This is a response to Zion's article on the Top 10 Things he wishes Games Workshop would change, published at TalkWargaming.com.
It's always good to see an amateur look at a company that makes products they enjoy and take an interest in how things are run, but unfortunately this sort of 'armchair ceo' analysis is seldom insightful.
Looking at his top ten list, I noticed two things:
1, He attributes the majority of Games Workshops operating costs to its stores, and suggests closing them. This is a frequent mistake made by people who have a poor understanding of corporate cost structure, and how capital investment and operational cost management determine business strategy. It's a typical opinion based on 'the costs than can be seen' by the consumer. A nicely fitted out store in a higher end mall or storefront looks like the money has been put on the street. Primarily, this view overlooks the raw materials and supply chain costs a manufacturing company like GW has to manage - this is likely to account for at least as much, if not more, costs as the channels (stores, websites, re-sellers).
It would be interesting to see the spit between store sales and web sales for GW, and even more interesting to see the acquisition rates for new customers. Stores have always been focused on new player recruitment - this is not something that tournaments, Games Days and third party retails have ever been good at, and as a result, it has meant that most new customers start at a store. Game store re-sellers can help this, but Games Workshop has no way of stopping re-seller stores from recruiting the customers into other games instead, like Warmachine, X-Wing, etc. This is not something any company would want if they can avoid it, which Games Workshop has the size and reach to do by establishing it's own stores. Of course, once recruited into the hobby, many customers then move to the web to buy products ongoing - this can mean the bulk of the revenue ends up in another channel, which makes the stores look unprofitable - but the reality is, few new customers come into a hobby as complex as Warhammer 40k without a fair bit of assistance, usually provided by the stores at a high time, and thus cost, requirement.
2. Zion points out a disregard from Games Workshop in maintaining game balance, and thinks this should be more valued by GW. Games Workshop, and I would bet, most other games manufactures, value something in their game systems much higher than competitive balance - Fun. Now this is not simply "we have a good time playing the game" fun, but more complex fun, in which the customers investment in new products leads to more "Fun" each time the customer adds to their collection, and paints and games with their new products. While a well balanced game can be more fun, it's the new and different units, with strange and interesting rules and game effects, that make customers want to buy and play with more models. This may seem 'profit motivated', but the simple fact is that GW is a for profit business, and as such, needs to ensure that customer spend money regularly on the hobby. If that makes you upset, I'd suggest looking at a game made by a non-profit miniatures company. Oh wait, there aren't any.
Now I'm not saying that all games companies work this way, and I do believe that a trend towards games balance should be a goal for Games Workshop, but the fact is that true game balance is also incredibly difficult to achieve, requiring considerable time in product testing and evaluation before launch - which is a lot more cost. It's also impossible to put enough people and time into testing every possible combination of allies, data slates and supplements to find every possible situation that hurts balance. You can work out how much effort, and thus cost, it would take to do this with a basic observation of new rules changes leading to 'broken' balance. How long does it take between the release of a new codex and the emergence of a new death star? It's typically several months, across a global player base of thousands of players. GW can't hope to replicate that level of codex analysis.
That is not to say Games Workshop can't make some improvements, however I think they are making moves in the right direction however. Any system or product base as complex as the Warhammer 40k rule set requires a 'test and learn' change approach. New rule sets and models can be released, observed, and then adjusted as needed. Data slates, digital codexes and supplements can provide a way to adjust the meta as needed - as we are seeing. For example, Knights and lords of war are a good counter to the currently popular death stars, thus the meta balance changes (note I didn't say improves). It's very unlikely with a system as complex as 40k that true balance is possible - and if it was, it's likely the units would be far more generic across armies. This is something some systems suffer from - Infinity is a good example. Most of the Infinity armies are essentially clones of each other, with minor stat variations and the occasional unique unit. It works for that system, but in reality it leads to fairly low diversity. 40K on the hand has wonderful variety, and all the armies have distinct play styles and units - this makes it very interesting, and very fun.
