Wednesday, 5 January 2011
The Beginning of the End for Games Workshop?
Games Workshop have today issued a profit warning on the back of declining sales for the 6 months to 28th November. In The Guardian an analyst revised his profit forecast from £17m for the year, down to £12m. This analyst maintains that there is still long term growth to be had from GW, but I'm not so sure. The city has responded by knocking 13% off the GW share price.
Personally, I think that unless GW can make substantial inroads into the computer and video game markets, they may be gone in as little as 5 years. GW have pretty much reduced their range to games that require and entice players to get into the hobby of collecting and painting toy soldiers. If they were just a manufacturer/distributor of their products, they might have been okay, as careful management would have allowed the business to expand and contract. However, having a large chain of retail shops that sell nothing but GW product leaves them vulnerable to even small shifts in the market. Other toy and games shops will have done exceptionally well this Christmas selling traditional board games, lego games and console/PC games, but GW has nothing to offer those customers.
Twenty five years ago, Games Workshop was a specialist games shop which offered a great range of RPGs and board games with miniatures and the then still very new Warhammer rules. I'm not bitter about the commercial direction they took and I certainly don't want to see the company fail and cost the UK hundreds more jobs. Nontheless, I can't help thinking: if the empire that is GW plc had evolved differently, or had been split into separate divisions, I might still have reason to go into my local GW store as a gaming customer.