It’s no secret that GW’s sales were down in 2013 from the previous year and that their stock price plummeted on January 16, 2014 when this was formally announced in their most recent financial report.
As a GW customer of more than two decades I can’t help but have some thoughts and lamentations about it.
I’ve been a GW customer for 25 years and I’ve had many discussions about this situation recently with a friend of mine who’s also been at it about 2 decades and who worked for GW for 10 years. It seems GW has forgotten that what they are selling in addition to their model kits and games is an intangible: FUN.
When people are having fun with the GW hobby they get excited, buy new products, share it with friends and both help build the customer base and sustain it. It’s been apparent for at least a couple years now that GW no longer sees any value in intangible things that helped sell their product. They just don’t see a connection between activities and promotions that generated fun and excitement and their profitability and they simply will not do anything these days that doesn’t directly have a built in profit margin of its own.
Games Workshop has no customer loyalty programs. Exciting promotional events and activities like they had in their shops back in 2007-2008 are dead and gone. Nowhere is the problem more evident than in the transition of Games Day events from giant parties celebrating the hobby to mere paid admission stores where people queue up to buy the same merchandise they can buy in their local shops. And the near monthly increases in price points have driven away many existing customers and turned off many potential new ones.
GW sales were down worldwide last year. While there are many reasons for that, some of them beyond GW’s control, GW certainly has contributed to their own problem. Years ago GW tried making basic “core” units affordable and gouging a bit on elite troopers and larger centerpiece models and it worked pretty well for them and their customers. Now the entry point for the GW hobby past the starter sets is quite high and GW currently prices even basic army units so high that many hobbyists don’t feel they can afford to build a worthwhile army. GW upper management seems intractable on their current pricing structure and is ever pushing the limits of price points with nearly every new release.
In my more than 2 decades as a GW customer I’ve seen them alter their business practices and retail marketing plan many times here in the US.
At one point they envisioned Battle Bunkers in major markets all over the US with smaller “feeder” stores surrounding them in nearby surrounding communities. This was a grand scheme with a lot of potential, but it would take a while to implement it and see if it generated the kind of sales and large customer following that would allow GW to finally conquer the US market the way they conquered their home turf in the UK. Unfortunately, there were never more than five Battle Bunkers at one time ever and in recent years GW has completely abandoned that plan in favor of one-man part-time stores that are only open five days per week. They never did make a serious commitment to realizing their grand-scheme of capturing the American market with their store saturation plan. It’s not the first nor probably the last time they’ll make a wide swing from one business plan to another without giving the previous plan the time it needs to be fully implemented or show a result.
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| Wrist bands sold at GW shops the weekend of the Dark Vengeance release. |
GW sells a lot of starter sets, after all, it’s a really cool product with high quality contents and it’s still a good deal for the money. Starter sets are a great way to get started in the GW hobby. However, the current high cost of sticking to the hobby and expanding one’s collection means that a lot of these customers never develop long-term loyalty to the hobby and Games Workshop products. They simply don’t return to the store and purchase more product over the course of several years which until now has been the bulk of GW’s business. If GW can’t replace the hobbyists they lose over time due to natural attrition, are driving even more customers away with their rapidly ballooning prices, and have trouble bringing in new long-term customers due to the high cost of hobby entry, this does not bode well for their future. It makes me very sad to see what is happening and how it has hurt my local GW stores and the local hobby community.
Games Workshop needs to rediscover the formula that fun + excitement for customers = sales + profit for GW. If GW doesn’t soon learn to do a better job of balancing the needs, desires, and budget of their customers with their own need for profitability they will continue to find themselves failing their customers and themselves in the hobby marketplace.
I’m still a fan of GW’s products and I’m still a customer, but some of their actions over the past couple years have sorely tested even my own die-hard fan status. I hope they find their way back to what made them popular in the first place, I’d hate to think of a day where there are no new models coming from Games Workshop.
If you missed my article last week while the blog was having problems, here’s a link: Broodlord Attack! Customizing Single Pose Models.
