Saturday, April 27, 2013

Thoughts: What Would You Do if You Owned Games Workshop?

Anyone got an aspirin?

I was perusing The Back 40K's archives and stumbled upon this article by SandWyrm where he goes into how being a publicly traded enterprise affects Games Workshop's decision making.  Aside from his derisive comments about Mitt Romney and capital restructuring, I think he's spot on in his analysis and offers valuable insight into how business at Games Workshop is conducted.  The article got me thinking about the nature of publicly traded vs. privately owned business, but mostly about what I'd do if I ran the show in Nottingham.  

First things first: Move the company to buy back 100% of its shares and retire the stock.  Were I unable to do that effectively, I would move to repurchase as much stock as possible to regain as much control of the operation as I could.  Why?  Well, obviously, if you're running the show, you want as much control as possible and you don't want to be second guessed by people who, in all likelihood  don't understand the dynamics of a miniature wargaming company.  

The primary duty of investors is to make money for their clients, which, as SandWyrm writes, means profitability and the stability thereof take priority.  For a niche business that relies heavily on long term customer loyalty and satisfaction, this can be has proven damaging to Games Workshop's customer base.

After privatizing the company, dialogue with the filthy gaming masses who buy their plastic crack from me would start immediately.  What would you like to see more of?  What changes do you think could be made to the game, both specifically and generally?  How can we improve existing products?  These are questions that I don't think GW has asked for quite some time.

From what I can tell, two of the major issues in the hobby today are the yearly price hikes and cynical game design.  Price hikes are an obvious gripe, and unfortunately, they're probably not going away until GW privatizes and the priority shifts from pleasing shareholders to customers.  Some things are obviously beyond GW's control, like crude oil prices which affect the price of plastic and shipping.  The miniatures produced by GW are unarguably better than they've ever been, which is an additional cost (I'm a machinist and the tolerances I hold aren't cheap, mold making is vastly more expensive).  However, more gamers than ever are saying enough is enough and leaving the hobby altogether, or like many others, slowing their buying greatly due to what they perceive to be unjustified price increases. 

The cynical game design has also driven many out of the hobby.  What do I mean by "cynical" game design? For those of you who have been gaming for a few editions, you may have noticed how the meta has changed through the updates from, say, 4th to 5th, and again from 5th to 6th.  5th edition was the rise of the transport vehicle, with many cursing the Imperial Guard and their mobile bunkers.  Las/Plas Razorback "spam" was all the rage, with metal bawkses as far as the eye could see.  This was a rather large shift away from largely foot-slog armies and the occasional transport during 4th.  Now that 6th is here and we're a few codices in, we've seen Assault units reduced to a gimmick and Assault armies shelved in favor of Flyers and Monstrous Creatures in order to cope with the changing tides.  

As many of you are already aware, this was intentional.  Games Workshop wanted to sell more Rhinos, so they made them practically mandatory.  MCs and Flyers are the new hip thing now, so you just have to have one.  No, really, you have to have one.  The Tau Empire is the only 6th edition codex thus far with anything approaching versatile and effective anti-air units that aren't Flyers themselves.  I, like many others, feel that a unit should be taken based on its own merit and how it jives with the way you want to run the army.  I feel that the game design should reflect that philosophy.  The best part about the philosophy is gamers will no longer feel resentment over what gets put in their army.  If the game is balanced towards smooth play mechanics and not sales, gamers will no longer feel as though they have to have a Flyer or three in their army just to win a game every now and again.

My boldest move as head of Games Workshop would be to make the rules available for free online.  This will never happen as long as I'm publicly traded, which in my opinion, is necessarily the root cause of GW's priority issues.  

The 6th edition rule book and codices are practically works of art.  For what you get, they're worth every penny you pay for them (or at least they would be if anyone bothered to proof-read them before they went to print).  Fifty-something dollars is a steep price to pay for an army you may not end up playing, though.  And if a gamer buys a codex but ends up not liking the mechanics of the army, he may be put off by the high prices of the entire line and not purchase any more product and regretting the products he did.  By putting the rules (and just the rules, no fancy art or fluff) online, this gamer can preview an army, purchase products and play and feel as though he has made an informed decision rather than jumping in headlong and potentially regretting his choice.

This has the added benefit of controlling online codex piracy.  Like it or not, pirated products of poor quality reflect poorly on the company who originally produced the product, even though they had nothing to do with their product being stolen.  By maintaining a respectable-looking rule set online, Games Workshop would become the primary hub for downloads instead of The Pirate Bay.  This opens up opportunity for free advertising, as well.  If customers are visiting your website for rules, they're also looking at your products.

Secondarily, and this is a big thing, an online rule set can be changed at any time without a massive re-issue or worse, a hot fix, which muddies the game.  New units can be added and points costs can be adjusted as the edition reaches maturity.  The rules should obviously be balanced ahead of time, but the flaw in the design may not come to light in the million tests you do in the lab, but in the million and first out in the wild.

One thing that comes to mind with this scheme is the existence of physical codices.  If a rule imbalance is discovered and patched, how is that then fixed for physical copies of the rules?  Perhaps the physical rule sets could be eliminated entirely and instead be changed to fluff books with army specific painting guides, photos and maybe army specific scenarios and a character.  Something to think about while I engineer my takeover of Games Workshop from my back room.

Continuing with this train of thought, I do believe I'd keep the release scheme Games Workshop currently uses intact, rolling out new codices periodically.  The current pace of a new 'dex every other month is, I think, excellent.  The only alteration I'd make to it is making sure each codex was mostly written and balanced against the big rule book before the first rule set went out, making tweaks or additions as necessary as time went on.

In addition, the Games Workshop website would be a hub of user submitted and polished extras.  Got a new and exciting campaign mechanic?  It's up.  Scenarios for small games?  Shazam, posted.  GW was pretty good about things like this being added into White Dwarf, but petered out during 5th edition.  Lately it seems as though this trend is coming back with the White Dwarf Daily, which is a step in the right direction.  The gamers make the hobby.  The more variety they're provided, the more interest there is in the hobby.  Supporting user generated content is a great outreach tool and builds a ton of goodwill towards the company.  In a niche business that relies on long term customers faithfully supporting the hobby, every now and again you're going to have to throw them a bone.  Think about it, when's the last time GW let even a rumor about upcoming releases slip?  Wouldn't it be nice to know they're not only hearing you but actively listening?

As far as the existence of physical stores is concerned, before making any decisions, I would have to look at their profitability and what effect they have on the Friendly Local Game Store dynamic.  Their single-employee store idea, I think, has merit, serving solely as a retail outlet and driving the gamer to play at a FLGS, however, their existence also has the potential to take sales away from the FLGS Games Workshop is trying to support.  Many a FLGS has at least a 10% discount, but many do not.  The move to cut off online retailers is not the way to drive business to the FLGS or other retail outlet.  It has been my experience and the experience of many others that gamers are happy to support their store on the condition that they perceive it's a good store and supportive of their buying (I've been in some literal rat-hole game stores; the regulars loved the place).  Details on how to support FLGSs will likely vary from store to store when I am crowned king at Games Workshop.

The main thrust of this is that I would shift focus from shareholders to customers.  Unfortunately, with shareholders able to vote management out of their roles if they don't perform or look out for their interests, that becomes difficult to do without eliminating that part of the equation altogether.  Even pitching the idea of short term sacrifice to please loyal customers mid- to long-term is a tough sell to investors who are often looking at profitability (which is their job and I don't fault them for it at all.  They have their own customers to please).

This is all just my opinion, take it for what it's worth.

What would you do if you owned Games Workshop?  Leave your comments below!
-Jordan

2 comments:

oni said...

"...buy back 100% of its shares and retire the stock"
Very strongly agree. This is the core of all their problems. Some companies just aren't meant to be publicly traded, sometimes the customer dynamic cannot support it.

"The cynical game design has also driven many out of the hobby."
While this may be true it's how the game is able to stay fresh and drive sales to keep GW alive. It may seem like a bad thing, but it is actually incredibly good; for everyone.

"My boldest move as head of Games Workshop would be to make the rules available for free online."
Very strongly disagree. This would cannibalize sales. Your customer base would have no reason to buy any of your books... ever! Codex, Rulebook, no matter; the fluff is read once and then almost never thought of again. People purchase the books for the RULES, NOT THE FLUFF.

"If customers are visiting your website for rules, they're also looking at your products."
Not necessarily. Today's average consumer is well educated on the product(s) and knows exactly what they want. How many times recently have you blindly walked into a store (of any sort) just to see if they had anything you want to purchase?

Every business thrives or perishes based on it's sales, whether it's publicly traded or privately owned.

Myles said...

Keeping the game fresh is one thing (and important), but the virtual negation of tactics and entire armies via edition updates and "codex creep" is taking things too far. Carnifexes have been almost written out of the game, sadly. This is what I mean by "cynical."

We have a working model of this idea in Wizards of the Coast, with them offering a slew of their rules for free as .pdfs and yet they still somehow manage to sell gobs of role playing books in addition to their other accessories. On top of books and accessories, GW has an entire miniatures line to support themselves.

The rules would act as "free" advertising. A purchase doesn't necessarily have to happen immediately, the idea need only be planted. Offering the rules for free would allow customers to be more educated on the products they may (or may not) want to purchase. This also would breed goodwill towards GW, a company that desperately needs it.