[Archive] Why does Games Workshop keep raising their prices?

ibanez08skate:

GW prices are slyly increasing and it’s really p***ing me off, i just looked on the website and i’m sure that Archaon used to be 15 pounds, but now it’s 20! i haven’t played warhammer for the last 2 years and coming back and seeing the increases in prices is almost scary, i thought GW were a hobby organisation, but to me now it seems they are there purely for profit. i mean, regiments going up 3 pounds, blister packs going up 1. And just as bad, those units that they’re selling for 12 pounds i.e Wood Elf Eternal Guard, pack of 5, Dark Elf Cold One Riders (5 PLASTIC MODELS FOR 12 POUNDS!!). i don’t understand.

Does anyone have any ideas why they might be increasing the prices that isn’t profit related? because the next time GW raises its prices, it’s going to lose BIG business because people can’t afford to pay so much for the models. I just can’t see why GW would put their company in danger just for some short term profit.

Theory_Man:

One reason,

GW miniatures are made from pewter or plastic.

“Pewter is a metal alloy, traditionally between 85 and 99 percent tin…” - wikipedia

The price of Tin has gone up.

Price of Tin

http://www.lme.co.uk/tin_graphs.asp

There is a good discussion in this thread that relates to this topic

https://discourse.chaos-dwarfs.com/t/5537

cornixt:

You often wonder if the multimillion pound international company has people who are better at analysing business related things like price and demand, or if a gamer with no experience in those matters would do better :wink:

As someone who is confounded by the marketing department (“Do you even know what the product does?!”), I think the latter might actually be more successful.

Thommy H:

Because people keep paying them.

Kera foehunter:

well if you have a sucky product . you double the price and then they think people will buy it .

look at the gas prises . Good old middle mangerment.

wallacer:

In the gambling industry it’s called chasing.

It’s where someone making losses keeps increasing their bet to try and cover their previous losses.

Only difference is that in GW’s case it is the cost of the product rather than a bet that they are increasing.

Hashut’s Blessing:

Please take a look before starting a new thread as this has been spoken of MANY times. It’s because they wish to recuperate from their decrease in profit gained after the LotR line died out due to film hype subsiding. Theory_Man, you’re price of tin theory (not meant to be a repitition, but oh well) is credible, but doesn’t explain the plastic prices. If anybody says it’s because of oil prices, it’s untrue. Oil hasn’t significantly risen, taxes upon it have (in petrol at least). As for £12 for 5 (I’d like to point out mounted and IMo beautiful) models, is actually a good deal compared to a lot of things, I feel. Would you rather pay £12 for the equivalent of 10-15 models (I.E. 5 mounted) or £20 for a single metal one, mounted (about 3-5 miniatures worth of metal)?

Theory_Man:

Theory_Man, you're price of tin theory (not meant to be a repitition, but oh well) is credible, but doesn't explain the plastic prices.

Hashut's Blessing
Maybe it does. (Theory Time)

Fact:
Games Workshop has two line of products in terms of materials; those made from plastic and those made from pewter (excluding gaming supplies, painting/modeling supplies, books, copyrights and forge world models).

Theory:
Games Workshop wants to kept the gap between prices between lines of products close while at the same time reduce the number of figures in the more expensive line (pewter).

Eventually GW would do away with its pewter line and have only the plastic line.

However, they would not reduce the price of their plastic line once the pewter line is gone. This would allow them, in a few years, make more profit of plastic line of products.

Mosk:

ok lets keep in mind ALL the costs that go into making a GW fig. Also keep in mind that i do not enjoy the prices either (so for my necron army (i will put pics up soon) I have used warriors, plasticard, plastistruct, and green stuff to make imortals, pariahs, and wraiths.

Concept - some one needs to get paid for doing their job of making concepts.

Computers and CAD (and CAD updates) - since GW uses computer aided drafting programs, they need comps and CAD programs (which are pricey)

Molds - you must make molds

Pewter and plastic - plastics and pewter has increased. also GW is now using a new better plastic then what they used two years ago.

Packaging - must package the figs

Gas prices increasing - increase prices of shipping due to gas have increased prices.

Advertisement- gotta advertise…

Now with all that said and done, how much money does GW really make off of a land raider ? i Dont know but probably less then when it first came out at 50 bucks

And 22 bucks for 5 plastic cold one riders? I love it compared to the 75 bucks for me to get the blood knights

Kera foehunter:

well get ride of the usless over head. if there not helping the product .there not needed

Narflung:

Advertisement? That’s White Dwarf isn’t it?

Hashut’s Blessing:

Concept - some one needs to get paid for doing their job of making concepts.

Computers and CAD (and CAD updates) - since GW uses computer aided drafting programs, they need comps and CAD programs (which are pricey)

Molds - you must make molds

Pewter and plastic - plastics and pewter has increased. also GW is now using a new better plastic then what they used two years ago.

Packaging - must package the figs

Gas prices increasing - increase prices of shipping due to gas have increased prices.

Advertisement- gotta advertise...
Yes, but this is true in anything.

See above (not necessarily the same equipment, but research is constantly being done for any company).

Molds are a part of the process of making the models and have been a static cost that wouldn't increase beyond inflation rates and this extra cost is applied each time they buy a new mold, not constantly.

Personally, I prefer the older plastic as the new stuff doesn't work so well with plastic cement nor if you don't bother to undercoat it first. I agreed with the tin though ;)

Packaging prices can be reduced by not using the cellaphane wrap on the boxes (of which not all of them have anyway) and not using the plastic compartment trays inside the box. However, packaging hasn't risen in cost beyond rate of inflation either.

Petrol price increases, most of this is due to taxation and in most countries, there is a SLIGHT reduction (not noteworthy IMO) for businesses. However, I do agree here still.

Advertisement? We pay £4 for their advertisement. At the moment, the only other advertisement they get is word of mouth/internet and from their games, which we pay for as well. (Yes, WD isn't a cost-free venture, but they still make a profit from it and we pay for the advertisements within it.)

Overall, they have had to increase prices due to tin increases, which would be felt elsewhere in other markets. Plastic has slightly risen in cost also, but again, this is felt elsewhere in other markets and lastkly, fuel prices are being flet across the board. Their price increases are beyond the rates of inflation and beyond the "add-on" cost increases of other things. they are raising prices in an attempt to make up for profit lost from LotR no longer doing so well.

Ultimately, it seems like this is just about working for them, but if they continue to do it, they shall quickly start to lose total revenue. With fixed costs as high as theirs, losing out on units sold is not good in the slightest as even a small drop (at the revenue they would've received instead) can be dangerous to them.

That said, it seems they may be changing their minds with the plastic cold one riders. The current common example is the two extremes of cold one knights and blood knights with a price difference of £28 due to the blood knights being metal (however, these will have less spare parts and, IMO, aren't as detailed or well done). Even so, a box of Chaos Knights is (IIRR) £30 which is still £18 more than plastic equivalents... Now, the cost differences between pewter (and/or its components and processing) surely isn't representative of such cost differences?

cornixt:

Petrol price increases, most of this is due to taxation and in most countries, there is a SLIGHT reduction (not noteworthy IMO) for businesses. However, I do agree here still.

Hashut's Blessing
A barrel of oil is twice what is was last year, and ten times more than 10 years ago. This is before any taxes.

For the main part, a business will intend to generally make between 10-20% of it's turnover in profit. More turnover, more profit. Adjusting the price can also make more profit, but only as far as the market allows. The market is mostly teenage boys, who have been getting record amounts of pocket money and presents each year. As long as the prices of models keep within the limits (and the quality doesn't differ) then GW will do okay. The amount that people buy is still limited largely by the amount people can/will paint or put together, so dropping prices won't cause a large amount of extra sales.

It was only 6 months ago that people were discussing how poorly GW have been doing by looking at profits and stock prices, so it is funny to see more complaints about prices.

X-Porter:

Well, whatever it is, $55 Canadian for a box of 5 plastic Terminators is BS (and I don’t mean Ballistic Skill).

Especially considering the metal box cost me that much a couple of years ago and those minis are much better. If I wasn’t getting a Forgeworld conversion set I would never have bothered with them.

Kera foehunter:

just like the oil co. Becase there can with no sound reason!!!

1st lession don’t spend more than you take in.

2 don’t hire all your fiends as yes people

3rd sell a good product and run a co. were people are willing to work as a family.

This is all you need to know

Hashut’s Blessing:

Oil prices have risen at a steady rate of 200% each year for 10 years then. this would have been incorporated each year for the past 10 years in such a case if it affected them that drastically. I’m aware that adjusting the price adjusts profit earnt and sales sold, but it depends upon the elasticity of demand before anything else and if they continue to increase prices with their current elastic demand curve, they will soon lose out on profit (not be at a loss, just reducing the amount of profit they are making). As for it being limited by what people can mkae and paint, I can’t recall the last time I knew of someone that didn’t have more stuff than they could make and paint (this includes the internet, particularly on threads involving “you know you’re a veteran wehn…”).

Those 6 months ago, it was pointed out that they weren’t doing poorly at all, in fact, they were doing better profit-wise than they had pre-LotR and profits were rising. The stocks fell sharply, but remained higher than pre-LotR, because the hype of the films died down and their free advertisement of LotR things died out and people no longer cared (as much) for that type of stuff.

wallacer:

Frankly, the reason why prices are increasing is not the problem.

The real problem is the fact that GW’s customer base cannot keep absorbing price rises indefinitely. Eventually it will reach a point where GW price themselves out of the market and Warhammer begins to die.

Kera foehunter:

what do you mean going to die !!!

if it wasn’t for us hard core people it would !!!

Hashut’s Blessing:

I don’t think it would die, so much as stop progressing. Those in the hobby (seriously) with enough models to game and the required books would stop buying new books (assuming they can’t afford it) and just play with the older editions (which they own). But, I do agree, wallacer, that the fanbase can’t abosrb it indefinitely…

two_heads_talking:

Please take a look before starting a new thread as this has been spoken of MANY times. It's because they wish to recuperate from their decrease in profit gained after the LotR line died out due to film hype subsiding. Theory_Man, you're price of tin theory (not meant to be a repitition, but oh well) is credible, but doesn't explain the plastic prices. If anybody says it's because of oil prices, it's untrue. Oil hasn't significantly risen, taxes upon it have (in petrol at least). As for £12 for 5 (I'd like to point out mounted and IMo beautiful) models, is actually a good deal compared to a lot of things, I feel. Would you rather pay £12 for the equivalent of 10-15 models (I.E. 5 mounted) or £20 for a single metal one, mounted (about 3-5 miniatures worth of metal)?

Hashut's Blessing
explaining plastics is an easy thing to do. to create the molds for injected plastic it costs between £100,000 to £250,000 so, one of the reasons "core" units are done in plastic is that many are needed and the initial investment (considered a full loss until it recoups it cost back twice.. ) so in order to be a complete profit GW would need to see £200,000 to £500,000 respectively on each full plastic sprue set up.

So, while plastic is the cheapest material to use for production, the initial investment of the molds etc, are the big cost. Now, with modern technology thrown in and the Cad devices used to create the initial sprues, the cost is lowered slightly, but the investment into that part of the industry was huge.

So, in a nutshell, there are your costs. Is it the only reason? Nope, but I hope that at least gives you a slight insight into production of miniatures..

There is no mystery or conspiracy theory of Chinese hording all the pewter or tin, or Martians hording the plastics and big oil companies getting rich of plastic sales. It's a market that is very niche and withing that very niche market it is able to create it's own supply and demand. And supply and demand is the market driver that everyone can understand.

Now, does that make it any easier that 20 years ago I could by 3 rhinos (that compared to the newer ones, look like cr*p on a stick) for 20 dollar and no, I cna't buy one for less that 30 dollars unless I find a discount. NOpe.  But guess what?  20 years ago I was paying less than a dollar for a gallon of gas.. So, let's go easy on the wayback machine and realize that sometimes, it's just part of busines..  

I'd love to see the prices drop or at least keep level for 5 years, but within this hobby, I won't hold my breath. As a hobby, there is no need to collect and if it gets too expensive, you can stop buying it. Unlike food and water, you will be able to do without.. lol:hat off