MODEL BUSINESS MODEL – PART 2
…THEN LINGER LIKE A
BAD SMELL…
GW started to sell books. It made them money. But the culture in those
books corrupted those that read them. The fascist might-makes-right, elitist
drivel they contained reflected in company management styles and the arseholes
that populated the stores. Too many half-wits assimilating it all and churning
it out, inflicting that and themselves on others. Awkward little thugs finding
more ways to make themselves obnoxious in addition to unpopular. It was
amusing, in a sad, sick way.
A community forum appeared on the increasingly-popular and steadily
evolving GW internet site. The company encouraged people in their gaming
community to share ideas. Trolls gravitated to it. They bullied anybody that
suggested things they disagreed with, the age of the cyber-trolls was
beginning. These idiots tried to force company ideologies onto the ‘noobs’ with
vindictive insults to ensure the ‘snowflakes’ (as they’d call them today) “got
the hint” and left. They had no idea who they were attacking. It didn’t matter.
They had the anonymity of the internet and indifference of the company to
enable them.
I’d suggested a couple of things over the few weeks I bothered to
visit the site. Imperial flyers. Imperial warbuggies. Heavy Sentinels. The ability for infantry to
throw grenades. The ideas got trolled to hell with pathetic trash insisting
background literature said the Imperium didn’t have them or some other bullshit
excuse based on the respondent being an arsehole trying to make himself a sad
little king on a sad little hill. A year or so later, GW introduced those
things. Valkyries. Tauros. Heavy Sentinels.
It was a repeating pattern. New people would join the hobby and
instantly know more than those who’d been there for years, then bully and mock
them for concerns. Within a few years, they found themselves on the fringes of
the hobby, targeted by the new people who claimed to be all knowing, the
concerns of those before them now their own in a vicious cycle of what goes
around comes around that began after the original elements of the community had
been driven out.
Over
the years, a lot of my ideas got adopted and produced by the company. Turns
out, though, that the gestalt plays a huge roll in this. In the real world,
beyond the fortress walls of the company, their market asks for things people
like me think of all the time. We share a collective desire. The company
figured this out too. Eventually. They had ignored us and allowed their
sycophants to bully us into silence, then they unleashed lawyers and stole our
ideas, claiming them as their own, based on nothing more than ideas were based
on things from the Warhammer or Warhammer 40,000 setting, and copyrighted them.
The
original creators got no credit. No recompense for what made the company
millions. They expanded the practice to bigger and bigger targets. One of the
more recent ones is to claim ‘Space Marine’ as their own IP, despite the fact
it was a term coined by authors dating back to the 1930s, decades before GW had
been back-birthed and respawned in the arse of Bryan Ansell, the ‘man’ who
styles himself as the very same God-Emperor in the 40K literature. This is what
happens when you inhale paint and glue fumes. It triggered the very clever,
legendary, SOD OFF BRYAN ANSELL White Dwarf issue way back when.
The
company doesn’t understand (or care about) the betrayal their fans feel because
GW management just don’t get the whole loyalty concept. The original creators
of Warhammer and WH40K wanted to share ideas with their community, using math
to make a great game, but Ansell and his ilk used math to make money,
sacrificing what the hobby was all about along the way. Wherever you find
someone with an idea, no matter how selfless or beneficial their intentions,
you’ll find at least one arsehole trying to exploit it to make themselves money.
And,
since the days of Rogue Trader, GW made one stupid decision after the next.
They don’t bother with market research. GW head-management relies on the
delusional, megalomaniacal opinions of trolls and sycophants (inside and
outside the company) to respond to their market. They assume that they control
not just supply, but demand, the misguided belief that this means the company
gets to demand what the market will pay, unaware demand is what the market
wants. This has led to where they are now.
Since
1996, the rules for Warhammer and Warhammer 40,000 have been updated to new
editions five times. That’s an average of once every four years. And each is
slightly worse than the one before. This has proven problematic because the
Codex or Army supplements have, in many cases, taken five or more years to
update, rendering some armies completely obsolete for years on end. Worse,
every supplement updated is afflicted by power-creep, leaving every previous
one that much more uncompetitive.
Power-creep
refers to two distinct things. The first is how points costs are used to allow
a new product to outperform the previous new product that has the same points
value, a marketing tool used to encourage people to buy the latest release.
Which brings us to the next definition. Someone who takes advantage of this
power-creep to win games through legalised cheating is a power-creep. They are
the key demographic targeted by GW. They have to win. They are obnoxious,
unpleasant, and usually cashed-up because their parents are arseholes who spoil
their spawn rotten and raise them to be arseholes too.
Nowhere
has this power-creep problem become more apparent than Space Marine Codex
supplements. There were, at one point, six of them, while the Orks, Imperial
Guard, Eldar, Tau, Tyranids, and Necrons were spread across just nine more.
With only a single updated supplement every three months, across both Warhammer
and 40K, you can see how it got bogged down. At three-or-four next edition
Codex supplements every year, it took four-to-five years to update them all,
but since some got dropped or ignored as others got multiple updates… well, it
doesn’t take a genius to figure out what happened. Armies sat on shelves for
years. Players grew-up, moved on. But it was worse than this.
GW
constantly shifted to and between new projects. Blood Bowl. Talisman. Titan Legions. Warhammer Quest. Necromunda.
Space Hulk. Gorka Morka. Mordheim. Lord of the Rings. There were a rash of
them. Brief blurts of ideas that generated a lot of interest and short term
profit-spike, but burned out quicker than Hugh Hefner without a Viagra. Players
who invested in these suffered the same fate, every time: any support and
products for these games vanished as quickly as retail staff working for GW.
But
what looked like a series of monumental, idiotic blunders was, in fact, a cold,
calculated, methodical raping of its market. The constant changing of rules,
new Codex and Army books for each race every few years, modified rules that
forced players to purchase full-size squads to play games, new formats to make
them buy more and more models… it all channelled money into sales. Combined
with constant, ridiculous price hikes to artificially inflate profits, the attrition
in market share didn’t look so bad… at first.
The
company was unfazed by the backlash of disgruntled, frustrated players. Its
market regenerated. The folks who had been ripped-off, bled dry, and screwed
over might leave, but there were always new fools who lined up to be parted
from their money. The next generation. The company only cared about profit, and
a shitload of it. Heads rolled in retail when sales figures dropped. Management
made the decisions that led to failure, but staff at the bottom wore the blame
and consequences.
Only
a fool ignores wise counsel, and GW demonstrated foolishness on a grand scale.
They repeated the very same mistakes that led to disaster, changed nothing and
expected different results. Lord of the Rings proved a huge cash cow… until the
public lost interest less than two years later. But GW kept pouring money into
it, expecting it to last. It turned into a money pit, sucking down a huge chunk
of the previous profits as the tide of this new market receded. Did they learn
from this? Hell no.
Pissed
off with over-inflated, extortionate prices, product-lines that only consisted
of big-ticket items, and supplemental rule books that cost more than a game
console new release game, but which players had to purchase to actually play
games (forcing players to spend hundreds, even thousands, of dollars on their
army), the market began to desert GW quicker than it could regenerate. The
market moved toward other games, other miniature suppliers, and began to make
their own house rules for GW products.
Did
GW learn from this? Did they adapt to their market? Fuck no. They unleashed
their lawyers. They set them upon rivals and their own market-community alike,
stealing ideas and copyrighting them, claiming it as their own under the name
of company stooges, demanding all evidence by deleted from the internet, suing
anybody else that made anything even remotely similar to their own models (which
was everything), and even trying to copyright terms like ‘Space Marine’ that
had been around long before the company.
Ironic
given so much Warhammer and Warhammer 40,000 background literature is lifted
straight from the work of others. Read books like The Foundation series by Asimov, some of the works of Heinlein, and
EE Smith’s Lensman series, and you will suddenly realise GW has engaged in a great
deal of copyright infringement. But if GW has its way, they will simply use
their lawyers to rewrite history and then delete and burn the works of those
authors. Even the dust jacket of Asimov’s The
Foundation Omnibus, that was published before GW came into being, bears an
image of what looks a lot like a Tau spacecraft.
But
what they did, while unethical and mortifying to the general public, is not
unprecedented. Those of you who remember the movie Stargate, and the series that it spawned which ran for over a
decade, may not be aware that the now copyright term Stargate (and its function) did not originate with that series in
1994. It first (as far as I’ve been able to ascertain) appeared in Joe Haldeman’s
1974 Forever War, which was protected
by copyright laws. I’ve no idea if the Stargate
franchise has to pay his Trust any royalties.
But
the lawyers at GW were not done. They were set upon suppliers. The little mum
and dad shops that sold games and miniatures. If they wanted to sell GW
products, they had to order a minimum number of items even if they couldn’t
shift it. And they couldn’t sell it outside a certain area. They couldn’t sell
those products to people in other countries. You see, GW had been ripping off
Australians for years, charging around 65% more than what the clients in the UK
paid, so savvy Aussies had been buying it from the US, who paid around 30% more
than the UK. Even with P&H it was still cheaper than buying it in Australia.
But
under the terms and conditions of trade imposed by GW, only GW could make
internet sales. Sure, it looked like GW was violating Fair Trade laws, but the
company had never hesitated when laws established to prevent unethical
behaviour threatened their profit margins. Besides, that’s what the lawyers
were for, dealing with anybody stupid enough to challenge GW. Like foolishly
believing that the ideas they created were not automatically the property of GW
because they mentioned something GW related or that GW insisted was its IP, even
if they didn’t have copyright and it wasn’t.
The
backlash was catastrophic. The market contracted, like a sphincter GW
aggressively raped over and over. Sales plummeted as people abandoned the
predatory business. Profits went with it. An intelligent person would
reconsider their business model, change their attitude, evolve, adapt. Not GW.
No, their response was to just jack-up the prices again. A model that cost 50
cents to produce, package, market and ship was sold for ten, even twenty times
that, what remained of the market propping up profits.
Instead
of trying to fix the problems – shitty products, price gouging, rules mechanics
that simply didn’t work, and unethical treatment of the market, staff and
rivals – GW focussed on the problem it had created, by trying to aggressively
drive competitors out of the market and continue to make overly elaborate Codex
and Army supplements they then sold as big-ticket items. It had become
impossible to keep those current. Players simply couldn’t play the games. Their
rules were obsolete within months. So GW did what they always did. GW amputated
entire games. But this time, it was a founding game: Warhammer.
GW rebranded it with a whole new set of rules: Age of Sigmar. The focus, like the new Warhammer 40,000, was on
maximum size squads and other big-ticket items. Whoever spent the most could
purchase armies that could crush their opponent. An army cost upwards of $500,
the rules and Codex or Army supplement another $200, paint at $5 or more
(each!) for a tiny pot. If you didn’t have a spare $1,000 to just hand over and
piss off, GW didn’t want you. You were considered, and treated as being,
worthless.
So where do the now disgruntled, discarded elements of that market go?
Well, there’s a whole new breed of miniature suppliers around, and many great
games. GW lawyers suddenly hit a brick wall trying to bully competition into
bankruptcy. Those rivals were there to stay. One of the more successful was Zombicide, especially its Black Plague range. It filled the gap Warhammer had left. Medieval miniatures
of far better quality and a fraction of the cost, with fun, simple rules that
did not constantly change and require the sale of vital organs to purchase, and
a focus on collaborative play rather than competitive.
To demonstrate just how popular the game became, and impact on GW,
look no further than the CMON Zombicide:
Green Horde Kickstarter. It had a goal to raise just $300K to produce the
next range for their game. It raised over a million in the first day. At the
end of the 28 days allotted to fund the project, it had raised over $5M. CMON
also made excellent use of the community forum option, responding to the comments
and ideas with adaptations to improve the game, make new miniatures, and so on.
Once the Kickstarter was over, however, their behaviour changed.
Communication with their community ceased. Suggestions for Optional Buys were
rejected out of hand. Requests from backers who wanted to purchase Exclusive
Kickstarter models that CMON indicated would be sold at promotional events (and
could be easily manufactured like all their other products), as part of the
Kickstarter Pledge that would be sent out to backers, were also rejected out of
hand. This was an odd response.
During the Kickstarter campaign, an element within the community had
expressed disappointment with two Optional Buys: Friends and Foes, and No Rest
For the Wicked. First, each of them included an Exclusive Kickstarter model
needed to complete a set of five based on characters from the Stranger Things series. To complete the
set, a backer had to purchase both Optional Buys at US$50 each, plus P&H,
even if they did not need or want the rest of the contents. These big ticket
items were a step in the wrong direction.
While Friends
and Foes included several redeeming features, No Rest For the Wicked didn’t. It included a ballista, which was
already included with the Core Box. It also included a second dragon. Again, the Core Box already included (a better) one. It included models that backers got
if they purchased the Rat King and Swamp Troll Optional Buy. In short, it was
an eclectic mixture of stuff but in no real way an expansion pack because it
did not include additional tiles, quests, or a rule book.
No Rest For the Wicked was a
straight-up, big ticket cash grab. If you didn’t buy it, you didn’t complete
your set of five Stranger Things
Kickstarter Exclusive Survivors. Did CMON adapt to its market? Did it offer the
two Exclusive Kickstarter models as a separate Optional Buy? Did it repackage No Rest For the Wicked as an actual
expansion and allow the backers to use the pledge manager to adjust as needed? Did
it offer additional Optional Buys like a Conversion Kit (alternate heads,
weapons, etc) and Survivors, cards, etc, from other sets (to replace lost or
broken items) for backers to buy separately?
No. No. No. And no.
It was a strange response. Business opportunity carelessly
discarded. A message sent to CMON on behalf of a group of backers even offered
to exchange some of the Kickstarter Exclusives for others. It pointed out the
black market trade in Kickstarter Exclusives made scalpers rather a lot of
money. If just 4% of the Kickstarter Core Boxes sold were used for this this
trade, a conservative figure on its value would be half a million dollars. More
likely much, much more. Estimating the value of product the company could sell
to its market instead of allowing scalpers to profit using this estimate put
figures at $1.25M, once again a very conservative figure and likely much, much
more.
The
message pointed out that, after all, the project page itself stated that “anything
marked with this: ‘Kickstarter Exclusive!’ is an Exclusive item for Kickstarter
backers, with remaining stock available at conventions and special promotions
only.” But it turns out that not all items marked Kickstarter Exclusive are
awarded unless backers purchase Optional Buys, they are only available as part
of the Kickstarter project, and even though remaining stock will be sold,
Backers cannot access this unless they attend a convention and special
promotion.
Yes, a Kickstarter Exclusive is used as an incentive to encourage
backers to fund a project. It is effectively free to backers. Although, try
asking for one without handing over cash (or even if you do) and see what
response you get. But it doesn’t make this toy or recipient any less special if
the company sells more copies to other people later. Those people would have to
pay for them. Seriously, if someone comes up to you and says, “me and the lads
like the product you make, we’d like to give you $1.25M for some of the things
you already make,” are you going to say ‘no’?
Well, CMON did. They answered that message with these three, short
sentences. “Add-ons and stretch goals cannot be exchanged for different
kickstarter exclusive items. As the campaign is over, we are not releasing
anymore stretch goals, add-ons or optional buys. Thank you for backing the
Green Horde!” So… let’s get this straight… players are offering to give CMON
money for product, CMON is not interested. The market can buy big-ticket items
to get what could be a small-ticket item, or keep their money and go without.
Unless they find something else they want to spend their money on.
Interesting. A real winning marketing strategy
there. Profit on small ticket items is not worth it unless you sell a lot.
Better to risk the market not buying big-ticket items at all in the hope they
will and you make big profit. Ignore the market. Restrict choice. Price a huge
chunk of the market out of the market. Tell the market what it will and can’t
do. Discard opportunity. Refuse to adapt. Treat those who do not bend knee with
contempt. Where have we seen that before? How did that work out?
This business failure was heralded by their complete lack of effort to
deter the trolls that migrated onto the community forum and posted comments.
Kickstarter does not provide an ‘edit’, ‘report’ or ‘fuck off’ button on their
comments options. You cannot edit your comments if you make a mistake, or block
trolls so a) you don’t have to read the mindless shit they spew, and 2) they
cannot troll you. To report a troll you have to report the project, and you can
only do that once… even if trolls continues to stalk, harass, and engage in
pile-on moves against a target.
The flaw is obvious. Trolls drive off elements of the market, and
discourage potential elements who might join. Worse, they discourage any ideas
but their own, and too often simply bobble-head at the company in the bizarre
hope for a pat on the head. They act like they are part of the authority, that
it is theirs, and don’t share or play well with others. Relying upon market
feedback that is corrupted in this manner leads to disaster. Trolls should be
reprimanded and then given marching orders when they fail to behave.
How did GW respond to this new challenge? What
strategy did they implement to deal with competition they could not drive out
of business with their lawyers? Did they lower their prices to increase the
market base upon which the company was founded? No. Did they improve the
quality of their product to justify their idiotic, self-destructive pricing?
No. Did they decide it was time to conduct actual market research? No. Did they
adopt a more ethical business practice? No.
Instead, they hired a new CEO…. Who retained the same idiotic
ideologies. He and his stooges happily admit they don’t give a damn about their
customers. They only care about money. Unless idiots are willing to scuttle in,
drop wads of cash for shitty product, then piss off until they bring back more
cash, those people are considered worthless, weak, trash. GW upper-management sell
their IP (often ideas they have stolen from others) through legalised injustice
to computer-game developers. The big money.
The notion that they make and sell the best miniatures, and will do so
forever, is delusional. Their product was briefly great, but largely the most
dominant. They have now been surpassed and will go the way of every other
dinosaur, they are just too stupid to accept the facts. Their model business
model is a wonder of the modern age, yes, but also an example of monumental
arrogance and ultimate, predictable failure. It is the inverted pyramid that will
topple for a series of very obvious reasons.
It has an incredibly narrow, shrinking foundation, but is top-heavy
with an abundance of wilful stupidity, the massive ego and greed of over-paid,
incompetents whose heads are buried so deeply in the trough of their own anal
cavities that they have lost sight of what the company was supposed to be, and
how it has failed to listen and adapt to its market. A White Dwarf that turned
into a bloated red giant, consumed all of its available resources, and
collapsed under its own, over-inflated gravitational mass to form a black hole
that will continue to suck long after it has vanished from sight.
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