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Over the last 12 months we have witnessed gaming manufacturers falling over themselves to increase their prices "in line with world metals markets".

Now, with global recession in full swing and tin and oil prices tumbling (http://www.indexmundi.com/commodities/?commodity=tin) do you think that we will see any reductions in the prices Privateer Press, GW and the like charge for their metal models?

I am not passing judgement here as in many cases model manufacturers sat on and absorbed cost increases until they simply couldn't any longer, and so will want to let their margins return to more normal levels before passing on any reductions. Also, there are other costs (such as wage and gas/electricity) that continue to rise. So to an extent they may be justified in not passing on all the cost reductions to their customers.

BUT: We cut them some slack when they upped the prices last year. We, the customers need to be aware that they are now sittiing nice and pretty on handsome margins over raw material and distribution costs thanks to increases that were "justified", at least partially, in the light of cost increases that have since evaporated!

To be honest, i think that we wont see any price reduction till a year or two from now.

You may think that they are safe now, but the world economy is still on a rollacoaster, if they drop their prices and then metals go back up hard and oil too then they are going into red. they still have to pay wages, use what materials they bought at the high price time, transport it. its a market of uncertainty.

GW only lowers prices to bring parity between countries or something just isn't selling (the black templar sprue box dropped 30% after 3 months due to really really bad sales).

I forecast NO price drops due to raw material costs.

Eric

I doubt it. Most companies buy in bulk metal, securing the price for "X" months/years and pay that no matter what the market does. It's the metal refineries/smelters that are losing at that point.

So it will take a long time for prices to go down if they do. Minimum of probably a year, with never being far more likely.

Smaller companies might be able to become extremely competitive if prices drop, since they don't generally contract as long as larger ones.

I should have perhaps made it clearer in the OP that I totally do not expect any company, large or small to reduce their prices in the short term. For a start, it is entirely possible that tin and oil prices might start to rise again in a few months time, so they would be foolish to do so.

I'm just pointing out that the price rises have finally peaked and that this should bring some relief for miniatures companies. The best I can hope for is that they will be able to curtail any further price rises for a considerable period.

I believe the miniatures gaming market(s) is(are) very competitive at the moment: witness Wizkids' recent winding up. So companies *shouldn't* be too keen to increase prices too quickly.

Well, Tin prices might drop, but other costs might rise. Without detailed ins and outs of expenditure, markup and overall profit, it's hard to tell. Sure, we know GW has high markup, low profit from their financial results, but it's hard to say which factors impress most upon those figures.

And as you say, Wizkids has been wound up, suggesting greater turmoil in the market. Sure, GW have made a cockup or twelve over the years, but when you remember Rackham almost folding (and now doing something odd to boot. Well, I said odd, something *I* don't understand) and the death(?) of Wizkids, it might suggest that things are less in their control than many might like to think. Again, it's almost a shame PP aren't floated, as then we could take their figures into consideration as well, rather than largely anecdotal evidence from players and their local experiences.

In terms of other costs that might affect GW, Average Earnings in the UK went up around 3.5% in the year to Oct 08, and the National Minimum Wage went up 3.6% in Oct 08. The cost of electricity and gas went up on average 39% over the last year.

The UK RPI statistics published today indicate that CPI has fallen back from 5.2% to 4.5% (http://news.bbc.co.uk/1/hi/business/7734522.stm)
There's a detailed breakdown of average price movements over the last 12 months here, for statistic freaks like me here: http://www.statistics.gov.uk/StatBase/prep/868.asp

I think the message I'm trying to get across is that up until the last price rise, cost inflation was of minimal importance when it came to large companies like GW setting the price, what was much more important was "setting the correct price-point" for their perception of customer elasticity. Only smaller companies (such as Heresy or Hasslefree) which operated on much lower operating margins (than GW's published 60%) had to concern themselves with "cost-plus" pricing as they faced relatively higher metal costs and (because they rely on the Royal Mail rather than their own distribution network) much higher distribution costs too.

That was bust wide open this year with the massive inflation in the costs of tin and diesel that was so high it was even eroding the big boys' margins.

But now I believe we are returning back to a more "normal" pricing decision for the larger companies. For a while at least they should not be allowed to say they are simply "passing on cost increases" if they increase prices over and above 3 or 4%.

P.S. I too have no clue what is going on with Rackham. I read Jean Bey's statement from beginning to end and am not much wiser! I gather they are out of Administrative protection now and have found a backer which seems to now own them (hence the name change, the old company will be wound up as a bankrupt, empty shell, the IP and creative staff will be passed to the new company owned by new investors), retaining Jean Bey as the creative director, but installing a new MD to manage the business overall. But that's as far as my Franglais skills go I'm afraid. I haven't the first clue what they are doing to replace the distribution arrangement they had with FFG.

Indeed. I like transparency in my increases myself.

With GW for example, I appreciate that as PLC, they are obliged to chase as much profit as possible, ergo annual price rises across parts of the range on a semi-cyclical basis. And yet, to their credit, by pushing more and more stuff into plastic, although prices go up, they are managing to keep the cost of an army surprisingly stable. A good example of this would be the Empire Reinforcement Batallion, which contained 10 State Troops, 20 Flagellants, 2 Wizards, and a Helblaster/Hellstorm. Before the plastics, the Flagellants alone would have set you back it's £50 cost.

And of course, with more plastics comes more Batallions, all of which offer some degree of savings, meaning when embarking on a more 'generic' army list, the price is lower than some give credit for. It's only when you get the level of infection I have that an all metal army seems a good idea!

PP have now said (I think, at least, I read it on a forum, make of that what you will) that even they are looking at introducing plastic components to keep consumer prices as low as possible.

Yeah, I think it was in the interview that Matt Wilson gave to the D6Generation podcast back in September where he confirmed PP would be seriously considering plastic as an option in the face of tin price increases. It will be interesting to see whether that occurs now.

I must admit that as a "casual gamer" now (I was truly insanely addicted to LotR from 2001 until 2005, when I came to my senses) I simply cannot justify the cost of new metal models from pretty much any "big name" manufacturer. I think this year I have bought 2 metal models new this year from PP and that is it, and a handful of limited run "boutique" models from small companies. Plastic models are a different matter of course - I am slowly putting together my "El-cheapo Chapter" of the Spayz Marienz - which are cheap (based around Black Reach and a some 20-year-old beakies that were lying around my attic, and I have also forayed into PPP of various genres for variety - on the excuse that at least they don't add to my pile of unpainted and unplayed-with lead.

Thinking about it, it is necessary to filter my comments through the view point of a somewhat jaded gamer. I've got to appreciate that the view point of someone who really loves their army and is desperate to field 1500 points of unique pewter and will game with it for 10 years solid is going to be different, but no less valid than my own, where I have around 5 years' worth of painting for various games in the loft, and little motivation to get on with it as I already have more armies and games than I can ever use in my limited gaming time. Even if prices were to come back down to 1980's levels for metal models it wouldn't be rational for me to buy any more under those circumstances!

Which perhaps sums up the situation nicely. GW (and PP) bet their profits on their turnover primarily being derived from gamers who are "price inelastic" and are prepared to pay whatever they ask because they really, really, really want the models because they love them so much.

I wouldn't deny those people exist, and exist in numbers.

My contention always seems to be that GW and perhaps PP and Rackham seem to be in denial about the proportion of turnover that they owe to more "casual" gamers like myselves, who like their stuff, but aren't "addicted" to their particular brand and are quite prepared to swap their spending to other sources if we feel we will get better value for money from them.

The jury will always be out as to whether GW's reducing volume of sales of WFB and 40k over the past 7 years has been because of pricing out the "casual gamer" at all. Because I am one, and many of my friends too (in fact pretty much everyone I have gamed with over the last few years - I don't game in GW stores, but at home and at a couple of independent clubs where I have friends) I, perhaps wrongly, believe *we* are a significant element of the GW and PP customer base, but to read GW's business plans, (and such documents as the Little Red Book) it seems GW (and because they price similarly, PP) are only really interested in the "dedicated hard core" fan base.

Personally I don't believe the dedicated hard core is large enough to sustain a business GW's size, and that for various reasons it has been eroded away faster than it has grown over the past decade or so, but that is old ground, so I'll leave it there.

I've digressed too far into opinion and away from my initial facts, so I'll hand back now...

But they aren't supporting the hardcores! Hear what Jervis said? They don't honestly care about the hardies. It is the casuals they look to.

Depends on the definition of "hard core". I would say they support "hard core hobbyists". But they don't so much support the "hard core gamers" Perhaps I should have been more specific.

After being in the hobby for 12 years or so i have gleaned some of GW's business plan and it actually revolves around grabbing someone in for an intro game and selling them a starter set, start paint set set and glue etc, after that if they come back great, if they don't nevermind they have still made the what £75 out of that person, rinse and repeat,

as Jervis' has always said they don't want to support 'hard-core gamers' and tournament players as they make up a small amount of the community

I would expect/hope to see price increases less often : )