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Rather than hijack the existing thread about why Wargames are expensive, I thought I'd bring up a new topic about an interesting point I read.

The poster posited that through GW raising prices, other Wargames companies are free to match these prices.

Now whereas GW have large overheads, smaller companies don't. It's easy to be cynical and just decide that the others are being greedy, but I had the following thought.

Are they price matching to avoid being seen as somehow inferior?

Many people don't buy non-brand food and clothes for instance, worrying about the old maxim 'cheap for a reason'. We'd generally rather pay a slight premium for some guarantee of quality. Is this perhaps the same of Wargamers?

For instance, had PP priced their metals 30% lower, would this cause unfair disdain amongst the miniature buying public? If Rackham produced their plastics way below GW's prices, would we suspect the quality of the plastic used?

Discuss.

I dont think that it's that at all. The majority of long term wargamers do tourneys. GW (don't know about other companies) only allow GW models in their tourneys. Hence, they charge rediculous amounts in order to profit off of those that love competition.

Personal opinion i actually find that PP metal minis are higher quality and a lot tougher than GW. Don't bend as much or break as easily.

They are jumping on the bandwagon because they can, GW has shown them that once you secure a player base, you can charge stupid money. You can fool some of the people all of the time.

Red9 wrote:I dont think that it's that at all. The majority of long term wargamers do tourneys. GW (don't know about other companies) only allow GW models in their tourneys. Hence, they charge rediculous amounts in order to profit off of those that love competition.

Personal opinion i actually find that PP metal minis are higher quality and a lot tougher than GW. Don't bend as much or break as easily.

Erm, the discussion isn't about GW's prices, but why other companies match them in unit cost (an army might cost you less, but the per model price is the same and occasionally slightly higher)

And I think you'll find GW's high prices existed long before the Tourny scene as we know it now. And they have massive overheads.

I don't think GW's margins are as high as everyone often thinks they are due to larger overhead costs. However, with GW setting the trend for what the market will bear why wouldn't a game company interested in its own survival mark there miniatures up to similar prices? Let's face facts here miniature companies are trying to make money doing something that they love, but they are just as much out to make money as anyone else. There's nothing noble in trimming your margins back just to seem more competitive or make your price seem more attractive to the customer, it's a risky way to do business.

I don't think there's any perception among the gaming community at large that cheaper equates to not as good. Since I don't have access to the accounts from the major manufacturers I can't precisely say what their margins truly are.
Everyone likes to rant about the price of plastic being so small in relation to the cost of a kit, completely disregarding all of the other cost factors that actually go into setting a price for the kit such as packaging(and the costs to develop same), labor to produce the kit, costs of shipping the kit, cost of developing the kit from sculpting to translating sculpts to sprue, costs of warehousing stock, etc. My perspective on this is forged by my work experience, I've been bidding projects for years and in the end it all comes down to where do we set the price so we make money and adequately cover potential problems and all of our expenses.

These overhead costs vary for each manufacturer, but they all have to take them into account. I guess the question really is if your competition is selling the same thing you are and their price is more than yours and you could adjust yours to be closer to theirs and make more money per unit, why wouldn't you? At what point would you add a .50c change in price on all of your average miniatures $20,000 more per year, $30,000, $5,000? These are the kinds of things that enter into these decisions.

If you are a smaller company looking ahead knowing that you will soon need a larger facility to manufacture and distribute your product how are you going to pay for that if your margins are already tight? you'll raise your prices to raise your margins, because you'll also have looked at covering the costs associated with that new space and a short term bump from something like a sale won't provide for your long-term needs.

Mad Doc Grotsnik wrote:Now whereas GW have large overheads, smaller companies don't.

That's a huge assumption to make right off the bat.


GW have huge overheads... but they also have huge sales, and have a lot of their own infrastructure.

A lot of smaller companies outsource their casting and/or mouldmaking, which is more expensive. Those that are casting their own figures would pay more for raw materials, as they wouldn't get the same discounts for bulk purchases as GW would.

Smaller companies would also likely pay more on shipping/transport, again through not getting the same huge-scale discounts that companies the size of GW would get.

In fact, pretty much everything, on a 1-1 comparison, would work out more expensive for the smaller company.


Then on actual profit you have to consider economy of scale. Smaller companies don't sell as much... so are going to need a bigger margin in order to make money out of it.

I rather suspect that you would find that the vast majority of smaller companies aren't pricing at GW-ish prices just because they can. They're doing so because they need to in order to keep going. People get so used to the 'it costs 2c to make a model' claims that they miss all of the other costs that go into running that sort of business.

Mad Doc Grotsnik wrote:The poster posited that through GW raising prices, other Wargames companies are free to match these prices.

For instance, had PP priced their metals 30% lower, would this cause unfair disdain amongst the miniature buying public? If Rackham produced their plastics way below GW's prices, would we suspect the quality of the plastic used?

Agreed. GW's high prices have allowed other companies to charge similarly high prices. But it's not a "quality" issue - it's a bottom-line profits issue.

If GW had kept prices (and profits) down in the industry, as they did a decade ago, PP and Rackham would have gone belly up by now. Just like VOID / VOR and all of the others. Everybody else died because the margins were too slim, and they couldn't turn a profit to stay in business. Going out of business meant that they never stuck around to develop market share.

But GW raised prices, allowing PP and Rackham to make money while slightly undercutting GW, and build critical mass in various gaming markets. GW's greed allowed actual competitors to step into the heroic tabletop miniatures wargaming hobby.

GW gambled that higher profit for a smaller slice of a competitive market trumps a smaller profit from a monopoly position. Personally, I think this was a huge business mistake, given that the entire point of capitalism is to create an unregulated monopoly! And GW's lower share prices agree.

To be fair though, GW's competition are still tiddlers in the pond dominated by big bad GW.

Is a hard thing to quantify market share of course. For every person exclusively playing Warmahordes, there is probably one playing Warmahordes and GW system.

Makes me wish PP were a PLC, then I could squizz at their profit margins/sales volumes and do more than just idylly speculate.

Actually, your logic of GW needing to charge more due to overhead is backwards. Yes, GW has significatly higher costs than any other mini company- that's because they are the biggest and most profitable. Big overhead, yes, but also HUUUGE infrastructure. If they made more money as a small company with less overhead, you would see a seperate GW for every country (heck, for that matter, every state).

For a company the size of GW, the cost of overhead is insignificant next to the benefits of infrastructure. For a smaller company, overhead takes a big bite out of their gross. Yes, it hurts GW, too, but compared to their overall profits, much less of a bite.

Any company will charge as much as they can get away with. For a perfect example, look at the effect Starbucks has had on coffee. 20 years ago, I could walk into any independent neighborhood coffee shop and buy a cup of coffee for @ $0.75 or a fancy drink (expresso, cappucino, etc.) for under $2. Then Starbucks blitzed, puching the idea of selling coffee drinks for $3-$6. Now go into the same indy shops- you'll find their prices match Starbucks. Because people paid for it at Starbucks, they'll pay for it here. Yes, inflation has had an effect, too, but inflation hasn't jumped 300% since the late 80's.

As for your point of higher prices to be perceived as premium, you have a valid point. At one point, a study was done (I can't remember the product, but I think it was Gucci or Rolex or some similar product) where prices were lowered on an extremely luxurious item and sales actually dropped. I think, though, that with something like minis, where quality is obvious to the buyer upon examination, perceived "quality by price" (hopefully) doesn't come into play.

JohnHwangDD wrote:

Mad Doc Grotsnik wrote:The poster posited that through GW raising prices, other Wargames companies are free to match these prices.

For instance, had PP priced their metals 30% lower, would this cause unfair disdain amongst the miniature buying public? If Rackham produced their plastics way below GW's prices, would we suspect the quality of the plastic used?

Agreed. GW's high prices have allowed other companies to charge similarly high prices. But it's not a "quality" issue - it's a bottom-line profits issue.

If GW had kept prices (and profits) down in the industry, as they did a decade ago, PP and Rackham would have gone belly up by now. Just like VOID / VOR and all of the others. Everybody else died because the margins were too slim, and they couldn't turn a profit to stay in business. Going out of business meant that they never stuck around to develop market share.

But GW raised prices, allowing PP and Rackham to make money while slightly undercutting GW, and build critical mass in various gaming markets. GW's greed allowed actual competitors to step into the heroic tabletop miniatures wargaming hobby.

GW gambled that higher profit for a smaller slice of a competitive market trumps a smaller profit from a monopoly position. Personally, I think this was a huge business mistake, given that the entire point of capitalism is to create an unregulated monopoly! And GW's lower share prices agree.

JHDD , as usual very 聰明

@MDG:

The problem for GW is that market share is even a question at all.

If GW had squeezed pricing then, PP and Rackham have ZERO because they're closed down due to no money, making it trivially easy to calculate GW's share.

I like GW's games, but I think the quality of their product would benefit from greater competition.

I don't think I'll ever be a fan of Warmachine, but I'm glad it's present.

Agreed, sensible competition tends to be a good thing for consumers and for innovation in a field.

To the original question of other firms pricing practices though, I'd say it's quite possible.

There will always be super-informed customers out there who do lots of research before buying and usually wind up with something between exactly what they want and the most bang for their buck. History has told us that those people are not the majority though.

Folks buy on perceived value and price is definitely something which people relate to value. Something with a much lower price than the leading competitor is often perceived to be inferior or have something wrong with it. That may be a complete misconception, but folks will tell you that that particular price is low for a reason.

Getting back to our hobby though, in terms of pricing, everyone is a business. GW's stuff is priced the way it is because people are paying for it. As to the other companies, does this mean that they can raise their prices to increase the perception of value associated with their product? Sure it does. There are a couple of things to keep in mind though. First, even with GW's overhead, they are selling enough miniatures to keep their unit costs at a reasonable level. The bulk of their business is still in plastic and pewter, so that's their bread and butter and they've got the volume to ensure cheap pouring and injection molding costs. The competition, even the major competition is running at lower volumes with higher pouring and molding costs. They don't have the massive overhead, but they also don't have the massive volume to spread their overhead costs around on.

Whether the competition needs to remain cheaper than GW is open for debate, but they certainly will have an easier time selling their product if they just 'let' GW be the expensive one. GW's price increases though have (as others pointed out) been positive overall for the hobby in that they've allowed the other companies in the industry to increase their prices and profit margins. I don't like paying more for things anymore than the next person, but I can't deny that because of GW's price increases, Reaper stays profitable and I can keep buying the paints I like. That's just one example.

The bottom line is that the price increases are allowing the industry as a whole to be more competitive and bring out nifty new games and miniatures. The downside is that we pay more for our various bits of plastic and metal crack. The upside is that we reap the benefits by getting more cool things out of our hobby, well, hopefully.

LunaHound wrote:JHDD , as usual very 聰明

When you don't write things in English Luna could you at least translate for the majority of us? I know I'd appreciate it at the very least, and thanks in advance =)

Neconilis wrote:

LunaHound wrote:JHDD , as usual very 聰明

When you don't write things in English Luna could you at least translate for the majority of us? I know I'd appreciate it at the very least, and thanks in advance =)

Intelligent.

Unless I've mis-read my Kanji.

Neconilis wrote:

LunaHound wrote:JHDD , as usual very 聰明

When you don't write things in English Luna could you at least translate for the majority of us? I know I'd appreciate it at the very least, and thanks in advance =)

Hey , think of it this way , im doing you a favor.
You dont like me posting , nor do you put me on ignore.

So i do the next best thing and write in another language k?

@Luna: Heh.

@Neconlis: The 2nd character is easy - sun + moon = bright.

@Luna: if you really want to mess with people, maybe write in something less well-known like Thai or Arabic?

JohnHwangDD wrote:@Luna: Heh.

@Neconlis: The 2nd character is easy - sun + moon = bright.

@Luna: if you really want to mess with people, maybe write in something less well-known like Thai or Arabic?

er read PM hmm

Is all OK!

LunaHound wrote:

Neconilis wrote:

LunaHound wrote:JHDD , as usual very 聰明

When you don't write things in English Luna could you at least translate for the majority of us? I know I'd appreciate it at the very least, and thanks in advance =)

Hey , think of it this way , im doing you a favor.
You dont like me posting , nor do you put me on ignore.

So i do the next best thing and write in another language k?

I don't put you on ignore because I don't dislike most of what you post to be perfectly honest. I wasn't being sarcastic either, I was simply curious and wanted to know what you said.

Though if you want to be stubborn and combative over this, well so be it.


Automatically Appended Next Post:

JohnHwangDD wrote:@Luna: Heh.

@Neconlis: The 2nd character is easy - sun + moon = bright.

@Luna: if you really want to mess with people, maybe write in something less well-known like Thai or Arabic?

Thank you John.

Or just don't do it Luna.

But on topic...

I think that Privateer gets far too much credit for their "fantastic pricing".

Yes, some of their metals are priced competitively. But then there's things like the prices on their infantry models, the infantry attachments, warcasters, etc which make GW's metal prices look halfway decent.

It's all a question of scale, imo. Metals in Warhammer/40k tend to be items that aren't going to be as numerically frequent in an army list(excluding things like Sisters of Battle/Grey Knights or Steel Legion/Vostroyan/the older metal Guard armies).

What are you all complaining about when you have cheaper alternative stores?

It is quite funny that buying from these sites as a group will put a huge dent in the FLGS sales, but I guess that isn't much of a factor for most. Maybe the FLGS stores will be kind enough to just stop selling GW stuff, but they will just leave the tables there for us .

As far as I am concerned maelstrom does not seem that cheap, especially for people outside the U.K. If someone could explain in detail how I can actually save money (more than 5% after any shipping mind you, as in a minimum of 10%) using them I might consider it, but it does not seem to be all that much cheaper when it comes down to it. Saving 5% while putting my FLGS out of business (not that I really buy much anyway) just seems to be spiteful at best.

Wrexasaur wrote:It is quite funny that buying from these sites as a group will put a huge dent in the FLGS sales, but I guess that isn't much of a factor for most. Maybe the FLGS stores will be kind enough to just stop selling GW stuff, but they will just leave the tables there for us .

As far as I am concerned maelstrom does not seem that cheap, especially for people outside the U.K. If someone could explain in detail how I can actually save money (more than 5% after any shipping mind you, as in a minimum of 10%) using them I might consider it, but it does not seem to be all that much cheaper when it comes down to it. Saving 5% while putting my FLGS out of business (not that I really buy much anyway) just seems to be spiteful at best.

I'll be honest with you; Maelstrom is actually much, much cheaper for us Aussies due to the odd exchange rate between Australian dollars and British pounds. Over here, a box of Dark Elf Warriors costs me $50.

From Maelstrom, it's $33. However, I love my FLGS, and they deserve my money for their excellent service, so I only buy expensive stuff from Maelstrom, such as multiple $50 boxes or vehicles.

JohnHwangDD wrote:The problem for GW is that market share is even a question at all.

If GW had squeezed pricing then, PP and Rackham have ZERO because they're closed down due to no money, making it trivially easy to calculate GW's share.

The beauty of this hypothesis is that in the 80's this was true, GW cleaned up in the 25mm fantasy models genre. Former rival sculptors simply became part of GW (Marauder etc.)

I often think that GW are stuck between a rock and a hard place being both a shop and a manufacturer. I wonder if GW stores would be better places if they stocked Warmachine, AT-43, Flames of War etc. I'm completely certain that they'd be more profitable (as stores) although I'm not sure I'd appreciate that 'spase mareens' sales style applied to every purchase I ever made and it would kill independent retailers off in the UK.

Hi all.
I have to agree with George Spiggot ,. about GWs befuddled buiness identity.
If GW were out and out minature manufacturers, hardly any overhead-reduced prices no reatail shops just online sales.
They could undercut nearly all opposition, due to maximising the economies of scale.
10 SM in a box to you for £5!(inc P+P)

But as they try to sell the 'GW hobby' in retail outlets this sort of muddies the waters,abit.

If the games were optimised for game play this could attract and keep customers.
But as the B&M store generate a massive overhead , the RRP point shoots up to cover the inflated costs.
And because of this GW uses the rules set to try to help market the latest releases, thus reducing long term interest in the hobby.

Because GW PLC corperate managment have made so many blunders, it has allowed other minature companies to grow thier buisness.

And as reguards to quality , Look at Perry Minatures , exellent quality plastic minatures at about £3.50 for 10!

So some companies price at about GW level, but many price well below.

George Spiggott wrote:

JohnHwangDD wrote:The problem for GW is that market share is even a question at all.

If GW had squeezed pricing then, PP and Rackham have ZERO because they're closed down due to no money, making it trivially easy to calculate GW's share.

The beauty of this hypothesis is that in the 80's this was true, GW cleaned up in the 25mm fantasy models genre. Former rival sculptors simply became part of GW (Marauder etc.)

I often think that GW are stuck between a rock and a hard place being both a shop and a manufacturer. I wonder if GW stores would be better places if they stocked Warmachine, AT-43, Flames of War etc. I'm completely certain that they'd be more profitable (as stores) although I'm not sure I'd appreciate that 'spase mareens' sales style applied to every purchase I ever made and it would kill independent retailers off in the UK.

Yes and no. For a great many people, GW are the entry point to the Hobby, and this is due to the Hobby Centres. To stock other companies products does the business model absolutely no good, and only serve to boost their immediate competition. Not exactly the smartest business move ever I'm sure you'll agree.

Part of GW's recruitment effort is ensuring that people have a place to play and people to play with. They maintain their own stores so they have more control over these environments.

For every FLGS, there is one CrappyLGS too. They're poorly lit, rude staff (comic-book guy from the Simpsons), no interest in teaching, probably be out of business in six months, bathrooms that haven't been cleaned in a decade, and so on.

No self-respecting parent will want their kids in such a store - and few self-respecting adults will either. These stores make it (or, more frequently don't) based on the buying power of the 17-23 year old gamer, and that's rarely much.

Don't get me wrong, I've been in some excellent independent game stores, and I wish there was one near me. Unfortunately, those that have been even somewhat local have been crap, and gone under in little time.

While my friends and I rarely game at the local GW, the fact that it's 20 minutes away means that when I want stuff, I can get it, and if I want a pickup game, I can find one. I know no one in my local area who plays PP games, largely because there is no store championing it, and no where to meet opponents.

So, GW running their shops is a good thing. It's how they ensure that new player's experiences with the game are positive.

---

On the original topic - I don't know so much. Lots of things have gone in price far more than miniatures, especially those with natural resource components like tin and oil. I don't know anyone who owns a home that is upset about the price of minis, we're all upset about the price of natural gas, water (my water bill has nearly doubled in 4 years, and I live on the great lakes, where something like 40% of the world's fresh water is stored), and how much we have to pay for trash collection now that there are fuel surcharges added.

I evaluate each product on its own merits. PP has some nice sculpts, but for the most part, I don't think they're as good as GW. Ultraforge's resin is of lower quality than Forgeworld's but it costs much less too, and it's still a good deal for the price. Hasslefree miniatures tend to be more expensive than GW's, but they're amazing sculpts. Reaper minis are a bit cheaper than GWs, but they're not consistently high-quality - and so on. I buy the ones I like, not the ones that I think are high quality because of their price.