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Friday, January 24, 2014

The Future of Games Days and Games Workshop - Part 11: *throwing minis at your screen*





The Future of Games Days and Games Workshop
Part 11: *throwing minis at your screen*

Today I will grant all of us a short breather from the many recent bad news surrounding Games Workshop. And for all of you, this will be the shortest wall of text in the whole series. More like a few bricks of text. What a relief!

The title of this series should really be called "The future of GW" for brevity, as Games Days are pretty much dead. And today's post could even be titled "The present of GW". 

Or maybe, in terms of more poetic justice, "In the grim darkness of GW's present, they only need cash!"

But that would be too negative. Don't want to be a party pooper every day :D

We all want change. GW wants yours. 

As we have seen in part 8, 9 and 10, sales for Games Workshop are worryingly down. And obviously, GW needs to do something about it. In order to avoid another 24% stock market crash, the sales decline must at least be stopped until the full fiscal year ends and the full year shareholder report comes out in May/June.

So what do you do, if there are no new 40k rulebooks or no Space Marines around the corner - two of the biggest sellers for GW? You try to sell a lot of high price items. 

"Well, that's not new" you might say. True. It isn't. 

Who put the deal in 'one-click deals'?

We still remember the Eldar one click deal which actually was more expensive than the price of its individual components, lol... 


Never again!
GW's one-click deals were famous for only saving one thing: mouse clicks.

Well, hold the phone, because Games Workshop has created new 'one click deals' of boxed army sets that actually give you a pretty good deal - compared to individual purchase prices. 


GW has put similar deals out for the holiday season at least for the last two years (sorry, lived in Japan before that, don't know what happened 2010/11), but at least to my knowledge, never did so for new army releases (especially not for new army releases!) or even throughout the year. 

GW's pain = your gain?

GW needs cash. You have cash. But you're not happy about GW recently and vowed not to buy (much) from them. What is GW to do? Of course, put up some 'irresistable deals'!

I have not even read the new Tyranid codex yet, but I heard it's pretty lousy. From what I read 'no-one' wants to buy more Tyranids or even start a new nid army. Like with other mass armies (Orks), building a swarm is one of the most expensive endeavors one can undertake in the GW universe. 

BUT WAIT, there's MOAR!


What's that - a big Tyranid Swarm box...

95 miniatures for 135 Euros. Not expecting much savings, I did the math. Then I did the math again. Then I had Ben confirm the math. 

And unless we both are not quite awake yet, the individual purchasing price of the same set is 243€. A saving of almost 45%. If your local hobby store gives you another 10% of, this gets you about a 50% off deal! 

Around 10% savings on two Carnifexes compared to the individual prize seems almost low in comparison.

The only thing that makes no sense to us is that 8x5 Termagants (64€) are cheaper than 2x20 Termagants (70€), but I'm sure GW will remove the cheaper option like they did with the Eldar Jetbikes ^^. 

Space Marines to the rescue! 

What sells better than Nids? Space Marines!

What do we need to have deals on to increase sales? SPACE MARINES! 

Like "42" for us here at Painting Buddha, "Space Marines" are the ultimate answer for GW.

So here's the Tyrannic War Veterans one-click-deal: At 193€ a saving of - if you round it up - almost nearly,.... wait for it.... 0% :D

On top of the savings of 0% you even get the chance to help GW get rid of its Finecast Tyranic War Veterans. 

JUST when I thought, GW understood how to make us buy stuff even if we don't need it... *sigh*

Dream bursts like bubble. :'(

More deals in the future?

In the light of GW's recent sales slump, a lot of people demand that GW lowered its prices. 
We all know that that is not going to happen, people. 

The only way for GW to rake in sales (by upping the sales volume) without losing face by lowering prices is to make 'real deals' like the Tyranid swarm deal. Players will like it. High price purchases get GW its much needed sales, everyone's happy. 

Unless, of course, GW thinks that their sales slump really is just a 'temporary' thing, as they mentioned in their recent half-year report. In this case, they will probably just sit it out. And be surprised that sales fell even more.

One thing I can assure you of is that someone at GW is watching those sales KPIs very, very closely right now. 

If the only thing they sold would be deals that offer us 45% more value, maybe - just maybe - something at GW would make click. 

What do you think? Will there be more 'deals' in the next couple of months to boost sales for GW? What would be your idea to generate more sales for GW? 

Leave your comments below!



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35 comments:

  1. Are these going to be available via independent retailers? If not then even with a 45% discount, GW would be getting the same profit from this as they would from selling to an independent retailer. Yes, I know that GW's recent strategy has been to try and take over supply from the independent retailer so they get 100% of the profit, but even so, if they need to ramp up sales and create goodwill with consumers, then putting together army deals that essentially sell at trade price is a good way to do it. If they do sell these through independent retailers, then they're taking a big hit on their profit share. Things must really be desperate for that to happen.

    ReplyDelete
    Replies
    1. Yes they are. I actually saw the first two boxes at the retailer two days ago.
      Which is kinda scary, considering that GW only gets about 50% of something that is 50% cheaper = 25%. And they still make a profit, I am sure.

      And I agree, if we continue to see this in the near future, GW really is desperate. But hey, I'll take their deals :D

      Delete
    2. Even if they turn a minimal profit for them, when their financial reports come out and profits haven't gone up they can say to the shareholders "well, we've at least stopped the sales decline". I'm not sure if I'm joking lol.

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    3. I think right now their most important task is to stop the trend in sales. Because that is what really concerns analysts.

      Delete
  2. It certainly wouldn't surprise me if they were trying to inflate sales figures. Hopefully in the long run it grows the consumer base.

    On unrelated note, and as the reply I put on the Beasts of War thread will likely be buried in the avalanche of other comments, you should do a regular column for them. They always want new content and it'd be a good way to raise the company's profile.

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    Replies
    1. That's a pretty cool idea :) I met Warren at GD UK and he seems like a really cool guy ;)

      Delete
    2. Send him a message or an email suggesting it. They publish article series by site users already, it's just a short step from there to make a series into a column. You have the blog to show you're plugged into the wargaming scene and have interesting things to say about it. I've met Warren briefly and exchanged various communications with him and would agree with your assessment :)

      Delete
  3. they arent really deals its just the cost per individual product on in production etc that makes the nids cheap. Dont expect it to be the same for anything else. its not a strategy.

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    Replies
    1. Yeah; I am afraid you are right. Then again, production is not expensive for any of the existing items. Injection-molding of anything costs mere cents. Or pence. ;)

      Delete
    2. Great series of posts Zaphod - I've really enjoyed them, and learnt a lot, thanks.

      I think you may be on to something here- I just did the math for the new Dwarf Battleline after reading this post. Discount for buying the set on the GW website rather than the individual units is 16% (on US site $165, vice a combined price of $191) and the warriors and quarrellers come in blocks of 20, rather than the individual boxes of 16. This is a much more 'gamer friendly' number. Perhaps this represents a move away from the arguably more cynical practice of producing sets that are just a few models short of the size you actually need to play the game? (not something you've picked up on specifically, but a real pain in the ass for WHFB players). If so, laudable.

      Howver.... This could of course be a result of trying to hook people into an otherwise failing product line (WHFB in general and dorfs in particular)?

      My prognosis - future not bright. Which is a real shame, particularly given the artistic and manufacturing quality of the models pushed out recently. They're beautiful! But... existing customers have pretty much had enough of GW management practice, and the cost to start up the hobby is so high, I cant see new customers flocking in...


      Thanks again.

      Delete
  4. Something has to improve product, we liked metal, price errr, placement moving to better real estate no chance, promotion yes promotion that's the answer, more advertising, only how? I know let make our monthly advert that our fans pay for weekly. Hurur we've fixed the share price:)

    ReplyDelete
  5. Paint deals could help them, right? I mean the markup on their paint has to be sickeningly high given the price per ml and what others (Reaper MSP/Vallejo/P3/etc.) charge.

    Or is it drops in the bucket compared to mini sales?

    ReplyDelete
    Replies
    1. I am pretty confident it's a drop in the bucket.

      Delete
  6. Is someone of you rich? how about we form a union and we all purchase actions of GW so we could mass a total of 51% percent. Then we could overthrow those current ruling tyrants! and bring GW back to how it used to be in the mid 2000's!
    We could do better sales than them since we wouldnt live inside a marketing bubble.

    ReplyDelete
    Replies
    1. Zaphod already did the maths on this and you would need tons of money to get to 51%...I mean you would need both CALPERS and the Ontario Teachers to even start thinking about it.

      The problem is that the value is not there to do a buy out. Maybe if the price drops by another 50% someone will see some value in it. But this is a nice marker and there are probably much better investing opportunities around for big investors.

      Delete
    2. Being able to buy out GW is not impossible but rather improbable.

      Really, getting what we want would be much cheaper and more fun than buying them out anyways. I even have a plan that I would give a higher than 50% chance to succeed at this. Probably even much higher, but first we need to get Season 1.2 and 1.3 ready :D

      Delete
  7. Your calculation about the Tyranid Swarm Box is wrong. The box has just a worth of 205€, so you just save 70€, that’s ca. 34%.

    Because you wrote “8x5 Termagants (64€)”, I assume you also calculated with 4x Ripper Swarm Broods (44€). But if you take two boxes with each 20 Termagants, you have already the plastic rippers from this box.

    ReplyDelete
    Replies
    1. Ah, sorry about that! Even though plastic rippers are not the same as the Finecast ones (luckily so!), I was unaware that the 20 Termagants box (70€) already includes these. Still a pretty good deal, I'd say.

      Some local retailers give up to 20% rebate on that item - so you end up at literally 1€ per miniature. That is a fair price, I'd say ;)

      Delete
  8. You are one hoopy frood, Zaphod Beeblebrox!

    ReplyDelete
    Replies
    1. You, too Ferminster! You surely seem to know where your towel is!

      Delete
    2. What I meant is that this set of articles is the greatest set of articles I've ever read in nerddom! Keep up the good work!

      Delete
  9. TL/DR: I don't think cheaper deals will boost their sales much unless those are for starting your own army.

    The problem is people who already are buying GW stuff and have their armies, we do not really buy more models because they suddenly go cheaper. We buy them because we need them for the army and/or we have time to assemble/paint them. My Necron army wouldn't really grow suddenly because GW reduces price for few items - unless I need those items. And to be honest, if I need them I will buy them anyway at some point. I barely manage to keep up with painting these days.

    IMHO only way to increase the sales is to make ENTRY to this hobby cheaper. Tyranid Swarm seems like first good idea I've seen. I actually wanted to start my Tyranid army. I was not really very happy about the codec, so instead of throwing money at GW, I decided to spend it smart. And Tyranid Swarm box (bought from retailer at additional discount) is a smart deal to get a new army. At some point I will have to buy more, but now I can already start playing with it.
    If GW can convince people starting this hobby and having reasonable amount of fun with it isn't expensive - through good starting army deals - this gives a chance for increased sales. And to build future consumer who can pay full price for those smaller, but important for their collection, pieces.

    I love cheaper deals, I really do. And my wife would be happier if those plastic soldiers were cheaper. But good deals should be smart (from GW perspective) if they want to increase sales. If I will buy too much cheap plastic now, I might not have to buy more anytime soon and that's not good for GW.

    ReplyDelete
    Replies
    1. I totally agree that the entry to the hobby should be cheaper. But apparently GW thinks that those new hobbyists leave the hobby after a year or two so they need to skim as much cash off them as possible.

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    2. Getting into this hobby would be easier if it was cheaper, but also if the rules supported smaller skirmish games. I won't buy another army because I don't have the time to paint enough models (I am too busy replying on forums), and kids new to the game just want to get stuck in quickly rather than spending months mowing the lawn and washing the car just to buy enough models to play their first game.

      Maybe I'm an old guy but a temporary diversion to the small skirmish ideals of Rogue Trader, Necromunda and Mordheim might cater to people who don't have the time, money or inclination to get one of those GW suitcases and fill it full of soldiers.

      Delete
  10. Read this and thought about you, ZB. I'm sure you've already read it, but just in case: http://www.belloflostsouls.net/2014/01/omg-you-must-read-this-gw-job-posting.html

    ReplyDelete
    Replies
    1. Hey Michael!

      Yes, I have read this ;) At first I thought "Oh great, they know something is wrong with them and they need someone to confirm it!" but then I realized that this position is only for 'in store experience' - and in store is really not where GW has it's problems ;)

      Delete
  11. hard boiled analysis as usual. I love how you are able to just lay it out there for us. I bet somewhere deep inside GW still loves us if you can crack the shell.

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  12. I think the problem is the whole package you get. The nyd box is ok. But as some of you already said. The whole thing is dedicated for beginners spending their money one year before they stop. One reason might be the rules as well as the push power btw tounament games. A friend of mine and me decided to start playing again, but guess what... We start to play second edition... It just feels like home!

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