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On January 16th, Games Workshop announced that its profit dropped by £3.4 million compared to the same period last year. Once that arcane utterance hit the internet, the Eye of Terror opened. Fell things came forth to pick the company’s corpse. Heretics spread rumors and uttered blasphemies about price hikes. Games Workshop’s empire, the headlines said, was burning.

Except that’s not really true. Games Workshop is far from dead – though it will have to confront many structural problems in the grim darkness of the near future.

Games Workshop Isn’t Dead – But it Did Take a Wound

Though it took a glancing hit, the venerable dreadnaught GW lumbers on. While it’s true that a dip in profits is worrying, making a £7.7 million profit – rather than an £11.1 million one – isn’t the same thing as running at a loss. A stock selloff precipitated by a poor earnings report isn’t a good thing by any measure, but it’s not the apocalypse. Games Workshop’s stock price, even after the drop, is around £5.50 a share – that’s £3.50 more than it was in 2009. Also note that this was only a half-year report, so while GW isn’t expected to make its £22.5 million full-year forecast, they’ll certainly make more than £7.7 million in 2013-2014. Its specialty miniature company Forge World and fiction imprint The Black Library are both doing fine. The company’s financially solvent, with £9 million worth of cash in their bank account and zero debts. So while it’s true GW’s profits aren’t as big as they’ve been in the past, let’s not get dramatic – this is hardly a company that’s burning to the waterline.

That’s not to say, however, that GW doesn’t have challenges it needs to face down. There are many structural problems that the company will face in the years ahead, from pricing, to an aging customer base and even new manufacturing techniques.

Miniatures Shouldn’t Cost as Much as a Real-Life Baneblade

If I walked into a GW store today and bought a ten-man Space Marine squad, a Rhino and five Citadel Paints to gussie them up, I’d pay about $100 after tax.

One. Hundred. US. Dollars. That’s $40 for the marines, $37.25 for the Rhino, and $20 for five paint pots.

One hundred dollars. For single troops choice and a dedicated transport.

That’s insane. Like Astropath-pulling-too-much-overtime insane. Citadel Miniatures have never been a cheap product, but during the ten years I played I watched the price per-mini skyrocket. In 2003 I remember paying $30 a box for 20 plastic Cadian Shock Troopers, now it’s $29 for half as many models. Meanwhile, the points cost to field a basic trooper went down, meaning Imperial Guard players needed more of the models that had doubled in price. And that’s not even mentioning the new hardcover army Codexes, which go for $50 a pop.

What happened was this: Games Workshop decided that their miniatures, already expensive, should become a premium product. Around the time of the price hikes, GW informational literature to investors and independent retailers started referring to their product as “The Best Toy Soldiers In the World.” While they have a point – Citadel makes excellent miniatures – I feel that perspective convinced GW management that they could take on a premium-pricing model. Their market dominance meant that they had few competitors, and increasing profits could fund retail expansion, please shareholders and make up for the recession. Furthermore, price hikes (and occasional new units) were a way to increase profits from existing customers who only bought a few units a year. But here’s the problem: Every time they used price hikes to squeeze existing customers who’d already bought into the game, they raised entry cost for new players. That makes it harder to recruit the 13 and 14 year-olds who’re critical in sustaining the hobby the long term. After all, why would teens pay $500 to create an army when they can get their strategy fix from League of Legends? This is why Forge World – a luxury brand that targets older players with more money – is doing fine, while the core game suffers.

And as the premium-pricing model weeds out the younger players, you run into a bigger problem from the other end.

Necron Triarch Stalker

The Long Fangs Can’t Make Time

When I was in college, I never thought twice about taking 5-6 hours out of my Monday to play 40k. Leaving school at 4:15 PM for a 5:00 PM game wasn’t unthinkable; neither was sitting in a diner afterwards talking about Necrons past midnight. Not so much once I started an 8:30-5:30 office job, and definitely not since I’ve gotten married. I’ve got less time now, it’s the downside of being an adult.

Scheduling a match wouldn’t feel so insurmountable, except that 40k keeps taking longer to play. Individual 40k games have more units these days. Lower points values per unit. More models per game. Apocalypse formations and flyers. I suspect GW wanted to create a contrast between 40k and smaller-scale skirmish games like Warmachine – or coax players into buying more plastic.

Either way, that has a consequence in terms of time. Play a troop-heavy army like infantry-based Guard or swarming Tyranids and it’s not unthinkable to take a 45-minute turn. Finishing a game in four hours feels like an accomplishment.. Add in painting time and you’ve got a rules set that’s untenable for many adults – i.e. the people able to afford premium-priced miniatures. This is anecdotal evidence, to be sure, but among my old gaming group, everyone who used to play 40k has moved onto quick-playing skirmish games like Malifaux and Warmachine. Not to mention the folks that transitioned to video games instead, since they’re easier to play thirty minutes at a time.

What’s sad about this is that Games Workshop has published several excellent skirmish games in the past – Necromunda and Mordheim in particular – that provided a lower-cost, faster-playing alternative that also served as an entry point to the hobby. If they wanted to walk that road again, it wouldn’t fix things in the long term, but it’d be a start.

The Terrifying Necron Menace of 3D Printing

One day soon, 3D printing is going to wipe Games Workshop off the map. In that golden future, we’ll print ready-made miniatures at home, copy Space Marines ad infinitum, babies will weep only diamonds and no one will ever fail an armor save.

At least that’s what some disgruntled fans say.

I don’t buy it. Look guys, GW execs don’t have cotton balls stuffed in their ears. They know all about 3D printing and the Hero Forge Kickstarter. They realize 3D printing could be a business threat. But here’s the thing – they could easily launch their own web UI that lets you design and print a custom Space Marine Captain. It wouldn’t surprise me if GW’s experimenting with it right now, and because they’re GW, they’ll buy the best printers and find out how to make the best 3D printed models in the business. Say what you will about their policies, but GW has been making high-quality miniatures for three decades and has continually improved their methods and technology. There’s no way they’ll let a cheaper, more versatile production method undercut their product.

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Games Workshop Stores: Not Worth the Points Cost

Games Workshop lives and dies by its brick-and-mortar stores. That network allows the company to control its product’s price structure to an impressive degree and is central in promoting the brand and attracting repeat customers. They’re not just stores, they’re monetized community centers. However, recently GW has rolled out a new plan to cut stores down to one employee and limit stock so that each location becomes more profitable. According to GW’s acting chief executive Tom Kirby, the profit dip in the last report was entirely due to this restructuring. However, I can’t see how reducing store hours (you can only ask one man to work so many days a week) and floor space is going to work in the long term, particularly since less space to play means a reduced community scene around the shop. Then again, I’ve read some arguments that GW stores are the problem, with rent and employee fees necessitating that GW as a whole sell more product and at higher prices. If true, it essentially means that we, the customers, are essentially paying a surcharge to shop at Games Workshop stores. That’s an especially ugly thought if you shop at an independent retailer a thousand miles from the nearest Games Workshop, as I did.

But no matter where it derives from, GW needs to ease off on their infamous price control. To stock GW products as an independent retailer, for example, you have to order a minimum amount and dedicate a certain amount of shelf space to it – and of course, GW sets the prices. But it gets wilder than that. Last April the company announced that they’d cut ties with any independent retailers that sold GW products over the internet to Australia, since gamers there were ordering from overseas to avoid the the 60-90% markup in local GW stores. In other words, rather than price its products competitively, GW opted to region lock a physical product. This weird ethos even carries over to The Black Library, which doesn’t offer ebooks on the Kindle store. Instead, they’re on the Black Library website, presumably so they can sell them one dollar under the paperback price.

Look, I’m not a business analyst. Nor I have I worked retail. I don’t pretend any special insight, but I doubt such a selfish strategy can last. There are three parties in this equation – GW, retailers and customers – and the current system only benefits one of them. At some point, the other two will choose to go play a different game.

There are people that would love to see Games Workshop burn. Jaded fans. Competitors. Downtrodden retailers. I don’t share that view. Games Workshop isn’t some unchanging emperor, kept alive via life support as his realm decays. The company is, if anything, a portly middle-aged man with a cigarette habit – he’ll be dead in ten years if he does nothing, but if he kicks the smokes and drops a few pounds, who knows?

In the grim darkness of the far future, Games Workshop may be with us after all.

Robert Rath is a freelance writer, novelist, and researcher currently based in Hong Kong. You can follow his exploits at RobWritesPulp.com or on Twitter at @RobWritesPulp.

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