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An unsubstantiated theory about GW and self-competition


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#1
Calyptra

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First, the disclaimer: I'm not asserting this as true; without evidence one way or the other, it's just speculation. This is also specifically about what happened during Kirby's tenure; I'm thinking about the historical rather than the present.

 

 

So, I was thinking.

 

I recall seeing it said on a number of occasions that GW cancelled the "specialist games" because they felt they were competing with themselves. The idea was that Bob will spend X amount of money on GW product, and that the specialist games were competing with 40k and Fantasy for that money. By removing the specialist games, GW allegedly thought they would still make the same money from Bob without having to support numerous games and model ranges, thus cutting their expenses.

 

Now, I can't find an actual source for this, so this theory might just be a load of internet nonsense. However, lacking sales figures or an official statement from GW, I can't prove that the specialist games were choked out and then cancelled because of poor sales either. Given some statements made by Kirby, such as the primary hobby being buying models, and given the stubbornly enduring popularity of games like Blood Bowl, the idea seems plausible.

 

Let's assume for the moment that it's true, because this is an if-then statement. Assume for the moment that GW really did think that customers would continue to spend about the same amount of money on the hobby regardless, and that they could increase profits by removing the costs of other games and model ranges. Assume GW wanted to narrow the focus of its customers by getting them to just play 40k, instead of 40k, Necromunda, Battlefleet Gothic, etc.

 

If that's true (and again, I'm not aware of actual evidence one way or the other), what if they wanted to narrow it further?

 

Tinfoil hats are a reasonable option at this point.

 

So you've got this game, and the game has a bunch of model lines, and supporting them all is kind of expensive. You could save a lot of money if you can convince as many of your customers as possible to all collect the same army. It's not great for the game, but you're really a model company not a game company anyway. You can keep the other armies in nominal production, with occasional, sporadic support, but you can save a lot of money if you only need to focus on a single model range, while concentrating your sales there.

 

What if GW made a sustained, concerted effort to get as many players as possible to collect Space Marines, because only really supporting one army lowers production costs while focusing sales on the kits you do produce.

 

If a sample of 10 players each play a different army, then you need to produce 10 different kits in order to get 10 sales. But if you can get 7 of those players to all play Space Marines, you can sell one kit, or one kit with some variant parts, 7 times. At that point maybe you don't even need to care about the other 3 players.

 

Now, again, I don't know that this is true. It's just a thought that I had. I'm also not suggesting that your love of Space Marines is somehow a result of insidious GW mind control. I would suggest that 40k players who aren't interested in Space Marines are more likely to wander off and play other games instead, because historically they have not exactly been encouraged to stay. I'm also not saying that, if this is what happened, it was in any way a good plan; I'm saying they might have thought it was.

 

It does seem like GW's marketing over the years has been aggressively focused on Space Marines. It also seems like they would benefit financially, at least in the short term, if most players bought Space Marines instead of other armies.

 

 

I dunno. It seems plausible. What do you think?


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#2
NiceGuyAdi

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I think the small range=low overhead=increased profit equation only works if you consider it in narrow terms.

Take it to the end conclusion and you have one rule set and one unit: Intercessors. If that was all there was to GW we’d all go off and find something else to do pretty quickly.

The breadth of range means there’s something for everyone, even if most people come into GW’s orbit through Space Marines.

As for the specialist games, they act as a gateway drug into other systems/armies. I don’t collect AoS, but Shadespire has a draw for me, and from that I could easily get into AoS.

Ultimately there are so many ways of skinning the GW business model cat, and not many of them are clearly right or wrong. A lot of it is as subjective to the people running the company as it is to you and me.

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#3
Triszin

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I actually think mantic games re-ignited specialist games at gw

 

they saw how much mantic was getting on the KS and seeing how much the community loved mantics terrain.

 

(partly why i backed mantics Kickstarters was to influence gw, as ridiculous as that sounds)

 

 

that and the new ceo/chair has certainly helped turn the company around


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#4
Calyptra

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Intercessors are a recent development, but there are plenty of similar exceptions in the timeframe I was talking about.

I strongly disagree regarding the specialist games being only "gateway games." There are many people who started with 40k but preferred the specialist games, including myself. I've had more fun playing Mordheim or Necromunda than I ever have with 40k.
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#5
Kinstryfe

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Cancelling a product within your offerings that is suspected to compete with your primary product offerings on the belief that said product is harming the main product isn't really anything but good business sense. Why do you think Apple mostly stops producing iPhones with larger storage sizes on their old model as soon as they launch a new model? It's just good business from the company's standpoint.

As for a conspiracy to get people to only play Marines... No. High grade injection molding molds are incredibly expensive, that's why GW can't make every kit they design, let alone think up. Why oh why would they ever have released new model lines of Genestealer Cults, Adeptus Custodes, Adeptus Mechanicus, or any other army of the past decade if they wanted people to only play Marines? Same question as to why they would be spending time, effort, and a ton of money redesigning the Sisters of Battle line from the ground up. You can also apply that to multiple Marine kits. There are what, 5 or more different Tactical Squad boxes at the moment? That's no different than supporting 5 different varied armies anyway.

The real answer is very likely two parts. One, is that Space Marines are very likely the highest focus tested army, at least on a visual level. You have to admit, they're unique and popular enough that even a lot of non Warhammer players in the greater geekiverse see a Space Marine and know what it is. The second part is more straightforward. 40k was originally very literally Warhammer Fantasy Battles in Spaaaaaaaaacccceeeeee. Eldar were just space elves, squats were space dwarves, Guardsmen were humans, etc etc etc. Only Space Marines were a truly "original" (to GW) addition to the game setting that endured past the early days, and are one of the few defensible pieces of intellectual property that GW had for a long time; hence getting Aeldari, Drukhari, Aelves, Oruks, etc. So when you're designing advertising, you use your strongest/coolest/most unique stuff to draw people.

It's all much less a conspiracy than it is sound business practices :)

#6
NiceGuyAdi

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I strongly disagree regarding the specialist games being only "gateway games."

 

You're right and I worded my post badly. I just wanted to point out they serve this function, not that that's all they're there for.


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#7
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It could be something as simple as manufacturing needs. When GW started they basically had metal kits that where being pumped out probably on the same production lines, all you need to do is change out the molds. Then they get into plastics, which likely meant sacrificing a few metal lines for the new equipment to operate. Fewer metal lines means prioritizing what is coming out of them. The specialist lines were largely metal, required less of an investment to the player, and didn't have the popularity of the main lines so they might have gotten the axe just because GW couldn't keep up with the growing demand on 40K and WHFB.

Now GW has expanded their manufacturing and made enough money where they can invest in molds for things like Necro gang boxes to be produced on plastic lines designed to manufacture most of GW kits. Meanwhile their resin lines don't have the same production demands the metal lines did when they were being traded out for plastic. I think the big shift now is that GW has the production capacity to to actually do things like what happened with AT:

Plan on doing resin
Blood Bowl does well in sales
Decide to invest in plastic molds to handle projected demand
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#8
Beta galactosidase

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It doesn’t have to be true about specialist games, but it’s definitely true about chapter tactics. Or why were the only book that had them consistently for 14 years?

#9
N1SB

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Hi guys, I've actually gone and read through Games Workshop's annual and half-year (i.e. financial) reports for the past decade.  I just want to support your points with some data points, because I think it'll help you guys have sense of scope as your discussion continues.  I'm a little bit sleepy and about to head to bed, so I'm going to round these numbers to the nearest million, but I do this just so you can "weigh" your different points (it's like discussing units in a Codex KNOWING points costs).

 

 

1. What's Games Workshop's biggest "cost"?

 

 

There are many forms of costs, you guys already mentioned a lot of them.  I'm just leaving some significant numbers here.

 

How much money does GW make in a year: a decade ago it was about 110 million GBP, growing to about 150 mil last year, and this year I'm estimating 200 mil as GW has been growing strong since CEO change.  So knowing they make this much, we can thinking about how it pays for their costs.

 

How much does GW's miraculous miniature-making factory cost: about 25 million now, but keep in mind this is a Fixed Asset or cost.  It's been pretty much the same facility for the past decade, in fact this past year they've invested much more than normal into it...which still amounts to only 2 million GBP.  To use an analogy, it's like us buying a really good desktop computer that's lasted us for years, but every once in a while we replace a graphics card.

 

So what's the single biggest cost to GW: it's their "Retail Channel", what you and I call Warhammer Stores.  It's the rent plus the salaries of their store managers and other costs.  This operating expensive is more than 40 million PER YEAR, making their 25 million pound factory seem almost cheap in comparison.

 

Thus, the injection molding machines molds and materials are a cost, but looking at their overall picture, it's Warhammer Stores that are the biggest expense.  When you're talking about GW cannibalisation, I'd be less concerned about the costs of production and more concerned about how can we stock all this stuff in the limited shelf space?

 

It's more intuitive to us to think about creating the miniatures (because that's what we do as Hobbyists), but the biggest concern is can our Warhammer Store redshirt demo all these new products and where are we going to put them?  GW's already working on solutions as our local store manager is very adept at using the online store as a guide, then putting orders in for us for items that are not currently stocked, but it is a concern.

 

 

2. How important are new products

 

 

Creating new products are a cost, but they also create new revenue, so it's not a negative.

 

I don't remember which year's report mentioned this, but IIRC in the past about 30% of GW's revenue in a year are attributed to new products.  That can be a totally new faction and models like Adeptus Mechanicus and Genestealer Cult, or incremenatal additions to existing lines, like how Space Marine got Centurions.

 

With new products being about a third of their business, it explains why GW constantly tries to push something new, despite the costs, while still continuing to support their existing ranges.  I imagine that figure has grown now with the return of Specialist games, where I probably spend more than for 40k now.

 

I'm just helping you weigh the issues, because consider what I mentioned above about this year, GW spent about 2 mil of fixed costs on their factory (about a 10% increase year-on-year) and even if that was just to support all the new Specialist Games they're producing, they will probably make 50 mil more (about a 30% increase year-on-year).  Yes, new products ARE a cost, but each is ALSO a new source of revenue that can pay for itself.  Sure, it can be optimised better, but don't see it as inherently a negative or a chore to create new products.

 

(Note - anticipating you mention research & development/design costs.  I think that falls into what GW considers its "central costs", meaning its entire operation in Nottingham, which includes the game design studio as well as the miniature design studios and Duncan's many 2 thin coats, which altogether is about 6 mil a small amount in the overall picture.)

 

 

3. What if GW narrowed its product range to focus exclusively on Space Marines, hypothetically

 

 

It's a great point, it's definitely worth thinking about, and GW already has.  And it has even broader influence than just Marine-on-Marine action.

 

A Marine-centric franchise...is basically Horus Heresy/Age of Darkness/30k.  I remember when we saw the 1st plastic HH boardgame, Betrayal at Calth, we nicknamed it "Start Collecting: Horus Heresy" because even though the boxed set represents 2 armies, it's up to us how we want to paint it.  It was 1 SKU or stock keeping unit that could represent 18 different Legions.  That would simplify things greatly for GW.

 

It should have come as no surprise that, as much as we on Bolter & Chainsword love 30k, the GW leadership might have loved it even more.  A simple, relatively contained range that is all sold on Mail Order so it has no Retail overhead?  That's the equivalent of free daemonic summoning.

 

And this Horus Heresy idea of having just a limited range of models is very relevant now, and it is no longer a hypothetical.  It's happening with Adeptus Titanicus and probably the re-release of Battlefleet Gothic.  Basically, it's not about Space Marines per se, but about Loyalist vs. Traitors...all using the same technologies, thus the same model ranges.  That's how they'll start, and depending on player feedback (i.e. if we buy them), they'll expand them with fuller ranges (Xenos Titans, etc.)

 

The reasoning I think is to get these games to market quickly, don't need to build up a whole range before release for a Big Bang.  Instead, it'll be a Rolling Thunder release, they're continually releasing and seeing player feedback, releasing then seeing feedback.  This limitation does deliver savings not just in money costs but in time and risk costs (i.e. imaging spending 2 years developing a game with a full-range of miniatures, then finding no one liked it).  Small start-up costs in this era with so many things going on.

 

Sorry for the long post, no time for a short one.


Edited by N1SB, 26 May 2018 - 05:07 PM.

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#10
Vanger

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To expand on the awesome post of N1SB, one more factor to consider is logistics and limited shelf and store-house space.

 

Limited run standalone games like Space Hulk are better, because GW doesn't have to bother with the logistics of long tail, but only bank in on the initial sales. It also frees up storage-space, and production space. The same production line that produced Space Hulk, made later Assassinorum Execution Force, etc and probably is currently working on the Rogue Trader games.

 

If GW would keep all their boxed games on stock, that would mean, they incurr additional costs on expanding their production lines and storage-spaces.

 

About making everyone play space amrines. How many people do you know who only have one army? Probably everyone has or had at some point a Space Marine army :) So if they'd only produced Space MArines, they would miss out on the profit made from secondary armies. Also the hobby aspect.


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#11
Plasmablasts

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The current model of (relatively) low initial cost ways into the hobby (specialist games, one-off games with discounts on new or existing units which can then be used in 40k, the current faction and alliance rules) help, I think, to tempt people into dabbling with a new army, who would otherwise be put off by thought of the investment in money and time to build a viable mono-codex army. Some of the dabbling might lead to someone buying into a whole army; if not, the dabbling still generates profits.

If we had ended up with the reductio ad absurdem of GW selling only Space Marines, they’d lose all of that dabbling.
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#12
Ratherdashing

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Super Smash Brothers doesn't put Mario on the box because of a conspiracy to get people to play Mario. If they wanted that, they would make him the most powerful character. But there's always going to be a flagship character.

If it wasn't Space Marines it would be someone else. But the flagship is not going to be something "weird" like bugs or elves or robots. It's obviously going to be someone recognizable, relatable, and diverse. Space Marines are that.

If Space Marines were spoiled they'd get the best codex instead of one of the worst. GW wants you to buy models. They don't care which ones.
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#13
DBadger

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Since the cost of the stores has been brought up, I've always wondered why GW don't go into concessions instead. Imagine a Forbidden Planet store where the top floor is a GW, or a Waterstones where instead of a cafe they add a GW store (Birmingham for example is seven floors). Or hook up with GAME, HMV and other gaming stores. Most Warhammer stores stock much reduced stock levels anyway, I can never find what I want in a store, so throwing some shelves and tables in surplus space in another store might work wonders. It would also make their silly one-man-operation stores more logical.
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#14
Lay

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I recall seeing it said on a number of occasions that GW cancelled the "specialist games" because they felt they were competing with themselves. The idea was that Bob will spend X amount of money on GW product, and that the specialist games were competing with 40k and Fantasy for that money. By removing the specialist games, GW allegedly thought they would still make the same money from Bob without having to support numerous games and model ranges, thus cutting their expenses.

 

Now, I can't find an actual source for this, so this theory might just be a load of internet nonsense. However, lacking sales figures or an official statement from GW, I can't prove that the specialist games were choked out and then cancelled because of poor sales either. Given some statements made by Kirby, such as the primary hobby being buying models, and given the stubbornly enduring popularity of games like Blood Bowl, the idea seems plausible.

 

Specialist Games were too small to compete with GW's main games. Or rather, they had stayed the same while the main games had grown in popularity. In the early '00s, GW launched the Fanatic brand as a means to keep their smaller games alive:

 

https://web.archive...._fanstudio.asp#

 

Q: Why was Fanatic set up

A: Fanatic was set up because we’d become unhappy with the level of support we could generate for the games other than Warhammer, 40K and Lord of the Rings. These games deserved proper support, but the success of our three main games made it very hard for us to provide it. So we decided to set up a separate department whose only job is supporting the games that GW produces other than Warhammer and 40K.

 

Q: Will you keep making new stuff for these games forever?

A: As long as you are playing the games then we’ll keep on supporting them and bringing out new material for them (and in some cases we may keep on supporting them even if you’re not playing!). We will, however, have to ‘cut the cloth to fit’, because when all is said and done Fanatic is a small operation running on a shoe-string budget. All of the material we produce will be made in short runs, in some cases literally to order (i.e. when you place an order we’ll go off and spin the mould to make the miniature!). All of our resources will be concentrated on making sure we can get you the best support we can - in other words, as long as the content is fantastic we’ll be willing to cut corners on the presentation.

 

Iirc, they started with multiple magazines and websites, until support shrunk down to one collective mag, which in turn moved online and was kept alive by one person, with more and more content provided by the community, until they shut everything down for good in 2013.


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#15
DBadger

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I've always seen specialist games as a gimmick to distract existing players rather than something to draw in new ones. Warhammer players read white dwarf, see the glory of bloodbowl, and buy a set. So they spend £50 or more on Games Workshop products that have no use or value to their existing army. GW get some money, the player gets a neat game they can play, but ultimately, they will still need to buy GW products to continue with their army.


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#16
Zuvassin

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I don’t know if it’s still online anywhere, but iirc, there used to be audio of a Q’n’A with Jervis Johnson that went over the demise of Specialist. I believe the event he was at was Blood Bowl related.

His explanation of the canibalization was, IIRC:

Necromunda or BB gamer buys a $30 (or whatever) “squad” of guys (ie a BB team, Necromunda gang, etc) and that could be it. Maybe some odd extras and a few mercs, but if all you like is Chaos or Dwarfs, you’re theoretically set.

40k or WHFB gamer buys a $30 squad or regiment. Neat, so what are the five other sets you’re getting to actually get this army playable?

It wasn’t the direct competition between a specialist unit and a core game unit, but the low entry cost of the specialist games that made GW think they’re were undermining the core games. Someone sees that $30 buys you all you need to play Mordheim or Necromunda (we’ll assume rules and starter sets cancel each other out across the game systems), but only buys you 1/2 to 1/4 of a single WHFB regiment, or a third of an IG platoon, or otherwise 1/5th to 1/10th of the total amount you need just to get started, and maybe they settle for the games that let you buy a new army $30 at a time and the odd blister rather than continually sinking hundreds of dollars to build and then expand/update.

Edited by Zuvassin, 19 June 2018 - 10:02 PM.


#17
Zuvassin

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I think Specialist Games came out of two motives:

1. GW’s background as a board game manufacturer and distributor. Games like Blood Bowl and Space Hulk are essentially just board games set in GW IP. I think initially even after dumping everything external to focus on their Warhammer IP, they retained that sense of using multiple game systems to cater to players.

2. Catering to niche IP fandom. Games like Horus Heresy, Necromunda, BFG, Inquisitor, and others also cater to some of the more popular elements within the IP, like hives and hulks in 40k.

I think along with my previous post about Jervis’ comment concerning the corporate belief that cheap-entry games undermine higher-cost ones, I’m guessing as GW evolved that original board game mentality was lost.
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#18
Scammel

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I simply suspect that they were never as popular as us folks posting on a Warhammer internet forum would like to believe, and thus didn't warrant continuing at a time when GW was not performing particularly well. It almost certainly made sense to drop them from store shelves like a hot potato - UK retail is an incredibly competitive sector where every inch of shelf space counts, and I've no doubt that GW has some very precise figures on the value of an inch of Space Marine product.


Edited by Scammel, 20 June 2018 - 09:08 PM.


#19
Rik Lightstar

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I was running a UK GW store at the time when Specialist Games got pulled. I'm not saying I know the reasoning, but I can tell you that up to that point I got ALLOCATED way more stick of it than I'd ever shift and had to send a lot of it back when they got pulled.

Keep in mind that GW barely had an online presence of their own at the time and without active store and club support these games die off fast.

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