Rick Priestley and Andy Chambers interviews on early GW (incl. 40k, Specialist Games)

[N1SB]

Rick Priestley, the godfather of Warhammer, describes the behind-the-scenes of Games Workshop's creation of Warhammer in this 1st part of 2 videos (presumably to follow).  The title says Warhammer Fantasy Battle, but it's really about GW overall, and around the 23:40 minute mark he reaches 40k, and 40k was a game changer.  It's not just about games, but a lot of the management issues that continue to impact GW to this day.

 

 

Key takeaways, anticipating Frateri on phones who want a quick breakdown:

 

• GW sold single RPG minis, but customers started buying armies, so they designed a wargame.  The customers lead, GW merely followed
• Bryan Ansell owned GW at this time.  He would, for example, hire a bunch of TSR (D&D) artists from its UK branch when it disbanded
• GW's rules tend to be complex in response to gamers wanting detailed rules.  Priestley himself thinks the rules were "over-complex", "burdensome"
• GW's compartmentalisation began early.  Writers, artists, sculptors were separate teams.  Minis "land on (Priestley's) desk" and he'd do a write up by 5pm
• 40k "boosted the business massively."  £10 million revenue with £1 million profit.  Bryan Ansell wanted to sell and retire, eventually to Tom Kirby, previous CEO
• They did a Management Buyout, and this is known, but Priestley really revealed a little bit of tradecraft.  I will comment on this in particular
• Bryan Ansell's exit allowed Rick Priestley to do things he wanted, like how WFB and 40k being Big Box Games 2nd ed onwards, and Codices

 

Aside from Rick Priestley's being the Malcador of Warhammer, Bryan Ansell was the Emperor of Games Workshop as its owner during this period.  My thoughts:

 

 

+++ GW was always very compartmentalised +++

 

 

Ever felt like GW's left hand doesn't know what its right hand is doing?  Like Forgeworld had no idea 40k 8th ed was coming and rushed to make its indices?

 

The initial expansion of GW, with Bryan Ansell, then-owner (and designer, he wrote with Priestley my favourite 40k 1st ed book, 'Ere We Go) included the entire TSR UK, the UK division of Dungeons & Dragons, and they were artists but they clearly knew roleplaying games.  I was shocked, SHOCKED, when Priestley described himself as "a casual roleplayer".  They would simply takeover Warhammer Fantasy Roleplay, like it became their territory, but Priestley was busy with plenty other stuff so he seemed comfortable moving on.

 

(The man he wrote the 1st edition of WhFRP!  If he's casual, what the frag does that make me!?)

 

But it's clear even during its formative years GW were like these mini-empires in the office.  That kinda continues to this day, and I know GW is trying to change, but it's like in their DNA.  I say that because the guys that joined during that time are now the Studio Heads...and they're used to working in this ad hoc manner.

 

It's hard to change a company's DNA.  Culture eats Strategy for lunch.  It's like GW today is the same when it got bought out, but even moreso.

 

40k analogy - my friend, Tourney Tony main'd Orks, like a Green Tide.  He was also known for his Ultramarines.  The way he played his Ultramarines was just like Orks, lots of Tactical Squads, a Blue Tide.  Now it's 10th and he wanted to use the cheap Black Templars, a Black Tide.  Because he can change his armies, but not his DNA.

 

And speaking of things not changing...

 

 

+++ Rick Priestley May Have Remembered the Revenue Wrong +++

 

 

Ha~ha!  I now have a complete picture since the MBO and GW had to submit audited financials

 

 

Update - So it turns out Rick Priestley most likely remembered the Revenue wrong.  He initially said £10 million Turnover (i.e. Revenue) and £1 million Profit.  I took a look at the time after Bryan Ansell sold the company and it was only at £5 million Turnover, BUT it was about £1 million Profit.  It would then skyrocket the next few years.

 

And I could think of a perfectly good explanation why, it might be because he's honestly humble here.  GW wasn't just Warhammer at that point.  There were other games, like Talisman, very popular.  He might be thinking, "Warhammer by itself was £ X million, I'll multiply that by a factor of Y%, that should all add up to £10 mil maybe."

 

I had a Eureka moment.  It's about why GW's Revenue and Profit were so stagnant until there was a change in leadership, from Tom Kirby who took over after Ansell to current CEO Kevin Rountree around 2015.  The turn upwards at the AoS General's Handbook/40k 8th onwards was explosive, and that's great...but I always asked "what the zog was GW waiting for!?"

 

40k was a turning point in GW's history, and aside from it reaching £10 million Revenue and £1 million Profit.  That's when Bryan Ansell decided to sell, precisely because it showed value.  You want to buy/sell a company right when its value starts going up.  So in addition to what Priestley was saying, the fact that Ansell wanted to sell at that point, is real proof of GW's boom.

 

(I've said, year after year, the gross profit margin of the products was 70%; a boxset that cost £100 would've cost £30 to make, just for the electricity and labour of making those minis and books, etc., but not including the designers' salaries or the Warhammer Store's rent you bought it from.  That's the GROSS profit margin, of the products.)

 

The NET profit margin is what Priestley described there GW's profit overall factoring ALL their costs, £10 million Revenue, £1 million Profit, that's 10%.  During Kirby's stewardship, GW was always about that 10% to 15%.  Edit - during the decade of stagnation from 2005 to 2015, that was about the Net Profit Margin.  Like GW grew to have £120 million, and its Profit would be predictably £12 million.  Now, under new CEO's leadership, it's about 30% consistently.

 

Again, it's like in that DNA for when Bryan Ansell sold the business, that 10% was what was expected.  So they just kinda complacently accepted it, played it safe.

 

Edit - I now think Tom Kirby, who was already trying to take a backseat in the late '90s by stepping away from the CEO role into the Chairman role, then being forced back into the CEO role in 2001...just didn't want to work that hard.  He was supposed to have retired like 20 years ago, sitting on GW stock!  And when the boss doesn't care, nobody else does.

 

40k analogy - I actually have a comparison.  My Astra Militarum-playing friend, Timperial Guard, used to just form gunlines with his ranks of Guardsmen and Leman Russes; that's how he thought he should play.  Very defensive, just try to outshoot his enemies, usually expect a loss or a tie.  He was completely happy with that state of affairs, and he's not alone.  Plenty of Tau and Eldar players were just like that.  Then 1 day he got some Tempestus Scions because he liked the models, had them Deep Strike in and actually take objectives, BOOM, he was suddenly winning.  It's like they got some used to that way of doing things, they just assumed that's how it worked, but a small change can completely turnaround performance.

 

As for how that company was sold...

 

 

 +++ Management Buyout strategy +++ 

 

 

So Priestley described in more detail how the Management Buyout worked and I was like, "I know that trick, I also know THAT trick, but can't believe they used it."

 

The big thing was that Bryan Ansell, who took over GW, always wanted to sell it.  It wasn't merely Priestley's feelings on the matter, it was how he said Ansell was already moving to the British Virgin Islands.  You might have heard how on the news how they are a corporate tax haven to avoid paying taxes.

 

(I 1st saw it working in Mergers & Acquisitions, like I was going through a document and it mentioned "BVI".  I pointed it out to my mentor like "is this a tax term" and he lol'd, "Yes!")

 

Why do a Management Buyout, a MBO?  Like Priestley said, it was an easier way to sell a company.  Normally you have all sorts of professional services, auditors, to come in and really take apart your company, so potential buyers have full disclosure.  But in a MBO, where you sell to the existing management...well, they're managing it, they already know everything.

 

Priestley was saying how their office was a dog's dinner.  Probably not something you want put under scrutiny, and they even moved to present a better image to potential investors.  The toughest part was actually the real value of the company was probably in the 40k intellectual property, which was inside Rick Priestley and John Blanche's heads.

 

(I'd love to have a look inside Priestley's and Blanche's heads...but an investor probably wouldn't, it's like too grimdark up in there.)

 

It's the same with tech start-ups, like dot-coms or a phone app company.  Where's their value?  It's in their lead programmers' heads.  It's kinda hard to actually sell until they make the thing.

 

A great example of who does a lot of MBOs is, if you know any company named Virgin, like Virgin Airlines, Virgin Megastore, Virgin Radio, Virgin Cola, Virgin Etc., they were all started by Sir Richard Branson.  His thing is this: he loves (and is great at) starting companies, but he's not interested in running them long-term.  He wants to move on to his next idea.  So he'll set something up, then try to sell that company, take the money and move on to the next venture.  If he can't find a good deal, he'll basically sell it to his employees, the actual management team.  What connects him and Bryan Ansell is that they always had this exit strategy in mind, it seems.

 

(Sir Richard has this joke, "You want to know the easiest way to be a millionaire?  Start as a billionaire and start an airline.")

 

So all these tricks, BVI...MBO, is it illegal?  No.  Is it unethical?  No.  It's just gamesmanship...the exact amount of gamesmanship you're supposed to do.

 

Edit - Priestley, in what I interpret was his tone, suggests there's something janky about the deal.  Like he implies they said it was a MBO but it wasn't totally bought out, like instead of just loaning the money to Kirby, maybe they took GW stock instead, like it's a MBO in name only.  That's totally fine and a done thing, you either pay back in money or stock.

 

40k analogy - BVI, MBO, it's the Loyal 32, back in 8th/9th when people bought 30 cheap Guardsmen and 2 cheap HQs to qualify for that detachment to gain cheap Command Points for Stratagems.  It's a little gamey, but plenty of tournament players were doing it, it was just part of the meta at the time.  These tax havens and ways to sell the company are the meta.

 

 

+++++

 

 

Warhammer taught me skills, like analysing numbers, strategic planning, etc., more than, y'know, school did.  I owe Rick Priestley a great deal of that.

 

And it turns out he has more to teach me yet.  Thank you, sempai.

Edited November 2, 2023 by N1SB

[Noserenda]

"But sci fi won't sell y'know" :D

[N1SB]

Update to my original post thanks to getting more records.  I feel like I finally completed a long-standing Warhammer project.

 

(On that note, I better get back to working on my long-standing Warhammer projects.)

 

Basically, I think Rick Priestley underestimated the Revenue of GW at the time, and I attribute it to his underestimating his contribution.

 

And fun fact, in terms of emoluments (like normal pay), Rick Priestley was making more than the GW CEO was at one point:

 

 

It's in In-Kind Benefits, which for something like an expatriot is housing allowance in the new country they've been sent to work.  Not sure what GW was offering.  Maybe he ate at Bugman's Bar for free and he went there for breakfast, lunch and dinner.  That'd have been hilarious.  Like he's part of the Warhammer experience.

 

Oh...as for why, we know him as the Father of 40k, but he had a title: Director of Product Development at GW.  Hahahahahahaha.

[Stitch5000]

Has speculation about Games Workshop as a financial business entity actually become a hobby in itself?

Personally, I don't understand the fascination, this kind of nuts-and-bolts stuff certainly undermines my suspension of disbelief. 

[N1SB]

In Wisconsin, a farmer...being wise in matters of both heaven and earth...said to me, "You should know where your food comes from."

 

That's the mentality I come here when I talk about stuff like this.  Also, farmers, cab drivers, restauranters are better economists than economists.

 

Understanding GW better informs our Hobby purchases.  I'll give you an example, we saw this pattern of summer releases of 40k, AoS, then a gap year where growth leveled off.  We knew they were going to hard push a 3rd product line one of their flagships just to fill this gap, either 30k or Middle Earth.  To my delight, it was 30k.

 

But your point is well-taken.  I'm a Techpriest.  These...nuts & bolts are my forte.  And I better get back to my 30k project.

[Mechanicus Tech-Support]

 nuts-and-bolts,  nuts-and-bolts,  nuts-and-bolts 

 

 

[Lexington]

I don’t spend a ton of time around the B&C these days, but when I see an N1SB topic pop up, it becomes required reading.

 

Thanks as always for all the insight (and fun!) you put into these articles.

[DukeLeto69]

On 10/25/2023 at 1:45 AM, Lexington said:

I don’t spend a ton of time around the B&C these days, but when I see an N1SB topic pop up, it becomes required reading.

 

Thanks as always for all the insight (and fun!) you put into these articles.

Yep ALWAYS required reading for me.

[skylerboodie]

Same interviewer has since released a short interview with Andy Chambers too. (Wow does he look different now compared to his White Dwarf photos from my youth; makes me feel old !) Good to hear his insider tales.

 

 

[Lexington]

I somehow manage to be surprised every single time I hear Andy Chambers’ voice, which sounds to me like it should be coming from someone at least twice his size. Like a damn foghorn, that guy.

 

Seriously, tho, lovely video, it’s great to hear these guys go on about the olden days.

[alfred_the_great]

16 hours ago, Lexington said:

I somehow manage to be surprised every single time I hear Andy Chambers’ voice, which sounds to me like it should be coming from someone at least twice his size. Like a damn foghorn, that guy.

 

Seriously, tho, lovely video, it’s great to hear these guys go on about the olden days.

and a reminder the “good ole days” werent that great…

[Noserenda]

Thats the real reason they had to leave the cheap offices, Jervis and Andy talking to each other all day resonated a wall down :D 

[Lexington]

1 hour ago, alfred_the_great said:

and a reminder the “good ole days” werent that great…

 

I do think it's interesting to hear how rushed and chaotic the creation of these now-legendary products seems to have been. Speaks to the talent on staff in GW at the time that they're still remembered so fondly.

Edited November 1, 2023 by Lexington

[alfred_the_great]

1 hour ago, Lexington said:

 

I do think it's interesting to hear how rushed and chaotic the creation of these now-legendary products seems to have been. Speaks to the talent on staff in GW at the time that they're still remembered so fondly.

like many legendary things, I think their status has been burnished by the passage of time. 
 

how many people actually play 3e 40k regularly, yet we routinely hear it was the high point of Codex writing (as an example). 

[Noserenda]

22 minutes ago, alfred_the_great said:

like many legendary things, I think their status has been burnished by the passage of time. 
 

how many people actually play 3e 40k regularly, yet we routinely hear it was the high point of Codex writing (as an example). 

Because its never as simple as rules quality when it comes to gaming? Models, uptake and availability are considerably more important most of the time. You cant play 3rd ed if you have noone to play with, or a Votann army for example and picking up rulebooks etc can be troublesome. 

Besides, 4th/5th was better ;) 

[Pacific81]

That was a really interesting post, thanks for sharing.

 

My goodness.. Andy Chamber's hair! What happened! But I can confirm it is not a case of Samson losing his strength, as he has done a quite excellent Slaine game for Warlord fairly recently.

 

I had heard that Priestley got promoted to the point where he was basically not doing any development and didn't enjoy it and so left, but don't know what truth there is to that.

[skylerboodie]

 

Part 2 now released (not watched it yet to be able to comment but I'm sure there'll be some 40K-related or GW financials/business-history references in here, as in Part 1).

Edited November 13, 2023 by skylerboodie

[N1SB]

Just some notes from this video, thanks a lot Brother Skyler, some interesting insight, including on Rick Priestley's exit:

 

• The Management Buyout put profit & loss front & centre...because they gotta pay back the loan
• Alessio Cavatore, whom we know as the Chaos Codices writer, was closer to him than Andy Chambers
• Warhammer Historical Wargames was his last project and was his transition to his own Warlord Games

 

 

+++ The MBO and P&L +++

 

 

Buying a company is like buying a house.  You're now a homeowner and you no longer pay rent...but now you pay a bank.  Suddenly, you notice every little thing in the house, you're doing your own home improvement instead of calling the landlord, to save money.

 

Rick Priestley described what it was like around WhFB 3rd and 4th, which was from early to mid '90s, how having to pay back the venture capitalists really put their mind to their profit & loss, creating new products with less staff and lower production values...a story as old as time.

 

It's horrible, I know!  Yet remember this was like Games Workshop's renaissance...around the same time as the 40k 2nd edition boxset.

 

Remember the 40k 2nd edition boxset?  Bombastic Blood Angel Captain with the hotrod fist on the cover, some of the books like the Index with the basic unit profiles for all the armies in that black & white pamphlet.  The Ork Dreadnought was a cardboard cutout!

 

It was awesome.  It was a tough time, but like sometimes your best work is when you speedpaint a project?

 

But the point is it's not always corporate greed, a lot of times it's I gotta pay my mortgage to keep my house.  And sometimes it does drive you to do your best work...because it's your house now.

 

Edit - Rick Priestley happened to mention a hypothetical number, £14 million, as the price of the MBO, and he immediately mentions he doesn't remember the exact number.  That'd be low/a really good deal, because my own guesstimate would've put it around £20 to 40 mil.  That £20 to 40 mil estimate is basically a rule of thumb that 10x the annual Revenue of a company is what it'll sell for, and I reckoned GW had a Turnover between £2 to 4 mil a year at the time.  But £14 mil is actually very possible and within the ballpark, like Bryan Ansell had wanted to sell and long agreed on a price before the deal was actually done.

 

Further edit - the more I think of it, the more possible it seems, because instead of all money, the Management (Buyout) Team prolly gave stock instead.

 

 

+++ Alessio Cavatore was closer to Rick Priestley +++

 

 

On 11/12/2023 at 4:21 PM, Pacific81 said:

I had heard that Priestley got promoted to the point where he was basically not doing any development and didn't enjoy it and so left, but don't know what truth there is to that.

 

 

Wooow, that was spot on, he literally mentioned how he was taken out of active development role, and became a mentor.  And at a mentorship level, Allessio Cavatore, the Italian designer behind the Chaos Codices, would go to Rick Priestley more.

 

Rick Priestley seems to be a good manager; he's like, I'm here if you need me, I'm not going to micromanage everything you do, I'll let you just do it.  But I always thought like he was the Dad, Jervis Johnson was Big Brother, Andy Chambers was Little Brother.

 

And Alessio Cavatore was the foreign kid that hung out at the house so much he was practically family.

 

But it shouldn't surprise me that Alessio really valued Rick Priestley, and probably everyone else's, collaboration.  If he didn't, he wouldn't have moved from his homeland to work with them, like it takes a certain amount of dedication, and he wanted full value for it.

 

This also explains how Andy Chambers's designs quite deviated from Rick Priestley's.  3rd ed 40k was like a totally different ruleset from WhFB and even 2nd ed 40k, like Andy has already developed his own style of game design.  It just surprised me a little bit.

 

 

+++ Rick Priestley was already headed towards Historic Wargaming +++

 

 

I always wondered if it was bad blood that caused Rick Priestley to leave.  Like he WAS Warhammer.

 

And it's like he was already drifting away with from what we think of as Warhammer to Warhammer Historic Gaming, which he would continue with his own company, Warlord Games, which makes Bolt Action, the 2nd World War wargame.  And it was a natural evolution.

 

I'm sure there WERE other issues, but it was like a breakup where all your friends knew it before you did.  Alessio Cavatore and the Perry twins, who sculpted a lot of early GW stuff including Lord of the Rings, went with him.  Andy Chambers would write the Soviet book.

 

It's interesting he mentioned not knowing about AoS much, since he left in 2010 2009 and it wouldn't come out until 2015.

 

 

+++ What wasn't mentioned: 2007 +++

 

 

There have been all these little stories about GW's crises, like Pokemon.  Rick Priestley mentioned Warhammer Historic Gaming was a bit of a boondoggle.  But at a financial/CEO/investor perspective, the annus horribilis, is 2007.

 

This was the year GW made an actual loss/negative profit that lead to all sorts of cost cuttings, like everything being one-man stores, that probably ended up stifling them for a decade until after the AoS General's Handbook.

 

I thought he was describing it when he said there was a bad year, but it turned out to he was talking about 2010.  But he did mention some things that seemed related to 2007.  I dunno, it's just this last jigsaw puzzle piece I'm still looking for.

 

Really fascinating look at how the sausage was made.

Edited November 13, 2023 by N1SB

[Pacific81]

That's really interesting @N1SB.

 

I would say on the historicals angle, a lot of the guys there were probably already into it (because that *was* wargaming until GW and some others came along) and also Rick himself I believe I think had a masters or similar in ancient/Roman history? It's why you get so many references of the Roman Legions (and things like the missing Legions) in 40k lore.

 

There was a really interesting interview with Bob Naismith on one of the YouTube channels recently (I forget which), he was the guy that basically designed the space marine, and he designed it as a kind of World War 1 British soldier, as a sci-fi concept, but with the input from Rick and the other guys there around it. So you always had that historicals theme running through things.

 

Of course Rick went on to design the brilliant Bolt Action, which is probably the most popular world war 2 (certainly at 28mm scale game) out there.

[Emperor Ming]

Great vid, more please

 

some ideas:

 

He could have went into more detail about army books, theres prob a whole ep there

 

chapter house....everyone would watch that one

[Lexington]

6 hours ago, N1SB said:

I always wondered if it was bad blood that caused Rick Priestley to leave.  Like he WAS Warhammer.

 

One thing I remember hearing, waaaaaay back when it all happened, was that Priestley was actually let go, specifically because he'd held back the Dark Eldar revamp so much - apparently, it'd undergone multiple revisions that he wasn't satisfied with, and the costs for the project ballooned as a result. He'd been untouchable before, as he held some significant portion of the company's stock, but he'd been bought out by management a few years previous. So, off he went.

To be extremely clear here, I have no knowledge about it beyond a vague memory of seeing that info on a post either here or on Warseer. However. some of the ways he talks about company ownership in these videos make me wonder if there was some truth to it.

[Cenobite Terminator]

Rick left Games Workshop in 2009, he said that the corporate culture had grown too focused on sales and no longer cared about innovation in game design.

[Firedrake Cordova]

3 hours ago, Pacific81 said:

interview with Bob Naismith on one of the YouTube channels recently (I forget which)

Probably The Painting Phase?

[Marshal Rohr]

Andy had a line in another interview insinuating the reason they talk about evil emperors on golden chairs was because of the GW board. As we get more of these behind the scenes interviews from the Painting Phase and we actually get first hand accounts from Rick and Andy and others it’s very clear there is a cabal of old business school alums and people who have never held another job in these bottlenecks at the company that are driving all of the universally bad decisions we’ve had over the last few years. The IT debacle. The warehouse. The website. The community outreach. Warhammer plus. It’s all coming from just a few decision makers trying to justify their existence and persistence at GW and it sounds a lot like if those people were gone we’d be seeing the things we actually want to see instead of the schizophrenic, unmoored releases and design changes of the last three editions. 
 

edit: after Sugs interview with the painting phase it does give me hope the Specialist Games Studio is in Good Hands, those Hands are just tied by worthless MBAs and salesmen. 

Edited November 13, 2023 by Marshal Rohr

[Rain]

45 minutes ago, Marshal Rohr said:

Andy had a line in another interview insinuating the reason they talk about evil emperors on golden chairs was because of the GW board. As we get more of these behind the scenes interviews from the Painting Phase and we actually get first hand accounts from Rick and Andy and others it’s very clear there is a cabal of old business school alums and people who have never held another job in these bottlenecks at the company that are driving all of the universally bad decisions we’ve had over the last few years. The IT debacle. The warehouse. The website. The community outreach. Warhammer plus. It’s all coming from just a few decision makers trying to justify their existence and persistence at GW and it sounds a lot like if those people were gone we’d be seeing the things we actually want to see instead of the schizophrenic, unmoored releases and design changes of the last three editions. 
 

edit: after Sugs interview with the painting phase it does give me hope the Specialist Games Studio is in Good Hands, those Hands are just tied by worthless MBAs and salesmen. 

 

This is true of many companies. They are started by a small group of talented and passionate people with a dream and a genuine interest in what they do. They become successful and go public. The MBA's take over. The MBA's do not actually use the product or service that the company provides, and do not fully understand why anyone would. In some cases (and I'd bet GW is one such case) they actively resent their own customers. They just understand boilerplate taught to them by professors that never actually ran a business themselves. They also have chips on their shoulders from being unable to hack a quant degree of any kind, or to go into finance with the big boys.

 

They implement boilerplate nonsense, and this tends to drive up costs. They panic at shrinking margins, but instead of firing the make-work idiots that they created new positions for, they fire people that actually develop/make the core product, and replace them with cheap offshore third party contractors because their MBA program taught them that human beings are fungible. They lie to customers (and sometimes) shareholders about just how much of the business they have hollowed out and replaced with offshores and H1B's with possibly fabricated credentials. The company trends downwards. It's a big mystery as to why. Or so I've been told.

 

Edit: I guess to be fair I think GW's financials are actually pretty good, or have been for the past few years. I was not speaking about GW per se, I had another company in mind that I have some inside knowledge of, but I'm sure it's not a unique case.

 

Edited November 13, 2023 by Rain