Games Workshop Group (GAW)


Games Workshop AGM: A relentless profit machine

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Games Workshop is casting itself as a relentless profit making machine. Customers, staff, and investors who don’t like it better get out of the way.

On Tuesday, the day before Games Workshop’s annual general meeting, my twelve-year-old son burst into the office and noticed the proxy forms allowing me to attend and vote.

When he saw Games Workshop written in bold on the papers he asked what I was doing. I told him I was visiting headquarters to find out more about the company. “Good,” he replied, “Can you take back my set?”

I think he was hoping for some cash back. Joe had bought a kind of starter kit and had started painting the figures in preparation for his first fantasy wargame. But without friends who play the game, or a parent modeller, he ran out of steam and for the past year it’s been standing in a pile destined for eBay.

The failure of Warhammer to storm the ramparts of the Beddard household has not put me off Games Workshop as an investment, but it does add to my insecurity because my personal experience coincides with the experience of gamers protesting through various Internet channels including this web site, that the hobby is increasingly inaccessible to gamers.

I came to the AGM wondering whether Games Workshop was alive to the risk that it is serving a diminishing band of nostalgic modellers who are prepared to spend a lot of money on intricate miniatures they will probably never use in battle, while through price rises, rule changes, and staff reductions at Games Workshop stores, the company has alienated new recruits who cannot afford armies of figures, and frankly aren’t that bothered about how pretty they are.

Though it’s profitable now, such a strategy might not enhance Games Workshop’s ambition to stay in business forever.

Walking up Willow Lane in Nottingham, the company’s headquarters looms like a fortress, shuttered and battleship grey. Within the keep is the newly refurbished Warhammer World, venue for the AGM.

Shareholders are led up a wide arcing staircase through one of three shops into the events hall, a keep within the keep surrounded by mock castle walls and filled with tables for gaming and modelling, and then into Bugman’s Bar, named in honour of the greatest dwarfen brew-master. There, the AGM motions are passed without question, new chief executive Kevin Rountree gives a presentation and finance director Rachel Tongue take us through the numbers. We’re whisked through a permanent exhibition of miniatures, some standing alone, and others massed in battle on vast sets, so tumultuous sometimes its hard to work out what I’m looking at. Here we mingle with directors and other senior staff including chairman Tom Kirby, who has run the company for most of its history, and Games Workshop’s head of intellectual property. In the final chamber of the exhibition, he and the company’s head of product and supply talk about Warhammer Age of Sigmar, a complete reboot of the original Warhammer Fantasy game. Then it’s back to Bugman’s for a lunch of roast beef, syrup pudding, and a pint (and a half) of Bugman’s Best, which is a very fine beer.

As an AGM experience it beats an hour in an anonymous public relations company’s office in the City.

Touring the exhibition, I asked one of the board members if he played, or if he modelled. He used to do both, he said but now he finds running businesses is even more fun. Not for the first time that day the thought crossed my mind that Games Workshop’s management might view staff, customers, and investors as figures on a tabletop that they must manoeuvre ruthlessly to victory. Rountree’s main preoccupation is recruitment. He and Kirby have spent the last five years returning the business to high levels of profitability by taking out cost. Now, if it’s to grow, the new lean profit machine must recruit new storekeepers, particularly in continental Europe and North America. It’s a hard job, he says, running a one-man Warhammer store, and the company’s tough love, it supports managers who “want to continue in the job”, contributes to a 30% turnover rate. I’m not sure that’s bad for a retailer but considering for most of Games Workshop’s managers the job must start out a vocation, it could improve.

I’ve got bad news for disenchanted gamers complaining on the Internet. The company’s attitude towards customers is as clinical as its attitude towards staff. If you don’t like what it’s selling. You’re not a customer. The company believes only a fraction of the population are potential hobbyists, and it’s not interested in the others. The move to one-man stores has reduced the number of customers, sometimes by 30%, but the stores are profitable now.

Maybe you think you’re a customer, or a potential customer, because you like playing games. But this is the important bit. This is the bit written in every Games Workshop annual report. The company’s mission statement is “we make the best fantasy miniatures in the world and sell them globally at a profit and we intend to do this forever.”

It does not mention games. In conversation, I’m told that the word “Game” in Games Workshop encourages the misconception that games are its business, but that only about 20% of Games Workshop’s customers are gamers. The rest are modellers and collectors. Maybe half of them think about playing now and then. The other half have no intention. People actually walk into the stores because they’re curious about modelling fantastic armies.

When another shareholder asks if the company would sell games with pre-painted easy to assemble miniatures like the popular Star Wars themed X-Wing game, there’s a collective growl from the Games Workshop people. It wouldn’t be a hobby business then, it would be a toy company.

Games are easy to sell if they catch on, but it’s the modelling aspect of Warhammer that makes it a hobby, sometimes for life, and peculiarly lucrative to Games Workshop. Some of the individual models we’ve seen in glass cases, those from the company’s Forgeworld collection, retail at £1,250 each. Some customers spend many thousands of pounds a year and they paint them with incredible craftsmanship. These are good customers.

Though I’m left with little doubt where the businesses’ priorities lie there is hope for gamers who like to model. Kevin Rountree explains how introducing products at new price points is different to reducing the recommended retail price, something the company resolutely refuses to do. It’s considering “putting more value in the box”, discounting in other words, when people buy in number. That ought to encourage gamer-modellers.

The Age of Sigmar is something of a revelation too. I hadn’t appreciated how much it breaks with the past. Games Workshop has simplified the rules from 150 pages in an expensive rule book to four pages that are available for free download or in its free app. They’re easier to learn, easier to play and easier for the company to translate into many more languages. The game’s narrative will continuously unfold with associated product launches and in a trick borrowed from the Space Marines of Warhammer’s futuristic sister universe, Warhammer 40,000, gamers can employ heroes with superpowers (Stormcast Eternals). Purists think they unbalance the game, but Warhammer 40,000 grew to be a far more popular game than Warhammer Fantasy. The company cannot divulge sales figures, its in a closed period and Age of Sigmar is only in its third month, but in terms of other metrics, downloads and Sigmar themed magazine sales, management seems more than satisfied. Anyway, it’s at pains to point out, Warhammer Age of Sigmar is a long-term investment.

I leave the Games Workshop fortress confident of one thing. Managment have set a course and they will not be deviated. Ultimately, shareholders who question it come up against the mission statement. Games Workshop exists to make models, because that’s what it does well. Potentially lucrative income from licences granted to video games producers like the much anticipated and soon to be released Total War Warhammer will always be incidental because video gamers do not become modellers, and Games Workshop doesn’t know how to make good video games.

Niche businesses are often very profitable and the hard decisions they take is what makes them different, but they’re also vulnerable if unforeseen events reduce the attractiveness of the niche. That’s why most niche companies try to expand their niches, or develop related niches. Having defined itself so tightly, perhaps the only way Games Workshop can grow is geographically, which explains the emphasis on North America and Europe (where it already has a sizeable presences). It has a small team in China, sussing out the Asian market.

Sigmar sounds like a good product, and I think maybe I should buy it for Joe for Christmas. But as I walk back along a tow-path to the railway station the spell wears off.

He just wants to play. He’s not an anointed one. He doesn’t have Warhammer DNA. I don’t think he’ll ever walk into a Warhammer store because he wants to paint a Stormcast Eternal.

Maybe we’ll get him X-Wing instead.

Share Sleuth: Objective | Top 50 | Who is Share Sleuth? | Performance


So Richard, does what you've learned from the unique GW AGM incline you to change your buy/sell/hold advice for GW?

I feel the next year or two are going to be important for showing they can expand the customer base (or not). That said, I think the IP rights alone will ensure the shares always retain degree of value and attractiveness as much more could potentially be done with them (as Disney showed then they took over the moribund Star Wars IP)

I'm no expert on IP but Warhammer is not mainstream like Star Wars so I wouldn't stretch the analogy too far. Any way whether more could be done with the IP is speculative. I want the current business to be a good one. Since it's just gone through some pretty radical changes it's difficult to know whether it is - we have yet to see the results. As usual in such situations I'm doing nothing! Games Workshop is only 3% of the Share Sleuth portfolio. That seems about right. Would I add the shares now if I didn't already have a holding? I'd probably dither. They're not obviously cheap.

That's not advice BTW. I hope through running model portfolios to encourage people to back their own judgement!

All the best,


GW is losing market share in a market which is growing, not shrinking. And rather than adapting to increase their customer base, they're pursuing a course of action to make them a niche within a niche within a niche.

Likewise, while I do believe they have valuable IP (not on a level with Star Wars, certainly, but it still holds quite a bit of value in the right hands), they've clearly demonstrated an inability to handle their own IP well, as well as a disinterest in maintaining it, as evidenced with Age of Sigmar, where they threw out the entirety of their Warhammer Fantasy IP in favor of the new Age of Sigmar world. That might be something if the new one was superior to the old, but the replacement setting is a convoluted impenetrable mess.

So for me, the wise advice would be to sell. GW brings to mind the Hemingway quote when he was asked how he went bankrupt. "Two ways. Gradually, then suddenly", he replied. GW seems to be pursuing a path which'll only lead to bankruptcy. It's a gradual pace right now, but you don't want to be invested in GW stock when it shifts from gradually to suddenly.

I firmly believe that GW are going down, probably quite rapidly!

I was a GW convert, staunchly holding on to my belief that they "made the finest miniatures in the world" as you put it.
Then the new "game" Age of Sigmar came out, and it was basically a travesty. There were no real rules at all.
By this point (at least in my country, sweden) everyone has deserted the warhammer franchise, since they blew up all the history and lore that fantasty lovers relish, and the rules for the new "game" leave everything to be desired.

This has lead me to find Privateer Press, and they make a game that is as elegant as it is balanced. Also the spouted claim of making the finest miniatures in the world is false, and I challenge anyone who disagrees with me to look at the archangel, for instance.
In short, the few hobby collectors will soon move on to something that satisfies their modeling and collecting urge, but costs less than half as much, and has proper rules support (you know, for actually USING the product you buy)

I was very sad for a few weeks after the warhammer franchise was scrapped, but now I do not ever give GW a single thought.

You had me until you tried to compare the quality of models between the two games. Privateer Press makes the worse quality plastics in the gaming industry, and it's not close either.

That and they've altered their game from 35-50 points making it much much worse. Mosh Pit chess is a thing among avid tournament goers but it's a terribly crowded game of blah and the strategy of moving pieces has evolved into a north south debacle. The elegance was lost long ago, and it's streamlined into fighting over the center objectives all game long.

While I do agree with you on the miniature quality, some of the earlier plastics are really not great. The more recent plastics have been much better and their metal and resin models are generally very good.

However, in terms of game balance and elegance, I can only assume you have not played much Warmachine became both are excellent compared to pretty much any other miniature system in the market place. When you see high level games that are recorded, there is an element of very good player skill, knowledge and model placement cancelling each other out. This can lead to some fairly attentional games, which maybe don't make the best spectacle in terms of game play. Go and watch a really good player against an average player, and you will see some really nuanced moves and tactics. It is a bit like watching Olympic level fencing, it looks pretty easy and they seem to just be running at each other, waving their swords about a bit unless you understand the sport in a more detail to appreciate all the features of a match.

Ultimately though, if it's not for you then don't play it. There are plenty of other games to play that might be more to your liking, but don't be so quick to dismiss Warmachine.

Interesting trip Richard.

I used to own some of their models back in the 80s, but never made it beyond a handful of badly painted trolls and warriors.

I guess the company fits your "hidden champion" genre, which - as you say - can be highly profitable. However, their commitment to doing something forever is a worry. Buggy whips are still sold, but no longer in any great volume.


Hi John. Yep that's the worry. That they'll keep mining the same niche into oblivion. Many of the hidden champions in the book of that name were actually quite big companies that occupied a number of niches. That's a more reassuring position to be in.

Hi Richard, many thanks for reporting back. Very interesting to discover only 20% of customers play the games. I think with the board's focus on upmarket modelling, sales growth will surely be hard to come by. True, video gamers do not collect models, but they do play games -- possibly table-top war games and could perhaps spread the Warhammer word. And video-game developers will pay money for IP rights, and so they are in fact a GAW customer -- just not a model-collector customer. Ultimately customers pay money, whoever they are. I too have a 12-year-old son and he said he had never heard of Games Workshop. I told him it was the shop with the big stone soldier out at the front and he then recalled seeing it and said he would never go in because it did not appeal to him. And this from a lad who knows all the Marvel films inside out. Maynard

Hi Maynard. I'm not sure how precise the 20% figure is. It was bandied around in conversation rather than put on a powerpoint! That said, it's pretty obvious who Games Workshop is focused on. I get the feeling that Games Workshop thinks of the licencees as their customers and not the end users (who are the licencees customers). How the licensee recruits customers is their business. GAW just wants the cheque to come through the post. That's as true of board games and card games based on Warhammer as it is of video games.

I don't think GAW are losing too much sleep over our sons! They're not made of the Right Stuff.

An interesting report. However, I'd be intrigued to know how they worked out the 20% figure when they categorically refuse to do any market research... "Otiose" according to the chairman if I remember last years report correctly. I may be being overly cynical, but it sounds more like a post hoc attempt to rationalise their decisions of recent years.

Decisions which admittedly have seen the company do some impressive work in sustaining profits despite selling less product, to substantially less people (as best as one can tell from the figures) over recent years. Personally, I'm sceptical of a company leadership culture that unwilling to consider alternate views and that fails to recognise potential customers, let along its competitors. The other players in the same niche market may be minnows in comparison but the explosion in growth of games like X Wing that you mention, or the various Mantic games, Infinity, et al surely paints an unwelcome picture. Their refusal to seemingly even recognise this surely cannot be healthy in the long run?

Really the future of the company depends greatly on how correct that 20% figure is because it represents how vulnerable they are to the network effect causing a sudden plunge in revenue. As potential customers move to other games that encourages other potential customers to move to other games too (after all, if you are interesting in gaming, why would you invest in a game that no one else is playing?), a domino effect with the potential to cascade if nothing is done about it. A little bit of effort to research their consumers, to understand their purchasing habits and how they use the product, and to understand the market ecosystem they exist seems almost blindly obvious. I have a lot of scepticism about a company that utterly refuses to even consider these things!

This is exactly their mistake; they don't care about our sons (lol, even if I have none); their problem is they don't want gamers, they want collectors. The problem is that they don't understand how people become collectors: they start by being interested in the game. I have bought GW stuff for 20 years now. I have not always played over those 20 years, as depending on the area where you live, it may be difficult to find other gamers. However, I kept buying because I knew I would play again sometime. Some of the difficulty to find other gamers is because of their new 1-man-store policy. I used to meet people there and play there; now I can't do that anymore. I am lucky enough to move to an area where my local friendly gaming store supports gamers, and 80% of the store space is dedicated to tables for gaming. therefore, I play regularly every week. And (guess what) I see others play other games. This generates interest in me on playing those other games, not GW. The problem for GW is that, with the prices they are setting for their products, and the lack of support for gamers, they are not going to get people to keep collecting their stuff.

For example, from my experience as a business analyst, their strategy is awful. They go from Warhammer Fantasy to Age of Sigmar; which includes rules that ridicule those who use their old armies (like having to stand on a chair and yield something to apply a buff to your unit). At the same time, they have sold one of their licenses, Warhammer Fantasy, to do a video game for the well-know bestseller series Total War. So, imagine, you play video games and get this awesome looking game...and then you find out that you could do the same with models in your kitchen table and play with your friends!!! Oh wait, the models that they have in the game and that you want to play with are not really available to play you lose interest and go back to your videogame.

Seriously, I used to spend $150-$300 a month in GW. Now, I don't go to their stores anymore, and I have started to spend that money in other games, like, guess what, X-Wing.

their bad.

I always chuckle when I hear the comment, "video gamers do not become modelers". I picked up the original Dawn of War(DoW) in high school because my friends played a lot of Starcraft, and DoW was like Starcraft with more races!

Fast forward 5 years and a lot of DoW: Dark Crusade later, a co-worker arrives on a Saturday shift with the brand new 5th Edition Warhammer 40K rule book hands it to me and lets me take my lunch break to read. I am blown away that this is actually a tabletop hobby and the detail and tactics involved in building an army. I instantly recognize my favorite army from the new expansion the Tau and proceed to pick up the 5th edition rule book.

I was fortune enough to live by the Los Angeles Battle Bunker while they had a 3-4 man staff. The manager at the time, James Bell, was amazing good at engaging the customer and encouraging people's hobbyist spirit. When you left the retail space, you entered a larger room decorated with Warhammer memorabilia and around 10 tables setup for people to engage in the game side of Games Workshop. You could find veteran hobbyist painting and teaching younger players how to play model and convert. There were display cases filled with models that cost hundred, some even thousands of dollars that were painted by what could only be described as true artists. The best part was as a gamer you had a reliable location that you could play the games, and engage with other enthusiastic hobbyists.

10 years later, I have 3000 points of Tau units (first army). 5000+ points of Chaos Space Marines(2nd), 4000+ points of Eldar(3rd), 2000 points of Chaos Deamons(4th), 4000 points of Space Wolves(5th), 2000 points of Warhammer fantasy Lizardmen, 2000 point of WFB Empire, and 2000 points of WFB Vampire Counts. I'd estimate 60% are painted so lets also think about paints and modeling supplies. I was lucky enough to buy most of this when you could find a Landraider for around $50. To purchase this now would be ludicrous. Gaming wise, the Bunker now has only 2 tables for playing, one additional for intro games, occupies less than half of the previous space, operates under reduced hours, and is a shadow of it's former self.

To give you a point of reference a Chaos Space Marine is between 13-15 points depending on upgrades, comes in a box of 10, and for around $40.00 after tax. The tanks are 100 to 170 points and are $60+. So do the math, thousands of dollars...

The friends I played DoW with also have extensive model collections, I'd estimate between the two biggest collections around 40,000(ha!) points of models. But then, we regularly enjoy playing Warhammer 40,000K in our homes or local gaming stores now. So I guess we are not collectors, just gamers.... =(

^^ This is pretty much it.
We are a games venue and retailer. We used to be a stalwart 'independent stockist' of a wide swathe of GW armies and models.
No longer.
Our gamers are disenchanted, our profit margin reduced to unsustainability. We make the about the same amount buying from a third party via specific customer orders.
And yet, the players still play with what they've got with older rules editions. (Very enthusiastically - a 40k tourney league every week, across a wide age range)

GW has always been traditionally most bought as far as volume is concerned by young teens (their parents), but this demographic have been completely priced out of the market. Age of Sigmar rules may get them back, but only because they're basically 4 pages of do-what-you-want-because-balance-and-gameplay-don't-matter. Sadly the prices won't.

GW don't do market research, they have no basis for their 20% estimate, and for our past retail experience it was blatantly untrue. Collectors are in general gamers first, or why would they bother collecting?
(except for codexes and army books before they put the price up astronomically and messed up their release schedules, those did attract non-playing collectors)

Other game publishers have models just as good, at far better prices, which would be just as stunning on a collector's shelf. They also have continued game support and an understanding of their customer base. Sorry games workshop, but the name and lore is not enough to carry you. The only reason you have any money on your books right now is because you're systematically screwing over any chance you have of making any in the future.

(I am in New Zealand) In the global sense my opinion is very heavily skewed towards RIP GW. I would sell, not buy.

Excellent comment.

GW seems to think their IP is as solid as Star Wars or Marvel - but it has no where near this ubiquity.

I am a business executive who happens to also be a long time gaming enthusiast and have been involved with GW products for years.

I am also very active in the various communities surrounding their products - from game stores, to online to events. Their 20% figure is wildly and grossly inaccurate. Especially once you get away from their branded stores and into 3rd party distributors (which have a very large market).

While the hobby is indeed important for some customers - its the game that attracts many, and the quality of such that drives (or hurts) sales.

Here is a prime example; A collector might buy one tank/plane/spaceship model - if that same model had good rules and was used in the game - the gamer would buy six of them.

This could be a billion dollar company if they could trade some of their hubris for business and marketing intelligence.

I would take that statement of only 20% with a very large dose of salt. Games Workshop does no market research.

From their 2014 Investor Report: "Our market is a niche market made up of people who want to collect our miniatures. They tend to be male, middle-class, discerning teenagers and adults. We do no demographic research, we have no focus groups, we do not ask the market what it wants. These things are otiose in a niche"

Going back 15-20 years, GW was really the only big company for non historical tabletop games. Having research wasn't as important. In today's tabletop market, there are now dozens of other companies fighting for the consumer's money. These companies do research and they do ask the market what it wants, and for the most part the market responds with the desire for well written rules as the most important aspect. Fantasy Flight's Star Wars games are a prime example of that. Because the rules are well written, it keeps people playing the game, and buying more miniatures. Fantasy Flight used to write the rules to a game called Dust: Tactics. The IP, while relatively unknown, grew in popularity quickly because the the game itself was fun to play. The IP owner, who had partnered with Fantasy Flight, wanted to take the game in a different direction and parted ways with Fantasy Flight. Dust is now a dead game, and the models, while very nice, do not sell anywhere near the levels they did when they had a well written game to back them up.

A collector buys a single model/unit because the looks of the model appeals to them. A gamer buys several models/units because they want to build an army for a game.

"Fantasy Flight's Star Wars games are a prime example of that. Because the rules are well written, it keeps people playing the game, and buying more miniatures."

This is an important point to bear in mind because I'm sure someone might say "It's the Star Wars IP, so that's why it's so popular." However, prior to Fantasy Flight Games having the Star Wars license, Wizards of the Coast had the Star Wars license and they were the ones producing Star Wars miniatures at the time. And like Fantasy Flight, their miniatures were pre-painted plastic, playable straight out of the box (In fact, they required no work at all to play with them, and you could play with them within seconds of taking them out of the packaging, while X-Wing models require some level of assembly before they're playable). Wizards of the Coast's game failed, however, because it just wasn't a very good game. Star Wars or no, people stopped spending money on it because it wasn't a satisfying gaming experience. It's not enough to simply see a Stormtrooper or an X-Wing and push it around a table. The game itself has to be entertaining, and that's why X-Wing is going from strength to strength. And now with another Star Wars trilogy on the way reuniting the original cast, I expect to see X-Wing topple Warhammer 40,000 from its perch as the #1 miniature game in the industry.

Very true. If you take a look at how many times the rules of GW's games were changed, with new editions of games, new Rulebooks, new Codices / Army books, Formations, etc., all to affect which product gamers buy this quarter or the other. A collector would not be moved by the changes to the rules of the game, so why do it, and why so often?

There's some interesting comments thrown around that video gamers don't play with models. I'm not sure if there's stats going around somewhere for that; but from my limited experience. Many video gamers play Wargamers though most Wargamers play video games. Most wargamers of the Y generation probably started off playing video games too.

The way GW treat it's perceived customers and it's business direction is not sustainable. My gaming group has spent 10's of thousands of dollars on models over the 10-15 years we've been playing Warhammer. We buy the games and the video games too. We love the IP and the models and the ability their product has too bring us together as a group to socialise.

What they are doing with the games now is not helping that. I've had absolutely 0 desire to go out and buy the AOS stuff. First time ever I've not been excited by their product. It's lame, boring, has no character or skill and all those things are enough to stop me from buying the new models no matter how pretty they look.

I have boxes of $100+ models still in the shrink wrap in my garage because one day I plan on using them in one of my games... not because of one day I'll plan on building it and putting it on display.

Game Workshop are out of touch with their market and I don't believe for 1 second that 20% are only the fraction that play. I've never met a person in a GW store who said I'm just buying thousands of dollars of these things because they look cool.

Gamers and geeks that we are, have very addictive personalities. The game is the hook, not the models.

My Tip is that Age Of Sigmar will be a quick success with no long term sustainability.

+1, CJ. It's EXACTLY what I think and what is my and my playgroup's experience. We gave AoS a Chance and played it 1 or 2 times, but it does not hook us. The first time after years and years of playing we start to loose interest in GW-News and -Products.

The 20% figure is a lie. GW, by their own admission, does no real market research. Perhaps only 20% of its customers go to tournaments but they had a vast following of customers that regularly played games at home and in stores and in regular tournaments. With the advent of smaller stores (in the US) and less attractive locations for those stores, GW is less successful at attracting and retaining the young customers.

What we are seeing in surveys is that GW is rapidly losing market share to competitors. By not also creating well-tested and balanced games interesting to the table top gaming community, GW has effectively given up huge market share over time to a variety of upstarts. In the past, in 2005-2006, GW had a small but loyal Lord of the Rings player base which was building until it largely lost over time due to writing horribly unbalanced rules and changing the game to War of the Rings in the past. That was how my son got into the table topy gaming world. However, when he could now longer find people to play, he switched to Warhammer Fantasy as did I, and we enjoyed a long run of good gaming only to see that player base eroded over time in a series of missteps in game design, pricing, and poor marketing. Rather than learning from that lesson, GW doubled down. GW has written poorly written and unbalanced rules for Warhammer 40K such that people have to impose "house" rules to play a decent game; GW has been raising prices to nose bleed levels; and neglected balance, scalability, and cost such that GW lost significant player base in Warhammer Fantasy over time. Many players have reacted negatively to GW's pricing policies and now refuse to buy its products in protest.

Those of us that have tried Age of Sigmar find it has some merits as a small scale, skirmish game, but it is basically a fantasy version of 40K with inadequate rules and substantially overpriced miniatures. $50 US for 10 base minis in a box is a rediculous price

GW's abandonment of Warhammer Fantasy has left the field for mass battle and tournament games to its competitors with a recent mass defection in the US Warhammer Fantasy community to King of War, an upstart with ex-GW refugees. Few people I speak to are interested in buying new models to play Age of Sigmar and I know of stores seeing paltry sales of the stuff.

You know, it is possible to both make and sell great models and promote the hobby and also make and design well-balanced games to play with those minis and to respect that part of the community. Instead, GW has decided to arrogantly react to the criticism but closing its eyes and mind to what is happening and not listening to its player base which became more strident and critical over time of GW. I know many independent gaming and hobby stores that now speak very harshly and critically of GW; its treatment of its independent retailer customers and their customers.

I flat out do not believe that only 20% of GW's customers play their games. Their models, admittedly, are spectacular. However, there is little to no reason to buy them if not for their use in the associated game - certainly not in the numbers they need to support their business. The only reason GW has reached the point it has is because they produced games that caught on and created a market for the associated minis. The fact they adamantly believe otherwise is just plain baffling.

I've had the thought GW is trying to milk their customer base for all it's worth before 3D printers become ubiquitous enough to make their business model obsolete.

Was their any indication as to where GW gets their numbers from? GW is infamous for being hostile to the very idea of market research and there has been no mention of any being carried out on GWcentric forums so I suspect that their attitude hasn;t changed.

Working out what %of people who buy miniatures actually use them in games is impossible without actually asking them.

As for Age of Sigmar Games Workshop figuratively blew up the Warhammer World, one of the most venerable and rich of fantasy setting that had lasted for nearly 3 decades, to make room for it. Its no surprise that their sales have been declining for years.

This is an interesting writeup Richard, thank you. Did anyone provide a source for the 20% figure? In the previous annual report, Tom Kirby bragged about doing no customer research so I don't see where they get this figure from.

Did they touch upon any of their competitors catching up on them and what they're doing to compete? Third party market research has pointed to several competing games overtaking their product ranges. While Warhammer 40,000 remained king in the market, others such as X-Wing, Warmachine and Infinity have overtaken Warhammer Fantasy (or at least before it was canned). In their shoes I'd be concerned that they've just handed a large fraction of their customer base over to their competitors by replacing Warhammer Fantasy with Age of Sigmar (which has proven to be controversial amongst their previous customers to say the least).

Hi Richard

Must admit I am glad I read through the comments and found out the 20% figure was just anecdotal. If I may be a little bold, I think possibly that caveat should be more strongly emphasised in your copy.

If 20% was a true figure and if it has always been 20% then this would change the dial for me on the potential for GAW, as it would address the three most crucial bear points -- 1) 3D printing threat 2) Change to new game rules threat 3) Hobby is too expensive to make big armies for most to play threat.

Personally I have my doubts about the stat. Perhaps 20% end up playing, but I bet more start with the intention?


The company clearly has a very valuable franchise that consumers connect with at some level but is just monetizing it in the worst possible way.

I think the evidence that the franchise is actually valuable lies more with the success of the computer games than the models. The IP library is so wide that developers can just come in and churn out a new title every few months (it seems) and consumers seem to find real value in this, which is very rare...but the company is choosing to invest in a way that guarantees the lowest possible return (probably negative) for shareholders.

For one, the company appears to have the same kind of valuable IP that a company like Blizzard has (Hearthstone, World of Warcraft, Starcraft). There is so much money to be made in this business...if you really treat it as a profit centre rather as an add-on. You can sell consumers a game but you also sell them all the extra downloadable content, this kind of model is just perfectly suited for what this company has...but they haven't done anything about it.

Consumers are obviously moving in this direction too, the pool of people who will play these games is growing rapidly. For most of these people, the offline format is inherently inconvenient and unappealing.

For two, why does the company actually have stores? The company's customers are probably happy to buy stuff online so what is the point? My assumption is that the stores offer a place to play the games...but this is obviously quite a strange reason to have a store. If the company is thinking that people will stop playing the game if they take the stores away then they obviously shouldn't have stores at all.

Imagine if the business was started five years ago, would it look anything like the way it looks today? No...and what I think this indicates is that management are way way behind the market. Introducing new price points and all that stuff is just rearranging the deck chairs on the Titantic, imo.

The company has the potential to create a really compelling product in one of the fastest growing categories in the entertainment sector (franchise computer game with DLC content) but it has actively chosen to invest in a category that basically no-one is interested in and young people don't want (model building). There is actually no reason this company couldn't be as large as Blizzard (multi billion $) but it requires a change in thinking that management seem unlikely to ever make.


"You can sell consumers a game but you also sell them all the extra downloadable content, this kind of model is just perfectly suited for what this company has...but they haven't done anything about it."

GW have done that recently: selling a faction's rulebook as usual, but then including superior rules for some of that rulebook's models and formations in seperate, purchasable, digital files. This hasn't gone over well with many customers, who view it as an extra expense piled onto the usuals (main rulebook, faction rulebook, many expensive models) to just keep up and keep their chosen army *viable*.

There's also some debate over how unique their IP is, which can be a lengthy subject to go into. But see how unique GW *thought* it was in the Chapterhouse Studios legal case and the 'Spots the Space Marine' debacle.

Blizzards Warcraft world started off as a licensed game set in the war hammer world

The stores are there for 1 simple purpuse. Getting new people into "the hobby". The store is mostly designed for this. Most of their stores have gaming table can be used for demoing their games, but not so much playing the "full" games. The staff is there to show people the GW products, wether it´s the gaming of the modeling/painting aspect.
The target audience is now a days is more early teens, with their parents wallets to back it up. The GW-store is a far better place to get those people and their money then a 3th party store.

Also those 3th party stores do not have a full commitment to GW, they also sell other games. A lot of them sell GW stuff because:it´s populair, and they give a (small) discount over the full GW price. GW accepts 3th party stores as a means to an end. In previous years, Gw for example, had been busy demanding a brick and mortar location from online sellers. Just because they want to be seen (hence their own stores). They do not mind losing online sellers, because their pricing would influence their sales on their own website.

Just selling models online doens´t work for GW, because of the drop-out rate of the costumers. They need a influx of
new people, the stores provide those.

Games Workshop stores are manned by one person: Anytime they need to take a break, a bathroom break, they boot everyone out of the store. Anytime a call is to be taken, they must interrupt the conversation or activity. It is unintuitive and uninviting. At a third party store, there are multiple staff, public restrooms, and table space. I can try out the game, play it, and ask questions for honest answers. The game is what I, and, my friends are passionate about. Friends that discovered, and, heavily invested into the GW product as a direct result of playing the RTS game Dawn of War, and, Dawn of War 2. Generation X and Y enjoy competition and prefer games with clearly marked winners and losers. A fun game with clear, concise rules that allow for layers of tactical play. What makes table top unique to me, when compared to video games, is that it provides a player with a very personalized physical representation of themselves to be displayed and admired on the table top.

Games Workshop has pure platinum potential if they'd shake off the dusty old cronies that are completely out of touch with their end customer base.

The irony of this is that Blizzard's game Warcraft was originally intended as a Games Workshop license (set within their Warhammer setting), but due to behind the scenes wrangling, GW cut it off, so Blizzard had to hastily hack together their own setting for the game, and now the rest is history.

First of all,
"You can sell consumers a game but you also sell them all the extra downloadable content".
Just assuming that you refer to GW's licensed video game, they sold many many DLCs for games like Dawn of War II or Space Marine, but after THQ went down, Games Workshop seems to focus on crappy mobile games that no one seems to play because most of them are badly made.
And the very notion of selling something comparable to DLCs in the form of Codex supplements, which are just a big headnut for the players (who certainly are far more than 20 %. I'd really like to know how GW came up with that number).

"Why does the company actually have stores?"
The company has stores because 1. these are great places to meet other players (and I do mean people who actually PLAY the game) and 2. since they've got big tables with buidlings, walls, bushes and such, always a good place to play and for the shop employees a great location to host events like Apocalypse games or other tournaments. 3. the shops are, as mentioned, a way to be seen and to gain new people. Although the employees could highlight the fact that it is a GAME far more.

"The company has the potential to create a really compelling product but has actively chosen to invest in a category that basically no-one is interested in[...]."
The company already *has* a really compelling product, backed by a great IP with epic scope (which gives them the advantage to other tabletop strategy games, in my opinion), and from what I see in my local stores, whether GW or 3rd party stores, "no-one" is quite a lot of people. And it would be more people if GW would return to less-absurd price ranges with their models. Many players (and again I mean PLAYERS) to whom I've spoken said they would buy more if they would just charge a bit less for the models (Just remember, in the early 2000's you could get 10 Space Marines for 24€ and now you get 5 for the same price - ridiculous).

What Games Workshop is doing with basically every move they made in the past few years is alienate their customers and fans. They need to get a way of connecting with their customers (Tom Kirby can go s**k it: They need to do "market research"), i.e. an online presence. It is the year 2015, and Games Workshop is one of the few big companies without Facebook or Twitter presence. What is wrong with these people? Second, Games Workshop should really put focus back on the game section of the Warhammer 40k game. Of all the people I know everybody says that the rules have become more or less something to accomodate the models, not vice versa. This leads to people buying cheaper models from other companies and just use them as stand-ins, as long as the scale is the same.

They don't have a social media presence for the same reason they don't have an official on-line message board any more. Their business decisions alienated customers, who then tried to express their unhappiness to the company via the only contact point (other than going to a shop) that they had, the company social media accounts.
Games Workshop explicitly do not care to hear what their customers want or if they are happy, so the avenues of communication were closed. It is as toxic as it is preposterous.

The stats they gave you seem very odd and arbitrary to me. GW has repeatedly stated it doesn't do market research, I've never in my 30 years gaming and painting these little soldiers, ever seen a customer feedback form, doesn't conduct a census of customers, as far as I'm aware, in the stores (and that would be a small demographic of a highly niche hobby) and actively discourages interaction with it's customer base via online means. My simple question back at them, had I been there to see this '20% of our customers are gamers' comment, would be 'how the hell do you know that?'.

And... if the gaming section is so very low, why all the bells and whistles to effectively destroy the warhammer fantasy gaming background and launch the Age of Sigmar one? It's only seen the release of one new mini range to play, the rest of the factions remained as was. The dramatic destruction of the previous gaming style and effort involved in creating the new, lower model count, skirmish game of AoS seems to totally fly in the face of the 20% gamer numbers.

I am very pleased to hear the boxed sets will have more 'bang for your buck' in them, because there's one thing really hurting GW and that's the lack of new recruits or those who'd like to return to it but won't even consider the frankly painful start-up costs, leading to an ever decreasing circle of gamers... sorry, I meant 'collectors'...

On the plus side, it does sound a much better day out than stuck in a conference hall with a tepid buffet lunch.

Fascinating insight. As a high level business professional who also happens to be a games workshop customer, and very aware of the gaming environment (at stores, online and events) I can say they are incredibly disconnected from their customers.

This statement;
"that only about 20% of Games Workshop’s customers are gamers. The rest are modelers and collectors"

They have no idea what they are selling (games, and models) and who their customers are.

An example would be in model kits that are used more in their game, or have better "rules". A collector might buy one of these kits - but a gamer, based upon the rules of the kit and its use in the game - will buy many more.

Simple basic accounting can show the errors of their ways - they have raised prices dramatically in the last several years - and sales have stayed flat (or gone done) - it does not take a phd in to realize this means they are losing customers. Making more per customer is not a long term strategy - and while sigmar is in their idea a product with a lower barrier to entry - it is not - a lower barrier to entry is a starter set that is $40 or $50 (without finding a friend to split a more expensive box).

I have seen many people drop out of the "hobby" due to their lack of support for the game - if people just wanted to hobby, there are many other alternatives (fine molds, hasegawa, etc.) - today as the barrier to entry lowers in their space (computer design, kickstartes, 3d printing) many alternatives exist for the gamer and hobbiest. Of course, a new start up is not going to take over GW, this is not the point - but hundreds of them do provide alternative sources - and these new sources actually engage in social media and their customers.

In short - buy your kid Xwing.

I don't suppose anyone there mentioned or commented on market research?

It seems worrying to me that a company such as them would not be interested in asking their customers what they want, but according to Mr. Kirby that is otiose in a niche market.

They are missing a lot on chances to grow. Look at Fantasy Flight Games the makers of X-Wing and other games. They are growing and even buying other IPs to grow. The Dawn of War video games are what got me into the table top gaming all the new video games need is a small flyer or video in them showing the game it's based on or even a free figure.
The 20 percent they say are gamers is missing that in their stores you can't play and most gamers try to buy where they play in the U.S. we go to game stores not GW stores. I wonder have they ever stated what percent of their sales are at GW stores vs other outlets?

Thanks Richard, a very entertaining piece! (And one that shows up easily on search engines you may be pleased to know.)

A few searches on the company, of which one was this page, throws up a few things. The oddest relates to the 20% figure on customer habits. There is a chairman's statement that baldly states they do not do market research. I am concerned that there seems to be a disconnect between that statement and the information given to investors at the event, though as you say it seems to be delivered as more anecdotal information.

Otherwise there is both a massive amount of customer created internet content, but also a surprising amount of sustained anger at the company. So it certainly generates lasting passions in the customers. One to watch perhaps if there is a management change and they try to grow by recapturing those customers.

Oh and looked up that X-Wing game for my nephew - that company seems to have a number of Star Wars model games that are very similar to the Games Workshop products. Did management comment on the Star Wars juggernaut baring down on them as a direct competitor?

Just to add one customer online forum has a whole section it seems dedicated to discussing the companies business practices (and a link to this article). Very negative!

"...that only about 20% of Games Workshop’s customers are gamers. The rest are modellers and collectors. Maybe half of them think about playing now and then. The other half have no intention. People actually walk into the stores because they’re curious about modelling fantastic armies."

It's amazing that they can say that with such certainty when they outright admit in their own financial reports that...

"We do no demographic research, we have no focus groups, we do not ask the market what it wants."

Speaking as a gamer, not once in my life have I ever encountered anyone who's purchased GW models strictly for modelling and collecting. Not one. I also engage through online communities, and every single person I've spoken with through there is also a gamer, not a modeler. Oh, I'm sure people like that exist, but in comparison to gamers? People who buy the models to actually play? There's no way they constitute 80% of GW's customer base, much less a majority, or anything other than a negligible percentage, and GW management is deluding itself if it thinks that most of their customers buy their models for no other reason than they want useless plastic knick-knacks to decorate their homes with. It's doubly absurd when they outright admit in their financial reports that they do no market research of any kind and boast about the lack of communication between them and their customers. So I'd really be interested in learning where they get the idea that 80% of their customers is made up of people who buy models just to paint them, put them on a shelf behind a glass case, and never touch them again, because I'd be very interested in meeting this person, too.

What's especially foolish about this assertion is this: a modeler/collector has no need to collect more than one of anything. Why would a modeler, someone who buys the models just to paint them, buy more than one Space Marine? More than one Grail Knight? More than one Witch Elf? They have no need for large numbers of models, because they're not buying them for a game. It's the gamers who buy box after box after box of the same unit. I have a slew of Space Marine Terminators sitting on a shelf and it's not because I'm a modeler who wanted to paint them each a different color scheme. I own them all because I occasionally like to be able to play an army of Terminators on the tabletop, ineffective though they may be.

Although I have to say, if you ever get the chance, I'd be interested in your asking them why the first two Age of Sigmar limited edition books never sold out, while the third sits on the webstore unsold after a few weeks. Whenever Games Workshop puts out a limited edition book it almost always sells out within the week, and some have sold out within minutes. They've been wholly unable to shift the Age of Sigmar limited edition books, however, and they only have 2000, 1000, and 1000 copy print runs. By way of comparison, the only times they've had limited editions which didn't sell, they were for Dreadfleet and The Hobbit, games which were financial debacles for them. That's certainly something worth considering.

"...not once in my life have I ever encountered anyone who's purchased GW models strictly for modelling and collecting."

I purchase GW models to paint, but very rarely (Less than $100 worth a year). The Warhhammer and 40k universes do inspire people like me, though my love for them is nostalgic. I purchase many more other models from competitors (Mantic, Warlord Games, Reaper Miniatures...) with no real intention to play games.

My girlfriend works at a game store and I can tell you this "negligible percentage" is actually a very large sales base. I believe they broke it down like this from the post 50% of sales are to people who just want to collect and model. 30% want to model, collect and play, while the other 20% are strictly gamers. Don't you think your getting some bias on online communities that are dedicated to discussion of the game aspect? Have you visited web sites like cool mini or not? On these sites you'll find this "neglibible percentage" out in force.

Back 30+ years ago in their early days, GW were a miniatures company. They decided that to expand, they needed to find a way to sell more models. That’s the whole reason the likes of Warhammer and 40,000 came into existence – to sell more models, providing people with a reason to but multiple copies of the same model, and in general significantly larger volumes. It was very successful strategy and they became the dominant force in the market in short order. Looking at that overall picture, it's hard to see that growth being the result of collectors buying more models for games they don't play, whatever local variation there may be at individual stores.

Why would anyone interested in modeling fantasy pick up AoS models? They are some off-shoot creation by GAW to attempt to control more IP. But the models are not fantasy. I don't read Lord of the Rings and then get a craving to model a sigmarine.
As a long standing modeler and video game player, I can assure everyone that less than 10% of people buy models with no intention of playing with them. Those that do buy just to model still want to show off the models to their buddies, who are--shockingly-- people who buy the models to also play with them. Without a gaming group to show well painted models to, most pure modelers aren't going to buy GAW models. They'd rather build a ship in a bottle.

Hello, I see that Games Workshop is taking a direction of a modelling company instead of a gaming company. I think it's good news because I was always primarily fascinated with the modelling aspect of the hobby.
Primary modelling, then reading novels and fluff, then playing video games and playing tabletop games in the last place.

I think that as models, WHFB and Wh40k stuff has one serious downside, though.
The miniatures are very characteristic for early tabletop games. Very crude, with grotesque proportions and made more for withstanding abuse in transport and on tabletop rather than for display.
These miniatures really turned me off from buying GW miniatures, so I'm left only with novels, fluff and video games.

As someone interested in modelling, I wish there would be Warhammer 40k miniatures and vehicles series in a proper modelling scale such as 1:72 and 1:35, with realistic proportions, designed for display, not for abuse.

Although I don't mean to insult you, seeing that you obviously like Warhammer for its style and all,

...did you notice the word GAME in the name GAMEs Workshop? They sell a game, the miniatures are a means to an end, nothing more. Of course I like a fine miniature with lots of details, but if you want to buy models for modelling and painting and putting on display, Games Workshop isn't the company for you.
At least it shouldn't be. Go take a look at Revell or other companies who actually not only target the hobbyist market, but where actual hobbyists go and buy stuff. From all the people I have encountered thus far, I would bet a number rougly around 150 people, only two of those bought Warhammer miniatures (Fantasy or 40k) only for modelling and painting.

And to be fair I think you got the right answer in the end.

GW used to be the market leader and spent the 90s developing market saturation. With partnerships with MB games and a range of price points, there were self contained products (Heroquest, Space Crusade) which introduced children to the universe and led to further self contained products (Space Hulk, Advanced Heroquest, Warhammer Quest, etc) that just happened to give people the start of an army. And so it went from there.....

Games Workshop have since shed almost all of their creative talent, who have set up their own companies (Warlord Games, River Horse, Renedra, Perry Miniatures, Mongoose Publishing, etc etc etc).

They have also voluntarily consolidated their business down to three products - Warhammer 40k, Hobbit/Lord of the Rings and Age of Sigmar (replacing the discontinued Warhammer Fantasy Battle).

GW used to have a product for every part of the market, and now simply doesn't. This has led to an explosion of smaller games and a rise in sales across the industry (except for games workshop, who have seen falling sales and profits maintained by cost cutting).

Age of Sigmar has been critically panned, and seen a mass exodus of customers to other companies.

Cheaper plastic figures for historicals and alternate fantasy and sci-fi figures are being made by Renedra (run by former GW staff) and Warlord (run by the former editor of White Dwarf magazine).

GW have previously proudly announced they do no market research or customer insight (which is shocking for a company and doubly shocking that they are proud of it) stating that they tell the market what it wants (backed up by a contraction in sales volumes).

GW is stating that the hobby that it's customers have is buying GW products. They seem to have lost sight of the games element, which is why so many retailers and games tournament organisers are now ending their relationship with GW.

GW seem to have forgotten the social element of their product, and while some people do paint and collect and never game, most do game, or at least aspire to. And the aspiration to get use the figures is important.

If GW customers didn't play, or want to play, then they simply wouldn't sell some of their least impressive kits. The humble goblin would go completely unloved. They certainly wouldn't sell more than one per customer of many of their products. But people assembling an army to game with are going to buy multiples of products to create a coherent force.

Age of Sigmar is an incredibly poor product, and looks to be failing in entire markets (America for instance) while products like X wing are going from strength to strength.

On X-wing you have a product with an easy buy in (£30 for the starter set vs £75 for the starter for Age of Sigmar), with price points low enough to easily expand your forces and in reach of parents pockets for a regular thing (most X-wing fighters are £12, most age of Sigmar sets are £30-35) with a familiar IP they are based on (Millenium Falcon, X-wings, Tie Fighters, every kid is going to know these things at Christmas).

It's also literally open the box and play. The Age of Sigmar models are not even snap fit anymore.

Age of Sigmar is going to be a business school case study on how you lost market share.

However GW will learn no lessons from this, because of exactly the attitude displayed in the article. If you don't 100% agree with them, they don't care about you. Which since you have money for a niche hobby and there are an increasing number of other companies who want that money and will pretend to care about the customer, is a dangerous position for GW to be in.

Communication is also sadly lacking. GW won't tell customers what is coming out in a month. Whereas Fantasy Flight Games has told people what is coming out at Christmas, so they have garnered 1000s of pre-orders of the new starter set that ties in with the new Star Wars film because of that.

And X-wing will be doing a tie in with the Star Wars Rebels cartoon series, again with product in stores before Christmas.

X-wing is also a lot more rewarding to play compared to Age of Sigmar. I'll be picking up the starter set for my daughter if she likes the new Star Wars movie, so she can play her mother, thus keeping them both occupied in the winter.

I would recommend it to your boy as well.

GW does not know who buys more than half of their products since those go through Trade Accounts so the 20% number gamers is probably only accurate to within 50%. The number might also be lower now as they have squeezed the gamers out of their lines. Given that their product is mass produced plastic with high set up costs but low additional unit costs it does not seem like squeezing out customers is really a good plan.

While the retail seems profitable currently with the one man stores it seem strange that the profitability of the manufacturing arm has dropped so much from like 30M to like 10M in the past few years. Makes me wonder if they change the charge rate manufacturing sells the products to the sales team at to hide how weak the retail performance is. While it does not really matter as profit is profit, it can certainly influence decisions about corporate structure and unit performance.

Comparing their recent negative sales (money or units) growth to other comparables in the geek area (Magic, X-Wing, Super Hero Stuff, Boardgames) which have all been on a tear shows how poorly they really have been doing with their customers. Saying your niche is people who buy your products is pretty strange description but they have never really understood their customers as stated in a report a few years ago.

Really interesting article. I'm not a GW investor so I don't have an opinion on the business, but I find what was written eerily similar to this article written by Ryan Dancey about/analysis of TSR.


Hello Richard, an interesting read indeed. I would like to comment from my own perspective, as a person who both runs his own business and a blog site for the Horus Heresy, the most expensive GW line. First of all, the 20% figure is a load of junk. Our blog has a Turnover in excess of 10,000 people per month, and almost everyone who is inclined to comment is commenting with some degree of interest in the rules of the game. Horus Heresy is the game where the £1200.00 miniatures are sold and they are not for display! People like myself do collect them and display them, however we ALSO actually use them to game.

My experience with the company over the last 20 years has been one of continual decline, where they stemmed from having great initiatives like skulls (essentially a rewards program for mass purchases) to continually driving up their prices despite he competition in order to maintain the profit margin. I hate to break it to you, but they are on the verge of pricing themselves out of the Australian market.

GW used to be an affordable hobby, but with starter sets costing a weeks wages or more for their target audience I'm not sure how they think they can keep up, not when Fantasy Flight Games (as one example) are able to provide a miniature (pre painted for those who lack the time or skill to paint, and re paintable for those who want to paint them) with heir own simple and balanced rules for a mere fraction of the price.

Do you know where GW is really at right now? As an example, take it with a grain of salt, but proportionately, They started selling kits for $1. They used to sell 100 kits a day, and made $100. One day, due to rising costs and such, they had to raise the cost to $2. The customer understood this, so, they still brought and the company now made $200 per day, or double what they used to make. Unfortunately, the company got made public, and now they want to impress the share holder with good dividends. So, now they charge $3 per miniature. But, the customer knows they are getting ripped off, some stay, some go. Now they only sell half the models, and only make $150 per day. Seeing that they have now dropped in incoming money, they attempt to fix it by raising the cost again, reasoning that "if we still sell 50 models per day, at $4 each we will get back to $200 per day." Unfortunately, they neglect that the customers will drop off again, and now they only sell 25 models a day, making them $100. They are now shipping less product, have the costs they had when they found $100 couldn't support them, but are back to earning what they were before the first price rise. This is GW.

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