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Is Games Workshop in trouble?

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Games Workshop released it half-year report for the latter half of December 2013 and though the results weren't great, investor reaction was much worse. The company's revenue was down 10.4 percent:

Sales in the first half of the year were down against the comparable period in the prior year, continuing the trend that developed in the second half of 2012/13. During the first half, the rapid transition from multi-man stores to one-man stores and the reduction of trading hours across the Group caused disruption in our retail chain. We also experienced some decline in sales through independent stockists.

Games Workshop maintains that this is a temporary problem:

We view these as short-term issues and expect to see growth return in both channels. We continue with our store opening programme (27 stores opened, 20 closed in the period) secure in the knowledge that our one man model allows us to ensure new openings are profitable. In the future we expect to benefit from the more focussed selling operation across all channels against the background of a materially lower cost base.

Investors disagreed, punishing the stock with a 24 percent drop. ICv2's Scott Thorne explained investor sentiment:

... on January 16th, after GW released sales figures showing sales for the past six months down 10.4%, the stock price dropped 24% in one day (see "Games Workshop's Sales Dip 10.4%"). That's a lot of shareholder value gone bye-bye very quickly. Imagine going to bed with a nice crisp $100 bill tucked away in your wallet and waking the next morning to find the fairies had replaced it with three twenties, a ten, a five and a one. That's how those stockholders feel.

Games Workshop continues to retool its operations for success, including changes to its Finecast production and release schedule. But it seems that Games Workshop is trailing the path that Reaper has blazed on the crowdfunding front. With the advent of affordable 3D printers right around the corner, Games Workshop is wisely trying to stay ahead of the curve. It remains to be seen if these changes will keep Games Workshop afloat in a world of crowdfunding and 3D printers.

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