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Jan 2023: GW Half-Yearly Financial Report, I had made a mistake, HH 2.0 overestimated


N1SB

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3 minutes ago, N1SB said:

 

This is a great heads up.  Our American Brothers (I used to live in the States, East Coast, Midwest, West Coast), any insight?

 

Like, for example, this HY was very HH-focused...maybe HH isn't popular in the US?  That doesn't right either, though, I see a lot of American lore videos.

 

Also, I got to go to bed.  I think I've been up 24 hours straight.  If anyone asks, I've headed off to a customer meeting at their office.

Horus Heresy did pretty well here in the Southeast. A lot of it was out of stock throughout most of the year though and somewhat delayed to come back in. As well, a lot of the HH releases were delayed, so I'm wondering if they generally just ran into supply issues.

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10 minutes ago, WrathOfTheLion said:

Horus Heresy did pretty well here in the Southeast. A lot of it was out of stock throughout most of the year though and somewhat delayed to come back in. As well, a lot of the HH releases were delayed, so I'm wondering if they generally just ran into supply issues.

I think HH also did well in the Southwest. Everything was sold out for a bit. I still have a tough time finding rhinos. 
Even the Warhammer Cafe in LA County had slim pickings. Their FW HH stuff was pretty well picked over too. 

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1 hour ago, N1SB said:

 

This is a great heads up.  Our American Brothers (I used to live in the States, East Coast, Midwest, West Coast), any insight?

 

Like, for example, this HY was very HH-focused...maybe HH isn't popular in the US?  That doesn't right either, though, I see a lot of American lore videos.

 

Also, I got to go to bed.  I think I've been up 24 hours straight.  If anyone asks, I've headed off to a customer meeting at their office.

 

I'd say it made a big punch here. I've also seen amazon and ebay store quantities drop pretty fast for the starter box. I think there are two main factors effecting HH

 

1) Its drawn in people that were put off by the switch to 8th edition rules, so you're probably more likely to see them playing at indie shops and gaming clubs.

2) HH started out with more expensive and difficult to assemble miniatures, so the people who play it are probably more likely to have also spent the time to master 3d printing.

3) Maybe a third point - there are far fewer models available for HH. Even of the larger vehicle selection, most items are out of stock or delisted. Hard to sell what you don't have. Unlike combat patrol, you also can't really use 40k models though. At least you wouldn't be encouraged to. The models are pretty specific to the game.

 

I think its been generally well received though.

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9 minutes ago, twopounder said:

 

1) Its drawn in people that were put off by the switch to 8th edition rules, so you're probably more likely to see them playing at indie shops and gaming clubs.

 

 

Personally I never understood this. HH rules are more complicated than 7th editions. 

 

Honestly. GW would probably make a killing if they did a "one size fits all Warhammer Legends rulebook" that basically combined all the best elements from 3rd to 5th edition. 

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I think stock had to be the big thing. So much of the 30k catalog was out of stock for months stateside, I wouldn't be surprised if that choked out a lot of their sales for at least this past half in North America, because there was nothing to sell.

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6 hours ago, N1SB said:

 

My fellow Brother Spess Mareen, this was my initial assumption.  Moreover, even that small bump I assumed was Licensing revenue from video games.

 

It's not.  The Horus Heresy 2.0 is pulling its weight, faster than AoS even after it's had some time to build up momentum!  Imma brb, breakfast.


great work with the writeup!

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2 hours ago, jarms48 said:

 

Personally I never understood this. HH rules are more complicated than 7th editions. 

 

Honestly. GW would probably make a killing if they did a "one size fits all Warhammer Legends rulebook" that basically combined all the best elements from 3rd to 5th edition. 

 

Not really, at least not for me. They have more eccentric weapons, but only pre-game deployment types were convoluted. Outflank and deepstrike will be much less popular, but they were badly broken in 5+. 

 

Honestly, it's more the changes to vehicles, weapon use and armor saves that turned off the people I've spoken to. Primaris didn't help and they still don't seem to have found a place in the game.

 

The massive surge in 30k sales should be proof enough that a large number of players prefer 3.x over 8.x, whatever their reasons may be.

Edited by twopounder
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5 hours ago, N1SB said:

 

This is a great heads up.  Our American Brothers (I used to live in the States, East Coast, Midwest, West Coast), any insight?

 

Like, for example, this HY was very HH-focused...maybe HH isn't popular in the US?  That doesn't right either, though, I see a lot of American lore videos.

 

Also, I got to go to bed.  I think I've been up 24 hours straight.  If anyone asks, I've headed off to a customer meeting at their office.

As far as my area (Northern Colorado, US, though I dip my toe in the Denver competitive scene)- HH is popular among painters and lore-fans, not so much among active players. Maybe once or twice I've seen active games or people looking for games in my area, though I will freely admit I'm not keyed into the HH scene. Talking to my FLGS staff though, it just isn't as popular as 40k or even AoS, though it still sells. 

Edited by Lord_Ikka
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Great analysis as usual @N1SB :)

 

I Was considering why I don't think WH+ has peaked, and two things came to mind. One outside of GWs control, one very much within.

 

1. Is the general streaming fatigue. There's a lot of services now, many of them with sokme great offers, but my general feeling about them tends to be that I just can't be bothered. It's not even a money issue, it just feels like a hassle without enough of a quality of life improvement. And by many accounts, this has been a growing feeling for a while now. And while WH+ is obviously more specialised and niche, I'd be surprised if they weren't impacted by that as well.

 

2. Is the so far unrealised potential and even more so the unfulfilled promises. When it launched, we were told there'd be regular, new content. I can remember a lot of doubts about their ability to pull it off, and from what I've can see that seems to be exaclty what happened. They clearly had a couple of impressive projects in the pipeline when they started, but it seems to me there was limited planning beyond that initial phase. That confirmed a lot of the intial scepticism, which I think kept a lot of potential subscribers from signing up to it. Even now...the Pariah Nexus trailer looks great, but when I watched it all I could think was "Cool, this looks great and will be a much extended version of the trailer we saw when the Pariah Nexus box came out...but shouldn't this have been a mostly finished product when that was current for players?" And I think that's been something of a theme for me with WH+. Some of it looks great, but it doesn't feel consistent enough to throw money at or to overcome the reluctance to sign up for yet another service. But since I'm not someone who cares all that much about the vault and I can get high quality battlereports from other sources, this would be the main thing they could draw me in with.

 

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While not a spreadsheet expert (so I might be reading it wrong) it seems strange to me that that licensing profits were down at a time that there is more licensed products on the market than ever.  Besides the games there is the various action figures from Bandai, McFarlane Toys and the avalanche of releases from Joytoy in the last 12 months.

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Great write-up @N1SB. As allways a very interresting read.

One thing about stuff like Black Libary and Warhammer+ is they should probably not been seen as a pure money making tool but more as an marketing tool like the White Dwarf. I mean probably most of us get some inspiration for a project from a book or some WD articels or a battlereport. And not only gives us Warhammer+ more of this it gives us easy access to old WDs and campaigne books. Things newer players would probably never get their hands on othwerwise.

This is hard to put into value especially without all the data. I would be very interrested to know if GW have ever noticed something like "We put out a story with unit X doing some cool things and now we have sold 10% more of that unit" I would be supprised if they did not.

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Good news then :) I was surprised AoD has overtaken AoS and its seemingly halfway to 40k!

I do suspect the Forgeworld spike in 2016 might have more to do with Warlord titans than the middle of 1st ed Heresy, especially as the plastics were starting to come out around then and they would have gone on the general mail order numbers as i understand it (At least for revenue) and thus eroding the FW sales of resin marines, but not upgrades i guess? 

But yeah, ive heard anecdotally that whilst Warlord titans are a lot of work for FW they are massively profitable, and given their cost could create quite a bump even with comparatively few sales, and FW has sold thousands according to the certificate numbers, though obviously not all at once :D 

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I think the fact that Warhammer+ made a profit in year 1 at all is impressive.

 

However, I'd query the assertion that it will make £6 million rather than the reported £3 million as the subscription costs are up front, rather than a monthly cost? So, unless there are more subscribers throughout the year (which there might be) the revenue would remain the same?

I personally am a subscriber, and am happy with the content for what I pay, but I find it frustrating that there isn't a console app (which is how I watch all of my streaming services). I have no idea if that would affect subs but it has certainly reduced the amount I actually watch, on a service I have paid for (because watching on a browser is not ideal - none of the videos play without buffering issues on my XBox but run fine on my PC).

I also think GW are "preaching to the converted" as far as advertising Warhammer+, in other words pretty much exclusively via their own channels, and think there would actually be a broad market outside of their existing customer base (gamers). For example, I have a lot of friends that read Black Library novels but have zero interest in gaming/collecting/painting that had no clue Warhammer+ existed.

I think if they ever got to a point of marketing outside of their own channels they would have to add more content and change their pricing model (same cost, paid for differently).

But, I would say Warhammer+ is definitely a success. And let's not forget, it's not just animated shows - it's battle reports, painting videos, lore videos and the vault. The content is still slim, but to have produced the amount they have, for the money spent, is actually very impressive.

The question now is: Do they feel if they invested more budget to produce more content, could they pull in more subscribers? I think the honest answer is yes, they could, but maybe not without changing the service in some way.

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43 minutes ago, Noserenda said:

Good news then :) I was surprised AoD has overtaken AoS and its seemingly halfway to 40k!

 

AoD also had an edition and starter box launch with its first plastic models. I doubt it can continue at those numbers unless they shift so much support to it to keep interest churning. I don't personally know anyone who even plays AoD to be honest.

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Thanks for the write up @N1SB

 

Glad AoD is doing well - its certainly the only GW stuff I'm currently buying and I'm really enjoying building and painting them. If this encourages them to push more into HH plastics, they'll get no complaints here.

 

Not the forum for it but I wonder what's gone wrong with AoS 3rd Ed. Seems like a lot of online people are down on it, from my limited perspective.

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1 hour ago, StraightSilver said:

 

However, I'd query the assertion that it will make £6 million rather than the reported £3 million as the subscription costs are up front, rather than a monthly cost? So, unless there are more subscribers throughout the year (which there might be) the revenue would remain the same?

 

Only some of the subscription revenue is upfront, from those individuals who opted to buy the annual subscription package to get early access to the minis. For subscribers on monthly plans, obviously they are going to continue paying during the second half of the financial year as well.

 

So yes, the revenue will increase in the remainder of the year, but not by double.

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28 minutes ago, Halandaar said:

 

Only some of the subscription revenue is upfront, from those individuals who opted to buy the annual subscription package to get early access to the minis. For subscribers on monthly plans, obviously they are going to continue paying during the second half of the financial year as well.

 

So yes, the revenue will increase in the remainder of the year, but not by double.

 

It's almost certainly pro rated, as annual subscriptions to a service are deferred revenue, so those revenue figures will account for annual subscribers at 6 months not the full up front cost. 

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37 minutes ago, StraightSilver said:

Ah, I was completely unaware there was a monthly subscription available, I thought you could only pay all in one go - now I feel stupid paying all at once..... :)

You save on two months paying the full payment annually :smile:

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1 hour ago, Arbedark said:

It's almost certainly pro rated, as annual subscriptions to a service are deferred revenue, so those revenue figures will account for annual subscribers at 6 months not the full up front cost. 

 

Ah fair point. If anything it becomes a more complicated calculation because these results will include 25% of the revenue from year-1 annual subscriptions (which at a guess were higher than year-2 renewals)

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Regarding HH in the US:

 

I can't help but feel but availability/rear-end infrastructure challenges may be a factor in the earnings. For example, on the US GW site, all of the plastic dreadnought weapon frames (for both Contemptors and Leviathans) have been listed as "Temporarily out of stock Online" - and have been so for months.

 

Legion-specific offerings on the Forge World site routinely go in and out of stock with little or no warning.

 

Is it the end of the world or a product line killer? No, of course not. But it is an additional impediment to deal with in what is already a sort of specialist game in a niche hobby.

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3 hours ago, Sothalor said:

Regarding HH in the US:

 

I can't help but feel but availability/rear-end infrastructure challenges may be a factor in the earnings. For example, on the US GW site, all of the plastic dreadnought weapon frames (for both Contemptors and Leviathans) have been listed as "Temporarily out of stock Online" - and have been so for months.

 

Legion-specific offerings on the Forge World site routinely go in and out of stock with little or no warning.

 

Is it the end of the world or a product line killer? No, of course not. But it is an additional impediment to deal with in what is already a sort of specialist game in a niche hobby.

 

It actually seems like 3d printing is actually propping the game up, allowing people to fill in units they need after buying a box, as everything is always out of stock. Proxies are pretty much a requirement to field a full army unless you started playing a decade ago and already have a full collection. I've seen the Kratos in store, along with the box set and maybe a random kit. Definitely nothing like the 40k shelf.

 

Its going to be interesting to see what happens going forward with units as GW resolves the supply chain issues.

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