on tourists and japan closing its borders ended their income, the japanese themselves didn't use them enough.

I don't think a warhammer cafe could rely on tourists like that so it would have to be geared more toward the japanese, like the... Moomin cafe apparently???

 

Looking at the food of all these themed cafes they seemed to be themed around the franchise, so, uh, Corpse Starch burgers at the warhammer cafe? 

 

I think the smart thing for a japanese warhamer cafe would probably be to have huge mind blowing dioramas like warhammer world, as that could attract people just on its own.

I think I'm even more curious to see how this will go now.

Edited July 27, 2022 by twiglets

[excelite]

9 hours ago, phandaal said:

We can safely say that Warhammer+ did not have a barnburner year. Observe the difference:

YouTube videos:

"In the year we delivered more rich online content than ever before: The Space Marine armouring vignette explored a seminal piece of our IP, our Kill Team trailer unveiled a range of new miniatures and propelled a new edition of our Warhammer 40,000 skirmish game to an exciting start, and the Horus Heresy trailer showcased the full spectacle of mass battle in the far future, announcing to our legion of fans that something special was coming this summer. These pieces of animated content racked up c. 9 million views on our own channels alone, to say nothing of the millions of views generated elsewhere through reposting, watch alongs etc. We think it is safe to say that Warhammer content has never been viewed more than it has this year."

Warhammer+: 

"In the year we launched Warhammer+. It is only now approaching its first anniversary and so it is still in very early development. The exciting content delivered through Warhammer+ will remain an integral part of our digital offer and how we share our IP."

We have to differentiate here a bit. I said wh+ didn’t do as bad as some vocal folks make it seem, not that it’s their new cash printing service  
 

right now, I think the only ones that are really happy and make most of it are the ones who are in for it for the vault.

i got a little lucky with a buddy not wanting his selected model, so I got the ork as well and we swapped and put the assassin on eBay. The auction (not fixed price scalping) got me about 80€ (+shipping), so in total I got wh+ for somewhere between 5-10€. 
 

I‘m not sure if I would be happy with what you get for the full price and I can see why people might be unhappy.  That’s why I’m interested in how the second year will manage to keep people signed up.

Edited July 27, 2022 by excelite
Typo

[Redcomet]

Spikybits had a video out, laying out how GW is in trouble, so that must clearly be the truth.

[Lexington]

11 hours ago, WrathOfTheLion said:

Could be possible, but I don't think that would be the factor here, given the change is between last year and this year, and both are years of the current background.

Just in my own anecdotal experience, I’ve seen a fading interest in 40K’s main “storyline” - such as it is - from people who are into that sort of thing. One complaint I’ve heard pretty frequently is how every new event is hyped up as earth-shattering, only to end up with a fairly familiar status quo. After the Gathering Storm/Dark Imperium really did shake things up, the new normal is leaving a lot of people cold.

8 hours ago, twiglets said:

If they are having real difficulty getting hold of animation that alone could be cause for conservative caution in a report even if subs are up. Or it could be that's its rumbling along as expected and there's nothing to say. Or a hundred other things. 

Eh, I dunno. Sure, these could be real problems, but WH+ has been a pretty big investment for GW, and represents a radical evolution in the company’s business strategy. If it were any kind of success at all, it seems to me that the first annual report after launch would address the service in some way beyond saying “this also exists, and does not seem to have caused excess death or illness in the general population. Moving on…”

11 hours ago, TheVoidDragon said:

I don't follow novel stuff too closely, what authors are no longer working with them?

Curious about this, too. I know the most beloved author on the AoS side moved on, but that was a few years ago, IIRC. For 40K, I hadn’t heard of anyone dropping or being dropped by BL besides Thomas Parrott, who didn’t seem to have made much of a mark yet, and even that was back in 2020. Anything missing, here?

Edited July 27, 2022 by Lexington