Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

I had an interesting conversation with my partner who does company production business stuff theory thingy for a living (I have dated her for 3 year and I still do not understand what she does) but she told me that GW can totally afford to sell more models in 1 box and in fact should in order to make more. In fact, she tells me, this is why their box sets have been such great deals as of late because they're ramping up sales to make more profit. This got me thinking about orks and why I'm missing like half the model range in my own collection. I refuse to buy Mek gunz, stormboyz, kommandos, etc.... because they are, in my mind, a waste of money. They're not bad units, just the cost of them compared to their role and points is not worth it to me.

Let me kinda explain what she told me (she read this and approved of what i am typing):

Scale of production. I'm not sure of this myself but she told me that there are two costs when it comes to production. Fixed cost (items that either you pay for once or pay an exsact amount every time for) and variable costs (items that change a lot in price depending on how much you need). Now, due to the nature of GW's production, GW only has one type variable costs and that's plastic, resin, metal and fine cast (all super cheap at the scale gw buys it for) but they have a hell of a lot of fixed costs. Their machines and molds, for example, are a fixed cost. They paid for it once and so never have to pay for it again. Employees also come under this, it doesn't matter how hard they work employees they're still paying them the same.
So, because the majority of costs from GW are fixed costs they actually make more money by making more models even if they do not sell.
For example, they bought one machine and one mold. It costs them £1,000,000 to buy the machine and make the mold. They bought a lump sum of plastic for £100,000 to get the great deal and now start production. They make 10 large model sprues and that's it... They close production and throw the mold away... now they're left with 10 models and a lot of wasted plastic. Therefore, to just break even they have to sell those models for £110,000 each, which nobody would even think of buying.
However, GW does the same thing but this time they use all the plastic and make 2,000,000 models sprues out of the plastic. Now to break even they only have to sell the model sprues for £0.55p each! Now, obviously, they wouldn't sell them for so cheap but let's say they sold them for £20 each (which would give them a 363% profit) they don't even have to sell all the models to break even and people are very much likely to buy the same model for £20 than they are £100,000. In fact, they only need to sell 55,000 out of the 2,000,000 models to start making a profit! The rest can stay in storage and make them more money over time.
And because they already paid for the machines and molds and never have to pay again for them they can keep pumping out models which, in turn, means they can lower the price. And this is what they do with the box sets. They make things people actually want to buy (it helps that the exsact same model is more expensive if you buy it separately) and it doesn't matter how much they shove into the box it won't cost them any more or less because they need to use up the materials anyway and they do not need to pay any more for machines.
Therefore, it would make GW more profit to sell 3 mek gunz in 1 box for £27 than 1 for £27 because people are more likely to buy the first option and they also get to produce more spures putting down the cost or something. I think... i'm nit sure. XD something about the fixed price is already paid for and the variable cost always exists no matter how many products you produce, but it will always be covered in the selling price as well. Therefore, when the company is at the break-even point, they will not have to pay attention on trying to sell for profit because basically, they still earn profit if they only sell one product (obviously they would care though).

No idea if this is true or not... it's not my field of study, but what do you think?

It would be a nice world if companies sold products for closer to their production costs but unfortunately they sell them for what people will pay unless they have a good competitor which GW don't really.

Ever seen the production cost for a bucket of popcorn at the cinema? Makes GW look like they're throwing models away by comparison. GWs prices are actually pretty in line for a niche hobby. Other miniature companies, Lego etc are all roughly the same price, WH4K just requires more models. Malifaux seems much cheaper because it uses much less models but the models themselves are similar to GWs.


Would I like them to be cheaper? Sure, but it won't happen cause people still buy the models for how much GW ask.

tl;dr but yeah, this has been the real cornerstone of the Rountree-era profits and growth.

What you are deescribing is the Start Collecting box... I pay £50 and I get stuff that "mega deal feeling" even though I don't want or need a 3rd commissar or a 4th Tech Priest Dominus.

See also stuff like Forgebane, which is is 80% old products, 20% new products... and you are fairly unlikely to actually need both "races" from it. They know people will want - say - the Armigers and the Skitarii so rather than sell 2 products for £50 they can sell 1 product for £80.

Smart business.

GW prides on them being the apple of miniature games. Part of their self identity IS price of their models. Lowering prices would be weakening their brand for them.

But due to scale of production GW COULD sell cheaper. GW is one of the best miniature companies in term of potential to flood the markets profitably with cheap models. Mantic games etc fight against GW by making cheap models but if GW put economics of scale into full usage mantic would weep as they could not sell as cheaply as GW.

But...That goes against whole principle of "quality models with quality prices" that runs GW.

 Sim-Life wrote:
It would be a nice world if companies sold products for closer to their production costs but unfortunately they sell them for what people will pay unless they have a good competitor which GW don't really.

Ever seen the production cost for a bucket of popcorn at the cinema? Makes GW look like they're throwing models away by comparison. GWs prices are actually pretty in line for a niche hobby. Other miniature companies, Lego etc are all roughly the same price, WH4K just requires more models. Malifaux seems much cheaper because it uses much less models but the models themselves are similar to GWs.


Would I like them to be cheaper? Sure, but it won't happen cause people still buy the models for how much GW ask.

She said it doesn't matter if they have no competition. They're a small company in relation to the majority of modern companies in a very niche product. GW is a monopoly of a none essential good. Basically, it doesn't matter if they own the model Market this doesn't ensure success because nerds can happily spend their money else where like movies, games, card games, etc. Obviously, what my GF thinks happened, is GW screwed themselves sideways by boosting prices and treating customers the way they did... some idiot in their company must have thought they could do anything because they're a monopoly but they're a monopoly in plsstic figures.. it's like saying you own all the world's dust so you can charge what you want. However, a water company, for example, is an essential good. Basically, if you own a monopoly on water in a country you can do what ever you want, you can charge a fortune, advertise you customers are worthless squigs and hit people as they buy the water. But because water is essential to life and you're the only one with it they have no choice but to do what you want. Now, gw believed they could do this, found out they couldn't and are in full panic mode over the last few yesrs to get back the customers.

That's what she tells me... lego also make a lot of money on the side as a huge international company that has movies, more games, digital media, partner ships with other brands, etc... gw has none or very little of that in comparison. She says in the 21st century business world they might as well still be that little shop that sells models made in their sheds.

Well, with the latest financial report, there was some talk about the board being resistant to reducing prices and that's what kicked off the starter sets / boxed games. The price of those models works out better than clamshell HQ types.

Monopoly is a funny word, it refers to a company's ability to influence a market. The fact GW owns the 40k brand and IP doesn't make it a monopoly, it's ability to control other people's prices would (on things that can include but are not necessarily tabletop miniature games.)

I don't think GW actually possesses that kind of market influence, but it's not like I've looked into it closely.

The kind of thing that would have to happen for GW to consider dropping their prices dramatically would have to include cheap production techniques (i.e. 3d printing) and the widespread availability of files for printing the models that did not violate their IP.

In other words, there would need to be a cheaper alternative and that doesn't exist (yet.) I've seen some very good prints, but I've not need multipart prints appropriate for putting together a creative army. The availability of good one-offs does not compete with the scale of GW's operations.

And I'm not sure this would be welcome. The quality of GW's work would suffer because they can't finance the creation of new materials. The board would likely consider selling the line to a larger company and we'd end up with a very homogenized version of what we have now. That's not attractive to me and I don't think anyone would want to see it happen.

 lolman1c wrote:

 Sim-Life wrote:
It would be a nice world if companies sold products for closer to their production costs but unfortunately they sell them for what people will pay unless they have a good competitor which GW don't really.

Ever seen the production cost for a bucket of popcorn at the cinema? Makes GW look like they're throwing models away by comparison. GWs prices are actually pretty in line for a niche hobby. Other miniature companies, Lego etc are all roughly the same price, WH4K just requires more models. Malifaux seems much cheaper because it uses much less models but the models themselves are similar to GWs.


Would I like them to be cheaper? Sure, but it won't happen cause people still buy the models for how much GW ask.

She said it doesn't matter if they have no competition. They're a small company in relation to the majority of modern companies in a very niche product. GW is a monopoly of a none essential good. Basically, it doesn't matter if they own the model Market this doesn't ensure success because nerds can happily spend their money else where like movies, games, card games, etc. Obviously, what my GF thinks happened, is GW screwed themselves sideways by boosting prices and treating customers the way they did... some idiot in their company must have thought they could do anything because they're a monopoly but they're a monopoly in plsstic figures.. it's like saying you own all the world's dust so you can charge what you want. However, a water company, for example, is an essential good. Basically, if you own a monopoly on water in a country you can do what ever you want, you can charge a fortune, advertise you customers are worthless squigs and hit people as they buy the water. But because water is essential to life and you're the only one with it they have no choice but to do what you want. Now, gw believed they could do this, found out they couldn't and are in full panic mode over the last few yesrs to get back the customers.

That's what she tells me... lego also make a lot of money on the side as a huge international company that has movies, more games, digital media, partner ships with other brands, etc... gw has none or very little of that in comparison. She says in the 21st century business world they might as well still be that little shop that sells models made in their sheds.

But tabletop wargaming is a world unto itself. Nerds won't spend their money elsewhere because in a lot of cases Warhammer is the only place they'll spend that amount of money. I'd consider my other hobbies a very distant second to tabletop wargames. The amount of money I spend on video games in a year pales in comparison to how much I would spend on TTGs and I imagine it's the same for a lot if people. I don't pretend to be an expert on economics but I feel like TTGs are a seperate kind of industry from a typical hobby primarily due to the social aspect and how much of a niche it is.

But the marketing research has already proven you wrong. Look at gw's profits. Then look at the profits of a single video game or movie recently. Nerds do spend on mass way more on other products than they do on warhammer. The fact is, there is so much distractions jow a days... it's not like in the 90s when it was, read a book, watch day time tv or plan warhammer. Now we're spoiled for choice. Do i spend £20 on a box of marines, a video game, a movie ticket, porn ))), comic, manga, twitch, youtuber merchandise, mtg, new DnD, X-wing, and so mcuh more!

Short answer: yes.

Long answer: it is evident they're building up to that.

Take a look at what has been one of the most popular releases of the last few months: Armiger Knights. Between forgebane and the 75$ for two kits that I've heard nothing but good things about, these kits seem to hit much, MUCH closer to the "what consumers would pay if they chose for this product" mark than an extremely similar kit, the Adeptus Mechanicus Ironstrider, which is IIRC 1 miniature, slightly smaller, for 66$.

See, the sales of both Armigers and Helverins both contribute to paying off the investment on their sprue, just like if they sold an Armiger/Helverin flexi-kit with 2 fewer sprues (the ones used to make the duplicate in the current kit) and priced it at 50-60. But instead of feeling like "aww, I just got ripped off and now I have all these extra useless bits" the customer feels like they almost got a 2-for-1 deal.

Put me in charge of games workshop, and one of my first orders of business would be to take our already well paid-off kits, and up-scale 'em. "ork horde" box with 2x boyz and a nobz, "Guard Platoon" with 2x infantry squads and a hwt, etc would all be in regular rotation as temporary splash deals (release them permanently and you'd end up with the 2nd hand market prices eventually lowering down such that people still wouldn't buy them.)

Just one word about the production costs coming from a finance guy.

It's true that the more models you casts with the same equipment (ie same amount of money invested), the lower is the unit price but there are a few elements to consider to avoid a biaised analysis :
1/ it's not true that you can produce ana unlimited amount of models with one machine because they have a limited daily capacity and have a limited lifetime, the point here is to know wether this daily capacity is saturated or not
2/ it's not true that payroll is a fixed cost. You can surely extend the number of models cast with the same number of employees but there is a limit. You can ask them to work more but usually, hours are then paid higher. Then you can hire more people or organise a new shift with a whole new team and if you do not staurate your new team capacity, the cost per model will increase
3/I'm pretty sure trat molds have limited lifetime (see 1/ for consequences)
4/ There are more variable costs than plastic / metal / resin. I'm not an expert but I'm pretty sure that GW plant electricity consumption is very high (as every other plant) and I remember that we talked about limited production capacities due to limited power supply capacities a few months ago. On top of that, if you push the casting equipment to its limits, the costs of maintenance will increase (higher number of technicians, prodution stops to fix the equipments....)

As a conclusion, I would say that the general reasoning is right but we cannot conclude if it's really applicable without knowing exactly what are the drivers of GW production costs and how saturated their production facilities are. On top of that,there are also marketing consideration such as price positionning vs conmpetitors that would interfere with purely industrial considerations.

Sorry for the long post !

 lolman1c wrote:
But the marketing research has already proven you wrong. Look at gw's profits. Then look at the profits of a single video game or movie recently. Nerds do spend on mass way more on other products than they do on warhammer. The fact is, there is so much distractions jow a days... it's not like in the 90s when it was, read a book, watch day time tv or plan warhammer. Now we're spoiled for choice. Do i spend £20 on a box of marines, a video game, a movie ticket, porn ))), comic, manga, twitch, youtuber merchandise, mtg, new DnD, X-wing, and so mcuh more!

Video games are a less niche market. Unless you have evidence that when sales of GW droppesd off the players migrated to video games and not other TTGs then I don't think I'm wrong.

General idea is sound. Given how long some kits have been in production they've got to be like printing money now. I'm think Space Marine Tacticals, the Rhino chassis and similar things that are mainstays.

I would like to make it clear that their workers are NOT a fixed cost though. If they make more models, they need more people loading those machines, quality checking and packaging them, because, even if they just run the same manufacturing process longer, workers need breaks. If they were to expand a factory or open a new one, then there's a whole lot of new one time purchases, in addition to the workers and materials.

It's not necessarily wrong to say that if they doubled the number of models in a box for the same price to us, that they couldn't continue to make a profit, but it's not quite as simple. Of course, I've very minimal understanding of the costs of designing, manufacturing and running an operation like GW'S. I am very aware that plastic prices are increasing and it seems unlikely that would (or should) change. I'm also (although less) aware that the actual cost of the materials in a regular infantry box ranging from £20-30 is much lower than the shelf price. This isn't a case of GW being any different from any other successful business though.

 lolman1c wrote:
Obviously, what my GF thinks happened, is GW screwed themselves sideways by boosting prices and treating customers the way they did... some idiot in their company must have thought they could do anything because they're a monopoly but they're a monopoly in plsstic figures..

His name was Tom Kirby, and I'm pretty sure he said this word-for-word in an annual statement around 5 years ago.

 Sim-Life wrote:

 lolman1c wrote:
But the marketing research has already proven you wrong. Look at gw's profits. Then look at the profits of a single video game or movie recently. Nerds do spend on mass way more on other products than they do on warhammer. The fact is, there is so much distractions jow a days... it's not like in the 90s when it was, read a book, watch day time tv or plan warhammer. Now we're spoiled for choice. Do i spend £20 on a box of marines, a video game, a movie ticket, porn ))), comic, manga, twitch, youtuber merchandise, mtg, new DnD, X-wing, and so mcuh more!

Video games are a less niche market. Unless you have evidence that when sales of GW droppesd off the players migrated to video games and not other TTGs then I don't think I'm wrong.

I only have story evidence for this (I myself played the 40k games for years rather than wanting to play the actual game again). My gf wouod probably be able to do a real analysis though so I'll have to see what she says.


Automatically Appended Next Post:

craggy wrote:
General idea is sound. Given how long some kits have been in production they've got to be like printing money now. I'm think Space Marine Tacticals, the Rhino chassis and similar things that are mainstays.

I would like to make it clear that their workers are NOT a fixed cost though. If they make more models, they need more people loading those machines, quality checking and packaging them, because, even if they just run the same manufacturing process longer, workers need breaks. If they were to expand a factory or open a new one, then there's a whole lot of new one time purchases, in addition to the workers and materials.

It's not necessarily wrong to say that if they doubled the number of models in a box for the same price to us, that they couldn't continue to make a profit, but it's not quite as simple. Of course, I've very minimal understanding of the costs of designing, manufacturing and running an operation like GW'S. I am very aware that plastic prices are increasing and it seems unlikely that would (or should) change. I'm also (although less) aware that the actual cost of the materials in a regular infantry box ranging from £20-30 is much lower than the shelf price. This isn't a case of GW being any different from any other successful business though.

Workers are a fixed cost. 1. Terminology wise, they are. If you ramp up employment you're paying a different amount but that amount is not going up and down. Materials and power, for example, are variables because their price does change every month, ect... i think that's how it work. 2. I've spoken to employees of their factories. Trust me, they wouldn't hire more people. XD


Automatically Appended Next Post:

Crispy78 wrote:

 lolman1c wrote:
Obviously, what my GF thinks happened, is GW screwed themselves sideways by boosting prices and treating customers the way they did... some idiot in their company must have thought they could do anything because they're a monopoly but they're a monopoly in plsstic figures..

His name was Tom Kirby, and I'm pretty sure he said this word-for-word in an annual statement around 5 years ago.

Yeah, my gf when doing a small analysis was laughing when people said that GW can do what they want because they're a monopoly. They're basically a small fish in an ocean of whales and we're the plankton. The whales will gulp us all up while they can't really pick or choose.

Good work everyone btw, my gf is looking forward to reading all this and maybe doing more research.

As I recall, it was the same preamble where he said their target market was 'people who buy our models'...

There are other costs to consider. Packing and distribution is a larger chunk of the price of things than we like to consider, and shelf space is a premium that fills up a lot faster if you triple the box size. You're not wrong on the fixed vs variable cost aspect of it though, but its also important to remember that the high fixed costs means that there's a lot of risk involved in a kit. You really have to bank on getting more customers, because if a kit fails and the people that do buy it don't need to buy more than one of it, you're taking a huge hit.

There's also concerns of the perceived value of your product. When you make something that doesn't make sense to put 3 of in a box (characters, vehicles, etc) then how do you justify not selling it at a 3rd of the price to your consumers? In this discussion we understand that from their end, there's little difference between producing 1 of something and 3 of something, but as consumers, we still expect to pay a third if that's what we're getting.

I do think its interesting to see how Age of Sigmar kind of feels like an experiment in this direction though. Most of the Star Collecting sets passively sprinkle in a unit along with a model that costs the value of the box to begin with. Ironjawz notably have like zero reason to buy anything other than the two starter sets. I think a design along these lines makes a lot of sense, but you have to change the way armies are structured a bit to really make it work, though to some degree the keyword system and emphasis on Chapters for every faction feels like a step in this direction.

 LunarSol wrote:
There are other costs to consider. Packing and distribution is a larger chunk of the price of things than we like to consider, and shelf space is a premium that fills up a lot faster if you triple the box size. You're not wrong on the fixed vs variable cost aspect of it though, but its also important to remember that the high fixed costs means that there's a lot of risk involved in a kit. You really have to bank on getting more customers, because if a kit fails and the people that do buy it don't need to buy more than one of it, you're taking a huge hit.

There's also concerns of the perceived value of your product. When you make something that doesn't make sense to put 3 of in a box (characters, vehicles, etc) then how do you justify not selling it at a 3rd of the price to your consumers? In this discussion we understand that from their end, there's little difference between producing 1 of something and 3 of something, but as consumers, we still expect to pay a third if that's what we're getting.

I do think its interesting to see how Age of Sigmar kind of feels like an experiment in this direction though. Most of the Star Collecting sets passively sprinkle in a unit along with a model that costs the value of the box to begin with. Ironjawz notably have like zero reason to buy anything other than the two starter sets. I think a design along these lines makes a lot of sense, but you have to change the way armies are structured a bit to really make it work, though to some degree the keyword system and emphasis on Chapters for every faction feels like a step in this direction.

It's an interesting question regarding price. People do not like to comparerules between facrions but i do like to compare price. For example, Ork mortors vs IG mortors. You get 3 in the IG but the older or bug gun (not the mek guns) you get 1. Plus it's like a 20 year old model. The boards decision to stick to prices i think will hurt gw the older the company gets and the older the models get.

If they stick to prices it will be an improvement. One of the things GW traditionally did was raise the prices on old kits despite already paying for their costs to keep them similarly priced to what new kits are priced at. If they keep kits at their current price indefinitely they become cheaper over time due to inflation.

Another thing to point out: GW is a monopoly for 40K and AoS only. We had been seeing that due to resentment towards GW several other companies were making inroads to gather up former 40K/WHFB players and pull them to other game systems.

I think current management was/is aware of this, and is in the process of battling to stop the hemorrhaging. It seems to be working - but I do hope in the future we will see some sets with more models in them - notably imperial guard troops, dire avengers going back to 10 models, maybe 20 Ork boys to a box and the like.

However, right now I don’t think GW is hurting in a way they NEED to increase model count for box -they’re making a healthy profit for the moment and have hit the product-to-cost ratio they feel is good for them. Not that I agree with their silly pricing, as I still only buy from GW when I can get an insane discount (about 40% or more).

Ahh... yes... increasing prices... especially the same model... they have stopped doing this but right now gw appears to be run by two teams with different personalities. (My opinion not my gf's). Half the time they make the same old dumb mistakes and the other half they actually seem like a normal good modern company. A few people i know they they're not bad, they do try, they're just lazy... like if they were a student they would write a good presentation but produce a lazy essay. I'm not sure what to personally belive. I think I would need to analyse them for about 5 years with their "New GeeDubsTM" attitude.

Companies have learning curves as much as people do. You can't as a group say ,we're better and be better. Good resolutions alone don't carry.


Automatically Appended Next Post:
Also their pricing isn't sillly when compared to other modelling companies.

GW's pricing is only silly when compared to their own models - that's my only issue. As far as I'm concerned a company can charge whatever the heck they want for their models...the market will either support them or not (to the detriment of other customers often).

It's the inconsistencies within the actual model range which are bothersome to me. Mainly their Start Collecting boxes, battle forces, and boxed games range from "reasonable" to "a very good deal", but when viewed against other products make them laughably expensive. So, I buy very few modern GW products.

For example, one of the Horus Heresy Boxed games gave you:

3x 10-Man Tactical Squads
1x 5-Man Terminator Squad
1x 5-Man Custodes Squad
1x 5-Woman Sisters Squad
2x Hero/Character models in plastic
(+all the game components)
Price: $150. (47 figures)

Alternately, $140 gets me....four plastic characters (Farseer, etc.).

There is a reason I've purchased 3-4 of the HH boxes in the past and have never once purchased a single $25+ plastic figure from GW (or any retailer).

But you did buy the boxes. Wich is pretty much exactly the point OP makes. I'm pretty certain GW in pretty much every way possible makes more profit of big box sets vs single sprue characters

Oh, I agree. I'm not arguing for/against the OP. Personally from a laymans' position I see fewer SKUs being a better thing, not worse. I'm merely commenting on the general GW price debate.

I've long rallied for multi-character boxes, as they would make sense, more profit, and have the added bonus of pleasing customers. Why pay $35 for a Techmarine if I can pay $50 for a box of a Techmarine, an Apothecay and a Chaplain...meaning GW uses one box, one art sleeve, one packaging, and one mould, etc.

From a Xenos perspective - why do Eldar not have a three-four model kit which is used to build Farseers, Warlocks and Spirtiseers, etc. It makes too much sense to not be done, but alas...if the consumers continue to support absurd $35 characters then we'll never get there.

 Elbows wrote:
Oh, I agree. I'm not arguing for/against the OP. Personally from a laymans' position I see fewer SKUs being a better thing, not worse. I'm merely commenting on the general GW price debate.

I've long rallied for multi-character boxes, as they would make sense, more profit, and have the added bonus of pleasing customers. Why pay $35 for a Techmarine if I can pay $50 for a box of a Techmarine, an Apothecay and a Chaplain...meaning GW uses one box, one art sleeve, one packaging, and one mould, etc.

From a Xenos perspective - why do Eldar not have a three-four model kit which is used to build Farseers, Warlocks and Spirtiseers, etc. It makes too much sense to not be done, but alas...if the consumers continue to support absurd $35 characters then we'll never get there.

Remember the way GW prices dual kits, though. If they did that you can bet it'd be $50+ for the choice of which HQ to build.