Why Games Workshop is not a good business

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Why Games Workshop is not a good business

Games-Workshop-Logo-430x178By Paco Garcia Jaen

There is no doubt that Games Workshop is a successful company. They make a lot of money, are very well known worldwide, keep a very healthy number of games shops that video game retailers would like for themselves and the popularity seems to be on the rise, despite the highly priced products in the current economic climate.

So there is an argument to say that they are a good business. As three of my gaming friends put it in one of our conversations “they are making money, they are the people in the know, so that’s it. You are saying otherwise, and therefore you are not being logical, Paco”. Yes. They, pretty much literally, said that.

So, for the sake of clarity, I will point out that I do not consider profit to be the reflection of good business. Good business, in my book, is when any company makes the most from and for its market, not just its product. Also is when a company reaches to the widest possible demographic successfully.

So, as business, is it the best it can? The answer is no. By any stretch of the imagination.

There is no doubt that they make money. This is not because they do the best they can as business but because they do well with what they have. They have a loyal (brainwashingly so) following of people who are prepared to pay huge amounts of money for what is perceived to be quality product. They are also prepared to put up with the constant change of rules and the new books that appear on a regular basis.

They also make money because their margins are astronomical. Last I heard it was 2000%, but I have no real way to prove that, so take it as a guideline and not as a rule.

Let’s look at their shops. I have no idea what it is like where you are, but here, in Brighton (UK), the shop is small, dingy, uncomfortable and smelly. It is attended by people who don’t seem interested in anything else than to sell you as much as they can, which would be fine if they just pretended they care about the people and weren’t so jolly obvious about the intentions. But, of course, they are indoctrinated when they start employment to behave like selling drones and not like people who have an common interest with the clients. I know all this because the owner of my Friendly Local GAme Store is a former employee of Games Workshop and he can vouch for all this.

Needless to say, if you go into any of the shops and ask for any product they don’t sell, you will receive a smirk and probably be shooed away with some sort of holly water least you pollute the mind of anyone into believing there are games that have nothing to do with them.

You might get the feeling I don’t like their practices. I don’t. But let’s forget about that for a bit and look just at the business aspect exclusively. I still believe they’re not doing the best they can.

For starters they are not supporting everything with their name on it. Allowing other company (Fantasy Flight Games) to handle some of their products, specifically the RPG line and some boardgames, is indeed a shrewd move. However, refusal to sell those products and even support them with miniatures is incongruent. You may argue that it takes shelf space. I will argue that is space that will host products that will produce profit and will attract a different type of customer who could get interested in the rest of the product line.

You could also argue that they already have a business model that works and therefore don’t need anything else. I would argue that is a very narrow minded perspective for a business that relies on retail and retailers to sell their wares. Attracting shoppers who are interested in something else than their main lines of product provides the perfect chance to sell something else. That is pure logic. How many times do we go to a shop to buy X, and then get the shop assistant ask us “May I interest you in this? It’s only £xx today and it would work very well with your purchase”. Those shops do that because it’s a technique that works. I am not ashamed to say it has worked on me and you shouldn’t be ashamed to say it’s worked on you.. it probably has worked on every one at some point.

Thirdly, GW has a reputation for attracting “spotty kids”. Firstly I would like to point out that we have all been “spotty kids” at some point. To refuse going to a shop because there are young people in it is absolutely pathetic. The sort of prejudice that we condemn in other areas of the population when they call us “geeks” or “nerds”. Those kids will be us someday. However, I would like to point out that the majority of the sales team that work in GW hardly provide an image of professionally and trustworthiness that would inspire me to follow their advice or look at their wares. It is sad to say so, but when the person who is “helping” me is so eager to sell and so disinclined to talk and empathise with my needs and enthusiasm, I turn onto the internet and onto other shops if available. This, my friends, doesn’t make business sense.

I think it is pretty clear by now why I don’t believe that Games Workshop are the best business they can be. I would stretch that to say I don’t believe they are a “good” business. The margin of profitability they have are never, ever, ever passed onto the consumer. Products keep getting more and more expensive, even if the production keeps getting cheaper and cheaper. And no, I will not believe for a second that producing a plastic miniature today is cheaper than creating a metal one 20 years ago. Or even today.

This is not to say they don’t have their good points. It should be praised that, if you are into their games, the support is endless. Free painting lessons, tons of advice, championships, their own dedicated magazine… all at the fingertips if you like going exactly by what GW dictates.

Plenty of you will be wondering why I care. I am not into their games, so why bother writing all this?

Because I care about the hobby at a grander scale. That’s why.

GW was the flagship of our hobby. Games Workshop is the organisation that brought us D&D from the US and introduced myriad games. It is a social hub where young guys can get together and share a hobby that, if it is anything like mine, will change their lives.

But GW doesn’t care about that. At all. They care about profit. And nothing else.

I expect that from banks. I expect that from insurance companies. I expect that from heartless companies that carry products so detached from human nature that they don’t need to worry about humans.

I expect a fashion retail to worry about fashion. Not just because they should have an interest in making money, but because they should strive to provide the best fashionable content at the best price and to satisfy customers, and that means listening to those customers and predicting and setting trends. I expect a car manufacturer to care about cars for similar reasons. The same can be said about pretty much any industry.

Well, I expect GW to worry about gaming and gamers. They fail. They care about perpetuating a formula that’s making them millions without innovation and without passing any of the loyalty from the customers back to the fan-base.

And quite frankly, that bothers me. It bothers me a lot because I can’t help but to see what good work they could be doing with little effort and how they totally disregard it. It bothers me that their communication with the gamers, suppliers, press, etc, is mostly on bad terms, and it bothers me how they totally ignore people’s complains and suggestions.

Correct me if I am wrong, but that is not a good business.

 

9 Responses

  1. I don’t think there’s anything wrong with making a profit, even at an extremely high profit margin. There’s an economic idea that the value of something is, in fact, what people are willing to pay for it, not what people complain it is. Yes, $30-40 USD per squad seems a rather steep price, especially for gamers interested in trying out the game casually. But people do pay this price, and Games Workshop is free to enjoy this high price. If Games Workshop wants to lower the price to $0 USD, they are free to do that as well, but of course they would have trouble staying in business.

    Prices aside, I do find a major culture of business asshattery in Games Workshop. They are incredibly lawsuit-happy; if you try to make a website displaying their complicated rule system in a more accessible format–say a wiki rather than a stupid PDF–they will get angry. They have no respect for their customers, no respect for the enjoyment of their product which fuels many really creative works. If you want to recombine the bits in wacky ways, say an “infected terran” by combining space marine bits and tyranid bits, and sell that, you will find legal friction should GW discover the sale, or even just the idea. GW has an incredibly dinosaurish view of copyright and does. not. give. a. shit. about the love customers have for Warhammer 40,000(R)(TM)(C)(Patent No. 13789238934988493). Their interest is only in selling sprues at a high profit margin and selling overly complicated rulesystems in an art-padded, dead tree form. Every time you buy a codex, you have to buy yet another rule book just to understand the references to yet more rules. Get a clue, GW, and publish the rules online in a decent fucking format, like a wiki.

  2. I must agree with you. I don’t particularly have a problem with them having a high profit, except that they don’t even economise where they could, like packaging.

    With the rest of your comment, I think you’ve got it spot on!

  3. Karl says:

    For the most part I agree with your complaints of games workshops practices. Having been a GW manager (some time ago now) I can say that there was a time where the staff were well educated (all 3 of the staff in my store have degrees), but stayed to enjoy working in an exciting store where like cheers everyone knew your name. We made tea and coffee for our customers, ram events and activities because we enjoyed it, and happily talked historical, warmachine, or any other geeky thing we could. My customers knew the store stayed open because they were loyal, and they knew I and my staff would sell them things we thought they would enjoy, or could use. We were not unique, but gw changed with attitude towards games nights being ‘don’t let them just play games and that, if they’re not buying anything, why’re they there?’. As well as at a national managers meeting when discussing price rises they stated ‘we don’t want poor customers that can’t afford our products.’ If I recall it was in response to the question would we not have a bigger audience if we lowered prices. I’ll not put names to quotes, GW are touchy at the best of times. My point is those staff aren’t happy with their roles, and their pay has been frozen (despite profits) on grounds of the recession, they can no longer enjoy the day with like minded staff as the one man store format continues to take hold (thank you Australia). The staff that leave, as me and mine have, are now on a position they can’t afford the hobby they’ve put so much of their lives into. I realise I’ve rambled a little, but please spare a thought for the hard working staff that are as dismayed as you are (they do exist), and remember without gw or a new chain taking their place our hobby will wither and die in 30 years as it is a window to a new world for thousands of people every month world wide, even if only a fraction stick with it, or see the light and buy perrys, warlords, gripping beast, wargames factory, or any of the other great miniature company’s product that have an audience from that window.

  4. Truthsayer says:

    There seems to be an awful lot of text with very little substance here. What there is, is very poorly researched and seem to be off the back of a few bad experiences.

    How can I qualify ‘very badly researched’? Easy. Take a look at GW’s last financial report (2011-2012), which is freely available on the web, and two numbers stand out. Their revenue for that period was £131M, yet pre-tax profits (thats PRE-tax, folks) was only £19.5M. That tiny, two minute piece of research would have slammed the ‘Oh my god, GW sell everything at 2000% profit’ assumption – even if you did only use it as a guideline. You and I both know you were setting the tone against their company just by mentioning it.

    I don’t fully know what training GW staff get. I do, however, know that one of their ten commandments is ‘advise the customer what they need but sell them what they want’. That’s the whole commandment. No financial caveat. So if a customer needs a rulebook, but wants a pot of paint, that’s what the company is telling them to buy. Hardly sounds like your assertion that they are all ‘selling drones’. More like you had a conversation with a disgruntled ex-employee (for the record, I have never been to a friendly Game store; actually to the point where I just don’t bother with them any more).

    Your comments about Games Workshop not talking about other games are just absurd. I don’t walk into an Audi garage and talk about BMW’s because that’s… well… stupid. Yes, the staff are there to stoke your enthusiasm. Yes, they are there to listen to you bang on and give a turn-by-turn, phase-by-phase account of the last three games you played. But they still have a purpose, and that purpose isn’t to talk about games they don’t sell. Because, frankly, the store isn’t the place for it, unless you are a hobbyist who actually doesn’t bother to get off their arse and find a local Games Club. They’ll let you talk about whatever the hell you want. And you can probably drink beer whilst you do so.

    I’m interested to see that you think they don’t sell anything other than LOTR, 40K and WFB. Last I checked, everything they still made was available on the GW website. And no, when they don’t even have space for all their blister pack models for their most popular ranges, I would be very surprised to see other games sat on their shelves. If you’re wanting new releases and expansions all the time, then frankly you’re being a little shortsighted again. Even with Every month sporting a 40K or Fantasy release (and then take one month for the new Hobbit films), that means 5 releases for one system and six for the other. There are 15 WFB armies and 15 40K armies just listed on their site, meaning it would take almost 3 years of near constant releases just to bring them up to date for whichever edition each is in now. And you want them to release other stuff too? You claim that there are drones who unquestioningly follow GW; I would state you are one. Why aren’t youy finding new stuff to do with each of these games. Its not like you’re lacking for resource material – unless there is an underlying phobia of research, and not just for this article. The ‘may I interest you in this’ principle IS being used, just the other way around (I’ve had a fair few conversations about specialist games on recent visits to various GWs). It’s a shame if that’s not happening exactly in the order you like, but it is still happening.

    The spotty kids thing is a lovely diatribe that goes nowhere; again, you seem to be basing this on a bad experience in your local area and nothing concrete. And no, my friend, I guess they won’t sympathise with you if you’re taking even a tenth of the negativity present in this post into the store with you. I’m just a hobbyist too, and it wound me up to the point I penned this response.

    It’s telling, however, that you talk about going online. GW stuff online, even from other websites, still is made by, and proceeds go to GW. So what are you trying to prove, other than still buying their stuff?

    How do you know producing plastic miniatures is getting cheaper. There is zero evidence to back it up (other than ‘you heard from someone’). I had a long chat with someone who is involved in quality controlling the metal parts cast by BAE systems (that’s right, the Defence Contractor) who had stated that the ‘state of the art’ casting principles they had just last year adopted, had be being used by GW for a good few years prior in their plastic range. Doesn’t sound cheap, does it. Back it up with hard evidence, or leave it out.

    After this, you climb so high up on your soap box, it’s hard to figure out what point you’re making. What ‘formula’ are GW peddling? What PROOF do you have that they don’t care about games and gamers (their games are, as far as I can tell, hands down the best out there) and a lot of gamers I know are so short sighted in a business sense, I for one am GLAD GW take complaints and suggestions with a large pinch of salt.

    Apologies for the delay in posting, I have only just found this post over the weekend when doing my own research into the company (on a whim, I might add, not to bash for fun). It just appears that you are one of the 5000 gamers or so that populate various forums and somehow think we are the core of the hobby – the truth, my friend, couldn’t be more different.

    • Just to let you know, I have seen and read your reply.

      This time I will not engage with you. Your comment is trollish and I have spent more than enough time dealing with the likes of you in the past. I think also *with* you in the past. And I am bored with you.

      I will leave the “comment” on the site because, unlike other websites whose owners get offended at the slightest sign of opposition, I believe in freedom of speech, but I will not reply.

      • Truthsayer says:

        So someone asks you to clarify your figures – to back them up with hard data – and it classifies me as a troll?

        This is the first time I have posted on the website (as I said in my original post). You make a number of points that are unclear or that are unfair to say without something a little more substantial than the experiences of a single person.

        Maybe my tone was overly confrontational and hence you classified me ‘troll’ – but I think a number of GW employees might feel the same about your comments regarding them, so I don’t feel too apologetic for it.

        If you are going to found something like GMS and go on record stating things like this, the least you can do is back up what you say with figures. Otherwise, I have to ask who the real troll is.

        • Ok “Truthsayer” I’ll reply just the once (and trust me on this one, it will be just the once).

          Firstly, just so you know that pretending their level of revenue is a good indicator to “deduct” their margins is a great deal more preposterous than to believe the information from people who worked at the firm.

          I didn’t set the tone against the company by mentioning that, I did by titling the article.

          Oh right… so one of their commandments is to advice the customer to get what they want. That must make it true! Sorry for the sarcasm, but to pretend that they don’t tell the badly paid staff to sell as much as they can is plain silly. That happens in pretty much *any company* that relies on sales. Whether they use more or less aggressive (or passive aggressive) techniques is a different matter altogether.

          Uhmm… so you judge every games store by the same benchmark because you’ve had some experiences and yet, I am not allowed to do that with GW shops? You serious?

          You know, I work in a company that doesn’t create all that’s possible within our industry (elearning) and I have *no problem* in sending customers or potential customers to other firms that give the services they need if they ask. It’s called Customer Service”. Furthermore, there are a lot of products with the Games Workshop logo in them – boardgames, role playingames and the like – they react just as badly when you ask about those. That is not just poor customer service, it’s plain stupid.

          Also, when you’ve just arrived to a new place and find a shop, entering to enquire is not being “half arsed”. Shops have shop-windows for a reason, to attract people inside. If they’re not prepared to use that to help the people who come in, they’re not a good company. Capicci?

          “Releases and expansions all the time” is exactly what they do! If they don’t have space for their own blisters, then they should go to a good shop designers and get some re-designed so they can use their space more efficiently.

          Also, yes, I’d love them to release more stuff. Stuff to support the products they license, like the RPGs. Exactly what’s the problem with that?

          So I am a GW drone now and unquestionably follow GW? Your logid is *totally* absent there.

          If you have read my article carefully, you’ll realise that I am actually defending the “spotty kids”. If it takes just an article like this to wound you up, I’d strongly suggest to get a thicker skin!

          Who says that I buy GW products from the GW site? The only GW products I’ve bought in the past have been those produced by Fantasy Flight.

          I know producing miniatures is getting cheaper because I know a few game designers who have managed to publish games recently with minis because the production costs have gone down considerably thanks to China. You don’t have any evidence because you haven’t looked for any, so before you question my research (which admittedly I didn’t spend too long on) do yours.

          If you think their games are hands down the best out there you really should get out there a bit more often.

          I barely ever populate other forums, but I am part of the core of the hobby, like those other 5000 people or so you mention. Just because you don’t like/agree with what I say doesn’t make me part of the core. Or anyone else, for that matter.

          Your post wasn’t just overly confrontational, it was aggressive. If a number of GW employees might feel the same about my comments, they’re welcome to post things in here. They have their own voice and I doubt they need some sort of paladin to defend their stained honour.

          If I am going to fund something like G*M*S? I am not going to, I did it, three years ago and this is *my* site where I can say whatever *I* want. Things you don’t have to like, like you don’t have to visit my site if you don’t like it. If you want the site to be run in a different way, either come on board fully and commit to it like I have, or create your own, it’s very easy.

          Dude, I get it, you’re part of the GW Cult. You’re completely unable or unwilling to see where GW could be better and can’t take criticism of the company. The fact that you’ve completely ignored the good points I have mentioned about GW is a good indicator. By all means continue and have fun, but don’t go out there patronising people who decide to disagree with you just because you have a tunnel vision about the company you like.

          And please please please, don’t waste time replying. Go and play a game instead or do something fun.

  5. Lord Boofhead. says:

    “Needless to say, if you go into any of the shops and ask for any product they don’t sell, you will receive a smirk and probably be shooed away with some sort of holly water least you pollute the mind of anyone into believing there are games that have nothing to do with them.”

    So you walk into Chain Clothing Stores or Specialist Car Yard and ask about the competition on a regular basis then?

    Look up straw man…

    • Err… no Boofhead.

      I enter a GW and ask about Chaos in the Old World, Relic, Deathwatch or *any* other product with the Games Workshop logo in them and I expect to be able to buy them because that’s why there is a huge Games Workshop logo at the top of the shop.

      Maybe you identify “they don’t sell” with “their competition” but, surprise surprise! it is no.

      So “look up straw man”.

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