Now For Something Different: Games Workshop Stock

Beautiful Theories Are Always Destroyed by Ugly Facts

In theory, if a company raises their prices during a recession their earnings should go down. And if their main customer base happen to be wargamers, who pride themselves on their ability to think strategically, you’d think they would do the math and stop buying that companies product. All logic and reason should indicate that the company in question should have their profits drop and share prices should plummet into the abyss. Recent evidence suggests otherwise

Games Workshop, the company known for creating numerous strategy games including “Warhammer Fantasy and 40k”, decided to implement the seemingly suicidal strategy of raising their prices during the recession. Against all conventional logic and reason, Games Workshop steadily rose the prices, spun the roulette wheel, and bet the future of the company on the number 13. If you had stock in their company, it looked like it was time to bail – or so I thought.

It seemed that Games Workshop was going to suffer for their gamble – sales for the first half of 2009 were rather slow.  Customers voiced their discontent on popular gaming forums such as Warseer were awash in complaints towards the companies prices. At last, I thought, Games Workshop’s customers  would show that they couldn’t be squeezed like an orange.

Then news began to filter outthat Games Workshop was actually going to make a profit in 2009.

Market Reaction:

January 5, 2010 – Games Workshop Stock Trades at £250.53 a Share
January 6, 2010 – Games Workshop Stock Trades at £333.85 a Share

Then the fiscal report for 2009 came in this January: Sales Down Slightly, But Profits Up (Thanks Australia).

Games Workshop, against all odds, managed to make a profit of £4.3m, up £15.3m from last year. As of January 21, 2010 their stock has steadily risen to £377.00 a share.  It seems only a few wargamers couldn’t resist buying Games Workshop products while the vast majority kept buying their miniatures. Like a battered housewife, they crawled straight back to their trailer to the loving arms of their husband wearing a trademark wife-beater.

Faith in Humanity Shares Plummet

I could understand gamers being loyal to Games Workshop if their lord and master was providing a quality product or was noble and good. However, Games Workshop has gained a bit of a nefarious reputation over the years. Like the time they tried to destroy online stores selling their product in the name of defending their intelectual property. Or the ongoing debate about how Warhammer Fantasy, one of their flagship products, is arguably unbalanced. Then there’s the numerous cease and desist letters their lawyers send throughout the world. Even their FAQ’s, that are suppose to help balance and clarify the game, sometimes do more harm then good.

To the credit of wargamers, there really isn’t an alternative to Games Workshop games. The company has crushed most of it’s competitors and has  a large stake in every aspect of the hobby. Paints, brushes, modeling kits, novels, their own chain of stores, tournaments, conventions dedicated to celebrating themselves aka “Games Day”, and their own magazine that promotes their product. The only thing Games Workshop is lacking is their own line of food, although I’m sure it’s on the way.

Prophecy has foretold of a challenger that would come and liberate the world from it’s grasp. Unfortunately, most of the hero’s that have tried to slay Games Workshop have usually tripped and impaled themselves on their own sword before actually fighting the dragon.The only exception to this is the company Privateer Press, responsible for the game “Warmachine”, which has managed to stake a claim to the market but has been hindered by one of the worst marketing campaigns in history – pushing the catch phrase “Play like you have a pair” to geeky hobbyists.

This has created a dilemma for any wargaming enthusiast -you either have to go into a game like “Warmachine” and hope you can find other people that play the game, or bend over and sell your soul the Games Workshop. It seems that the inability of gamers to stop buying wargames and the incompetantce of potential competitors has created the perfect storm of stupidity, giving Games Workshop supreme power over everything.

Drugs Are Cheaper than Warhammer

I can’t say that all Games Workshop fans are addicts suffering from spousal abuse- they are inventive addicts who think of ingenious ways to hide their bruises. Games Workshop fans have long since recognized that the company was a bit evil, and have made “Hate the company, love the game” the slogan of every Warhammer Fan. The community consistently strives to figure out ingenious ways to enjoy the game. If say a type of miniature is ridiculously expensive, a few searches on the internet will reveal an ingenious solution someone figured out of how you can use a combination of other Games Workshop products to create the same miniature, but at a lower price.

This combination of abuse from Games Workshop and the inventiveness of a massive fanbase that are unwilling to give up on their products no matter the abuse, has created a simple way of measuring intelligence.  Based on a consumer of Games Workshop’s products behaviour, you can actually figure out what their level of intelligence is.

Tier 1: Breathtakingly Stupid - Pays full price for everything.
Tier 2: Simply Dumb - Orders online and gets 20%-30% off.
Tier 3: Moderately Intelligent – Orders online and finds the conversion guides to build the troop choices.
Tier 4: Smart – Stops playing.

Now if you will excuse me, I have some Druchii to paint.

Want to discuss this article? You can do so here, in our forums.