Games Workshop Profits Down 24%, CEO Happy

[Karloff]

Games Workshop Profits Down 24%, CEO Happy

At the heart of this new strategy: job cuts and restructuring.

Games Workshop has had a really good year, says acting CEO Tom Kirby. Not that great if you're measuring by that pesky profit margin, or even stock price for that matter [http://www.escapistmagazine.com/news/view/131450-Games-Workshop-Stock-Plummets-By-24-Percent]; sales fell by 9% in the year, thanks in part to hard times in the North American segment, and profit before taxation fell to £12.396 million, as opposed to last year's £21.395 million. However that isn't what Kirby's pleased about. What has him smiling is that Games Workshop has streamlined distribution, implemented its one man store policy, and cut huge chunks out of its middle management structure. Cutting costs and reducing risks, says Kirby, is key to Games Workshop's long term survival.

"What is really remarkable, however, is that it was all accomplished in five months. The levels of complexity handled by our back office staff - personnel, IT and accounts -are beyond my descriptive abilities," says Kirby. "We all owe these people a big vote of thanks. They have saved the company millions."

Games Workshop reinvented itself in the fiscal year now ended. It used to be organized on a country-based management system; now all those middle managers have been let go, four European offices have been shuttered, its North American arm no longer has autonomy, and pretty much everything is run out of Nottingham. Its one man store policy means exactly that: each store has one member of staff, which saves on salary but theoretically means each store manager should be earning more than before [http://www.glassdoor.com/Salary/Games-Workshop-One-Man-Store-Manager-Salaries-E11822_D_KO15,36.htm].

Kirby touched briefly on copyright concerns, without actually mentioning the dreaded words Chapterhouse Studios [http://www.escapistmagazine.com/news/view/121956-Warhammer-Company-Makes-Space-Marine-Trademark-Claim]. He describes Games Workshop's legal crusade as "very difficult to do ... far too much money spent on far too little gain," a remarkable statement given the company's litigious history.

One of the big reasons why Games Workshop has been ferocious about its IP is its arrangements with third party computer game developers, like the now-defunct fiscal year 2013 [http://www.escapistmagazine.com/news/view/134877-See-Bankrupt-THQs-Head-Office-Or-Whats-Left-Of-It] royalty payments dropped £3.5 million, going down to only £1 million, and while there was some improvement in fiscal year 2014, it was only up £0.4 million.

Perhaps, with less royalty cash on the line, Games Workshop can afford to be philosophical about its IP. However you'd be unwise to publish, say, Adventures of a Space Marine Love God any time soon, entertaining though the idea may be. Games Workshop might be a little philosophical, but there's no reason to think it's forgotten its lawyers' phone number.

Kirby also announced his intention to step down as acting CEO. An ad for his replacement will go up the day after Games Workshop's AGM, on September 18th.

"We have not decided what will happen if no suitable candidate is found," says Kirby, "But I suspect my wife will be livid."

Source: Games Workshop [http://investor.games-workshop.com/wp-content/uploads/2014/07/2013-14-Press-statement-final-website.pdf]


Permalink

 

[Xan Krieger]

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

 

[PunkRex]

"What is really remarkable, however, is that it was all accomplished in five months. The levels of complexity handled by our back office staff - personnel, IT and accounts -are beyond my descriptive abilities," says Kirby. "We all owe these people a big vote of thanks. They have saved the company millions."

Now get the hell out you've all been made redundant.

 

[shadowmagus]

"We're doing great!"

Translation: As a floundering company with an IP that is rapidly growing stale while the ruleset becomes increasingly inane and models become increasingly expensive. At the same time, competitors are seeing their numbers increase because we can't retain our customers due to poor business practices so we're cutting out most of the fat to try and stay afloat in the hopes that when we put out the next army update it will bring people back.

 

[Zontar]

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

Or better yet, have a reasonable price for their products instead of the laughably high markup they have on them now. I remember when prices where just half of what they are now, and that was less then 10 years ago. The company is dying a slow death for one simple reason: more people are leaving then joining. You want people to join? Get them when they're young, 14 usually. That used to make sense and actually work, because 14 year olds could afford it. Now? No way could a 14 year old convince their parents to hand them over the money they need.

I say screw Games Workshop, they're dying a slow death due to their bad buinsess practices. Free market at work and all that noise. I just hope whoever either buys them out or buys the 40k IP when they is smarter then they are.

 

[ObsidianJones_v1legacy]

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

Barring that, Dawn of War III?

You know, that series that Once Topped Global PC Sales [http://kotaku.com/5165265/dawn-of-war-ii-tops-global-pc-sales]. Or actually challenged and beat Wrath of the Lich King [http://www.escapistmagazine.com/forums/read/7.93072-Dawn-of-War-II-Dethrones-Lich-King]...

The one that people are still modding and playing to this day because it's one of the best RTS games ever.

The one that people constantly [http://steamcommunity.com/app/56400/discussions/0/558747922432471572/?insideModal=1] beg [http://dow.wikia.com/wiki/Warhammer_40,000:_Dawn_of_War_III] for [http://www.gamefaqs.com/boards/605276-warhammer-40000-dawn-of-war-iii]?

You remember money, don't you GW? The good times you both had? Why would you do this to yourself?

 

[direkiller]

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

Barring that, Dawn of War III?

You know, that series that Once Topped Global PC Sales [http://kotaku.com/5165265/dawn-of-war-ii-tops-global-pc-sales]. Or actually challenged and beat Wrath of the Lich King [http://www.escapistmagazine.com/forums/read/7.93072-Dawn-of-War-II-Dethrones-Lich-King]...

The one that people are still modding and playing to this day because it's one of the best RTS games ever.

The one that people constantly [http://steamcommunity.com/app/56400/discussions/0/558747922432471572/?insideModal=1] beg [http://dow.wikia.com/wiki/Warhammer_40,000:_Dawn_of_War_III] for [http://www.gamefaqs.com/boards/605276-warhammer-40000-dawn-of-war-iii]?

You remember money, don't you GW? The good times you both had? Why would you do this to yourself?

or just go to sega and make Total War:hammer 40k
commanding an army of 10k gaunts and with the ability to do space battles would make anyone's day.

 

[Zontar]

"We're doing great!"

Translation: As a floundering company with an IP that is rapidly growing stale while the ruleset becomes increasingly inane and models become increasingly expensive. At the same time, competitors are seeing their numbers increase because we can't retain our customers due to poor business practices so we're cutting out most of the fat to try and stay afloat in the hopes that when we put out the next army update it will bring people back.

Oh god-Emperor this. I remember my highschool days when I say the sets and started reading up on it all. It was pretty interesting and I got myself a Tau starter set for a decent price (it costs more then twice what I paid today, I just checked). In my group of friends we had another Tau player (we both didn't mind their lore and where more a preference of aesthetics for him and play style for me), some Ultrasmerfs, a Necron, Tyranid and Oark player. We liked the game, we liked the models and we liked the lore, so every week or so at least one of us was buying a new set to add to our personal army.

And then we got hit hard by 5th Edition syndrome. Prices started to go up fast, less new, smaller models started to come out and instead the larger ones which we rarely took any interest in (I think we had about 6 tanks between the lot of us), the rules became pretty crazy, it got harder to do quick, small battles, and so on and so forth.

I wasn't the first to abandon it, I was one of the middle ones. Last year of high was the last time I bought one (it was a Sky Ray) and I haven't looked back since. None of us buy their stuff anymore, we've found better sources. Be it paints, models, or just games we've found things that are both better in quality and for a much lower price.

We still take out our owned models and use a good old 4th edition once in a blue moon, but it's just not like it was in the good old days.

 

[rofltehcat]

or just go to sega and make Total War:hammer 40k
commanding an army of 10k gaunts and with the ability to do space battles would make anyone's day.

Oh no, those space battles would just be like the Total War sea battles...

What they really need to do is make the hobby more accessible. There are many things I would rather do before getting into Warhammer and from the little I played and what I know about the universe, I'd probably love it. The entry barrier is simply far too high.

 

[Symbio Joe]

"I cut down my risk of falling down stairs by removing my legs."
Quite a salesman this Mr.Kirby.

 

[Hairless Mammoth]

I can't wait for either a class action lawsuit from all the shops that were slowly forced to buy too much stock, weren't allowed to sell competitor's products, couldn't sell enough to stay afloat and were bought out by GW or for those shops to sadly go under thereby ruining GW's revenue even more. (Hopefully the one guy in each of those is able to start up his old store or find a job somewhere else immediately.)

I'd love to buy Space Marine and Dawn of War II on Steam, but can't find the strength to give money to a company that practically used mobster tactics to swindle the stores that sold their goods faithfully for years. I'd never get into the game even if I did have a local group to play with.

Instead of trimming off the fat(via a back alley surgeon that just cuts out random bits of flesh and probably stole a kidney or two), they should address their real issues. They have a popular IP, as long as they don't continue to run it into the ground. Stop trying to control all aspects of it in order to raise the prices. That's why people aren't buying new models, new rule books, or the novels and possibly one reason why THQ went under. (Maybe, they thought they could sell enough copies of 40K games to offset the ridiculous royalties. That didn't help their other financial woes.)

 

[omega 616]

Wow, dick move ... I am happy that I have fired most of our employees. How about just charging less for the products? The stuff is painfully expensive and that is when I was kind of into it about 10 years ago. It seems to be a very base level understanding of how business works "charge more money, get more money", like you have 100% customer retention but if you halved the cost of the products and advertised, you would get a lot more custom.

I think the warhammer 40K universe is so ripe for board games, books, movies, video games etc but they wont indulge it.

 

[ForumSafari]

I wasn't the first to abandon it, I was one of the middle ones. Last year of high was the last time I bought one (it was a Sky Ray) and I haven't looked back since. None of us buy their stuff anymore, we've found better sources. Be it paints, models, or just games we've found things that are both better in quality and for a much lower price.

Very much my experience too, the funny thing is that their competitors aren't just better or cheaper, they're both at once. With other games charging somewhere around a battleforce for a full army and with the odels being roughly as nice and he rules tighter...well, why play at all?

 

[AstaresPanda]

stop giving it to random twats to make shitty games with. We all want a Dawn of War 3 hell even dow2 dlc would be fine at this point we all want a Space Marine 2 the MMO Eternal Crusade is coming out soon and sounds great. Its a great IP Relic has done great work.

 

[Xan Krieger]

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

Barring that, Dawn of War III?

You know, that series that Once Topped Global PC Sales [http://kotaku.com/5165265/dawn-of-war-ii-tops-global-pc-sales]. Or actually challenged and beat Wrath of the Lich King [http://www.escapistmagazine.com/forums/read/7.93072-Dawn-of-War-II-Dethrones-Lich-King]...

The one that people are still modding and playing to this day because it's one of the best RTS games ever.

The one that people constantly [http://steamcommunity.com/app/56400/discussions/0/558747922432471572/?insideModal=1] beg [http://dow.wikia.com/wiki/Warhammer_40,000:_Dawn_of_War_III] for [http://www.gamefaqs.com/boards/605276-warhammer-40000-dawn-of-war-iii]?

You remember money, don't you GW? The good times you both had? Why would you do this to yourself?

I was just playing Dawn of War Dark Crusade actually, a modded version of course (Titanium Wars specifically since it adds a ton of new units). After Dawn of War Retribution failed to live up to my expectations (a campaign for each race actually means each race plays the exact same campaign) I would welcome a return to the Dark Crusade way of doing things, they just need to boost squad sizes and bring back base building (also fuck the eldar, get rid of those bastards).

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

Or better yet, have a reasonable price for their products instead of the laughably high markup they have on them now. I remember when prices where just half of what they are now, and that was less then 10 years ago. The company is dying a slow death for one simple reason: more people are leaving then joining. You want people to join? Get them when they're young, 14 usually. That used to make sense and actually work, because 14 year olds could afford it. Now? No way could a 14 year old convince their parents to hand them over the money they need.

I say screw Games Workshop, they're dying a slow death due to their bad buinsess practices. Free market at work and all that noise. I just hope whoever either buys them out or buys the 40k IP when they is smarter then they are.

When I think about Games Workshop I don't even think about the tabletop game, to me it's all about the videogames.

 

[NuclearKangaroo]

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

Barring that, Dawn of War III?

You know, that series that Once Topped Global PC Sales [http://kotaku.com/5165265/dawn-of-war-ii-tops-global-pc-sales]. Or actually challenged and beat Wrath of the Lich King [http://www.escapistmagazine.com/forums/read/7.93072-Dawn-of-War-II-Dethrones-Lich-King]...

The one that people are still modding and playing to this day because it's one of the best RTS games ever.

The one that people constantly [http://steamcommunity.com/app/56400/discussions/0/558747922432471572/?insideModal=1] beg [http://dow.wikia.com/wiki/Warhammer_40,000:_Dawn_of_War_III] for [http://www.gamefaqs.com/boards/605276-warhammer-40000-dawn-of-war-iii]?

You remember money, don't you GW? The good times you both had? Why would you do this to yourself?

nah, people clearly want a shitty plant vs zombies rip off with warhammer 40k characters

http://store.steampowered.com/app/254650/

all the DLC together costs more than the stupid game i shit you not

also i love how the photoshopped these huge WH40K characters on the screenshots just to try to make the game look less boring

 

[Dr. Crawver]

I hate the removal of multiple staff members. While they're pretty much on contract that they can't say anything bad about the store, it's pretty clear they're overworked. It causes the store to shrink in size (one man can only watch so much and work the till), means less games can happen (again, till thing), less interaction with the regulars (new customer walks in, got to get on that immediately).

I mean I remember the old wakefield store. That was a huge, 2 floor thing. I went in there last year, and it was half of the first floor, with the second floor not belonging to them. I understand that it was probably crippling in rent costs, but bloody hell, they had one game table, from 20. It was actually genuinely saddening. I miss the game and scene I grew up with, not what it is today.

 

[faefrost]

My take. GW is desperately looking for a buyer and is doing slash and burn fat clearing and bone cutting to make the company seem enticing and drive up the otherwise collapsing sale price. The value in the company now is in the IP. Not the employees, the stores or the actual product. By cutting all that stuff back they hope to find a buyer that wants the IP at a good price.

 

[J Tyran]

Want money? Make Space Marine 2, many of us would love it. Yes THQ is gone but still surely someone can pick up where they left off.

Barring that, Dawn of War III?

You know, that series that Once Topped Global PC Sales [http://kotaku.com/5165265/dawn-of-war-ii-tops-global-pc-sales]. Or actually challenged and beat Wrath of the Lich King [http://www.escapistmagazine.com/forums/read/7.93072-Dawn-of-War-II-Dethrones-Lich-King]...

The one that people are still modding and playing to this day because it's one of the best RTS games ever.

The one that people constantly [http://steamcommunity.com/app/56400/discussions/0/558747922432471572/?insideModal=1] beg [http://dow.wikia.com/wiki/Warhammer_40,000:_Dawn_of_War_III] for [http://www.gamefaqs.com/boards/605276-warhammer-40000-dawn-of-war-iii]?

You remember money, don't you GW? The good times you both had? Why would you do this to yourself?

Looking at those royalty payments GW should have totally bought Relic during the THQ firesale, they could have let them carry on making 40k games and then all the profit would have gone to them and they would soon recoup the investment. They could have even thought about making a Company of Heroes table top game too...

Shame really, we might never see another Dawn of War now.