The Iron Fist: How Games Workshop Put A Stranglehold On The Australian Market

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**reds8n**

http://www.kotaku.com.au/2013/04/the-iron-fist-how-games-workshop-intends-to-monopolise-the-online-sale-of-products/

magine the scenario: you are a large scale distributor of a product. For years you have been selling these products globally; you’ve shown a firm hand in dictating how much these products cost in these specific regions. Australia, for example, as an out-of-the-way market with a high cost of living, pays almost double compared to the US.

Then: the internet. A new global marketplace grows rapidly year-on-year. Independent retailers across the US and Europe begin shipping these products to regions like Australia, regions you once controlled with an iron fist. Your grip slips. The genie is out of the bottle. A more savvy consumer base becomes aware of just how badly they’ve been treated. They import from overseas. They buy less locally.

Do you…

A) Reduce the price of the products in response to a more competitive retail environment, growing your market, embracing the consumers who want to buy and use your products?

Or…

B) Do everything within your power to manipulate and control the global market, effectively shuttering the distribution model that helped build your company into the juggernaut it is today.

Games Workshop went with option B.

————–
Globally, Games Workshop is probably the most recognisable brand in all of tabletop gaming, but in Australia consumers grow frustrated. Prices are overwhelmingly inflated, Australians pay almost twice what Americans do and that discrepancy has remained in spite of competition from online retailers.

Much like the price of video games, it’s an issue that has refused to disappear, and Games Workshop has decided to take action. But instead of changing its pricing structure, making prices fairer for Australians, its solution has been to close the net on all online sales, meaning that all Games Workshop retail partners can no longer sell products online, only in-store, effectively destroying the online independent Game Workshop market in one fell swoop.

In short: if you want to buy Games Workshop products online, you can only buy them from the corporate Games Workshop website.

“GAMES WORKSHOP believes that its best interests are served by reserving online retail sales of its products in North America to GAMES WORKSHOP’S own corporate website,” reads a new Games Workshop agreement, sent out to independent retailers on March 15.

“North American Retailers are not permitted to sell GAMES WORKSHOP products on any website, webportal, third-party web-portal or other Internet-based platform of any kind.”

In addition, retailers across the globe are now being strong-armed into selling only within their own region in what is essentially a region locking of physical table-top gaming products.

How is this possible? How can this be enforced? Simply put, it can’t. But as per this new agreement, Games Workshop will not deal with retailers unless they follow this new code of conduct. If you, as a retailer, want to buy Games Workshop products at cost price from official distributors you must follow these guidelines. If you don’t, you won’t get the product. Simple as that.

And that’s bad news for Australians who want to pay a fair price for Games Workshop products.

————

“In Australia it’s the worst I believe. Their prices are close to double what we have here in Canada.”

Matthew Glanfield runs MiniWarGaming, a site and store that works as a community hub for Games Workshop tabletop gaming. It provides information and is home for a massive community of readers interested in Games Workshop products, but as a business 80 per cent of its revenue comes from online sales.

Just under two weeks ago, as a result of the new policies put in place by Games Workshop, Matthew Glanfield announced they would be closing their store. What other choice do they have?

“Rather than trying to fix [price] fluctuations,” he explained, in a YouTube video discussing the closing of the stores, “they decided to not let you sell outside of [them].”

But just how bad are the price fluctuations?

Take The Island of Blood, a package that contains “everything you need to start playing Warhammer”. In the US, on the official Games Workshop site, this package costs $99. In Australia it costs $165. This is a regular discrepancy; in fact, it’s quite generous compared to other products sold. Chaos Space Marines, for example, cost $37.25 in the US, but $62 in Australia. The price difference tends to range from 60 to 90 per cent.

That’s a pretty big discrepancy.

Locally, Games Workshop have been reluctant to talk about the price differential, or discuss the new regulations. When we finally got in touch with someone in Australia we were told they were “too busy” to comment and, even if they did have time, they wouldn’t be able to comment on the price situation. Prices, we were informed, are set in the UK.

But with regards to online sales, Games Workshop’s retailer policy justifies its new rules as an attempt to build upon the customer relationship created by purchasing in brick-and-mortar retail stores. According to Games Workshop, this move is an attempt to stop online retailers from “free-riding on the significant investment made by in-store retailers in promoting the hobby”.

Simply put, Games Workshop is claiming these new changes are, in part, an attempt to protect local retailers, to help support that side of the industry. But, speaking to Australian independent retailers, these changes do not protect their sizeable investment. On the contrary, it undermines it.

————
“When the Aussie dollar got strong things became bad for us. Even with shipping costs it was still cheaper for players to order overseas. Our margins were already gak and now they’re worse.”

Speaking on condition of anonymity, one local independent retailer told us that new changes put in place by Games Workshop negatively impact business. Over the past three years, sales of Games Workshop products has dwindled, and these new regulations could make things worse.

“Games Workshop see this online sales thing as the solution to problems at retail,” the retailer explained, “but it actually just makes things worse. People don’t say, ‘oh now I’ll have to buy locally’, they just say, ‘I’m not going to buy this product anymore.’”

And this is precisely what’s been happening at retail in Australia over the past few years.

“Games Workshop used to be really good for us,” said the retailer, “but it’s been like this for years now and nothing has changed. Now we don’t sell anything.”

And the reduced sales of Games Workshop product are compounded by the fact that retailers must continually hold a minimum value of product in store if they are to be allowed to buy and sell the product.

“The current margins on Games Workshop products are very low and if we want to sell their products, we have to dedicate a set amount of product and space in our store. And space to a retailer is money.”

It’s strange that instead of embracing a growing market, it appears as though Games Workshop has hit the panic button and is now in the process of putting it in a chokehold. In Australia, at least, that appears to be having a negative impact. The market is changing; that’s indisputable and of course it is the prerogative of Games Workshop to respond to that change, but once again it appears as though the Australian consumer is being asked to bear the brunt of an evolving marketplace and that simply doesn’t seem fair.

Our anonymous retailer agrees.

“There’s an easy solution,” they explained. “Instead of charging us, say, $10 for a product, why not just charge $8. That way we can pass on the saving to consumers.”

Why not indeed?

**Kilkrazy**

The solution is for Australian players to stop buying any GW products. A year off would do it. The results would be clearly visible in GW's accounts. As long as you keep buying the stuff at sky high prices, GW will sell it at sky high prices.

**Tyron**

Kilkrazy wrote:
The solution is for Australian players to stop buying any GW products. A year off would do it. The results would be clearly visible in GW's accounts. As long as you keep buying the stuff at sky high prices, GW will sell it at sky high prices.

Pretty much this.

Gamers and companies can put forward a clear case of GW predatory tactics, but at the end of the day gamers don't care enough to do anything about it unless it hurts them financially. Much like citizens who have a grievance with government polices, they grumble but won't do anything until it hurts their pockets and by then it's too late.

**jonolikespie**

Nothing new there unless you count the anonymous independent store owner speaking out (seriously is the anonymity really needed, surely GW aren't- ok yea I could see them no longer selling to someone who badmouths them).

But anyway it's good to see this sort of crap not going unnoticed.

**ExNoctemNacimur**

What I find interesting is that a relatively important news outlet is reporting this - do Kotaku usually report on GW stuff?

**Riquende**

I'll admit to being not too clued up on the whole Oz/GW prices thing, but I do wonder is it unique to GW? What sort of markup (if any) would an Aussie pay on an average product from Mantic, Warlord, Privateer Press etc?

**Kaptajn Congoboy**

Kilkrazy wrote:
The solution is for Australian players to stop buying any GW products. A year off would do it. The results would be clearly visible in GW's accounts. As long as you keep buying the stuff at sky high prices, GW will sell it at sky high prices.

Yup. This is, in fact, the only solution when there is no customer interaction.

**jonolikespie**

Riquende wrote:
I'll admit to being not too clued up on the whole Oz/GW prices thing, but I do wonder is it unique to GW? What sort of markup (if any) would an Aussie pay on an average product from Mantic, Warlord, Privateer Press etc?

Within the hobby it is a pretty unique problem. As far as I am aware Mantic, Warlord and PP all allow me to jump on their online stores and order from whatever country they happen to be based in for the same prices as everyone else after taking currency exchange into account. GW on the other hand are trying to force me to pay AU prices.

Outside of the hobby a lot of things (Adobe software and videogames are the more notorious that I know of) are doing this, the difference is not many of them are trying to stop you ordering the stuff from america, most are trying to be competitive.

**Banicks**

I can understand it from 3 points.

Consumer:
Which I am, my money is precious to me and I/we want to stretch it as far as it will go to get the maximum out of the hobby whilst, well basically living.

The majority of everything is 50% more in Australia. Cars, Games, Movies, and so forth. We are used to being taken for granted on a market where in other countries the consumer is king. In Australia it is a case of, well if you don't like it, don't get it.

I think most companies view Australia as a fertile consumer market where our economy has not been negatively affected by the GFC, in fact it has gained from it. I bet my left nut that this is the reasoning GW went with option B as well. To stay afloat and offer cheaper miniatures elsewhere, they can juice the Australian market for that much more.

Unfortunately we don't have a choice sometimes. Whilst I agree boycotting for a year may get the attention of GW. It would only hurt the GW franchise owners. Australia isn't like America and the UK - GW is practically the only miniature gaming stores around where you can play socially. Could you go without Warhammer for an entire year as your hobby, without the assurance that doing so would still not lower prices and possibly mean the closure of all of these stores? Which brings me to my next point.

Operator:
When I initially started I got to know the owner of my LGS. He is a nice bloke, who was into the hobby and a great painter. I also got to know his staff. Within the month major chances underwent the worldwide structure of GW based off of what I assume was negative profits and a reactive business plan to cut operating costs whilst maintaing prices and hopefully increasing profits as a result (This rarely works, GW need a 101 on Business)

The owner lost a handful of experienced staff, and now has to run the store with only himself and 1 experience staff member with no relief because of running costs.

He is under pressure to keep the store open, to sell, to keep it open, to live and let others enjoy the hobby. His hands are tied as the article said, and he couldn't go into any great detail, from head office UK. They set the prices and sell at those prices to him, and in turn he has to make his overhead, profits and living expenses from that.

When you see 40-50% off RRP online as a consumer, you face a hard decision. Because this isn't a case of supporting an Australian business, you're funding the greed of head office GW and now only barely keeping two employees afloat under greater stresses to sell, and try to keep the current players happy and informed. In the past 6 months or more the operator knew the majority of his players bought their miniatures online, because he didn't sell them to him. And as a result he has to show a level of displeasement by not assisting them as much as he would people who purchased in store. This is fair in his eyes, but ultimately that means Australians are paying that extra percentage for assistance from the GW representatives and employees? Something given freely to US and UK players - ie: Customer Service.

During a weekend, I can hardly get assistance for a painting session or information on a game because the poor guys are so busy with potential new players, who usually get drawn in, but then immediately put off by the prices after the intro game, assistance for new/experienced games, and trying to get painters in store for sessions and so forth in the hope that they may spend cash on further products. Personally, I purchased all my supplies and figures from the store, I could have gone online but I thought I would help out where I could.

Not an easy position to be when your hands are practically tied. Understanding his point makes my decision harder. Because I simply cannot justify spending 40-50% more on the same product to ensure continued Customer Service. Moreover, when does that good grace of service run out?

It's paramount to charging to hire a table or their services, and at the rate things are going, it really wouldn't surprise me if operators had to begin doing this.

3. Head Office GW
The problem. They won't talk about it. They won't explain it.

I'm quite certain that is Australia dropped off the Earth as well, they wouldn't care. If the pricing issue is as bad as they indicate the online sales to be, they should have recognised the problem lie in pricing, not online sales. Depending how this goes, I may lodge an investigation into the matter with the ACCC, however, being that it is online sales of an overseas nature. I'm not sure what could be done.

Any discrepancies will have to be taken up by the online sellers to see if what GW is doing - contracting sale of their product, is legal.

But at the end of the day, what stops someone making a friend online in USA/UK - and getting them to purchase the boxes for cheaper, send them to me in Australia and then back door sell them for a greater profit/keep for myself.

This leaves GW open to illegal imitations and piracy similar to what the gaming industry experienced. And as a result, they changed business practices towards F2P and DLC packed games to offer cheaper AAA titles than they used to be originally.

I just can't fathom the level of ignorance that head office has chosen to take. And makes me question whether now is the time to begin collecting my CSM army online before it goes away, or just boycott the hobby altogether.

**Kilkrazy**

ExNoctemNacimur wrote:
What I find interesting is that a relatively important news outlet is reporting this - do Kotaku usually report on GW stuff?

Kotaku isn't the BBC, or even IGN, it's basically a popular videogame blog site that went pro. They probably published it because someone's friend is an Australian and talks to them about GW.

If Penny Arcade covered the story it would have more impact because they have such a huge readership. The PA guys actually play 40K and other games.

**jonolikespie**

GW is not a franchise.

**Miguelsan**

I'm going to say that the answer (where available) is to decouple the badly called HHobby from GW. I play 40k but I don't play with GW's figures.

Those who can't play any other place than a FLGS might be limited but all others that play in private events or houses would do a great favor to everybody by dropping GW's stock for other companies, if people can get into their minds that an Ultramarine melta gunner is nothing more than a figure with a certain type of gun they will be able to open their minds to a huge world of options bringing extra creativity to the Hobby and flipping the bird to GW along the way.

The main problem from my PoV is not GW but rather those co-opted players that can't imagine that a LRBT is anything else than what GW choses to sell because... because... because GW said so and it's set on stone forever, ever.

M.

**Banicks**

jonolikespie wrote:
GW is not a franchise.

What would they be called technically then?

**-Loki-**

Banicks wrote:
jonolikespie wrote:
GW is not a franchise.

What would they be called technically then?

A franchise is where an individual (the franchisee) is permitted to trade under the companies name. GW does not do this - stores are not franchised out, they are run purely by Games Workshop.

**jonolikespie**

Banicks wrote:
jonolikespie wrote:
GW is not a franchise.

What would they be called technically then?

Um.. I don't know, a shop?

A franchise is when a hugely successful company lets someone buy the right to use their name, products and business model but the store is owned by the person who owns it, not the company. GW stores are owned by GW, the people running them are managers who get paid no matter what, not owners needing to make a certain amount to be profitable that month.

ninja'd

**Scipio Africanus**

Riquende wrote:
I'll admit to being not too clued up on the whole Oz/GW prices thing, but I do wonder is it unique to GW? What sort of markup (if any) would an Aussie pay on an average product from Mantic, Warlord, Privateer Press etc?

As a rule, things are usually 170~% higher here than in the states.

There are a number of reasons for this:

1. Centerlink. Everyone has a lot of money to go around (well, not a lot, but for some it's enough that they don't seem to feel the need to work.), so they can usually afford the prices.
2. The dollar was low 10 years ago. Not really an excuse anymore, but many large companies stick to their guns that we must pay $100 for new games instead of the US standard $60. Even if they let us pay $60 for every CoD release, they'd still make more, purchase for purchase than they do right now.
3. We don't stop buying.

**Banicks**

-Loki- wrote:
Banicks wrote:
jonolikespie wrote:
GW is not a franchise.

What would they be called technically then?

A franchise is where an individual (the franchisee) is permitted to trade under the companies name. GW does not do this - stores are not franchised out, they are run purely by Games Workshop.

Cheers

**jonolikespie**

Getting back to the point you were trying to make Banicks, I know exactly what you mean about wondering weither it's worth collecting a new army or just boycotting the hobby altogether. The thing is I'd boycott the HHHHOBBY, not the hobby. GW are content to pretend they are the only company that makes toy soldiers and we will buy anything they make, no matter how hostile they are towards us. I'm not going to quit GW entirely right now, I still have finished armies I can play, but when the next edition of fantasy rolls around my continued participation will depend entirely on how much the meta changes and whether or not mu current models will be competitive. As it is I have already started trying to push other systems on my gaming group and open their eyes to the other companies out there.

**Maddermax**

Scipio Africanus wrote:
Riquende wrote:
I'll admit to being not too clued up on the whole Oz/GW prices thing, but I do wonder is it unique to GW? What sort of markup (if any) would an Aussie pay on an average product from Mantic, Warlord, Privateer Press etc?

As a rule, things are usually 170~% higher here than in the states.
]

Ah, no. Most things are 20-40% more, and only certain hard to transfer items (like cars and software which has regional controls) or certain 'protected' markets (like books and some produce) get marked up far more.

I did a comparison of other miniatures sellers the other day, and most (PP, Infinity and malifaux) mark up 20-30% between UK and Australian RRP, which is also about what shipping costs, so our model stores over here can still make a living off them. Even if shipping was free, most people don't mind paying an extra 20-30% for stuff from your FLGS, as you're supporting the local hobby. The 180%+ that a lot of GW stuff is marked up is ridiculous though, and people find it hard to stomach those prices.

**H.B.M.C.**

That article is nonsense. The price discrepancy is because Aussie's have a higher minimum wage. That's how world-wide market prices are set for everything.

At least, that's what the men in white armour keep telling me...

**JWhex**

GW hates the Internet the same as Don Quixote hates windmills. They both believe in certain victory if they just keep tilting at it long enough.

**OrlandotheTechnicoloured**

Hardly new news,

and not only folk in Aus stuffer from this behaviour

Just look at the prices people in Europe pay for identical electronic kit (eg games consoles, PC) compared to the USA

the mark up is a lot more than just the extra tax we pay (prices have got slightly closer in the last few years)

companys exploit the market in whatever way they can, it's virtually a duty to shareholders who (legally) are their main concern (privately held companies have more flexability, whether or not they choose to use it....)

EDIT: not that I wouldn't prefer a more enlightened pricing policy for our AUS compatriots if GW really does want to keep it's markets separate as it clearly does

**masterdoobie**

Let's face it guys, our country sucks... (if you play any sort of miniature game

).

Seriously though, vote with your wallet. I still enjoy games of 40k but I proxy most of my models these days. I have already planned out my next couple of purchases for my imperial guard, none of them will be from GW though.

**Maddermax**

masterdoobie wrote:
Let's face it guys, our country sucks... (if you play any sort of miniature game ).

Seriously though, vote with your wallet. I still enjoy games of 40k but I proxy most of my models these days. I have already planned out my next couple of purchases for my imperial guard, none of them will be from GW though.

Not any sort of miniature's game. Only one in particular. Other miniatures games aren't nearly so out of whack, because they have to be internationally competitive.

**jonolikespie**

Maddermax wrote:
masterdoobie wrote:
Let's face it guys, our country sucks... (if you play any sort of miniature game ).

Seriously though, vote with your wallet. I still enjoy games of 40k but I proxy most of my models these days. I have already planned out my next couple of purchases for my imperial guard, none of them will be from GW though.

Not any sort of miniature's game. Only one in particular. Other miniatures games aren't nearly so out of whack, because they have to be internationally competitive.

Exactly. GW are the only ones in the hobby taking this to the extent they do, most other companies just tack a few extra bucks on for shipping.

**Frazzled**

Don't buy from them. Send them receipts of other miniatures form other companies you bought instead.

**angel of ecstasy**

H.B.M.C. wrote:
That article is nonsense. The price discrepancy is because Aussie's have a higher minimum wage. That's how world-wide market prices are set for everything.

At least, that's what the men in white armour keep telling me...

I wonder where they are now?

**Do_I_Not_Like_That**

Frazzled wrote:
Don't buy from them. Send them receipts of other miniatures form other companies you bought instead.

I had too look twice. Frazz? outside off-topic?

Anyway, back OT. Normally, the sight of Australians suffering would fill my heart with joy, but this is a step too far for GW. It's probably been brought up before but is there nothing the Australian office for fair trading/monopoly commision/consumer rights/whatever you call it, can do about it?

**weeble1000**

Frazzled wrote:
Don't buy from them. Send them receipts of other miniatures form other companies you bought instead.

That is the way to send a message to GW. And GW listens to that message. I did essentially the same thing when I first stopped purchasing GW products. I e-mailed GW and calmly explained what I was not happy with. I explained a series of purchases of GW products that I had planned to make, listing the dollar value. Then I explained that in lieu of making those purchases I would instead spend the money on starter sets for competing games, describing the exact products I was purchasing and the prices. I explained that I had heretofore not purchased a single product from those competitors, but would now be giving those products a try due to Games Workshop's policies and practices that I disagreed with. I explained that if those policies and practices did not change, my buying habits would remain as I had indicated, i.e. not purchasing GW products and instead using that budget to purchase competitors' products.

Shortly thereafter I received an e-mail response and a personal phone call from GW US customer service. I explained again what I did not like, and although the customer service rep was not able to offer any solutions or make any policy statements, the company did take time to respond to that communication.

It is a tangible demonstration of loss of market share, which is worse than the loss of a customer.

**ExNoctemNacimur**

Frazzled wrote:
Don't buy from them. Send them receipts of other miniatures form other companies you bought instead.

Actually, this may not be a bad idea. And then send photos of you playing a game of Fantasy, LOTR, 40k, Epic etc. with these non-GW minis. It'll be funny, at least!