Games Workshop New Store & The Future of Gaming

Like everyone who subscribes to the Webway, GW’s online e-newsletter, I was alerted to the opening of a new store in Oak Park, Illinois. The announcement declared the grand opening wouldn’t occur when GW originally promised. I won’t get into the irony of a GW store grand opening not happening when promised right now.

I also won’t get into my surprise at GW opening a store in Oak Park. I’ve never heard of Oak Park before and I don’t keep abreast of GW’s growth of retail stores. I was, however, amazed on reading that GW is opening another store.

Back in January, the Guardian Unlimited (a newspaper from the U.K.) had a story about GW’s profit warning. In that article it is stated that GW opened 15 new retail stores in the first half (of the fiscal year) and closed 8 of those. This means that Games Workshop is able to only keep less than 50% of new stores open. With odds like this the store in Oak Park has a 1 in 2 chance of closing even before its grand opening, which will be June 21st, and what kind of business model is that for a company?

On the heels of GW issuing a profit warning, which says that sales and profits will be less than expected, the company is opening new stores that have a 50% chance of failing. They have closed off games with a steady support of customers and gamers such as Blood Bowl and Battlefleet Gothic to succor the dying Lord of the Rings mini game. This, as gamers have seen first hand, is a business model that hasn’t worked.

There are two main independent game stores near me, Danger Planet Games in Waltham and Battleground Games in Abington, and both have had no success with the LoTR game. DP has kicked it out of the store completely and BG has a section of wall devoted to the game, which everybody mocks. The usual cry of “Ditch LoTR for more Warmachine space” is oft heard.

It makes sense to go with what you know especially when sales are dwindling. 40k and Warhammer Fantasy are hugely popular games, of course Fantasy is the better of the two, worth lots of $$ in profit for GW and the stores that sell the product. They’re also hugely expensive games, which is a topic I’ve abundantly discussed before.

I find all of this interesting because as I trolled Google for information regarding GW store openings I came across a blog run by the guy, Ryan S. Dancey, who was the business manager at Wizards of the Coast that revitalized Dungeons and Dragons and also put out the Legends of the 5 Rings game. On January 9, 2007 he made a post entitled “Predictions: 2007: The Game Industry” that directly relates to my diatribe in this post.

Of particular interest is his prediction for Games Workshop, which I have reposted here but please read his entire post as he makes some great predictions for WizKids, WoTC, and Privateer Press.

C) Before the end of 2007, Games Workshop will announce it is either being bought, is going private, or is merging with some other entertainment venture to form a new entity. On November 27th, Games Workshop was notified that Fidelity International had liquidated its position in Games Workshop’s stock, selling approximately 2.4 million shares, or 7.83% of the company. On or about that date, 6 million shares, or more than a third of the company, changed hands. As of yet, we are unclear who bought and sold those equities, but we believe that the action, which has no similarity to any recent move in Games Workshop’s stock, heralds a major change at the company. On January 5th, Games Workshop made a profit warning announcement, indicating that sales in the run up to Christmas had not met expectations, and that the company was revising its earnings estimates downward. Managements failures to address their sliding business model, and increasing pressure from large investors will force major changes at GW by year’s end.”

This is said by a man who is deep in the industry at one of the major players and clearly has his thumb on the pulse. I think we have already started to see some of the major changes at GW. My FLGS has stated that GW relations with him have vastly improved. He said now they actually care about fixing problems, improving relations, and making things work. It is almost like the fog lifted and GW realized the importance, value, and worth of independent stores, the community that exists there, and the customer-gamers.

Also, there’s rumors floating of a new and revised and improved Outrider program. For those too young to know the Outriders were gamers like you and me who went to local stores and promoted GW games. They ran tourneys, helped people with necessary skills of assembling and painting, and also taught people how to play. The horror stories of the old program are numerous, and as a former Mongoose Infantryman that is the Mongoose version of the Outriders, I know firsthand what some of those horrors are. I won’t repeat them here but ask any long time gamer you know and I’m sure they’ll have some tales.

If GW is actually improving their relationships with retailers and gamers and if they put together a good Outrider program and if they get their act together GW may be able to weather the coming storm. These are all big IFS. I’ve had a lot of negative remarks about GW throughout the years. However, if they’re able to reshape their image, their business plan, and get back to caring about the games they produce and the people who play them I will be the first to wish them well and congratulate them on the change. I’m not holding my breath but I do hope they’re able to get back to what they know.

The challenges GW will face are representative of the entire hobby. I think the predictions for 2007 are dead on and I think we are already seeing them starting to come true. Wizkids has pulled their product from retailers, good luck finding Horror Clix anywhere, and WoTC didn’t put enough product out for War at Sea after getting lightly singed by Axis & Allies minis (at least they learned but they should’ve had some product in reserve just in case).

A lot of the niche market games will fall and most other games won’t be worth your money. We all know what they are. Pirates, Rocketman, Transformers 3D card game, Starship Troopers Evolution, Battlefield Evolution, Clout, AT 43, and even the Stargate CCG.

Gamers will be limited to the big names like Warhammer Fantasy, 40k, Magic, Warmachine, Settlers of Catan, Carcassonne, Star Wars (and Starship Battles), Heroclix, and yes War at Sea.

This is a time that many of us will think twice before buying a shiny new game, including retailers, and also a time ripe for innovation. I applaud the innovation of AT 43, although I don’t think it’ll last but I hope I’m proven wrong, as a possible route. Manufacturers are looking for the next Pokemon and Yu-Gi-Oh and sadly most won’t find it. I don’t know what the next big thing in gaming will be but I’m sure that the big names are here to stay.

We can all do our part to help shape the future of gaming by writing to the manufacturers with feedback on their product and business practices. We can play the games we love at our FLGS. We can get our friends into these games and expand the customer base. We can buy our product at our FLGS cementing their importance in the business chain. Most importantly we can not be afraid to say what we dislike but we also have to be vocal about the games we love.

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