GW profits

[Starlight_Wolf]

Here's your daily dose of GW's numbers growing, nice to see staff getting a decent bump off the back of it.

 

Curious what to make of the last line 'Wade said it appeared there had been “a pull-forward of demand” in the summer and Games Workshop now faced tougher trading conditions.'

 

Assuming the pull forward is just 10th ed dropping and some other releases around that time, and now the inevitable cool off until the next big (core) release.

 

https://www.theguardian.com/business/2023/dec/07/games-workshop-hands-staff-2500-bonus-as-half-year-profits-rise-12

[Marshal Rohr]

Can a YouTuber explain to me why this is bad, actually? 

[Lexington]

Quick! Someone put up the N1SB Signal!

 

2 hours ago, Marshal Rohr said:

Can a YouTuber explain to me why this is bad, actually? 

 

I dunno, but shares apparently fell by 11% today due to GW only matching expectations (ah, the investor class...), so it's not necessarily extremely great news for GW. Probably not awful, though.

Edited December 7, 2023 by Lexington

[Scribe]

13 minutes ago, Lexington said:

I dunno, but shares apparently fell by 11% today due to GW only matching expectations (ah, the investor class...)

 

Gotta love that. Such a scam.

[Marshal Rohr]

19 minutes ago, Lexington said:

Quick! Someone put up the N1SB Signal!

 

 

I dunno, but shares apparently fell by 11% today due to GW only matching expectations (ah, the investor class...), so it's not necessarily extremely great news for GW. Probably not awful, though.

100% the lack of any substantial release tempo for 40K factions caused the overestimation. 

[EverythingIsGreat]

1 hour ago, Lexington said:

Quick! Someone put up the N1SB Signal!

 

 

I dunno, but shares apparently fell by 11% today due to GW only matching expectations (ah, the investor class...), so it's not necessarily extremely great news for GW. Probably not awful, though.

 

It looks like a (fairly common) case of "buy on the rumor, sell on the news" to use an investing cliche. I wouldn't call it awful, either.

[Emperor Ming]

Crazy prices will catch up with them eventually

 

How much is a 2k army now

 

£600ish? then paints, basing etc is easily another 100

 

Crazy

 

GW must assume Warhammer gamers are minted

Edited December 7, 2023 by Emperor Ming

[Doghouse]

1 hour ago, Lexington said:

Quick! Someone put up the N1SB Signal!

 

[Scribe]

17 minutes ago, Emperor Ming said:

How much is a 2k army now

 

£600ish?

 

Seems close? I havent looked at it from scratch (as my pile of shame is...shameful) but I know to finish off a few projects would be $400-$500 CAD.

 

EDIT: Scratch that, after tax to finish my CSM would be $700, and thats with a Combat Patrol included for those savings. Easily over $1000 Canadian, probably pushing $1500-2000.

Edited December 7, 2023 by Scribe

[Marshal Rohr]

Oooh, scandalous: Frontier fumbling the ball so hard on that Age of Sigmar Game might be the culprit for the stock drop. The main GW loss was licensing, maybe?

[Orion]

7 hours ago, Emperor Ming said:

How much is a 2k army now

 

Probably somewhere between £300 - £1800. 

[Marshal Mittens]

I like playing 40k.

 

I have a lot of Nerdy adult friends who play DnD or Magic or the like who won't even consider 40k because of the price, and most are normal middle class people with decent income.

 

I do imagine the ever rising costs will eventually be a huge problem for them. 

[Matcap86]

2 hours ago, Marshal Mittens said:

I like playing 40k.

 

I have a lot of Nerdy adult friends who play DnD or Magic or the like who won't even consider 40k because of the price, and most are normal middle class people with decent income.

 

I do imagine the ever rising costs will eventually be a huge problem for them. 

 

Which is funny as a quick google shows me the average magic deck can also run between 100 and a 800 for people invested in it. Explains why a friend of mine who is into Magic is complaining he can't find anyone to join in with his hobby as everyone thinks it's too expensive for a set of cards.

 

All in the eye of the beholder I suppose. I'd rather have minis for that amount of money then cards. 

[DemonGSides]

5 hours ago, matcap86 said:

 

Which is funny as a quick google shows me the average magic deck can also run between 100 and a 800 for people invested in it. Explains why a friend of mine who is into Magic is complaining he can't find anyone to join in with his hobby as everyone thinks it's too expensive for a set of cards.

 

All in the eye of the beholder I suppose. I'd rather have minis for that amount of money then cards. 

I agree, but magic has a lot cheaper starter venues than 40K ever could. It costs pennies to throw together a random deck. No matter what, minimum spend for 40k is $135 for a combat patrol. It's a hard pill to swallow. 

[Valkyrion]

I don't know about 10th edition, but a 2000 point Horus Heresy Pride of the Legion list would cost around £300 if bought from GW direct.

10 Cataphractii (300 points), 30 Tactical Marines (300 points), Contemptor (200 points), Spartan (350 points), 2 characters (200 points) - AoD Starter Box (£180)

Add on 10 Tartaros (£50, 300 points), 2 x 10 MKIII Veterans (£45, 400 points), and a Leviathan (£50, 300 points). That gives you 2350 points for £325.

 

Is it optimised? Of course not. Is it full of useful things that will see you through many years of gaming? Hell yeah!

You could even get that price down to as low as £250 given 3rd parties, or stay within your £300 region by buying from 3rd parties and tacking on some Heavy Weapons.

 

GW is often, quite fairly, given short shrift by the community for outrageous pricing (£40 for Heavy Intercessors, £75 for a sabre, £140 for a phalanx warder squad etc), but the barrier of entry is lower than a games console, on par with a weekend away, the price of two concert tickets over the year, half a season ticket for your local football team....

 

If you just want to buy the best army and play immediately then that is going to cost, but if you want to join every aspect of the hobby (building, painting and playing) then I don't think £250-500 a year is too high a price point for the time and enjoyment it offers. 

[Matcap86]

59 minutes ago, DemonGSides said:

I agree, but magic has a lot cheaper starter venues than 40K ever could. It costs pennies to throw together a random deck. No matter what, minimum spend for 40k is $135 for a combat patrol. It's a hard pill to swallow. 

 

Well, a lot of people start in the hobby with some marines, paint and some brushes. Basic starter sets on that front are 40-50ish or less.

A basic starter set with about half of the leviathan models, rules, dices, cards, playmat are around 70-75 around here. So I'd posit the real starter is around half of what you're saying. 

 

 

Edited December 8, 2023 by matcap86

[Special Officer Doofy]

10 minutes ago, matcap86 said:

 

Well, a lot of people start in the hobby with some marines, paint and some brushes. Basic starter sets on that front are 40-50ish or less.

A basic starter set with about half of the leviathan models, rules, dices, cards, playmat are around 70-75 around here. So I'd posit the real starter is around half of what you're saying. 

 

 

 

You can play a full game of magic with a prebuilt $20 deck from the store. You can't play a game of 40k with the box that comes with a few marines and paints that still costs alot more. Let's not even pretend warhammer 40k has as cheap of an entry cost as magic or similar stuff.

[Matcap86]

1 minute ago, Special Officer Doofy said:

 

You can play a full game of magic with a prebuilt $20 deck from the store. You can't play a game of 40k with the box that comes with a few marines and paints that still costs alot more. Let's not even pretend warhammer 40k has as cheap of an entry cost as magic or similar stuff.

 

... that's not what I said? I said the starting point for a lot of people in our hobby isn't as high as some people make it out to be.

 

The hobby for a lot of people isn't having a tournament ready 2000 point army. 

[phandaal]

5 minutes ago, matcap86 said:

 

Well, a lot of people start in the hobby with some marines, paint and some brushes. Basic starter sets on that front are 40-50ish or less.

A basic starter set with about half of the leviathan models, rules, dices, cards, playmat are around 70-75 around here. So I'd posit the real starter is around half of what you're saying. 

 

 

 

Desn't hurt to acknowledge that buying a starter deck from the store is going to be a cheaper entry point (in time cost as well as money) than a GW combat patrol. It is what it is. Warhammer is not a card game.

[N1SB]

21 hours ago, Marshal Rohr said:

Can a YouTuber explain to me why this is bad, actually? 

 

Brother Rohr, I hear ya, like some idiot on YouTube's bad take.  But (un)fortunately, you've got a homegrown idiot right here, in me.

 

Let's discuss the nature of the beast that is the stock market, because the Beast is a little bit separate from the Business (of Warhammer, GW).

 

 

The Stock Market Is Like a Munitorum Field Manual

 

 

Summary - the stock price of GW is just re-adjusting like points value, because it sees the world as a pure Mathhammer numbers game.

 

Yes, the stock market can be irrational.  Yes, the stock market can be wrong.  Just like the Munitorum Field Manual points costs sometimes.

 

And just like the Munitorum Field Manual, the points cost change, precisely BECAUSE it corrects.  That's the point of why it exists.

 

Broadly speaking, the stock market just literally tells you what things cost.  They're like pure Mathhammer.  They don't make the rules, you would look to the rulebook, the Codices, the Balance Dataslates for that.  Then analysts, like Auspex Tactics, tell you what the best and worst deals are, but it doesn't guarantee a win.

 

(So I made a triple C'tan list and I'm shocked the C'tan got buffed while either retaining their points costs or getting discounts.  It's crazy.)

 

And it's that idea, you KNOW points costs aren't everything...yet they kinda are?  Like Gollum arguing with himself, it's always that weird feeling.

 

What the stock market really is NOT is some YouTube reviewer who hates on your favourite film or streaming series or video game...because it simply doesn't care.  A YouTuber at least cares enough to hate.  Hate is not the opposite of Love; Apathy is.  The stock market doesn't care about anything, it's an AI playing a numbers game.

 

(The AI comparison isn't some zeitgeist referential humour; it actually happened, back in the early 2000s.  Vast majority of trades are automated.)

 

I say this because Brother Rohr reminded me of those YouTubers that use such news to dunk on companies they have a Love-Hate relationship with.  Not commenting on politics, just observing there are people that make videos like, "I told you, Go Woke Go Broke, stock price fell, VINDICATION."  Like, you're still not over her, are you.

 

That is the Beast.  It's a wild animal doing what a wild animal does.  So what is the Business?  Here we go, here's the meat.

 

 

New Editions of 40k Are GW's Best Years

 

 

Summary - because 40k has been the driver of rapid growth, it might be why this year is being judged more harshly.

 

Old image from a few months ago, not adjusting it with latest figures because they don't quite fit, but I want to show the why:

 

Hehe, still hadn't had time to dress it up yet, sry

 

I'll eventually put little pins on which games/editions came out for GW's Half-Year Report in January, but you can tell when new 40k came out.  It's the steep surge after 2017 for 8th, then again at 2020 for 9th.  Reminder, these dates are for GW's fiscal year starting in June, or when new game editions come out.

 

(2022 June was when 30k 2nd ed came out, that was that weird blip due to huge currency fluctuations...a point that will be relevant later.)

 

When you see the following numbers based on what I just described, you'll see what's up.  Comparing the information released with like-for-like:

 

• 40k 8th ed, came out Summer 2017
  • Core revenue UP from £70.9m to £108.9m, +34%
  • Royalties receivable UP from £3.3m to £4.2m, +27%
  • Profit UP from £13.8 to £38.8m, +181%!!!
     
• 40k 9th ed, came out Summer 2020
  • Core revenue UP from £148.8m to £186.8m, +26%
  • Royalties receivable DOWN from £10.7m to £8.7m, -19%
  • Profit UP from £59.2m to £92.0m, +55%
• 
  40k 10th ed, came out Summer 2023
  • Core revenue UP from £212.3m to £235m, +11%
  • Royalties receivable DOWN from £14.3m to £12m, -16%
  • Profit UP from £83.6m to £94m, +12%

 

(To compare, UK's GDP, meaning on average, most UK companies, etc., kinda, statistically...will grow 0.5%.  GW's growing at double digits.)

 

By laying out the numbers like this, you can see the stock market is actually acting at least according to its own logic.  That analyst the Guardian interviewed seems to know 40k is GW's main driver.  The plateauing, leveling off of growth, is probably what they're all responding to.

 

Thus, the stock market isn't hating on Warhammer.  It's adjusting its points cost like a stock price.  I showed you how it Mathhammers it out.

 

But Mathhammer is inherently limited, and in this specific case, there IS something specifically wrong here.  And here's where it falls apart a bit.

 

 

The Specific Problem With This Year's Mathhammer...Leftover From Last Year

 

 

Summary - the problem with this year's GW financial Mathhammer is that it carries a misleading statistic from LAST year.

 

In the above, you noticed I went all X is UP from Y, +Z% with cute Christmasy colouring that was unintentional btw.  That's how we report stuff, period from period, for the sake of comparison purposes.  The actual problem lies with when there's something amiss with the previous period, as the case is here.

 

Last year, I was really confused if you guys recall, about 30k 2.0.  It seemed to sell way more than I thought it did, I was amazed.

 

Then I realised something I just missed because it was directly caused by the currency fluctuations caused by a UK political event, the British pound fell so much, it made GW's performance much higher than it actually was.  It happened RIGHT BEFORE the reporting period.  That causes statistical shenanigans for this report.

 

I made a mistake last year with that.  Because we compare year on year growth, the source of that mistake is appearing here again.

 

In short, we're comparing growth this year to last year's artificially high, misleading growth figure...so you see the problem now.

 

(I DO believe that analysts, investors, trading algorithms ARE factoring that in, but it's hard to gauge.  But definitely responding to this.)

 

How do we remedy this?  We "need more information", but I know that's a cop out, so I'll tell you the truth, I need THESE following details.

 

 

Questions I Already Have In Mind

 

 

Summary - there's a few places I'm zoning in on, which should be answered in the more complete Half Year Report in January.

 

Revenue at constant currency will be the very 1st stat I look at.  This will resolve what I suspect is what this article seems to be zoning in on.

 

Then changes to where sales are coming from.  GW does a good job breaking down revenue from geographical regions.  North America's economy is recovering well.  Europe, for the most part, isn't doing as well.  UK, in particular, is struggling.  This is not insulting any countries' character, it's just this economy.

 

Incidentally, did Online sales decrease, because NOBODY CAN FIND ANYTHING ON THEIR NEW WEBSTORE!?  I've been reading you guys' other thread on issues with the new webstore.  My issue IS the new webstore.  I can't find anything!  That's got to have an impact on actual revenue.

 

Then any insight on the operating expenditures, the cost of running GW.  GW actually got worse at reporting this, almost intentionally hiding these, but they're very relevant.  Making miniatures need fuel, to run the Nottingham factory, then plastic is an oil byproduct.  This should be a minor thing, though.

 

(Incidentally, North America has a lot of fuel, as does France of all places, via its nuclear program.  Directly affects their economies.)

 

What we're getting right now is a Codex preview from WhC.  I want to wait for the Codex itself, the Half Year Report coming early January.

 

 

The Pull-Forward Of Demand

 

 

Summary - it just means you get more sales during a product launch period...which is so normal, they sound silly for mentioning it.

 

I just want to take a moment to explain what this article means about the Pull-Forward of Demand...I'll just translate the jargon.

 

The opening weekend of a film is usually the biggest, then it starts dropping off.  The Hollywood jargon is actually "the drop off".

 

The launch period of a product is usually the biggest spike, then it starts evening out.  This is perfectly logical and normal.

 

So what the article is saying is that in September GW announced its 1st 3 months of the fiscal year it made £121m.  Then continuing on, we're now at 6 months, if the trend theoretically continues, it'd be double that, £242m.  Instead, GW's most recently 6 month trading update is not less than £235m, so it's lower.

 

But that very 1st 3 months of the fiscal year is the Leviathan launch period!  The main boxset of the new edition of GW's flagship, 40k!  Of course that's gonna be a sales spike!  I'd be genuinely concerned if it's not, that would mean the new 40k was unpopular.  The article is conflating ideas, just throwing jargon at you.

 

I've mentioned before the stock market likes a straight upwards line, it doesn't like peaks and valleys, unlike cartoon depictions of business meetings.  It wants every year to grow at the exact same rate, every quarter, every day, every minute if possible.  Nice, steady, predictable line.  That's kinda the implied issue.

 

Except it's not a totally stupid point, because how many of you tried to pre-order Legiones Imperialis?  That was counted in these Half-Year stats.

 

 

GW's Bottleneck Is That Production Unable to Keep Up With Demand

 

 

Summary - GW's actual real problem is that their Nottingham plant, even with improvements, can't produce all these games, all the time.

 

So my friend Timperial Guard told me Legiones Imperialis was sold out in 15 minutes, even though he was at his desk right when pre-orders started.

 

It's not a new story, I know.  Happened with Lion El Jonson.  "Not currently available online" is the one thing I can find on GW's new website tbh.

 

Or even earlier, during the Call To Arms event here on B&C, I chose my army partly because I could get those minis; other ideas just were out of stock.

 

This is an obvious and actual real issue.  GW's core revenue cannot grow if it simply has no more inventory to sell.  I was just mocking the article for that Leviathan point, but to be honest, remember when Eddie or Nick boasted, "Everyone who wants Leviathan can get one!"  That should be a given.

 

 

GW WAS replacing AND expanding its production facilities, as seen under a line item called property, plant and equipment (standard term).  I tried to do a fancy graph here to simply show, there are so many plastic mould injection machines you can fit inside the Nottingham miniatures factory.

 

But it's not a complaint.  If you noticed, almost anywhere in the world, buying a house is increasingly difficult and costly?  Building new facilities faces the same problem, both higher actual prices and it's even more expensive to borrow money, a double whammy.  The same applies to new plants.

 

And therein lies the disconnect, and it's easier by wrapping all this up, because they are connected.

 

 

One Conclusion To Connect It All

 

 

This article focused less on GW's performance and more on the stock market.  The stock market is just a numbers game, and in that numbers game, GW is leveling off.  But there's that statistical shenanigans because it measures period on period, and the last one had these crazy currency fluctuations from a UK political situation.

 

So a janky numbers game got especially sucky because of currency issues screwing up the equation.

 

Then there ARE other issues, but we're only getting the Warhammer Community Preview article instead of the actual Dataslate/Codex/etc.  That's coming in January.  This is still a useful preview and I appreciate GW reporting its info in a timely manner to its investors.  However, that doesn't fix the real issue.

 

There IS a real problem, and that the GW miniature production facilities just can't keep up with the demand and new games, etc.

 

The share price, being a numbers game, will continue to reflect that without knowing what it means, like an AI bot playing a numbers game.

 

(There are things I'm actually thinking about which will be telltale signs, but they are pure speculation and I won't talk about them openly for now.)

 

Special thanks to Brother Doghouse for my new forum profile pic.  I love it because it is awesome.  It just cracks me up.

Edited December 8, 2023 by N1SB

[Special Officer Doofy]

18 minutes ago, matcap86 said:

 

... that's not what I said? I said the starting point for a lot of people in our hobby isn't as high as some people make it out to be.

 

The hobby for a lot of people isn't having a tournament ready 2000 point army. 

 

You can't play the game with a few marines. The hobby for most people involves playing the game. 2000 is what most people strive for, but the rules start at 1000 points in the core rules. And 1000 points is alot more than $50 even without paints or anything.

 

6 hours ago, matcap86 said:

Which is funny as a quick google shows me the average magic deck can also run between 100 and a 800 for people invested in it. Explains why a friend of mine who is into Magic is complaining he can't find anyone to join in with his hobby as everyone thinks it's too expensive for a set of cards.

 

Your post here also seems like your implying it's more expensive to get into magic than Warhammer 40k because of financial reasons and your friend can't get anyone to join because if it. Magic outsells Warhammer and far more people play it. Alot of it has to do with money and cost of entry (the other half is time).

Edited December 8, 2023 by Special Officer Doofy

[Halandaar]

Absolute speculation on my part here but I feel like the reason investors expected to exceed expectations (absolutely deranged sentence) is because they don't understand the product cadence?

 

40K is the biggest selling range. In a year where a new edition is launched, there is a big sales boom in the summer for the launch box and new rules and paraphernalia, and then there are massive gaps for the remainder of the year where nothing happens. The factions from the starter set get their product launches and that accounts for what, 2 weeks? Out of the remaining half year? And besides that the system is basically abandoned and players of every other faction are given between minimal and zero reason to invest in it. I mean maybe that's accounted for because GW at least understands that and would have set expectations accordingly, even if investors do not.

 

There are other factors I guess; perhaps the sales of the products that have released did exceed expectations but that has been offset somewhat by the fact that Legions Imperialis launched so late it probably falls outside of the half-year these numbers relate to?* And Kill Team pushed back out of that reporting period as well. 

 

*Direct pre-orders would be in, after-launch sales and third-party sales would not.

 

12 hours ago, Marshal Rohr said:

Oooh, scandalous: Frontier fumbling the ball so hard on that Age of Sigmar Game might be the culprit for the stock drop. The main GW loss was licensing, maybe?

 

Shouldn't think the income from that license would even have been expected in this reporting period. The half-year runs to late November (I think 26-27th) and RoR had only been out 10 days at that point. Steam would wait until the end of the month to determine how many units had been sold before paying the developer their share, and it takes up to 30 days to make the payment so Frontier probably haven't even had the cash for that yet, let alone paid on whatever they owe GW in royalties.

 

 

 

 

Edited December 8, 2023 by Halandaar

[Halandaar]

8 minutes ago, Special Officer Doofy said:

You can't play the game with a few marines.

 

Combat Patrol. They even explicitly market towards this as the beginner mode now with custom rules for the models in those boxes. 

 

I'm not going to try to claim that a 2000 point army isn't going to set you back a lot of money, but the idea that the entire game isn't playable below 1000 just isn't tenable.

[phandaal]

12 minutes ago, Halandaar said:

 

Combat Patrol. They even explicitly market towards this as the beginner mode now with custom rules for the models in those boxes. 

 

I'm not going to try to claim that a 2000 point army isn't going to set you back a lot of money, but the idea that the entire game isn't playable below 1000 just isn't tenable.

 

Main thing is, it is cheaper to start playing MTG than to start playing Warhammer. We can come up with a bunch of exceptions, but the basic truth is the same. It is a weird thing to derail a thread over, and attempting to split hairs over it is just embarrassing.

[Halandaar]

2 minutes ago, phandaal said:

 

Main thing is, it is cheaper to start playing MTG than to start playing Warhammer. We can come up with a bunch of exceptions, but the basic truth is the same. It is a weird thing to derail a thread over, and attempting to split hairs over it is just embarrassing.

 

Okay? It's cheaper to start playing Warhammer than take up rally driving. What point are people trying to make here? Seems like just another general push to turn yet another thread into a whine about prices.