Wednesday, April 17, 2013

A Forward

Good day to all my fellow geeks and distinguished nerds,

I must apologize for my long absence. Regardless, I must thank Josh for keeping Toyconstruct updated with a few major events. I have kept up with these ongoing events that have been happening in the realm of nerds and geeks and it is great to see you readers get involved in Josh's posts. Feeling connected to the issues that have been raised, I thought I put in a forward to the current predicaments that have occurred in Games Workshop (GW) and LucasArt respectively.

As mentioned in Joshua's "GW: new Policies Kill Online Retailers" post, GW has taken highly unfavorable measures in increasing their profit margin. Furthermore, their approach on PR has caused much stir in the wargaming community. In view of Miniwargaming closing down due to the changes in GW online retailer policy, I am saddened by GW corporate actions. While I can comprehend the corporate objectives of GW in trying to achieve direct distribution to customers to increase profit margins, I cannot see how the repercussions won't affect them in the long term. PR wise, they have given themselves a negative reputation to their hardcore fan base and the wargaming community alike. I would not be exaggerating that rage is on the streets and opinions on the company are pretty negative.

One of the Many Angry Warhammer Collectors :p

While the sentiments of disappointment, anger and sadness were expressed by veterans, die-hard collectors and wargamers alike, there has been no empathy on the part of GW. It is almost as if GW has purposefully detached itself from the community. As a collector and gamer of Warhammer fantasy, I begin to notice that GW has transition from a warm community-based wargaming company into a cold profit mongering corporate identity. And while it is inevitable for companies that grow bigger to become more corporate in its organizational structure, I feel like GW has become more alienated from its customers. While GW could relate to the fellow "nerd" back in the hay days of Tabletop gaming, they seem far from it now. The feeling I get when I walk into a few GW retail shops is filled more with awkwardness and a subtle dread that you would be conned out of your money compared to before. There is a lack of sincerity in the way they connect their customers and their reasons for increasing profit margins are more ludicrous as the days go by. You can't help but think that GW has gone ape shit and are killing themselves.


The funny thing is this. I have been hearing so many disgruntled comments about GW. On top of that, there have been many calls to boycott their products. I have personally felt that in the long run, this continuous impersonal approach to their customers would be their demise. And yet, when I went into my nearest local hobby store the other day, I was shock to find that the recent release of Warriors and Daemons of Chaos Army Boos were completely sold out. And then an interesting thought went through my mind: "What if this was the way to go to sustain their company and increase their market capitalization?"

The 2 Newest Hardcover Fantasy Army Books. At an average of 65 SGD, it gives an painful extravagantly expensive after taste for two 'colour' books.

On the surface level, while we, "old timers" are grumbling about how GW has spit on the faces of their fans, they are still reaping in great profits. The army books cost 65-75 dollars (SGD). A great increase from their previous army books that ranged from 35-45 dollars (SGD). Despite the increase, they have sold out faster than I can roll the dice. The apparent demand seems to be elastic. And then, I proceeded to question myself that perhaps their corporate moves are necessary to compete in a world where video games rule kids' lives.

Don't get me wrong here. I do not condone the actions taken by GW. Neither do I have any sympathies for the way they have been and are behaving. In fact, Josh and I hardly buy from GW directly. Either we go to our local hobby store or ebay what miniature we would need. In fact, after hearing about GW online retailer policy, who is to say that GW wont change their "brick and mortar" retailer policy that could see the demise of all of the local hobby stores in my country? I am already compelled in wanting to collect a few more Warhammer Fantasy stuff before I completely cut off from buying GW minis. However, perhaps this is a necessary evil that the management in GW think they must do in order to grow as a company and get an inflow of new customers. Clearly, their target segment now is young kids with parents willing to splurge on them and keep minds occupied. There is only so much I can speculate. But the bottom line is this, if their financial books are showing growth using this tactic, nothing is going to change. We would still be seeing a trend of increase in prices from GW. I foresee that local hobby stores will eventually not be allowed to sell their products unless there are no presences of GW stores in that country. Perhaps there will be some who will boycott them (inclusive of me) but I don't think they will be pretty much affected by it. I am sure they have taken into consideration about their action and have deduced that since they hold the monopoly in this sector, they have a large enough following to lose a handful of old followers to take in a whole bunch of new ones.

"It's nothing personal, just business" is an annoying adage but it seems to ring in true in the GW business model. It is my deduction that unless Privateer Press comes in and becomes more viably competitive in terms of market capitalization, the tabletop gaming world would still be  a GW one. And if you wanna still be playing Warhammer, you would have to roll with GW's way of business. The calls for boycotts have been somewhat insignificant to say the least. Clearly, it seems GW does not give two hoots about our ramblings or our small semblance of defiance. And unless the whole community inclusive of the new target segment refuses to give GW their demand, it would fall upon deaf ears. Harsh as it may sound, "It is either get with the times or get out."

"It's nothing personal, just business", a phrase used often in the Apprentice starring Mr. Rich Douchebag, Donald Trump and made famous from the Godfather.

On another hand, the closing of LucasArts is also another example of corporate action in the interest of profitability and risk minimization. LucasArts has been famous for producing many Star Wars games that were successful. Despite these successes that have gave much enjoyment to the Star Wars Community, the recent acquisition of LucasArts by Disney lead to LucasArts being shutdown. This action was taken as it was deduced that the new business model would minimize Disney's risk while licensing the Star Wars Franchise would give Disney a broad portfolio of quality Star Wars fame and increase profits. Furthermore, as Josh stated previously, it isn't like LucasArts was producing ground-breaking popular hits like Modern Warfare 3, Bioshock and Mass Effect type of games. As such, taking into consideration development costs, Disney is shelving potential games like Star Wars: 1313 and First Assault from LucasArts. This action done to concentrate focus on making the new Star Wars Trilogy movies.

In conclusion, there are corporate decisions that are made that come in contrary to our common understanding. In my opinion though, when you begin to look at these situation from a corporate perspective, you can seem to grasp the decisions being made. Nevertheless, I along with many gamers who patronized the GW franchise do not like to be taken as mindless lapdogs that would continue to submit to GW's outrageous sales tactics. My sentiments are equally as strong as Josh on GW's corporate actions but this is but one example of the consequences of having a free market economy.

It is a scary world out there in which corporations who monopolize their industry are able to render consumers powerless from preventing horrifying profit making tactics. My only salvation is that there are still many good companies that in spite of such a business climate, emit passion for their business in a deeper way aside from the sole objective of increasing profits. Companies like Bioware, GHQ, Hot Toys and Valve base their business model on a continual connection with the community. At the same time, they are able to generate profits and have great sustainability.

7 comments:

  1. 'Nothing personal, just business,' is a pitiful excuse for some pretty scaly behaviour, to which the correct response is: 'Too bloody right it's personal!'

    But GW, like Disney, and Warners and FatCorp in general, have basically cut their own throats and will bleed to death in due course. That happened to Airfix; that happened to TSR; it will happen to any FatCorp that fails to take into account the views of its market.

    However short the string - and that string seems to have something to do with one-upmanship in the War Gaming field - as more and more of their customer base becomes alienated, they will look elsewhere, or simply decide 'we have enough toys, we'll make do with what we have.'

    Or maybe just round things off with a few figures to fill gaps, and then develop campaign games around their own inventories. Or adapt what they have to smaller games if they can arrive at the big ones.

    If the customer is always right, it don't pay to piss him off.

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  2. I am in agreement to the article and what you have just pointed out, Piccolo. It is downright a poor excuse to use such a motto as their business model. Hell, even by subtle means, such an impression given would lead any company to fall on its knees in the future. I can't say for all the BigCorps around, but with respect to GW, they have been very jarring in the manner of business and because they are in a niche market, such tactics could only lead them further into their demise.

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  3. hawaiiwarhammerfanApril 19, 2013 at 2:14 AM

    This is rather interesting. Aside from the last post from Joshua about Warhammer to this forward article, I have gone to other forums and community blogs that voice out the same sentiments. Of course, blogs that are more heavily link to Warhammer would have more politically correct responses. But it gets you wondering this. If everyone has a negative opinion on the company, why do they refuse to back down on such draconian policies.

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  4. I hate to say this but I will be playing devil's advocate here. While I am not too familiar with GW policies, clearly, they are must have did some ample calculations to consider the direction they have been taking as a company. As for Disney, I cannot believe that they have been profit mongering at the expense of their clientele and fan base. Look at the way they have handle Marvel. And I have hopes that they will steer Star Wars in a good direction too. So i differ from Archduke Piccolo in terms of Disney cutting their throats and bleed to death in due course. I highly doubt they will end up in such a predicament.

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  5. I understand what you mean Shen. There are few examples of companies that cater so much to fan's demands that they forget to realize the overheads and cost in doing too much for the community. Ultimately, this results in the company seeing red and the untimely demise of them. True enough, these hobby businesses who depend on their community and fan base need to be making profits and profits should be of some motivation. But like Archduke and what I have mentioned in my post, if that is the sole objective of your company, and u erode ur foundation of what ur company built upon, ie. GW, it is a recipe for disaster. However, I do agree that Disney isn't like GW to such an extent.

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  6. Great article and good to see that there is consensus on Companies that do not really care for the customers. EA, GW and other will get their reckoning unless they make a change in what they do as a company.

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  7. The Real pity about the world of business is that more often than not, the exceptional companies that care for their customers and have a great product line that customers love usually get bought over by some corporate monger or huge conglomerate which might change the lovable company customers love into some profit glutton.

    While I do not see Disney as one of those companies, there are so many out there.

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