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Redbeard wrote:Ford changes their prices every year too. They don't make an announcement about how rising prices have cause the new Escort to cost more than last year's model. Instead they tout the improvements in the line. Better millage, more safety features, or whatever.

You have a point, but the analogy breaks down quite a bit because Ford raises the price on new models- models that can be verifiably confirmed to be in some way superior to the old. If Ford were to continue selling a 15 year old model at almost double its original price with zero improvements to it, people would say it's ridiculous.

And while yes, people do give Ford some credit that they can raise prices without apologizing to us, maybe part of the reason is that Ford doesn't refer to their customers as "followers" in letters to investors, claim that the Pinto is a Porsche of cars, or refer to automobiles as "The Ford Hobby" and act as though they had no competitors. If GW wants their customers to give them credit as a mature, adult company, they might want to start acting like one.

Ford doesn't. Apple does though... Maybe the reason that GW calls their customers 'followers' is because they're actually right, and people keep on buying, regardless of how many stupid price increase threads there are.

If I may interject here. There's a point in which I rarely see touched on when discussing Finecast vs. price increase and that is... GW made a calculated decision when producing Finecast. That is, Finecast is a much cheaper, more economically stable cost of materials, but has an exponentially higher margin of production error.

I believe that the price increase is a combination of annual increases AND the switch to Finecast; simply because they calculated a high rate of return on the Finecast product.

Redbeard wrote:Ford doesn't. Apple does though... Maybe the reason that GW calls their customers 'followers' is because they're actually right, and people keep on buying, regardless of how many stupid price increase threads there are.

I don't buy Apple either.

Redbeard wrote: and people keep on buying, regardless of how many stupid price increase threads there are.

Call it stupid or other adjective but for each fan that got fed up and decides to post a rant and doesnt vote with his wallet there are a considerable number of people in silence that do vote.

NAVARRO wrote:

Redbeard wrote: and people keep on buying, regardless of how many stupid price increase threads there are.

Call it stupid or other adjective but for each fan that got fed up and decides to post a rant and doesnt vote with his wallet there are a considerable number of people in silence that do vote.

Most cope with the price increase and buy less. Most have to much invented already to just quit or stop buying altogether.

oni wrote:

NAVARRO wrote:

Redbeard wrote: and people keep on buying, regardless of how many stupid price increase threads there are.

Call it stupid or other adjective but for each fan that got fed up and decides to post a rant and doesnt vote with his wallet there are a considerable number of people in silence that do vote.

Most cope with the price increase and buy less. Most have to much invented already to just quit or stop buying altogether.

There are more options... for example many can sell all their GW collections and reinvest in full ranges of other games and some... some could just make a big pause for years and regroup ideas of the hobby... others can and will buy more etc... but the annual sales reports numbers do hint the sales are going down and down year after year... so we can probably claim that people are voting in silence with their wallets

NAVARRO wrote:... but the annual sales reports numbers do hint the sales are going down and down year after year... so we can probably claim that people are voting in silence with their wallets

Are they?

I'm looking at the FY 09-10 report right now.

Sales by year (in millions):
2006: 114.5
2007: 109.5
2008: 110.3
2009: 125.7
2010: 126.5

So, there was a dip in 2007, a slight recovery in 2008, and growth to 2009, fairly stable in 2010.

Reported sales increased .6% last year... total sales are up 10% from 2006. How does that show that sales are going down year after year? Is it possible that the professional accountants and business people at GW know more than you do? I'm sure some people are leaving quietly. But I see a lot of the same names that whined about price increases two years ago still posting here (and still whining). I still maintain that GW knows its customer base and their financial strategy better than dakka posters do.

Redbeard wrote:

NAVARRO wrote:... but the annual sales reports numbers do hint the sales are going down and down year after year... so we can probably claim that people are voting in silence with their wallets

Are they?

I'm looking at the FY 09-10 report right now.

Sales by year (in millions):
2006: 114.5
2007: 109.5
2008: 110.3
2009: 125.7
2010: 126.5

So, there was a dip in 2007, a slight recovery in 2008, and growth to 2009, fairly stable in 2010.

Reported sales increased .6% last year... total sales are up 10% from 2006. How does that show that sales are going down year after year? Is it possible that the professional accountants and business people at GW know more than you do? I'm sure some people are leaving quietly. But I see a lot of the same names that whined about price increases two years ago still posting here (and still whining). I still maintain that GW knows its customer base and their financial strategy better than dakka posters do.

Really? Because I'm looking at the financial report, and here's what I see:

"Reported sales increased by 0.6% to £126.5 million for the year. However, on a constant currency basis, sales were down by 3.1% from £125.7 million to £121.8 million; progress was achieved in Northern Europe (+0.5%) and North America (+0.4%), while sales in Continental Europe (-9.3%), Australia (-2.8%) and Emerging Markets and Japan (-3.5%) were in decline."

What is a constant currency basis? They made more money than last year. And even if your constant currency thing is accounted for, that doesn't explain the obvious growth from 2008-2009, which pretty much invalidates the idea that sales are going down "year after year".

They're not. Sales might be down some years, I mean, we are in the middle of the greatest recession our generation has ever known. But they're up regularly enough, and if the only way to say "they lost sales" is to fall back to currency issues, I reckon that's not too bad.

infinite_array wrote: while sales in Continental Europe (-9.3%)."

This is Huge.

Redbeard wrote:What is a constant currency basis? They made more money than last year. And even if your constant currency thing is accounted for, that doesn't explain the obvious growth from 2008-2009, which pretty much invalidates the idea that sales are going down "year after year".

They're not. Sales might be down some years, I mean, we are in the middle of the greatest recession our generation has ever known. But they're up regularly enough, and if the only way to say "they lost sales" is to fall back to currency issues, I reckon that's not too bad.

Constant currency basis: An exchange rate that eliminates the effects of exchange rate fluctuations and that is used when calculating financial performance numbers. Companies with major foreign operations often use constant currencies when calculating their yearly performance measures.

So, actually, it seems they aren't doing as well as you think they are.

Also: What you're giving us is the number of sales in capital made. What you aren't giving us is the actual number of sales. If said number of sales is decreasing, then the reason why GW is still making money is due to their price rises.

I think 'constant currency' allows for inflation and currency fluctuations.

NAVARRO wrote:

infinite_array wrote: while sales in Continental Europe (-9.3%)."

This is Huge.

Is it? Or is part of a larger picture? Total sales went up 10% from 2006-2010.

infinite_array wrote:
So, actually, it seems they aren't doing as well as you think they are.

I don't think they're doing well, or poorly. I was disputing the claim that they were losing sales "year after year". That statement is clearly false. I make no claims defending how well they are doing. I'm not qualified to make that statement. But I can look up numbers in a financial report and see that a ten percent increase from 2006-2010 is not losing sales year after year.

Also: What you're giving us is the number of sales in capital made. What you aren't giving us is the actual number of sales. If said number of sales is decreasing, then the reason why GW is still making money is due to their price rises.

Do you know what these numbers are, or are you speculating? I don't know, so I am not going to attempt to guess. It could be argued that it is good business to lose some customers if you make more money overall... It could also be argued that customers who are being priced out were marginal customers to begin with and that during a recession it is good business to target customers who actually have disposable income, rather than those who wish they could afford your products. It could even be argued that they believe their product line and IP to be strong enough to re-attract lost customers after the recession ends that they're making necessary business decisions in order to ensure that they make it through the recession, rather than going belly up like so many other companies.

But, I don't know that GW is, or is not, doing any of those things; it is interesting food for thought though.

Redbeard wrote:

infinite_array wrote:
Also: What you're giving us is the number of sales in capital made. What you aren't giving us is the actual number of sales. If said number of sales is decreasing, then the reason why GW is still making money is due to their price rises.

Do you know what these numbers are, or are you speculating? I don't know, so I am not going to attempt to guess. It could be argued that it is good business to lose some customers if you make more money overall... It could also be argued that customers who are being priced out were marginal customers to begin with and that during a recession it is good business to target customers who actually have disposable income, rather than those who wish they could afford your products. It could even be argued that they believe their product line and IP to be strong enough to re-attract lost customers after the recession ends that they're making necessary business decisions in order to ensure that they make it through the recession, rather than going belly up like so many other companies.

But, I don't know that GW is, or is not, doing any of those things; it is interesting food for thought though.

That's what I really want to find - if we can find GW's actual number of sales, instead of the amount of money made from their sales, we can put this all to rest. If it's been decreasing or staying the same, we could say that GW's yearly price rises have been buoying the company. If their number of sales have been increasing, however, then everything about GW failing could be written off as hogwash, hokum, and poppycock.

As to your other points, they are very well made. One problem with the pricing out of marginal customers is that continual price rises will make marginal customers out of many more people. Disposable income, after all, isn't an infinite resource. I myself am looking into different game systems, with fingers dipped into Warmachine and Flames of War, and an eye on some 6mm Napoleonic models and rules.

But your point on re-attracting customers after a recession is a good one. Again, continual price rises may affect this, as will the memories of how GW treated it's customers in the past, but if the global economy is able to put itself back in track, I do believe we'd see more people come back.

I don't see Warmachine as a viable alternative, their prices are just as high, and the only thing that makes them 'cheaper' is needing less models to play. Part of the appeal of playing a wargame is playing a wargame and not a skirmish game.

Mantic might be a serious threat. They've got low prices, and are doing rules. But so did Starship Troopers (remember that one, didn't Andy Chambers do the rules?) and where are they now? Mantic might have startup cash that they're burning through making sales at a loss or minimal gain, once that's gone, then what happens? They're obviously playing the 'undercut the leader' game, but that can only get you so far. History is full of companies that set out to undercut a market leader, only to realize that they couldn't maintain the low prices in the long run and start making compromises.

Redbeard.
GW plc turn over incresed from £114.5 to £126.5 (£121.8) from 2006 to 2010.

Thats an increse in revenue of 9.5 %.(Allowing them the benificial flutuation of currency prices.)

So if the prices of GW plc product remianed constant in this period of time they would have grown thier customer base by 9.5%.

However, as GW plc have incresed thier prices by 20 % to 30% over this period.This means the sales volumes are falling.
(GW plcs financial statment curently places this reduction in sales volume at 4% per annum.)

At some point the annual increace in retail price will NOT be able to cover the drop in sales volumes.
(As the higher the prices, the more people drop out- can not afford to start.Untill the price increase reaches the top 5% income bracket, at £300 for a box of 10 tactical marines.)


As reguard to Mantic Games.
They are selling minatures in the open market , and so are competing with all the other minatures manufactureres out there.
This level of pricing is NORMAL for the table top wargaming market.
(It only appears cheap compard to the GW hobby. )

Mantic Games are simply producing product for a clearly defined demoghraphic,(gamers that like BIG battles ), that GW plc are NOT interested in.

To be fair G.W wouldn't win either way. Don't send a response people will kick off. Send a response people kick off. Either way it's a lose lose situation for G.W.

Redbeard wrote:

NAVARRO wrote:

infinite_array wrote: while sales in Continental Europe (-9.3%)."

This is Huge.

Is it? Or is part of a larger picture? Total sales went up 10% from 2006-2010.

I wonder if the prices adjustments were only 10% from 06-10 Economics is not my forte but hasnt this been debated already on dakka and the economics experts on board didnt pretty much figured out sales were down?

I dont know much but if product x sold Y in 2006 and if in 201o got a price increase of X+30%* shouldnt sales growth be more than 10% ??

*30% is a random number GW probably raised much more than that from 2006-2010


To me a -9.3 sales in GW own turf is HUGE... I understand US having PP and others established to compete but on GW main backyard? ouch... Curious to see also what happens to australia after the recent move...

Redbeard wrote:I don't see Warmachine as a viable alternative, their prices are just as high, and the only thing that makes them 'cheaper' is needing less models to play. Part of the appeal of playing a wargame is playing a wargame and not a skirmish game.

Mantic might be a serious threat. They've got low prices, and are doing rules. But so did Starship Troopers (remember that one, didn't Andy Chambers do the rules?) and where are they now? Mantic might have startup cash that they're burning through making sales at a loss or minimal gain, once that's gone, then what happens? They're obviously playing the 'undercut the leader' game, but that can only get you so far. History is full of companies that set out to undercut a market leader, only to realize that they couldn't maintain the low prices in the long run and start making compromises.

I'll give you the Warmachine example, as well as the fact that the aesthetic certainly isn't for everyone. For me, Flames of War replaces 40k in the 'army-sized' game. And in order to get my 40k fix, I've decided to pick up Epic: Armageddon. It's unbelievably cheap to get models from the second-hand market.

Starship Troopers made a cardinal sin in wargaming when they released their game - they only had 2 factions. Add to that the fact that the models were sub-par, and it seems like Mantic has a firm foot in the door. As for their marketing strategy, for all we know they could be producing their miniatures at lower costs than GW, and then actually passing those savings onto the customer while still making a profit. Add that to the fact that their models are perfectly suited for either 8th Ed Fantasy or Kings of War - depending on which you prefer - and they've got a chance to suceed.

The way I see it, if you'll allow me to geek out for a moment, is like the scene in Jurassic Park: The Lost World (the movie), where the one mercenary is taken down by the Procompsognathuses (-i?-'s?). Sure, each company in of itself may not be able to take down Games Workshop, but the number of small bites - from Mantic, Privateer Press, Battlefront, Corvus Belli, Wyrd, Spartan Games - coupled with mistakes made by GW - continual price rises, embargo on the southern hemisphere, poor marketing of Finecast, poor release schedule, bad PR moves against other companies and organizations - may be enough to cause some permanent damage.

Lanrak wrote:Redbeard.
GW plc turn over incresed from £114.5 to £126.5 (£121.8) from 2006 to 2010.

Thats an increse in revenue of 9.5 %.(Allowing them the benificial flutuation of currency prices.)

So if the prices of GW plc product remianed constant in this period of time they would have grown thier customer base by 9.5%.

However, as GW plc have incresed thier prices by 20 % to 30% over this period.This means the sales volumes are falling.
(GW plcs financial statment curently places this reduction in sales volume at 4% per annum.

This^was what I was trying to say

Lanrak wrote:
As reguard to Mantic Games.
They are selling minatures in the open market , and so are competing with all the other minatures manufactureres out there.
This level of pricing is NORMAL for the table top wargaming market.

But not normal for the miniatures market. GW prices are normal compared to most lines available on CMON (I posted these comparisons in another thread).

Mantic Games are simply producing product for a clearly defined demoghraphic,(gamers that like BIG battles ), that GW plc are NOT interested in.

I'll grant that's the market Mantic is going for. I'm not sure that GW is not interested in it, given the success of Apocalypse. But I think GW's emphasis is on producing quality models, often with sub-par rules, while Mantic is interested in producing cheap miniatures, and hopefully excellent rules. GW thinks of itself as a miniatures company that produces games in order to push models - that much is clear. Mantic is positioning itself as a gaming company that produces miniatures. It's a subtle, but important distinction.

Continental Europe is not GW's 'backyard'. Northern Europe is. I'm not saying Continental europe is unimportant, just that it is the UK that is Gw's home market (and that I think generates a fair old whack of its revenue).

It is not a sure thing that reducing prices will increase sales (far less profits), neither is it certain that increasing prices (even quite dramatically will reduce sales (or have a marked effect on profits). Certainly it may do so. Certainly it is the common perception that reducing prices will mean more sales and therefore higher profits and so it’s a common justification to buttress arguments against price rises.

Retail and manufacturing prices are not really simplistic. Reducing buying price in no way correlates to higher sales or profits, an awful lot depends on the specific market and product.

GW have a long history of getting big decisions right (from their perspective). They may have got this one wrong (moving to finecast and increasing prices also). But I wouldn’t bet on it.

Redbeard wrote:I don't see Warmachine as a viable alternative, their prices are just as high, and the only thing that makes them 'cheaper' is needing less models to play. Part of the appeal of playing a wargame is playing a wargame and not a skirmish game.

Mantic might be a serious threat. They've got low prices, and are doing rules. But so did Starship Troopers (remember that one, didn't Andy Chambers do the rules?) and where are they now? Mantic might have startup cash that they're burning through making sales at a loss or minimal gain, once that's gone, then what happens? They're obviously playing the 'undercut the leader' game, but that can only get you so far. History is full of companies that set out to undercut a market leader, only to realize that they couldn't maintain the low prices in the long run and start making compromises.

The only thing that makes them (PP) cheaper is also the main thing that lures people in... you have a alternative viable option right there, because, even if you say otherwise, a wargame can be skirmish... 40k is glorified skirmish... Facing stopping all GW hobby due to low disposable income and having a bit of fun with these little skirmishes wargammes guess what people do...

Mantic = underpriced= minimal gain? mate with all due respect its early to say such things... but the boardgame they did just got completely sold out and the volume of new armies they are making is probably a good hint they are growing... also PP growth is obvious... Infinity also etc etc

Your comparison with cmon minis is also strange I mean how can you compare a skirmish metal based game miniatures or highly quality casted resins for painters collectors with GW plastics? Apples and oranges... Funny thing is plastics regiments outhere do seem to be cheaper than GW most of the times go figure that out hey hehe

Redbeard wrote:What is a constant currency basis? They made more money than last year. And even if your constant currency thing is accounted for, that doesn't explain the obvious growth from 2008-2009, which pretty much invalidates the idea that sales are going down "year after year".

They're not. Sales might be down some years, I mean, we are in the middle of the greatest recession our generation has ever known. But they're up regularly enough, and if the only way to say "they lost sales" is to fall back to currency issues, I reckon that's not too bad.

Constant currency is an attempt to factor at fluctuations between currencies and associated hedging. For a company with a substantial portion of internaitonal sales, thats important.

Another interesting factor to look at would be total volume sales and same store sales.

scarletsquig wrote:- Mantic sells much less product than GW.. as a small scale operation they are probably able to hire someone who really knows what they are doing, and have that one person (or 2 people maybe) do everything...you really need to know your stuff to produce a quality resin cast, it;s that level of expertise and extra manual labour that is not easy to scale up to mass-production.

Sorry this is totally false, an inherent lack of ability for larger companies to acquire expertise is not the cause. Also according to the Mantic guy I spoke to at the Triples convention in Sheffield; Mantic outsource their plastic-resin production to another company.

scarletsquig wrote:- Mantic have stated that converting all of their metals to resin plastic is impossible, they do not have the production capacity to make it happen. So instead, over time, they are cherry-picking the 2-3 units that need it the most with cavalry being the absolute first priority.

So, I think it's mainly just down to how they run things, which is a very slow and careful approach. Note that they have only released 2 resin plastic kits so far, with a third planned for release next month.. so 3 kits compared to the 200 kits that GW churned out within a short space of time, rushed far too much and ended up with a poor result.

I do think that the GW casts will improve over time, but will not be touching their finecast range for at least a couple of years until the reviews start coming back positive.

As are GW, this seems to be the way to go with plastic-resin. Quality isn't an issue at all here (for me) I'm sure quality will improve or GW will drop the range, either of their own accord or due to a massive drop in demand or both. In any case GW plan to release some of the kits currently in resin in plastic. Comparative cost is an issue, not GW verses Mantic per se but rather why GW charge more verses their own metals while Mantic charge less.

Redbeard wrote:

NAVARRO wrote:... but the annual sales reports numbers do hint the sales are going down and down year after year... so we can probably claim that people are voting in silence with their wallets

Are they?

I'm looking at the FY 09-10 report right now.

Sales by year (in millions):
2006: 114.5
2007: 109.5
2008: 110.3
2009: 125.7
2010: 126.5

So, there was a dip in 2007, a slight recovery in 2008, and growth to 2009, fairly stable in 2010.

Reported sales increased .6% last year... total sales are up 10% from 2006. How does that show that sales are going down year after year? Is it possible that the professional accountants and business people at GW know more than you do? I'm sure some people are leaving quietly. But I see a lot of the same names that whined about price increases two years ago still posting here (and still whining). I still maintain that GW knows its customer base and their financial strategy better than dakka posters do.

The problem with your "analysis" is that you're mixing terms to the detriment of clarity: you are using their revenue for "sales", while most posters that claim declining sales are referring to a decline in number of units sold. To get a better appreciation of how this can be happening, consider the following;
-Assume, for the sake of argument, that GW has seen a 10% increase from 2006 to 2010,
-Further assume that the overall company-wide price increase averages out to 10% per year.

The problem is that if those two assumptions are taken, GW has had an increase of revenue of 2% each of those 5 years; but their prices are now over 60% higher. Put another way, in 2010 they had 110% of the revenue they had in 2006, but their prices were 160%.

The only way those can be reconciled is if the overall volume of trade has decreased.

The reality is actually far more complicated, a good source for information are the past discussions of GW's financial state (Osbad has a number of very illuminating figures, by the by).

George Spiggott wrote: Also according to the Mantic guy I spoke to at the Triples convention in Sheffield; Mantic outsource their plastic-resin production to another company.

This is true - their sprues are all stamped with Renedra. I think this is their site:

http://www.renedra.co.uk/index.html

porkuslime wrote:To the OP.. did you get a LETTER (Physically, thru the postal service), or an EMAIL response to your letter.

I would be dang impressed if they sent you a physical statement..

Yes i got a written (well typed) letter posted to my house,my son also recieved one.


Automatically Appended Next Post:

mercer wrote:To be fair G.W wouldn't win either way. Don't send a response people will kick off. Send a response people kick off. Either way it's a lose lose situation for G.W.

Whoa there,who said i was kicking off?
All ive said is that i was suprised i got a response.I will still not be purchasing new GW mini's as im buying up second hand mini's at the mo.This means i can still enjoy my plastic addiction and not have to pay the earth(for now at least).
Troll sense tingling?

Ugavine wrote:

Kilkrazy wrote:They try to put others out of business now.

No more than normal competition.

Bedsides, Killkrazy, you said above you don't buy GW products anymore so really why should you care. I am a paying customer, I'm the one that should be making a fuss

Chapter House lawsuit.

I can have an opinion about GW and voice it without paying them for the privilege.