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Wednesday, July 30, 2014

GW Financials (Economics 101 with Old Man Chaos)

Hey there denizens of the warp. Old Man Chaos here with another posting.  I want to discuss GW financials. Now, I'm not in any way, shape, or form an economist or a businessman. How could I be- I spend my money on a crazy hobby!



At any rate, their money is down and all that. Many are saying the sky is falling and GW is doomed. I say that, while possible, it is very unlikely at this point. Here are 3 reasons why these financials, while not great, do not mean the utter destruction of the company that many seem to love to hate:

1- The Economy- look, the economy has been sputtering for several years. That is a fact. Money is tight. The price of EVERYTHING (not just GW models) is going up while wages are flat (stagflation). The first thing to go in a sluggish economy is some of the luxuries and discretionary spending. A hobby like this is a casualty of the economy. I know that if my wages were going up and prices were OK I know I'd be on another army by now. Which leads me to...

2- Entertainment is down- I read an article last week how Hollywood is down for this summer. Even though there have been solid movies attendance is down (high prices? competition? sound familiar). The article even said that only Guardians of the Galaxy could save the summer (it won't, no matter how great it is). I just read today that Nintendo profits are WAAAAAY down (numbers make GW's look like a picnic). Again, I don't think this is the end of Nintendo either. Thus, it isn't just a GW thing per se. Entertainment in general is down.

3- Lots of Licensing Potential- For years, GW has resisted most efforts at branching their properties out into other formats and areas. We have seen an uptick in video games (mostly mobile), but that's it- nothing else. Their "IP" has so much potential- video games, shirts, toys, books, movies, board games. There are other ways to branch out and make money. They have a long, long way to go to be desperate enough to sell their IPs cheaply, that's for sure.



That doesn't mean that GW should be smiling. They do have problems, and they need to address them:

1- Gain new players- its simple- like comics, and videogames, movies- young people have to get involved. That's what will both increase profits and keep the game going. As it stands now, the game is too expensive to just "jump into",  especially if you are a teenager whose parents are being careful with their money. Some (not all) of these kits and codexes have to come down in price so that newcomers can get in. Without them, it won't last in the longer run.

2- Keep vets "happy"- now, that is a tall order. Our 40K fanbase is a large, diverse, and sometimes unruly lot. Some are downright cynical. Others, like Horus and Lorgar, now hate the thing they love most. There is no "one formula" to keep long time players happy. However, there are some things that they can try:

a) Sell codexes with a code for their digital counterpart without increasing prices
b) Have GOOD sales from time to time (20% off? Membership discounts?)
c) Continual support for all armies, but allowing us a breather too
d) Improve Warhammer: Visions
e) Make campaigns/codexes in softcover to lower costs (I want the Red Waaagh book, but I just can't afford it at 50)
f) God-specific codexes (for us Chaos guys, naturally)

3- Continue to make superior product- truth is, GW models are still great. Their rules system is fairly good, though it could be better. Their fluff is second to none. This is their strength, and they need to continue it- no resting on laurels here, lest smaller companies begin to pass them by.  However, they need better price points to keep people buying. Nothing is for free, but no one wants to feel gouged either.




Well, that's my 2 cents anyway. I think that the "sky is falling" cry is way overblown, I think that GW needs to think seriously about where to go from here.

2 comments:

  1. Unless I am mistaken, the global economy is doing that well either.

    ReplyDelete
  2. The global economy is quite sluggish as well, which isn't good for anybody, let alone GW.

    ReplyDelete