"Could Games Workshop do this?" Topic

Hi to you all, a long time historical gamer here who is just getting into skirmish level sic fi games like Deadzone and Infinity and who is also aware of a certain amount of growing disgruntlement amongst my 40k/fantasy playing friends towards GW.

Anyway, we were recently talking and theorising about GW and their business strategy for the future and its possible effects on the rival games/companies that seem to be becoming more and more popular. One of the group suggested that GW might even look to buy out some of these up and coming companies with the sole purpose of closing them down.

Do you think this could be possible? not sure myself but would be interesting to hear others thoughts.

Thanks

Would they? I don't know, But given their current financial standing, I'd say they could do so no time soon.

Yes, I have long said that GW could buy up moderate properties and games designs, for the sole intent of removing competition.

I'm not sure the current management would do this…. but I am expecting a massed cease and desist on wargames manufacturers who are not a part of the GW hobby.

It's possible, but I don't think it's probable. There market is not the old Grognard who's angry at them, it's the 11 to 17 year olds that are using mom and dads disposable income.

It may happen when you start to see these competitors open dedicated shops for their products in countries outside their own.

Given that the are believed to have done this in the past (20 or so years ago) and that fact is at the core of a lot of gamers resentment I can't see such behaviour working for them in the long run.

Robert

For GW to be able to buy them, current owners would need to be willing to sell their company first. Remember that these companies are pretty much all privately held, not publicly traded like GW itself.

And even if the owners decide to sell, they could use their newly acquired money to design a new product and start a new gaming company. Unless GW manages to get some sort of non-competition clause into the contract.

But if they buy them, they are no longer competition, correct ?

I could certainly see an acquisition, but have a hard time understanding why, after such purchase, they would cease manufacturing of the line.

It would become whack a mole since small operators could pop up as fast as GW could buy up competition

Most companies buy other companies for much more complex reasons then elimination. They have to have something worth absorbing. In the tech industry, It usually the talent. Talented Engineers are hard to find. Sometimes it's code base or customer base. However, GW is the opposite. Most of the competition are ex-employees that left for various reasons. The vast majority are still privately own. So you have to sit in a board room with a successful company CEO who you fired or drove off and talk him into selling your company for the simple fact of destroying it so you can maintain 0.5% of the market share. Now the company price is inflated and the vast majority of it will go towards the startup of a second company that will try even harder to compete with you.

My guess is that GW doesn't worry about the outside market too much.

"Given that the are believed to have done this in the past.."

Has anyone got any examples?

It may be that Kickstarter has already doomed any attempt to stifle GW's competition by acquisition. Buy one and another appears with a KS campaign. Quite a few of the card stock modelers began their companies because of Games Workshop's practices and prices, so that's another avenue of competition they would be hard pressed to suppress. In the US, they're not a big enough company to fight off the feds over predatory practices, so that might also limit their response.

I always thought the "Games Workshop Hobby" was their legal department.

GW doesnt have the money to buy companies like Privateer Press, Wyrd, Corvus Belli, or Battlefront, and if they did, they likely wouldnt have enough excess capital to warrant shutting down those product lines. In regards to keeping thrm open, they cant afford to do that, because buying up competing lines doesnt necessarily translate to increased profits, youre simply cannabalizing your own sales and diluting your own product, its a fast way to lose money.

It would not make any sense to do so, and their share holders would likely kick out the management team if they did.

At the time of their last report they had £9.00 GBP million in cash. I'd guess they could buy pretty much anyone they liked short of Hasbro with that liquidity and bank finance.

The outpouring of bile from the fans that would result from a takeover and closing of a rival probably wouldn't be worth it for GW.

If someone had something truly innovative or imaginative that could grow GW then I'm sure GW could acquire it.

There won't be any active takeovers. Every game company is just biding it's time waiting for the other competitors to implode…. ;-)

From gw's perspective they don't even see any of the above mentioned companies as competition.

As long as GW make huge profits and their competition remains small in comparison I doubt they will have any reason to buy them out. Indeed it is cheaper to just leave them in business. GW gets to hang on to their cash flow, and claim that they are not a monopoly.

Besides their business model seems to be based on a fa base that is constantly turning over. As long as they hook in new fans at least as fast as they lose existing ones the worst they will face is status quo.

It would be interesting to know if any important decision makers within GW discuss other game companies, and to what extent. I feel like they've been more likely to target third party bits sellers and resin component makers, not companies with their own IP. Until recently only a very small minority of competitors could stay in business for more than a couple years.

It would be a very poor business strategy if they did. I doubt if they would have ever grown this big if they were that stupid.

"Given that the are believed to have done this in the past.."

Has anyone got any examples?

I was wondering the same thing as this would be the first time I had heard of the practice.

Patrick, ever heard of Citadel? QT Miniatures? Forge World Original? Mayhem Miniatures? All started out as part of GW, then absorbed and eventually with one exception closed down.

I'm not sure you're right about QT Miniatures, they became Museum Miniatures and sold on the moulds for their 25mm to concentrate on 15's.

As long as GW can keep it's meat grinder business going, for them buy up any competition doesn't make fiscal sense. If anything I thunk they pretty much are aware that they are losing customer over a certain age group, but why I call them a meat grinder is they always have a flow of fresh meat that will either game for a short while and give it up, or move on to other games.

GW is a meat grinder, they always will be.

Even if they did buy up competition to shut them down, it would be a no gain sum as they'd only end up driving more people away from the hobby. There is no profit in it.