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 Duskweaver wrote:
Also, 12-18 year old boys are definitely still GW's core demographic, at least in the UK. You have to remember that those kids are not playing most of their games in GW stores or the independent gaming clubs you might belong to, but in school clubs on lunchtimes and after school.

Maybe that's true in the UK, but it sure doesn't seem to be anywhere else. I've never heard of this school club thing in the US.


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 Mad Doc Grotsnik wrote:
Seriously. If you’re operating at capacity and still can’t keep up with demand, does that suggest that your pricing is wrong?

Depends on what your production capacity is. If you're running "at capacity" because your capacity is one tactical squad per month then the fact that you can't meet demand is pretty meaningless from a pricing point of view. It's the same problem we have with trying to evaluate the success of GW's limited edition stuff: did it sell out because everyone wants to buy limited-edition releases at high prices, or did it sell out because GW made a very small number of them?

There’s non-limited, non-new stuff that they struggle to keep in stock.

£38,000,000 in profit for six months would suggest that it’s most definitely not a case of false scarcity, but a genuinely popular product at a price plenty are willing to pay.

They do of course need to lick their production issues. No point resting on your laurels. For every hobbyist willing to wait, there’ll be at least one that never comes back for that product. And if you can’t fulfil demand, one can’t imagine your shareholders will be terribly happy. Sure, they’re in the money at the moment anyway. Shame that’s not how capitalism works - they want more, and you’re obliged to provide that for them.


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Have a think (everyone, not Peregrine specifically) about why companies typically offer sales, and cut prices.

The most obvious is to sell through your stock - either in preparation for the next season (fashion, generals clothing, home furnishings) or because there’s something new coming out (DVDs, Blu-ray, Console and Computer Games).

To attract customers away from your competition. GW themselves don’t do this - but their retailers often do. There’s no difference between Dark Sphere offering a solid discount and Tesco selling me Diet Coke at 4 litres for £2.50 over Sainsbury’s 1.75l for £1.70. When I go there for that, chances are I’ll pick up the other things on my list.

Then there’s stuff like the X-Box One. When that came out, it was noticeably more expensive than its direct competitor, the PS4. Yes, it came with a Motion Thingy, but that was broadly considered a gimmick. Bloody clever tech like, but a gimmick all the same (note how they eventually removed it as a compulsory bundle). When they started being trounced in sales, they lowered their price to better compete. Whilst all consoles are themselves loss leaders, not getting them into people’s homes typically means fewer software developers expressing an interest. Fewer devs, fewer games, fewer exclusives, dead product.

So given the stuff we know to be fact (maxed production capacity, seriously profitable) - why would you be looking at lowering your price right now?

 Mad Doc Grotsnik wrote:
Also kind of suggests that a price reduction just ain’t gonna happen, because despite the naysaying, all is rosey.

Seriously. If you’re operating at capacity and still can’t keep up with demand, does that suggest that your pricing is wrong?

Except there has been a price cut, and it underpins all that has been financially positive about GW for the last 18-24 months.

A tactical squad might not cost £15 now, but you now get free Dwarfs with your Magmadroth, many equivalent rule books have seen double digit percentage reductions in price as they've been updated, the cadence of big boxes with massively discounted contents has increased.

Without any knowledge of where the capacity is being used, and whether the uptick has been driven by the product lines which do offer something that looks like good value, and the 3x Terminator-ish sized model boxes for £50 are shifting like pouring molasses in winter, one can't actually make any suppositions about whether the pricing structure is working completely efficiently.

It might be that charging £50 for 3 models is the only way they can be viable, or equally it might be a self fulfilling prophecy where they're not selling because they're too expensive, so the assumption by GW is to charge high because they sell in small numbers.

So yes, it is possible for GW to be going great guns and still have elements of their pricing structure incorrect.

One can start an army that way. One can’t build an army from those sets alone. Unless you’re Undead, in which case you more or less can.

If you were right though, we’d expect to see sales up, but not necessarily profits, no?

Not without detailed knowledge of what the cost price of the items in question are, no.

We know a mean average of what they spend vs their turnover, but we don't know a break down per SKU. So one can assume the manufacture and design cost of a product is about 25% of RRP before taxes, but with the massive swings in regional RRP, the likely significant differences between things bought like tools and paint and things manufactured, either in house or under contract, it would be very difficult to make such a broad assumption and back it up with the information we have at hand.

 Mad Doc Grotsnik wrote:
£38,000,000 in profit for six months would suggest that it’s most definitely not a case of false scarcity, but a genuinely popular product at a price plenty are willing to pay.

Not necessarily, because we don't have any context for those numbers. It's possible that GW could be making 50% more profit by improving their production capacity, and their "sold out" status is the result of false scarcity. Or it's possible that £38,000,000 profit is the maximum that can reasonably be extracted from the market, and selling out at their current capacity is a sign that GW is doing things right. We can't know unless we look at a parallel world where GW has different prices and see how their profit compares.

Have a think (everyone, not Peregrine specifically) about why companies typically offer sales, and cut prices.

You've covered the reasons for sales (IOW, temporary price cuts), but sales are not the only kind of price cut. There's a third reason for permanent price cuts: you're on the wrong point on the supply vs. demand curves and you need to adjust your pricing. Even if GW was the only company in the market they could still potentially benefit from price cuts.

So given the stuff we know to be fact (maxed production capacity, seriously profitable) - why would you be looking at lowering your price right now?

Right now? No reason. A price cut is a pure loss if you can't make it up in volume. But it's possible that GW should be massively investing in additional production capacity, and then making price cuts to maximize it.

tneva82 wrote:

 Just Tony wrote:

tneva82 wrote:Anyway for time being they really even CANNOT drop prices. If you cut down prices by say 10% you need to increase your sale volume by lot more than 10% and they are already maxed out capacity. They would automatically get less profit by reducing price. Not much more sales due to production issues, less money per kit. No company does that. Actually demand/supply says they are underpricing...

Oh, they could. They'd have to invest in growing the market through advertising and getting past that whole "boutique" mentality, but it's entirely possible to expand into the general populace. If Heroscape could do it, GW could do it in a heartbeat. Increase volume of sales in conjunction with lowing the prices and you exponentially grow your customer base. But such things are otiose in a niche, which is why they need to push it out of niche and make it mainstream.

As it is they cannot produce enough stuff to meet up with demand. So they lower prices, in theory people rush in to buy...oh wait stores are empty. "Waiting for stock".

In case you haven't heard GW is suffering serious case of not being able to produce stuff to keep up stock AS IT IS NOW. Until that sorts out any decrease of price isn't going to lead to more sales in significant amount. You can't really sell what you haven't produced now can you?

So you have inside information about production volumes and staffing? Cool. Is their inability to cover demand tied to not enough machine resources, not enough manpower resources, or a distribution/shipping issue? I mean, you have the inside knowledge, that would dictate whether they COULD increase production as well. If they need a few more boxers and sprue cleaners, then they hire them. I know what volume these machines produce at, and I can't see them NOT able to meet high demand unless they are TRYING to not meet demand.

Also, what they NEED to do is stop constantly tooling up new molds and models for kits that are perfectly fine. Every mold that is die cut is a massive expenditure in design and machining. It's just as easy to create a new copy of a master mold and run that into oblivion. Other companies do it all the time, especially with parts that they know are high volume parts. GW either knows this and chooses to not use that method, or they are thoroughly incompetent when it comes to the manufacturing side of things.

Inside? Annual Report covers it I believe.

As for the root cause? Well, we’re not 100% on that, but allegedly it’s due to their power grid not being able to support more machines.

Is that the local power grid in Lenton? We don’t know.

Is it a matter of getting an additIona circuit in place in the foundry? We don’t know.

Is the answer a second foundry being opened up somewhere? We don’t know.

Do they have casting machines sitting idle for want of power to run them? We don’t know.

But production capacity having been hit is fact.

 Adeptus Doritos wrote:
I can remember being a kid and a blister of 2 Chaos Warriors was like, six bucks. Maybe ten if it was something special, a Lord was like... fifteen bucks? I think I paid ten dollars for a couple of Champions. (I didn't play 40k until ~1998).

It's kind of sad I can get a better, more detailed Infinity single for about fifteen to twenty bucks, but a finecast character for 40k is like $40.00.

When I was fourteen, a box set of Space Marines was ... £10 - £15, I think. That was one month's income for me. Boxed games were only available as birthday or Christmas presents. Now, I can buy a boxed game with an afternoon's income.

Lots of stuff was cheaper when we were kids. But a mixture of tax rises (VAT went up 2.5% for instance), cost of living (Consumer Price Index is near useless for working out actual inflation. Just look at house prices and rent prices...), introduction of the minimum wage and subsequent increases thereon, all effect how much money needs to be taken to turn a profit.

GW have of course taken advantage of rapid prototyping - but has die cutting gotten markedly cheaper? I genuinely don’t know, so that’s not a rhetorical question. When it comes to actually pumping out the sprues once the design and die are in place, have there been any improvements there, or are they still having to use the same machines they used to show off at Games Day? Again, I have a clue, and that’s not a rhetorical question.

There’s way more to a price structure changing over time than ‘item X hasn’t gone up that much, why has Item Y’

I think that it will always be a thing for people to compare one item to another and as long as there are sci fi and fantasy models that are cheaper than GW, people are going to complain about the prices and gripe that GW is gouging them.

 auticus wrote:
I think that it will always be a thing for people to compare one item to another and as long as there are sci fi and fantasy models that are cheaper than GW, people are going to complain about the prices and gripe that GW is gouging them.

I think its more that these other companies are not offering cheap knockoff miniatures but very good products in their own right, I am not a GW hater, but I dont believe for a second that they make the best models or games on the market by a long shot.

When GW sold lead minis for 50p each of £2.50 for 5 I couldn’t afford them without saving up. 3 rhinos for £9.99 was a distant dream.

30 years later at whatever price they are I can get what I want, I don’t even have to budget as the sums are pretty trivial against proper expenses like mortgages, kids or the Mrs.

Don’t get me wrong I don’t buy allot but personal perspective varies that this topic never comes close to consensus.

When a box of minis costs the same as a take away meal they aren’t to expensive... most people probably have to many miniatures already anyway lol

 thekingofkings wrote:

 auticus wrote:
I think that it will always be a thing for people to compare one item to another and as long as there are sci fi and fantasy models that are cheaper than GW, people are going to complain about the prices and gripe that GW is gouging them.

I think its more that these other companies are not offering cheap knockoff miniatures but very good products in their own right, I am not a GW hater, but I dont believe for a second that they make the best models or games on the market by a long shot.

I’d argue they’re the most accessible though.

When I cast my dusty mind back to my gaming origins, large kits were metal. And a total pain in the arse to build.

In the modern day, even GW’s biggest kits (not including FW) don’t require many tools to assemble them properly. Once upon a time, Dragon Wings involved fannying about with tinfoil to create the membranes. Unit Standards needed a cut out and hand painted (colour printing was either expensive or crap. Sometimes both) paper, or tinfoil.

So whilst I’m sure there are companies out there making more impressive kits, or larger kits etc, GW are the Standard for modern table top wargame miniatures. Easy to get our hands on, not massively daunting to build, a level of sculpted detail to suit all levels of painting - but crucially, for the most part, up to the rigours of regular transportation and table top play.

Why ‘for the most part’? Fiddly bits are fiddly. Just today I decide to plonk Arkhan back on his Dread Abyssal. Good lord those reins look fragile!

 Mad Doc Grotsnik wrote:

 thekingofkings wrote:

 auticus wrote:
I think that it will always be a thing for people to compare one item to another and as long as there are sci fi and fantasy models that are cheaper than GW, people are going to complain about the prices and gripe that GW is gouging them.

I think its more that these other companies are not offering cheap knockoff miniatures but very good products in their own right, I am not a GW hater, but I dont believe for a second that they make the best models or games on the market by a long shot.

I’d argue they’re the most accessible though.

When I cast my dusty mind back to my gaming origins, large kits were metal. And a total pain in the arse to build.

In the modern day, even GW’s biggest kits (not including FW) don’t require many tools to assemble them properly. Once upon a time, Dragon Wings involved fannying about with tinfoil to create the membranes. Unit Standards needed a cut out and hand painted (colour printing was either expensive or crap. Sometimes both) paper, or tinfoil.

So whilst I’m sure there are companies out there making more impressive kits, or larger kits etc, GW are the Standard for modern table top wargame miniatures. Easy to get our hands on, not massively daunting to build, a level of sculpted detail to suit all levels of painting - but crucially, for the most part, up to the rigours of regular transportation and table top play.

Why ‘for the most part’? Fiddly bits are fiddly. Just today I decide to plonk Arkhan back on his Dread Abyssal. Good lord those reins look fragile!

I can agree most accessable in England, and to be honest when living in Huntingdon, there was GW in the most bizarre places (the sporting goods store for example) but where I live now, GW is at the GW store, most of the FLGS either dont bother with it or carry very very little of it.