Podcast Summary

Richard Kendrick, Managing Director of Arboreal Marketing, discusses the business model and success of the tabletop gaming company Games Workshop, the creator of Warhammer. Kendrick detailed the company's history, its resurgence since 2015, and its robust financial performance. He attributed its success to a deeply customer-centric approach, which included creating an immersive universe with extensive lore, leveraging a multi-channel sales strategy, and fostering a strong creator community. Kendrick contrasted Games Workshop's model of stable management and its firm stance against using generative AI for creative work with the struggles of other companies, like Electronic Arts, which he argued prioritised short-term profit over customer trust. The discussion also covered the company's pricing strategy, intellectual property defence, and efforts toward diversification.

 

Key Points

  • Games Workshop's success was built on a customer-centric model that focused on understanding the customer's connection to the worlds and lore the company created.
  • The business was multifaceted, encompassing not just tabletop games but also model painting, a publishing arm (The Black Library), and extensive cross-selling opportunities, leading to high customer lifetime value.
  • The company took a definitive and public stance against using generative AI in its creative processes, choosing to protect its creators and customers in contrast to competitors who were aggressively adopting AI.
  • Games Workshop's management style was characterised by stability and promoting from within, with the CEO having been with the company since 1998, ensuring a deep understanding of the product and customer base.
  • The company successfully utilised an integrated marketing strategy that heavily leveraged its community of content creators on platforms like YouTube to build trust and promote new releases.
  • Despite high prices, the brand's immersive experience, strong community, and constant product portfolio updates maintained customer loyalty and protected its market position from cheaper alternatives or 3D printing.
  • The company had made significant strides in diversifying its character representation, particularly by introducing more prominent female protagonists and armies, which helped broaden its market appeal.

Podcast Transcript

Transcripts are auto-generated

Kiran Kapur, Host (00:03):
[sci-fi music] "The armies of humanity battle for survival. With the imperium standing on the brink of annihilation, the Tyrannid hive fleets emerge from the cold void between the stars. The Space Marines stand as the last line of defence."

And if you recognise any of that, you will know we are in the world of Warhammer. And I'm delighted to welcome Richard Kendrick, managing director of Arboreal Marketing. Friend of the pod, been on a number of times before, always has an interesting perspective. Richard, welcome. You wanted to talk about Warhammer. It's one of those companies that's been around for a long time and has had an absolute resurgence recently. So for those that don't recognise Tyrannids and Space Marines, can you just give us a sort of background of what we're talking about with Warhammer?

Richard Kendrick, Arboreal Marketing (00:52):
Games Workshop started in 1975. It's a company that has got a number of different games crossing different fantasy settings. So you've got Warhammer 40K, which is the science fiction side of it. You've got Warhammer, The Old World, which is a Lord of the Rings type, high fantasy, classic high fantasy. They've also got a Lord of the Rings franchise tabletop gaming as well, which is very popular. They have a number of different spinoffs. You can play an American football version of Warhammer where you've got Orcs versus humans throwing balls and sort of crazy things happening on the pitch called Bloodball. They've got a number of different ballgaming opportunities or tabletop gaming stuff for different markets and different types of fantasy setting, depending on what you're interested in. They started as a bit of an importer of American games and then got into making their own miniatures.

(01:41):
And were really popular sort of the late 80s, mid 90s. Had a bit of a fall away in 2000. But since around about 2015, 2016, and certainly during COVID and post- COVID, they're an excellent model of a British business that has built itself up to be super successful, super profitable. But to really understand the customer, the customer's connection to the world they've built, the lore, that's L O R E, the lore they've built within that unit, the different universities. So there's multiple universities that they operate in, which have been created by some incredible authors. They've got their own publishing arm called The Black Library. They once upon a time had their own record label, which was for the band Race back in the early '90s. So they've been quite adventurous in how they've approached different potential product ranges, different ways to connect to customer. But at the heart of everything they do is the customer.

(02:41):
Although customers don't always feel that way, they sometimes feel like they're getting fleeced because it's quite expensive. They are very loyal, and they will stick with a game for a very long time for most of their lives. So there's a real customer lifetime value there that came to Workshop understand. And I think the reason it's come to light for me recently is they've taken a very firm definite stance on AI and how AI is going to be incorporated into the business at time when similar businesses, similar organisations are throwing AI at everything possible in the hope that it's going to save them a buck somewhere down the line, even if it means they annoy their customer base. Games Workshop have gone in the absolute opposite direction and said, nope, we're going to look after the customers first and worry about AI second.

Kiran Kapur, Host (03:26):
So let's start with, so it's a tabletop gaming firm, but there's also a huge element of ... So tabletop gaming sounds like I'm playing Monopoly, but it's much more than that. There's strategy games, there are rules, there is a lore, there are models, and the models can be painted. And that's quite key as well, isn't it? There's a whole modelling arm.

Richard Kendrick, Arboreal Marketing (03:48):
Yeah. If you're in that world and you are going and you are a collector, you are going to have maybe a couple of different armies that you really like. And within that, you're then going to want to paint them the way you want to paint them. So you're going to have to then learn how to do the painting, and you have to buy the paint. So there's a load of accessories that go with the core game. They'll bring out supplements for rules. Each of your factions has a particular backstory and history of which there are hundreds of novels that have been written that you can read. So I can regularly ... Most of my Audible Months are spent using my credit to get something from the Black Library or one of the great authors there. So there's a real immersive experience that is a way to separate yourself from reality, I suppose, and kind of dive into your hobby and really get invested in it.

(04:37):
A lot of people will jump across different game sets as well. So usually a collector won't just buy one game. They'll invest in several of the different universes the Games Workshop have created. And then on top of that, you've got things like the terrain to go on top of the table. You've got the dice to views. They've got the cards that go with it. There are so many different cross-selling opportunities or associated product ranges with core box sets that actually, that core box set leads onto quite a lot of cross-spending and is a very long customer value chain. You're going to have that customer potentially for most of their life. So it's very profitable arc, I think.

Kiran Kapur, Host (05:16):
I think the other thing I've always found have been, that I first came across Games Workshop buying a present because a nephew or something had wanted something from Warhammer and walking into a shop, which at the time I haven't been in recently, was very dark. They would have the Black Library, but the shops themselves were quite dark. The paint works quite dark. And walking in and thinking it felt quite alien, but I got a Christmas list to buy and walking up to a very friendly salesperson who switched from talking very detailed to somebody who'd obviously been gaming for a long time and they were in the middle of lore and discussions about things I'd never heard of and switched into the fact that I clearly hadn't got a clue what I was talking about. I just got a list in front of me. And I came up spending more than I intended to, but knowing that on Christmas morning, the one little face was going to absolutely light up, which is what we're all trying to do when we buy gifts.

(06:14):
So I found it very intriguing. Their customer experience is very good across people who are only customers tangentially because we're going in to buy gifts, but nevertheless have got money to spend right the way through to those that are absolutely in the lore and in the gaming.

Richard Kendrick, Arboreal Marketing (06:29):
Yeah. I think, and that's been core since the business started. So they've always had a retail network, and they've stuck by that retail network. Even when they introduced the website, they've got an e-commerce store. So they have an integrated bricks and click strategy across all of their sales channels because they don't just sell through the stores as well. They've also got distribution partners. So they have a distribution channel as well as their own stores, plus the e-commerce site. So that's quite a complicated multi-channel distribution thing, but they manage it very effectively because at the core of everything is the customer experience. So if someone doesn't have a local Warhammer store, then they can go to Element Games or they can go to another business and go and buy their Warhammer from there. And some people prefer that because they don't want to go to Games Workshop, but they want to stay in the universe, which is a strange thing.

(07:18):
But Games Workshop themselves, they invest very heavily. And the nice thing about it is everyone benefits from the success of the company. So one of the things they did at the end of last year after having a record year was everybody, I think they got around about 1,500 quid each. It didn't matter where you worked or what part of the business you were in, everybody shared in the success of the business. And they all buy into the fact that they're all fans who work for a company they love. And as with any company, there were going to be times when it goes well for staff and it doesn't go well for staff, but on the whole, they put the customer first, they make sure the staff understand the customer experience. And the important thing is acquisition. And like you say, you walked in, you didn't know anything, and someone who was super friendly guided you through the process and you ended up spending more.

(08:04):
That is a classic putting the customer at the heart, a customer-centric approach, isn't it? Particularly from a retail point of view, which a lot of places don't do this these days. And it's always been like that. When I first went into a Games Workshop store in about 1987, it was bright orange and rather than dark, everything somewhere in Merry Hill in Dudley, it was bright orange. And there was a very thin, very gawky, very tall, geeky guy who came bounding over and was full of enthusiasm to help me buy a miniature of Gandalf standing on a bridge and warrior, way before the films came out, obviously. But that was me at eight years old.

Kiran Kapur, Host (08:41):
We've mentioned that they are successful. I think it's very easy not to realise just how successful they are. I mean, this is a FTSE 100 company. It's one of the top hundred companies in the UK. It is huge. Can you just give us some figures around their sort of sales side?

Richard Kendrick, Arboreal Marketing (08:57):
Yeah. So they've recently announced their half-year ending for last year. So November the 30th, 2025. They had a total revenue arose by 10.9%. So they did 332.1 million pounds in the half year. So there was that 664 million quid a year. So they were a good-size business with a pre-tax profit increasing to £140.8 million from 1£26.1 million. So their pre-tax profit grew by 11.3%. A couple of people have been complaining that their licencing was down. It was down to about, I think it was about 12 million quid from 50 million pounds the previous year, but that's because they had the Space Marine 2 video game, which released in September 2024, which was enormous. It was an absolute runaway success and a beautiful example of integrated marketing, where they had their content creating community pushing the game. They had outlets, content creators like IGN reviewing the game, and absolutely loving it.

(09:56):
So you had the video game community loving it and introducing it to a whole new audience. You had the internal content creator, like the Games Workshop content teams. So you've got so many people on YouTube showing people how to paint, how to game. They do battle reports. You've got like tabletop tactics or you've got SEO Winters, really popular channels that get thousands of views every week on their games. And they're talking about how great the video game is. So you've got these two worlds sort of working together, these two different spheres working together, and then off the back of that, the game sold something like three million copies in its first month. So it did extremely well. So licensing's down this year because they didn't have a Space Marine two this year in 2025 financial year. It was a 2024 thing. But if you look into the future and the way they've planned ahead, they've got King of the Geeks, Henry Cavill, who has set up with Amazon and is now building a full universe on TV.

(10:51):
So there's going to be TV series, there's going to be films once he's got over Highlander. And along with Amazon, who are now licencing that off Games Workshop, and they are now going to be putting that into Amazon Prime. So you're going to see an enormous jump there once that licencing starts taking off. So as a company, financially, they're extremely robust. Even with their export market is the US, so their main export market is the US. And of course they got hit massively by the tariffs that our favourite Cheeto-in-Chief put in place, but they just absorbed it because they were so profitable. They said, "We don't really want to pass that on. " And the end of last year, they put a 2.5% price increase across the American market, but that was the first time they put a price increase since the entire tariff thing took off.

(11:35):
And it was only when they absolutely had to. And in fact, they actually put prices up overall. It was just a general price increase, so it wasn't particularly tariff-related. So even when the tariffs came in, they just absorbed it. They're so profitable, they're doing so well. And it's because they're leveraging that investment and that love of the world they have built, rather than taking a quick profit and trying to annihilate it with AI.

Kiran Kapur, Host (11:58):
The pricing issue is interesting because Games Workshop product Warhammer products are expensive. There's no way getting around that. And it's not like you can go, "Well, I'm not going to buy it from there. I'm going to go down the branding level and buy something else." Because if you or the person you are buying your gift for is into Warhammer 40K or Age of Sigma or whatever, then that's what you've got to buy. So in a way, you are hooked into a marketplace, and they set the pricing. Is there anything that prevents them from just constantly inflating pricing? Is it totally inelastic? What do you feel?

Richard Kendrick, Arboreal Marketing (12:36):
So if we do a quick Porter's five forces on it, as this is a marketing podcast. If we looked at substitution products ... So in terms of the supplier market, if we look at the power of suppliers in the market, there are alternatives, and suppliers can produce stuff. Game Workshop were quite threatened at one point by the 3D printer market because hobbyists love to kit bash stuff. They love to make up their own things. So there is a chance that people just go and buy cheaper stuff from people who do 3D printing. I think because Games Workshop have such a strong brand and they've invested so much in the universe itself, it is so immersive, and it's fun. I think if it wasn't fun for people who played it, then of course it would fall flat on its face every single time. Like any other computer game you come across really.

(13:25):
If it's not fun, you walk away from it. And there is a company called Mantic Games. Mantic Games has Kings of War franchise, which is a direct alternative to the Warhammer Fantasy Battle. It doesn't quite have the same background to it. It doesn't have quite the same immersiveness to it. It is much, much cheaper. It hasn't got the setting. It hasn't got the ... They leverage that lore so hard that it really does capture you and bring you in. And there is the brand element that you have to ... If you were into Warhammer, then you have to have the Games Workshop stuff. But there are alternatives. For the 40K, there's a game called BattleMech, which is slightly different, but it's robots. And even then, much, much cheaper to get into. And it has actually a very big universe and quite a good following, but it's not Games Workshop.

(14:10):
It hasn't got that brand level. It hasn't got that immersive experience. They're very good at constantly putting out models. And it's not always a big box or a big ball game. It could just be a small box set. It could just be an individual model. They released one yesterday that had the creative community going absolutely bonkers, and it was everywhere across Instagram. Everywhere I went, there was people talking about this new model that came out. That model will be about 35 quid, I reckon, perhaps even more, maybe 50, but that's a nice, easy way to keep your product line churning. So you're getting small sales all the time from new stuff that's coming out. That means it's a trickle effect. So it doesn't always feel as expensive as it might do. And then of course you've got the things like the paints and all the rest of it.

(14:51):
So if you're not going to buy the big game, you might go and buy a couple of paints instead and carry on going with that. So I think you've got a strong community, it's immersive. They've got a great lore. They leverage it hard, and the marketing is everywhere, so that it's the brand you're buying into rather than always the gaming experience or the models. So if you look at it from Porters Five Forces point, it's easy to substitute, but people don't. There is customer power. They could walk elsewhere, but they don't. It's quite easy with a 3D printer as you get yourself into tabletop gaming. So that's a pretty easy new entrance thing, and there is supplier power. So actually, if you think about it, profit should be under pressure. Actually, rather than, I'm just going to jack everything up. There are threats to that profit margin.

(15:37):
And we saw that in the 2000s when they lost sight of the customer, and they started just pumping out stuff that didn't really relate to anything. The game rules were baggy. It wasn't a fun experience anymore. They started looking at how can they take a quick profit? And it all kind of went a bit pear-shaped for them, a bit like Lego. With Lego, it took a while to get the user-generated content going and really get the licencing working for them in the same way. And they bounced back, and so do Games Workshop. The core thing for both of them is they love the customer.

Kiran Kapur, Host (16:08):
Yes. And they understand the different requirements of the different customers. So you can be more interested in the modelling and the painting, or you can be more interested in the lore. As you said, I mean, the Black Library has a huge back catalogue of books, and the new books come out all the time, and they are very well written. It's not just, "We sling them together." They're good quality books, or you can be interested in the actual, the community element. Do the shops still do the ... You used to be able to go along and have a gaming session there. They would have a gaming evening for experts or for beginners and things. Does that still happen?

(16:43):
Yes, I think so. I have to say, I'm in the former camp with this in that I mostly listen to the books. I don't really play the game. I do a lot of the painting because it's a good way of chilling out, but I don't really play anymore. But you're right about the Black Library. It's a fascinating example actually, because the Black Library actually started around about 1998, I think '97, '98. But they'd had people writing novels for them and doing comics. And what they used to do was hire in well established authors to come and write a fantasy novel for them, and then they would sell it. So there's a book called Conrad that came out around about '94 that I remember, and it did reasonably well, but it wasn't an established publishing house, and it didn't have an established link to driving the narrative of the universe, which it does now.


And I think what the Black Library has done, which is really clever, it's another route to get new people into the universe because like you say, they're really well written novels. Some of them are very ... There's a series called Gaunts Ghosts, which is very accessible. It's like Bernard Cornwall's Sharp series. There's a very ... One was based on the other, and Gaunts Ghosts is quite a large range. It's very accessible. It's a very easy way to understand the universe you're in. Once you're in there, you can go and buy those characters in the shop. So you can actually physically hold Gaunt and go and paint him, and you've now connected the two things together, you've made one tangible. So I think Black Library is another excellent acquisition tool where everything is kind of joined up really nicely. In terms of the retail experience, yeah, you can go in and play a game anytime you like, I think.

(18:17):
And it used to be a Thursday night late in Merry Hill in the early '90s, Wednesdays and Thursdays, you could go in, and they were over until about 10:00, and you could go and game in Dudley, which is near where I grew up. So I think they still do that because the more they can get games on the go, they give a free miniature away every month. So if you want to get into it, you can just pop in and ask for free miniature and they'll give you a free miniature. And it's different one every month, like this week, this month, it's actually Tyranids. So fits what you were talking about earlier on.

Kiran Kapur, host (18:49):
Again, we've been talking about sort of integrating marketing campaigns, but all of this is actually putting together customer lifetime value. Yes. So how are they leveraging that lifetime value? Because we've talked about the fact that clearly you can start as a child, you can come in as an adult, but some people, you yourself obviously started as a child, started perhaps in the games area, then moved into other areas. Now you're into the modelling and the Black Library. So how does that customer lifetime value work?

Richard Kendrick, Arboreal Marketing (19:15):
I think oftentimes it's kids who are really into reading and really have a great imagination that get into it early. So where parents have encouraged them to read, I don't know, Lord of the Rings or Dune or something similar, where reading and literacy and literature really important to them or perhaps gaming as in video gaming in certain franchises, not necessarily the Call of Duty crowd, but more the Baldur's Gate 3 crowd maybe. I think that means there's a very easy switch to hop from one to the other because you're already in that mindset. And then you go past this shop, and there's all these weird things that look familiar to you and cool. So you go in. So then of course you've got your parents at that age buying you stuff that encourages your imagination, encourages your hobby. I think it goes two ways then.

(20:02):
I think either kids stick with it through their teenage years, and they're probably usually into D&D as well or maybe other board games, and then they stick with it over time because they'll collect multiple armies, and their armies are always updated, and the paints are always new, so it never gets stale. And actually, most armies when they get to about three years old, they have a refresh programme, Games Workshop will refresh the game, completely redo the rules, bring out new models. So over time, you actually have to keep buying your army to stay up to date, which is a nice way to keep that recurring revenue going. The alternative is, like me, I got into it until about 1994 maybe, and then it just wasn't cool at school. I picked up a guitar and started playing in bands instead, and gave all that up and sold it to the car boot, which I'm furious about.

(20:49):
And then I got back into it in the last five years or so because I'm hugely into board gaming, and that re-triggered my imagination again. And actually, I just like the feeling of being eight years old and just taking my mind off stuff and immersing myself back in that universe. And of course I've got money now, whereas I didn't when I was a kid. So I could buy the things I could never afford. I could buy the bigger tanks and all that kind of stuff if I wanted to, or I can buy the books whenever I feel like it, or I can buy the paint whenever I want. So actually, that lifetime value becomes more and more lucrative the older we become because we just have to justify our money less. So we're more likely to go and collect more things and add to it more quickly, and we make decisions quicker.

(21:28):
So they get you when you're a child, but often people are introduced to it at an older age, and when they do, they really dive into it, become fully converted and go and buy the armies in one big batch and then just stick with it. So that regular refresh, I think the fact that they've always got great ... Their product portfolio management is very good. So I think they're constantly doing that product marketing really well, and they're keeping people hooked. I think the fact that there is such a strong creator community for them, there's such a strong affiliate market out there, with all of the different YouTube videos you can just immerse yourself in and watch and subscribe to. And it means it's an easy way to learn about something that could be quite complicated. As you're playing the game, you have to roll the ice and do maths and all sorts of stuff.

(22:11):
Whereas actually there's a bunch of people online who will help you through it step by step, and they're being supported by Games Workshop. They'll provide them with free models so the latest model they get to see. If there's a new game coming out, they'll send the game out to all of these creators first. They are playing them the moment this thing is launched. So the marketing is always tied up together at the moment it hits the market. Lots of other people are talking about it as well. It's not just coming from Games Workshop, and it's voices you trust because you subscribe to that channel each time. ,

Kiran Kapur, Host (22:39):
It's interesting that the creative community is clearly so important and very much the influencer within the marketplace. So could we talk a little bit about how Games Workshop is managed? Because it's been around for a long time. I think 1975 was when it started. And obviously, the market has changed a lot in that time. What sort of changes are you seeing in the management side of it?

Richard Kendrick, Arboreal Marketing (23:04):
Well, not very many, and I think that's kind of the point. So the CEO is Kevin Rountree. He came in as a CEO in 2015. Previous to that, he was CCO and CFO, but he actually joined the business in 1998, and he was, I think he came in as a financial, one of the accounting team. And over time, he has come through the ranks. But the nice thing about that is it means that he fully understands the customer. He fully understands what the product means to the customer and how quickly you can destroy that trust because he came through it , and he's lived through that bad patch in the 2000s, and he's overseen an enormous regeneration. The real thing I find interesting about him, he doesn't do limelight, he doesn't do interviews, he doesn't do big showy stuff. He doesn't stand on stage with a black polo neck talking about the next big thing, which has actually been the thing that's been around for years.

(23:58):
He doesn't do any of that. He just releases a half-year results, and he goes, and he talks to customers, and he goes around the branches, and he talks to the different store people, and he's visible internally, but he's not that bothered about being visible externally. But he absolutely has guided ... I mean, 2015, it's now 11 years of being in charge of business and seeing it grow and grow and grow to the point where it is extremely successful now and a real paradigm of what other businesses should be following. If you look at other people in different positions, well, the creative team have been relatively stable since the early '90s. In fact, I think one of them is retiring this year, and he was one of the guys who designed the original Warhammer miniatures back right in the early '90s. So the continuity promoting from within is really, really important to Games Workshop.

(24:51):
And if you compare that to, I don't know, analogous businesses like Electronic Arts, for instance, Electronic Arts has gone out and acquired lots of different businesses and those businesses have, if we take electronics arts acquisition of BioWare. So Bioware was originally responsible for the Baldur's Gate trilogy, the first two Baldur's Gate, sorry. It was also responsible for Knights of the Old Republic and the Mass Effect Trilogy, which are massive video game franchises. They were very story-driven. They had a huge customer community base, a community base where content was key, and people were really invested in the lore behind it. They also did Dragon Age, which is kind of ... So if you look, Mass Effect was like the 40K, Dragon Age was like the Warhammer fantasy, so there's quite a nice analogy there. And actually, if you look at it now, EA's influence means that most of the top people have been stripped out of BioWare.

(25:43):
There have been regular changes to the CEO and to the design team. They don't really care about the customer who buys the game. They just want to flog a AAA game and see the price. And they want to do it at $100 and they want everybody to buy it. And then they don't understand when people don't, because the lore's been destroyed, and the design team and the authorship behind it, creativity's been killed and electronic arts are trying to put AI into everything. They're doing mass layoffs and replacing everything with AI, which of course means that that creativity side of it is just going to be wiped completely. Whereas Games Workshop have done the opposite. They have very clearly said, generative AI will not be used in any of its design functions. It will not be used in its novel creation. It will not be used anywhere in the business really, except by a few champions who are being allowed to really look into what the impact on the business will be.

(26:33):
Even on back office stuff, they're not really interested in introducing AI. So people aren't being laid off because AI is being introduced in Games Workshop and they are successful. Electronic Arts are on their uppers and they're flapping around like they have been for years, and they're introducing AI everywhere because I don't know who knows why, but they see the profit. Profit is king to them, whereas customer is king to Games Workshop.

Kiran Kapur, Host (26:57):
Interesting. Yes. And I've just looked up at Electronic Arts and you can see that all their financial numbers are red and red arrow downwards. It's not been a good time. And they've got 14 and a half thousand members of staff. It's a big company.

Richard Kendrick, Arboreal Marketing (27:13):
Video gaming as a whole is struggling, but it's usually because everyone's relying on these AAA games to really drive sales forward, and then they're not investing in the customer afterwards. They think they can just put in extra downloadable content that people will pay for and that'll be it. That's fine. One business to look for in that area is OwlCat Games, and OwlCat Games are really starting to build stuff. So Larian have had great success with all this Baldur's Gate 3. It'll be interesting to see what they do next, but OwlCat Games really understand how to build a classic role-playing game that's story-driven and is actually within the Games Workshop universe. So they've released a couple of games that are licenced by Games Workshop, hugely successful. And now they're starting to dip their toe in the BioWare Mass Effect area, which if that works well, we'll see them jump up again.

(28:02):
But they're quite a small studio, and they're putting story and customer at the heart of everything, the same way that Games Workshop do, which is the opposite of what Electronic Arts do. So I think my point here is the integrated marketing, the dedication to customer lifetime value, the fact that they really respect their customers and their content community, they really leverage that YouTube universe of people talking about it and playing the games and everything. They work hard to maintain that. Doing all of that has meant that they are extremely successful. We see a lot of businesses who are doing the opposite and chasing the buck, they're chasing the profit. We see an awful lot of those businesses since COVID just haven't been able to get a solid foot. They've not been able to keep themselves going in the right direction. They keep chopping and changing, they keep changing their tactics, and they're losing money.

(28:52):
So what would I do? I would stick with the Games Workshop model if I was going to do it. I'd be investing in marketing. I'd have an integrated strategy. I'd stick with it for a long time to see fruition rather than chop and change everything every two seconds and then wonder why nothing's profitable.

Kiran Kapur, Host (29:05):
Yes. And if you can't make a games business work at the moment, you are clearly making a mistake somewhere because there has been a massive rise of the kidult marketplace. As you say, we've got the cash now, so we can invest it back in if we want. You can buy the things that you wanted to. It's not somebody going in and choosing something for Christmas. The last thing I wanted to ask you about was defending intellectual property because, as you said, there was, and I remember reading about it, a massive concern about the rise of 3D printing. As you say, modellers inherently tend to like to tinker. That is part of the excitement of modelling. "Oh, I can 3D print stuff. It would be a lot cheaper. It would be fun to do. " They're not necessarily doing it as a cost-cutting, they're doing it because it's enjoyable and fun. -How does Warhammer defend its IP?

Richard Kendrick, Arboreal Marketing (29:55):
So I think they've got an interesting, reasonably light touch ... To it, I think, because there is your core product and then there are the peripherals. So if they found out that someone was copying the paint pigments exactly, I think Games Workshop would step in and there'd be legal conversations. I think if people were mass-selling exact replicas of the miniatures that they sell, then they would step in and they would protect that pretty firmly because that is their bread and butter. But if someone's 3D printing terrain, or if they're doing the bases, or if they're buying someone else's paint range, or if they're kit bashing by printing an extra arm and then cutting the original arm off and sticking it on and what have you, I think that's seen as just being part of the universe. They're engaged still. What they're doing is they're investing their time into something they love, and to do that, they're relying on Games Workshop.

(30:49):
So I think that on that side of things, Game Workshop are pretty relaxed. I think if someone came out with the exact carbon copy book range as something that had just been written by Aaron Dembski-Bowden or someone, then there would be an issue. But I think because they understand it is a created university, it's a fantasy universe, people are using their imagination within it, and the more they use their imagination, the more likely they are to be engaged with the Games Workshop universe. I think they're pretty relaxed about that. They quite often, every Wednesday or every Thursday on Instagram, they have a community created section where they show off different things that people, they have photos that people have done of their miniatures and they've sent them into Games Workshop. They're quite often kitbashed, they're quite often altered. Every year they have something called Gold Demon, which is a painting competition, and all of that will be heavily modified to make it look as amazing as possible, but based within the Games Workshop universe, and they celebrate that.

(31:48):
They actively celebrate it. And the thing that I've been really impressed with over the last five years, I think as I've been getting back into that kind of world, is the way that they've diversified, or rather they've adopted diversification. So 1990s, you would not see a female within the universe. And if you did, it was scantily clad and heavily proportioned. Whereas now, actually, there is a whole army you can collect that is just like warrior nuns. You've got female characters within every single army you can collect. There are entire novel ranges. Now there are a series of novels based around female protagonists. You've got female antagonists. I think that gender gap is still wide, but it's narrowed quite significantly since the early '90s. If you look at the content community, there are a lot of women involved, loads of people like Alexandra Middleton, who has a really great YouTube channel, heavily on Instagram and on LinkedIn, where she shows about the painting and the lore, and she talks through all sorts of different things, including Games Workshop, but also Lord of the Rings and other fantasy settings.

(32:54):
She's fully immersed in it. And I think Games Workshop are getting much, much better at that side of things.

Kiran Kapur, Host (32:59):
But is very much where you would want a modern company to go. And of course is bringing in a different part of the marketplace, which brings us back around to our customer journey and customer lifetime value. Richard Kendrick, that was a really fascinating overview of a marketplace that not everybody will be aware of, but in a hugely profitable marketplace for the companies that get it right. Thank you so much for your insights.

Richard Kendrick, Arboreal Marketing (33:22):
You're welcome. Thanks for having me along.