This weeks WTF gripe. GW Profits???

A club member posted this link up on our boards and I thought I would share and discuss it here.

It pretty much says that sales are down but profits are up.  

Lets analyze. First of all, of course profits are up.  GW raised the prices on all of their products, as much as 50%. Or even 100%, and in some cases, 500%. Take a look at THIS ARTICLE for some info on a recent eye gouging price increase.  Also, I bought a Brother Corbulo model in 2007 for 8.00.  Now, without looking at the GW site because it is blocked from my work, I believe it is checking in at what... 16.00?  That is DOUBLE!  I understand inflation and all and I understand raising prices to reflect the cost of manufacturing, but the cost of making Brother Corbulo did NOT double.  

This is problem number one. GW profits are up because they have punched each of their loyal customers in the gutt by raising prices on their models. They know they can charge 50% more for a model than they were charging a few years ago because we are stupid and will buy it. 

In addition to raising prices, they have slashed costs. They have closed stores, fired employees and reduced the creative think tank.  An excellent example of where GW has taken a notable plummet is in their RPG stuff. I understand that Fantasy Flight is now handling their stuff.  And since they have taken over the reigns, it has improved, but before that, their published work was simply dreadful compared to what it was in the 80s and early 90s.  The Reikland series of adventures, "There's Something Rotten in Kieslev" for example, are without a doubt some of the best written roleplaying supplements for any game, any genre, ever.  They were chock full of handouts, intrigue, story and fun. They set the bar for other RPGs to try to follow. DnD could only fail in comparison.  

The more recent stuff... simply does not do itself justice.  

This is a result of years of cost cutting and neglect.  GW made a well deserved outstanding name for themselves based on providing superior product at prices that while were not cheap, were not killing us.  Then they started selling inferior stuff, at higher prices.  See the trend?  (I hate to say it but I just bought the new Warhammer Fantasy Roleplay released by Fantasy Flight, for a LOT of money, and I am very much less than impressed. More on that in another article.)

Let me reign myself in. GW doubled it's profits for last fiscal year. They did so by raising prices, (Double the cost of Corbulo), and cutting costs with crap development of new product. (Warhammer Fantasy Roleplay, Tyranid Codex.)  Need to stay on point!  

This is great for GW on the short turn. Some one says "We need more profit!". Some one else says "Ok, lets make more profit, what is the easiest way to do so?"  (Raise the price of super glue to 40.00 an ounce.) Promotions are handed out, some short term exec pads his bank account before planning his retirement and we bear the brunt of it.

But that brings me to the next issue. GW sales are down.  In trying to increase profits, they are not only kicking us all in the balls, they are discouraging vital newcomers from entering the hobby.  Loyal buyers will always exist. We will always buy their product, and they can always count on our money. They know that they are not significantly going to increase profit off us except by raising profit.  Which they did. 

What they are not taking into consideration is the Loss and Gain effect, as I call it.  Over time, the hobby loses people and gains people.  Guys become disenchanted with the game. (Necron players?) They lose their jobs and have to make changes. (Brother Captain James) So forth. They leave the game.  This creates a dip in GW sales.  Normally, this is compensated for by people like me.  I started playing the game a few years ago and am a new player relatively.  Fresh blood. Blood for the Blood god!  Dollars for the Dollar God!!!  But when I started playing 40k I was paying 2.50 a pot for paint. Corbulo cost 8.00 US.  A predator was under 30.00.  On and on and on.

Here comes the point... 

Wait for it...

Cutting costs is producing inferior product and chasing away loyal customers. Raising prices is also chasing them away. But the problem is that the combination of those two factors is chasing away the fresh blood.  Blammo!  Profit is up but they are selling less.  Less new people are joining the hobby. More people are leaving it.  More people are leaving the hobby than joining it.  Less people are buying new stuff. Sales are down.

Know what I call this?

Know what else I call it?

Will this kill GW? No. I doubt it. The company will continue. Changes will occur of course. Customers will come and go. Creative types will be run out of the business by greedy financial types. (Dave Taylor we love you.) The fanatical core will always be here. The show will go on.  

But at what cost?  

Growth.  Improvement. Progress.

Don't get me wrong, I am not griping about rising prices. The cost of business has increased for every one. I support GW raising prices to off set their costs.  But it does not take an MBA to know that doubling profit while losing sales is not a good thing.  Or is it?  What do you think? 



Chicago Terrain Factory said...

Actually - it might take an MBA to understand what GW is up to. They are busy making a profit & your still playing/paying....

Jawaballs said...

Not sure if you got the point CTF. I do not begrudge GW for making profit. I want the company to succeed and prosper. I will continue to play and pay until my hands are so atrophied and arthritic that I cannot hold a brush. (It looks like that day is approaching faster than I would like:(

The point is that doubling profit while losing sales does not look like a sustainable business model. No? What that means is all that you have done is raise the prices of things you are selling. There is no growth, and in fact, negative growth.

What is the cost of the immediate profit?

Chicago Terrain Factory said...

I get the point.

GW has followed a business plan of premium pricing and lower volume of sales for at least 10 years. Despite some ups and downs, the plan seems to be working for them. GW is not nearly as dumb as customers think.

The plan you are advocating is for volume pricing - lots of sales with lower per unit profit. Mantic is trying this plan. We'll give them a few years to see how it works out.

The interesting point of comparison is that Mantic is made up of ex GW guys. Maybe they agree with you that Premium pricing is a losing strategy.

Jawaballs said...

Ahh got ya. The issue I am seeing here is that they are pricing a lot of newcomers away from their products. For example, when I got into the game, I sucked at painting, but I considered 2.50 a pot for the paints or 8-10 bucks for a blister figure acceptable. Now that they are almost 4.00 a pot and 16.00-20.00 a blister, I still buy them because I am locked in, but would I have done so in 2006? Who can say. I know four years ago I said to my self, man, this stuff is expensive, but looks cool. I can't imagine coming into the hobby now that the startup cost has pretty much doubled.

I am no business major, but can't see any thing but potential for short term gain and long term loss in some decisions that have been made since I started playing the game.

The_King_Elessar said...

Et tu, Jawa?

Briefly then:

Doubled Profits is (almost) a lie - last year they had £9million of debt to pay off - this means their profit would have been (iirc) significantly larger last year if not.

Fiscal Year ending March 2010 was BEFORE the latest 2 price rises, and included Space Hulk.

"Cold weather and snow" is a misnomer - we had the worst winter in over a Century in the UK.

Prices in the 90s were not kept at a steady growth rate. For about 5 years, as far as I remember living through it, prices changed by maybe £3 altogether on the average boxset. Price rises now are merely compensating for this shortfall - remember when the Rhino Mk2 and Land Raider Mk2 were released?

That was because they had (just) turned a profit on them a couple months before for the first time.

GW kept prices lower than they 'should' have been (needed to be) for over a decade in order to best take and consolidate the position as the premier Wargaming Miniatures company in the world. Now they have that absolute dominance, they stop losing money like noobs by price rises - sure, we suffer for it, no question...but they should have done it years ago.

I hope that answers your points.

If not, almost half of my posts in the BoLS thread are sensible and relate to the topic.

The_King_Elessar said...

Oh, and I never congratulated you on the GT win, so congrats for that ,and apologies for forgetting to do so.

The Verderer said...

Personally, I don't buy my stuff at retail, only from the Warstore, or used from my local gaming store. Also, if you want to get superglue cheaper, just go to any hobby store, and you can get glue which is cheaper and superior to any GW products.

Jawaballs said...

Thanks for the background Ellesar. I can only write about my limited experience, which starts in the fall of 2006. Except for in buying their RPG stuff. Which used to be amazing. One thing that cannot be denied. They are the king of the genre. And yes, their loyal fans will continue to pay whatever prices they ask for most of the stuff because it is just that good. Except for the glue of course! I will be trying Gorilla Glue as suggested by so many people in response to my last gripe. :)

Gareth said...

I think the recent (last few years) proliferation of other mini games (mantic, malifaux, warmachine, flames of war) is a clear sign that GW does not have a great business plan. There are tons of players that are switching to other games, because of cost, rules stagnation, or the fact that they haven't had a release for their armies in almost a decade. I personally have switched to warmachine because I feel I can get more mileage out of their products for the cost. You are dead on about their creativity, not only WFRP, but I feel White Dwarf has taken a nose dive. I agree totally they must make a profit and I want GW to flourish... but the prices are nearing the ridiculous.

Great article.

Man Boy Genius said...

You realize also the time period they refer to saw the release of a new edition of a core game (fantasy 8th), which seems to have done nothing for sales at all. Strange? All I have to say is this isn't the purple sun you're looking for (or power scroll as well)

The Little Wars said...

Completely agree with you. I'm in the position of having sat out of the hobby for just about a decade and getting back into it this past year. I walked into my FLGS and my jaw literally dropped when I started looking at the back of the boxed sets. I understand inflation etc. But $50 for a tank is asking a little bit much. Especially when you consider where the points costs of individual models have gone (down) with each new edition. I quit the game at the end of Second Edition and what would have been a 2000pt Guard army then barely scrapes the bottom of 1000pt barrel these days.

I'm 28 now and in theory, have a lot more disposable income than I did when I was 16 and still I'm finding it very hard to drink the GW Kool-Aid on this one.

Night Runner said...

I've been in the hobby for over 25 years, and I'm sorry to say I can't buy and build the large armies I use to. I have become very selective as consequence. I buy little and only when I need to. I use my old armies and only upgrade a new unit when needed. So before I buy something I test play it first with a proxy to see if it is worthwhile. Otherwise I have shifted to skirmish games, since they are more affordable - like Killzone for example. With this game I only need less than 20 Citadel models to play. That means I can build several factions without breaking the bank.

So I think even grass roots like myself are changing our spending & gaming habits as GW reviews it's financial profit making strategies.

I wonder if a platform of gamers invested and bought enough shares in GW to have a say on how they do things. Would we be so obsessed with profit or would it be more tempered with maintaining quality with sustainability for gamers to allow the hobby to grow.

I wonder?

donelbayne said...

I think with the global economy being what it is that a 3% decrease in sales is a pretty good achievement for any hobby company (as hobby's are an easy way to cut spending in a household). A 3% decrease in sales for a hobby company in this economy that has increased prices by 40-100% is phenomenal. Though I agree with the over all tone and feel of what you are saying I do not necessarily agree with the "losing old players and not get new Players" point of view.

eriochrome said...

Remember that with an average 10% price raise a 4% sales drop in money actually means about a 13% drop in volume. Since most of GW costs are fixed costs independent of volume(store costs essentially the same to run selling 1 or 4 kits) they can only cut costs so much to keep up with falling sales.

Given that the period also included a system update where everyone playing should need to dole out some additional dollars does not seem like it is good news going forward.

FoxPhoenix135 said...

All I know is, with rising costs of GW kits and costs of living in Alaska (Jersey has got nothing on us...), it is quickly becoming a hobby that I simply cannot afford. Even cruising Ebay and barter-forums for my goods have yeilded little results within my budget.

As a new father yourself, Jawa, surely you are beginning to see the costs of raising a child. Then try raising two, and owing child support on a third, while having a single income for the family. Kids, wear protection... or you'll end up poor like me!

Now, because I love all my children, I simply will not drop 60 bucks for a new tank kit from GW. Nor can I justify dropping 40 on a used kit of the same type. I have already sold off all my armies except IG, of which most of my troops are non-GW models (barring me from any official events).

Now let's look at the game I CAN afford: Flames of War. Battlefront Miniatures are geniuses. They are of the frame of mind: "Let's make the best ruleset, and the best miniatures in this scale and genre. If people like them, they'll buy them and we don't have to stress over the competition." In a Flames of War tournament, you can:

A) Use armylists from older editions of the "Intelligence Briefings", as long as you have the current errata.

B) Use miniatures from other manufacturers, as long as it is in the proper scale.

C) They even provide paint compatibility charts if you don't want to use their commissioned Vallejo paints.

Their whole business model is based on making the best product, pricing it fairly, and giving the customers what they want. They don't tweak the ruleset to make the newest model better in the game, they leave it alone. That is why they have been around for years, but the game is only in its second edition (and likely will remain that way for a while). Instead of creating a new edition of the game (invalidating old books and requiring you to re-buy your entire library), they release erratas and simply edit the current edition. This results in a much more long-lived edition of the game, that is a lot more balanced and fun to play. Flames of War is one of the few games I play that I feel it is less about the lists you play (how many newest models you field) and more about HOW you play your list.

Ok, rant mode off! Convert to Flames of War! (Just kidding, but it would be nice to have more players!)

pegboard said...

Without meaning to sound grumpy, but you're missing a huge point. Doing business in the UK costs more - a lot more - than it does in the US. Less of the income is profit and more is taken as tax.

I don't believe that quality is decreasing - it isn't - but you're entirely correct in saying that increased prices are driving new players away. For me, that's the saddest part.

Anonymous said...

What else is there to say other than this is all something we all know about. It is honestly up the consumerst to take matters into their own hands and essentially force companies to respect consumers again. GW does not have such respect, and they are not alone, it is all over in retail that consumers are being ripped off. With that being said, consumers need to wisen up and pull their heads out of their asses. I personally have never bought anything directly from GW. I would say 90% of my collection of 40k items is bought via Ebay/Forums. I make it a point to make sure that I never pay close to GW prices for any item.
I also have my own personal price guide and how much I am willing to pay for units. With that said, I take the time always to search out the best deal. This is a quality not many other consumers share. It is too often that many new players believe the prices that are there is the "best" they can be. It is also another issue due to the fact that it is local hobby stores that pull in new players, and those hobby stores want to make profits, so they sell the individual the GW stuff at FULL PRICE! This is a moral dilemna considering the store owners know that a consumer can purchase said items cheaper elsewhere.

GW is smart, they think we are dumb, and for the most part many of us are (blindly ignorant). It is up to the players to adapt and overcome, seek out other companies for miniatures, use only what you need to, and when you do, get it as cheap as possible! We need to also rely on one another, I have always pushed for 40k players to sell off unused models/bits. It is the only way we can help each other survive the harsh price gouging! Not to sound cliche, but 40k players need to unite! I have always offered my services for pricing, and I have had quite success trying to get better prices for individuals for whole armies. I even made a whole article about it on DakkaDakka Forums.

....If you are still reading, congratulations you have survived my rant!

Crazy Red Praetorian said...

It is NOT the store owners job to make sure consumers get the "best" price. Most FLGS owners that provide play space for their customers have to suppliment the stores income with comics and other more profitable items to keep their doors open. So, get off of your rant against the morally challenged store owners because your soap box is rotten and is about to collapse any minute. In other words, that part of your argument is weak and totally way off base. Short sighted individuals such as yourself have closed many game stores.

Anonymous said...

No, but it is the store owners job to try and retain customers as much as possible. This being quite difficult when the individual finds out they paid 20% than the should of for certain items. I am not stating that all hobby stores have this issue, but locally here it is a big issue. There is only one game store that sells GW stuff at BELOW GW prices, and for that I give them my business (not 40k, but other items such as paints and other models). I still place most of the blame on GW, and I am only stating that it does put store owners in a shitty situation. Do I hold it against the store owners? No. Do I think they can find ways around it? Yes. Although when it comes down to it, you should always support your local store, but it is GW that is forcing the stores into such issues, considering many have basically sold less GW since the price increases.

Also if you know your price costs of running a hobby store, you would know comics are not very profitable. Most hobby stores are staying in business thanks to the increase in TCG, not comics/40k.

Zachary said...

i say you should not complain about this so much jawa, i have to buy my stuff in Hong Kong and for a box tacticals i have to pay abou the equivilent of 55 US dollars.

Flekkzo said...

I don't know of any of you have worked in a big company and have endured explanations of how things are going many times over. My understanding of business is that there are a few different schoolboy thoughts and one very popular among the consumers is high volume, low price.

This is what you most often hear about in comments. The secret sauce is low price. It's taken as some form of truth, which it isn't. It's an over simplification of one horribly boring subject. Low price means low margins means hard to make a profit means cutting costs means quality/innovation/etc has to go. Look at Nokia and how dominant they once were, and look at how Apple has crushed them in profits. That's because at the other end of the spectrum you have the premium products. The world of high quality, innovation, good margins, and well targeted cost cuts (Apple does packing and transportation just as well as Walmart and IKEA and is using COTS hardware parts and volume buying to cut costs).

So with this information I can clearly see a bad trend at GW here. Sales are down is really really bad, because that means growth is bad. Jawa hits the nail on this one. GW needs to grow.

The quality also needs to go up. The minis are awesome but the rules aren't. Some units are still outright bad, and the rules gives rise to far too many interpretations which leads to a bad experience.

Realize that you can only charge premium for premium products. Paint, glue, etc is not your premium products GW. Cut the costs and fix it. If I can get better products for less you are doing a bad bad job. Jawa totally hits the nail on this one.

The minis I am torn about. On one hand I don't know about their profit margins, but on the other hand I know about my lack of tons of cash, and there are people so so much worse off. Because I think Jawa's concerns are real. The minis are too expensive for consumers. They aren't $199 iPhones vs $49 generic phones that both comes with horrible plans.

Jawa, have you thought about writing a community letter to GW and get the concerns across? I think we hobbyists tend to complain in futile ways.

(Does anyone contemplate the GW is still getting the same money for a box sold at full price at a FLGS or at 20% off online?)

Crazy Red Praetorian said...

@ MadMaverick:
First of all it is a free market and you are definitely entitled to shop where you please. But, you as a consumer are not OWED a discount.

Here are the facts. GW gives dealers 45% off of SRP, with that discount they have to pay rent, employees, taxes, and if they're lucky pay themselves. A profitable store will run at 15% to 20% profit margin. If they give a discount, they are taking money out of their pocket to give to customers. Buying customers is not a way to succeed in the hobby market. That market is too fickle.

Now compare the price of comics. A good size store that orders a healthy dose of comics will get 50%-57% off of cover price. That is better than GW and better than WOC that gives about a 47% discount. Toys get between 25%-35% for discounts. That makes comics more profitable by percentage and as a dealer sales more his discount increases.

Discounting is a bad idea for a retailer that wants to stay in business long term and provide gaming space for their customers. No one in a niche market ever got rich giving their profits away. I understand the virtues of volume marketing and discounting. However, it can't apply to the FLGS because the volume doesn't exist.

Btw way I know these numbers because I owned and operated a chain of comic/game stores for 10 years.

Jeffery said...

As a new Warhammer 40k Player I can say that introduction cost was a huge factor. It's not that I can't go into The Guard Tower (my local game shop) and just buy one of every BA Model but I'm not going to. I have better things to spend my money on. But to be fair to GW I do get a premium bang for my buck. I bought an Assault Squad and spent about 4-6 hours per mini (perfectionist) in painting. That is about 20-30 hours of enjoyment not including the effectiveness of the models themselves in combat.

Now I understand that I may be in somewhat of a unique situation here. I am a 26 year old man with no kids. I have only just begun playing and see myself running into some big problems when wanting to expand on the hobby (custom models, higher quality equipment, and additional armies).

While we are on the subject of hobby stores I’d like to shout out to my hobby store “The Guard Tower” (Columbus, Ohio). If you spend 200$ or more on a single visit you get 20% off! I mean I don’t even buy anything off of eBay simply because of this. I spoke to their owner and he said that he honestly didn’t care about profits (and just like someone above said) that the TCGs were adding more profit than Warhammer 40k itself.

To sum up I guess the costs slightly bother me but only because I want to try a lot of things (new armies, new models, odd setups) but am unwilling to put the money into them. I recently acquired a large Tau from a friend who didn’t want to play and owed me some money. The MSRP of the army is about 500$ and on eBay I don’t think I could get more than 2-3 hundred out of them.

Anonymous said...

@ Red
If GW sells product to owners at 45% off SRP, then why can't the store still sell said items at 15-20% off to the consumer? They are still turning a profit none-the-less yes? I understand that such a discount would be great, but if it increases the volume of customers then it will balance out. As my local hobby store has done. Initially had about 10 consistent 40k buyers, since discounting prices by 15% the buyers have increased to relatively 25 now. I would feel that the 15% discount trade off would justify such a thing? I am not a store owner but I have worked in retail for almost 10 years. Comics are not as profitable in my area due to the high volume of book stores with their ability to stock the newest at lower prices, thus the prevalence of the TCG.

Regardless of the numbers, it still does not disregard the shit situation hobby stores are in. I feel that eventually the only place to get GW products will be online because stores will eventually just not warrant the stocking of such high prices/low return items.

My local store has actually recently just started stocking Wargames Factory items. According to the store owner, he has sold almost every single Wargames Factory item he has received, as well as his full stock of Imperial Guard Codexes, all roughly in a week. This tells me that people are using non-GW for GW games.

Flekkzo said...

@CRP Thanks for the insightful post. It's refreshing to hear some real numbers for once.

Two thoughts:

Supporting your LFGS makes sense. Do it. They are not the reason for GWs prices.

Giving a 5-20% rebate for big buys does sound like a good idea. Buying one box isn't that worth it if you have to order online. Buying half an army or more on the other hand…

Jeffery said...

Like I said as a new hobbyist but to play the advocate here we get a lot more bang for our buck with our product than way 90% of the video game market (60$ game that you literally get 8 hours of game play off of).

As far as business practices there are parts I understand and there are those I don't. Like with the GW Glue. As far as I understand there was no reason for that. As a new player I only felt comfortable buying the GW stuff. Even the guy who teaches me how to paint kept saying "You don't need GW brushes, paint, glue, basing, and in fact its better to not use theirs" but I did so anyway because I felt more comfortable doing so. Luckily it was me and 5 others who were all buying these supplies at once.

Dex said...

I am pretty angry with GW over their latest stunts. They closed the Battle Bunker HQ in Glen Burnie to relocate it next to a massive FedEx(or was it UPS? I forget) shipping warehouse, and laid off all the employees. I LOVED that place. It was a 20 minute drive away and I was able to walk in and see showcases full of minis painted by people like Dave Taylor. Now, with that closed, my other local store has been reduced to being staffed by a single person, and is open for business 36 hours a week (mind you, this is a store in a very populated area, and I have never seen less than four customers in there at a time, and I try to go during off-hours). When I am there, the guy is distracted, tired, grumpy, and unable to provide the one-one-one geek-talk and service that made me fall in love with GW stores when I was a kid.
I've noticed a trend in the salesmanship of the GW staff as well. They are being very active in their attempts to push the GW hobby supplies on you. I recently dropped in to pick up a ForgeWorld order I had delivered (about the only reason I go to a GW store these days), and the employee tried to sell me the GW paint station, superglue, primer and file set. I told him that the paint station is garbage and that I have everything I need at home, and he chuckled and said "wouldn't be doing my job if I didn't ask". GW is very aggressively trying to market their hobby supplies as the only hobby supplies that should be used with their models. It is a matter of convenience. They think they can stock their stores with sub-par over-priced hobby supplies and people will buy them, simply because they don't want to be bothered going to other stores to hunt down the good stuff. And guess what? It works.
Everyone knows that times are tough, people have less money to spend, and thus businesses have fewer customers walking in the door. I'm not going to say what GW should do, because the industry I work in is very different from that GW is in. However, I can't help but think that they are going too far with these changes. Sure, you downsize a bit to control your labor, but reducing six-man stores to one-man stores? Increasing the prices by such massive margins? Putting your customers in high-pressure sales situations so you can squeeze an extra 30 bucks out of them for some piece-of-shit paint station that cost you two dollars to manufacture?
It's easy for me to gripe about this sort of thing, but I don't think I'm being unreasonable.

Kevinmcd28 said...

Well Jawa lets look at it this way, the American dollar is worth less than it was 3 years ago. 5 years ago an american dollar was worth 1.60 and now it is worth .87 . That is almost half as much.....there is one price increase. By downsizing they have less cost to do buismess. There is one profit increase. Also since the american dollar is down pewter and plastic prices do increase. Hence why blisters cost so much more now. Do I like spending more? hell no I remember when 20 guardsmen was $20 but I can never blame what is essentially a good buisness plan because the better GDubs does financially the more thier buisness can grow in the future with better technology, its like a mini plastic recession.

Kevinmcd28 said...

the above values were exampled in canadian dollars fyi

ivangterrace said...

I am friends with a FLGS owner and he tells me that it is really hard to get people into 40k, especially kids.

He'll talk to the parent(s) who come in with the kid, tell about both 40k and fantasy's universe a bit, tell how the games involve a lot of math and reading skills, then he tells the parent how much it costs to get started.

Typically a starter set + a beginner's tool set, (has clippers, little knife, and I believe he bundles paints with them along with access to free paint lessons he gives) which is around $130-140ish together, and thats usually when the parent says "Woah!" and says something like "I'll consider it" and more often than not, they don't come back.

Now this particular FLGS is doing fantastic despite the times, but it kills both me and the owner that there are not a lot of newcomers.

David said...

Interesting post Jawa. All the comments already show that there is more to it than what the US customer sees in the stores. I just wanted to ad one more thing regarding the European vs American policy.

In the US the current trend is not having any GW stores, but instead facilitating other stores (like your hobby centre) with GW products. This has to do with the way GW thinks about employees on a long(er) term basis as compared to the way the US government thinks about employees. In Europe you are way more bonded to a company by rules and regulations, and besides that, in case an employee does not fulfill his full potential, he in not fired, but enters a learning trajectory to increase his skill etc.

What this comes down to is that in Europe many new GW stores are opened every year, while fewer other stores get the 'privilege' of being a premium retailer (the nr.1 stores for also selling GW products).

I've encountered many GW hobbyist from the US in the store I work at, and they are all really enthusiastic about the fact GW has actual stores over here. I'm not sure what the future trend will be in the States, but over here, its growing fast.

Hopefully you'll stay hooked, because you're adding a lot of value to the community. Just buy your glue somewhere else, and keep rocking.



Gibbtall said...

I recently learned that another GW is closing near me... I used to boast about being in a perfect location for the hobby, centered in a mass of 3-4 GWs, and being in the same town as the Canadian head office. Now, just a few years later, there is 1 GW within a 45 minute drive, and no head office. I've spoken to a few employees, and they generally give me the usual company crap about it being too expensive in malls, one actually talked about GW selling "a premium product. We don't have sales because we don't want to undercut our own product, you have sales on stuff that is obsolete or unwanted"

I'm continually frustrated with GW, I feel they are banking on the fact that they have a bunch of addicted hobbyists that would rather spending a bit more then quitting their hobby, and sacrificing getting new hobbiers with reasonable prices. This weekend I took my little cousin to one of the remaining GWs to learn to paint, it took over $60 to get him a single box of Tyranids, 3 paints, 2 washes, and a paintbrush. His mom doesn't have a lot of money, and I doubt he will get to buy anything else for a long while.

Crosser Modelling said...

Personally with the release of the new and improved WFB rules, several great codexes in 40k, nids excepted (but they were always going to suffer in an edition that favours mech imho) things are on the up. Most important to me the quality of the new model sculpts are mind blowing, its hard not to buy a full army of everything that comes out they look so good! Plus although metal models now cost a bomb plastic provision is on the rise allowing you to convert your own, hell with counts as you don't even have to use a model of the same race anymore. On that note 'counts as' also saves the cost of buying a space wolves, chaos and vanilla marines army.

Feuermann said...

the main causes of this is:
-WFB sucks!!!! 8th is more dinamuc, but it still sucks, and you need tons of minis to play(mix expensive figurines with procrastination)It neeed more realistic and commonsense-based rules(now WFB is only a dicerolling game, like ludo)
-Mantic Games: yes, these guys are releasing tons of cheaper minis with a very good quality
-prizes increases, but our wage not(well, this is for EVERYTHING, not only for GW)

Anonymous said...

I do not think GW's prices are, with a 25% discount, that bad when you compare them to the start up cost of many hobbies (e.g scuba diving, most sports). The main issue is peoples expectation of price. Toy Soldiers is perceived as being a cheap hobby.

I buy Vallejo paints from my FLGS and the occasional GW boxed set. Mostly though I buy my stuff off ebay or Mantic. I see no reason to pay a premium price when I do not need to.

MascisMan said...

Here is a thought on what Jawa mentioned earlier about the entrance cost to the hobby doubling.

Warhammer is a niche hobby. It is something that people specifically seek out. Generally speaking, people don't randomly walk by a GW, peek in the window and spend $2-300 on a Sunday afternoon whim. Most people that join the hobby, join because a friend plays and they have seen them play and liked it.

Therefore, GW can charge whatever they want, people that seek it out will pay whatever the entrance fee is (assuming they have a job or generous parents).

It's similar to the car business. People don't randomly buy Lexus', Mercedes, and BMW's. People specifically seek those luxury cars out (knowing ahead of time that they can afford them). They leave the mass sales to Kia, Toyota, and Honda. Then they tell their customers if they want to save money, buy a Kia.

We can't have both. If we want the type of product support/media/fluff that GW provides, there will be a cost involved. Until we have the numbers in front of us we have no idea what they are facing.

Having said that, $40 an oz for super glue is utterly retarded. Just like a $100 oil change at the Mercedes dealership.

fal|endeath said...
This comment has been removed by the author.
fal|endeath said...

i seriously would agree, when i was younger (about 10 years?) i wasn't able to afford any GW figures cos in singapore GW was hard to come by tho prices are like $15+?

just recently i went to aussie to visit my gf, and i found a GW store, and i was an avid reader of warhammer 40k novels and always read the back cover stating the GW stores are able to bring newcomers and intro them into the world of warhammer.. but that didnt happen to me. i went into the store, looked around, and the prices already killed me. just one figurine cost as much as the japanese gundam models i use to make.

secondly i felt lost because the staff were either too involve with the regulars that when i did try to make a purchase no one was there to help, did service drop? (or was it because i was asian cos usually i guess you dont see an asian being that interested in such thing? lol)

but its truly an expensive hobby to start. and i didnt get to purchase the space marine captain that i initally wanted to buy. i visited 3 times during my one month stay, was ignored. i guess i'll stick to novels for now..

kazzual said...

I suspect GW is using an evolving business model here, but they are doing it in an unusually agressive fashion.

It's perfectly normal for a business to tweak their pricing to try and find the sweetest profit spot. Those adjustments usually come as small adjustments, though, not the slaps that GW has been handing us for the past few years.

There's nothing evil to it. GW is just trying to maximize their profit, like any other business. I do think it's foolish, however. The cost of entry has become a serious barrier, and boosting price so much in the middle of a recessioncan effectively kill the next generation of GW players in the womb, so to speak.

I know I personally do not buy as much GW any more. I like their games, and I like their models, but I'll make due with my Rhino mark 1 models before shelling out the sheckles they are charging for replacements these days, or surf eBay looking for people getting out of the hobby and dumping armies. I've been playing GW games since '94. If --I'm-- not willing to spend on them, I suspect a lot of others are going to tighten the belts soon.

The only thing that really rattles around in my head is this: With GW acting so aggressively with their pricing they are taking a big risk of alienating a lot of existing players and killing new entrants. if they go too far over and gerate --real--rage among the players, will they be able as a company to shift back the gears to a level that will entice enough people to stay with them despite their bad rep (note--I don't think they have an awful rep now, just saying if they go too far they will certainly get one. They are already considered to be fan gougers.)?

Stay tuned, horror fans.

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