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.

https://investor.games-workshop.com/2019/04/12/trading-statement-and-dividend-2/

Following on from the Group’s half year report in January, trading to 7 April 2019 has continued well. Compared to the same period in the prior year, sales and profits are ahead. Royalties receivable are also ahead of the prior year following the signing of new licence agreements. The Board’s current expectation is that profit before tax for the year ending 2 June 2019 will be c. £80 million.

so they continue to do well

https://www.nottinghampost.com/news/business/games-workshop-posts-55m-boost-2751716

work continues on the new factory and warehouse

Who knows how much the release of plastic Sisters of Battle will impact on next year's profits.
My guess is that it'll be significant.

Aside from Brexit-related uncertainties, the only "risks" I see for GAW:LSE is not keeping up with these insane growth rates.

 OrlandotheTechnicoloured wrote:
https://investor.games-workshop.com/2019/04/12/trading-statement-and-dividend-2/

Following on from the Group’s half year report in January, trading to 7 April 2019 has continued well. Compared to the same period in the prior year, sales and profits are ahead. Royalties receivable are also ahead of the prior year following the signing of new licence agreements. The Board’s current expectation is that profit before tax for the year ending 2 June 2019 will be c. £80 million.

so they continue to do well

https://www.nottinghampost.com/news/business/games-workshop-posts-55m-boost-2751716

work continues on the new factory and warehouse

Yes they do, but it appears the double digit growth has now flattened out to more modest growth compared to previously. Although it is perhaps that they have now recovered from a period of extremely bad management.

And the price of ever new kit will still go up,while the effort (for some of them) remain sub-par/mediocre.

 Aenar wrote:
Who knows how much the release of plastic Sisters of Battle will impact on next year's profits.
My guess is that it'll be significant.

Aside from Brexit-related uncertainties, the only "risks" I see for GAW:LSE is not keeping up with these insane growth rates.

To their credit, they’ve been saying as much for a while now.

I think it really depends on the kits they release in the future. If it's more like the recent Chaos Terminator kit for the price points they are asking I think there will be problems.

Character sprues are also ridiculously priced. The worst one I can think of is probably the Jackal Alphus.

 Gael Knight wrote:
I think it really depends on the kits they release in the future. If it's more like the recent Chaos Terminator kit for the price points they are asking I think there will be problems.

Character sprues are also ridiculously priced. The worst one I can think of is probably the Jackal Alphus.

Unfortunately gw’s biggest problem right now is having enough stock. Shadowspear sold like hot cakes even though it was more expensive than dark Imperium for less content. In most companies where demand exceeds supply, the answer is to increase prices. Gw have absolutely no incentive to reduce prices unfortunately.

I presume there is a fine line that they'll cross eventually.

If people are happy to pay £20+ for individual character models then that ship sailed long ago and nobody was on it.

 Gael Knight wrote:
I presume there is a fine line that they'll cross eventually.

It's not a fine line, it's a very fuzzy one.

There are people who won't buy any GW product, considering even Start Collecting or Dark Imperium grossly overpriced even with retailer discounts.
There are people who won't buy GW other than second hand at a steep discount.
There are people who will buy Start Collecting and similar, but balk at the more expensive new stuff and character blisters.
There are people who are fine with buying base kits by the dozen and don't mind the price of character blisters.

There are still a LOT of people in that last group. I was in the first group from the end of 5th edition to the tail end of 7th. Stuff like Start Collecting got me back in, and I'm more in the 3rd group now - I'm not buying $40-45 CAD blisters when I can convert my own heroes from $7 miniatures. I did break down and buy a $25 Admech Techpriest, that was basically my price ceiling (and I got it with an online retailer discount, that helped).

When Sisters of Battle releases, I'll probably break my price ceiling for that one army. I won't LIKE it, but I will vote with my dollars for plastic sisters. So where you are on GW purchases can shift without being completely alienated from the company. Charging too much money isn't going to make me hate a company enough to boycott them - their practices and treatment of customers do that. They can charge whatever the market will bear, they'e in business to make money.

I don't understand the complaints about the price of their products. I find them very reasonable here in the UK, but I can understand the anger of people living in AUS/NZ.

Sounds like GW is on target and doing well. The stock issue I think they know won't resolve until the new factory and warehousing issues are resolved; or at the very least that they've not got a chance to get a handle on it until the new factory is online. And that is good news that it continues to be so because it means the huge investment in a new factory, offices, warehouses and staff and staff training etc... is all worthwhile.

If they were reporting strong stock levels and projections to remain like that in the long term it might have unsettled that big infrastructure investment. WE should expect to see stock remaining an issue at least until that new factory is online for a while.

Thamor wrote:
I don't understand the complaints about the price of their products. I find them very reasonable here in the UK, but I can understand the anger of people living in AUS/NZ.

Since I started (including a break over several years) collecting the price of many models and Boxes has doubled or more. Best example is the Cadian Infantry, used to be 20 Guys for 20€, now it's 10 Guys for 23€. I can understand some price increase over time depending on business growth and inflation, the better modeling on newer models etc. but cut down half of the box and even increase the price for something that is absolutely outdated?
Most troop boxes ranging from 10-20 models were around 20, 25 €. The Multipart Space Marine Kit with 5 Marines was around 10€, building an army still was expensive but not nearly as much as it is today.

I personally like that GW is doing well. It is good for the game I love. Hopefully they will be realistic about sustainability of this kind of growth though.

As for the prices, the order I get at McDonald’s has gone up more % of price than GW products. I think the prices are in line considering inflation

 rocksville wrote:

Thamor wrote:
I don't understand the complaints about the price of their products. I find them very reasonable here in the UK, but I can understand the anger of people living in AUS/NZ.

Since I started (including a break over several years) collecting the price of many models and Boxes has doubled or more. Best example is the Cadian Infantry, used to be 20 Guys for 20€, now it's 10 Guys for 23€. I can understand some price increase over time depending on business growth and inflation, the better modeling on newer models etc. but cut down half of the box and even increase the price for something that is absolutely outdated?
Most troop boxes ranging from 10-20 models were around 20, 25 €. The Multipart Space Marine Kit with 5 Marines was around 10€, building an army still was expensive but not nearly as much as it is today.

Kinda pointless trying to compare prices outside of the base currency which is Pounds sterling, prices are far more volatile when you take into account currency exchange rates over long periods of time.

Are you denying that GW have substantially raised the prices on old existing kits?

Inflation has not matched these price increases over the years. Also, GW produces these sprues for pennies, production cost hasn't risen.

 Gael Knight wrote:
Are you denying that GW have substantially raised the prices on old existing kits?

Inflation has not matched these price increases over the years. Also, GW produces these sprues for pennies, production cost hasn't risen.

"they produce these sprues for pennies" is only part of it though, there's storage costs design costs, inital mold creation costs, distribution and shipping costs. and then GW has to pay their staff. and then yes make a profit etc. there's also the artistic merit of the figures that allows higher prices (some of their minis are drop dead gorgious)

the crunch on production may be doing them a favour in one respect in making far less able to build up stock that sits about taking up space and capital, from the amount of shortages it's seems like a lot of the newer stuff is very much made and out the door pretty fast

annoying if you can't get hold of a new release (and even more annoying if you can get an older kit) but probably a lesson they'll learn even when capacity increases so expect to see them continue on the smaller production runs with a bit more product than now, but not the sheer pile of stuff the tended to build up in the past

 Gael Knight wrote:
Are you denying that GW have substantially raised the prices on old existing kits?

Inflation has not matched these price increases over the years. Also, GW produces these sprues for pennies, production cost hasn't risen.

So exactly how much did it cost to produce the space marine tactical squad ? Give us a detailed breakdown .

People always spout about GWs costs not increasing an inflation this and plastic costs that .

So let's here it, how much does it cost to get these penny sprues into the hands of nerds like me

Obispudkenobi wrote:

 Gael Knight wrote:
Are you denying that GW have substantially raised the prices on old existing kits?

Inflation has not matched these price increases over the years. Also, GW produces these sprues for pennies, production cost hasn't risen.

So exactly how much did it cost to produce the space marine tactical squad ?

£7.

Give or take.

Obispudkenobi wrote:

 Gael Knight wrote:
Are you denying that GW have substantially raised the prices on old existing kits?

Inflation has not matched these price increases over the years. Also, GW produces these sprues for pennies, production cost hasn't risen.

So exactly how much did it cost to produce the space marine tactical squad ? Give us a detailed breakdown .

People always spout about GWs costs not increasing an inflation this and plastic costs that .

So let's here it, how much does it cost to get these penny sprues into the hands of nerds like me

Popcorn Ork

 Azreal13 wrote:

Obispudkenobi wrote:

 Gael Knight wrote:
Are you denying that GW have substantially raised the prices on old existing kits?

Inflation has not matched these price increases over the years. Also, GW produces these sprues for pennies, production cost hasn't risen.

So exactly how much did it cost to produce the space marine tactical squad ?

£7.

Give or take.

that's less then the minimum wage so.. doubtful.

Let's look for a moment at the cost to produce. A Space Marine tactical squad consists of eneugh bits to make ten Space Marines with some options, for simplicities sake we'll assume ten marines are designed, each one taking an hour to sculpt, we'll also assume the minis are made for minimum wage by a 25 year old worker in the UK (they're not, GW mini designers are proably paid much better) which is about 8.21 pounds per hour. given the level of detail that goes into a modern mini (take the new CSM stuff massive amounts of detail) we'll assume each one takes about an hour. This then is an inital design cost of 82 pounds. and thats just a guy doing the CAD work (autoCAD BTW costs 195 american monthly) then there's the cost of the molds, which aren't cheap, setting up the factory lines etc.

so yeah a new unit can cost big bucks, now once the costs ARE recouped, yeah the minis are basicly printed money and near pure profit, but the idea that making Minis is "free" is silly

There's nothing doubtful about it.

Their cost of sales, the money spent on the design, manufacture, packaging etc (including wages) is, by their last report, roughly a third of their turnover.

So, you average that out onto a single product, approximately one third of the money that product costs is the actual production costs. A Tactical squad cost ~£20 before VAT so a third of that is roughly £7.

The reality is on this specific product all of the one time fees such as die machining have already been absorbed in previous reports, but you don't account for things in this way except when amortising your assets, so an average serves us better for this comparison.

There is no opinion here, this is fact based on GW's own figures.


Automatically Appended Next Post:
Actually, I hadn't accounted for the fact that a good percentage of their turnover will be comprised of trade sales, who'll be buying kits at less than RRP.

So in actual fact there's every chance that the cost to produce is less than £7 because many kits will be sold at a lower cost.

Either way, for every £1 GW spend on making stuff, they gross £3 on sales. This is actually quite low, historically they've spent less, around 23-25% of turnover, but that's probably explained by the increased rate and volume of new releases.

Lets also not forget that GW likely soaks quite a huge running cost for their retail outlets. Whilst their highstreet shops are also important for generating revenue its a major cost that pretty much no other miniature maker has to even consider.

So GW gets exclusive stores, but at the same time has to invest into them and keep them running. It would be interesting to know the trade-off, but its likely very hard to measure. Especially since if you remove local stores you might well see local interest dwindle over time (since in my experience many hobby clubs don't invest enough into their own recruitment and can easily die on their own).

That said considering GW keeps opening stores overseas it suggests that the cost/benefit is a net gain for GW.

The stores have absolutely no relation to production costs and are an entirely voluntary cost for the company.

Financially they've swung between loss and small profit, they probably pretty much break even on average. As advertising they'd be largely unquantifiable, but the near absence from the North American market, relatively speaking, suggests that they're not essential to success.

The issue will always be that stores offer no benefit to people who don't use them or aren't near one, so why should they care if they contribute to driving GW's prices up?

 Azreal13 wrote:
, so why should they care if they contribute to driving GW's prices up?

In my experience a lot of people don't really care about production costs. Heck just look at how many complain if a computer game is more than around £20 or so. Though I think a part of it is that most people decide what is fair in their own mind and don't really want to nor know how to work out the ins and outs of how many things are actually made.


As for stores I think it might vary country by country. I think in the UK if GW rolled up and closed their stores the wargame scene would be in a very bad state right now. Their schools program might keep it going at some schools/universities; but beyond that I'd expect widespread death outside of anywhere but the biggest urban areas. Mostly basing that on the fact that I've seen quite a few local hobby/geek stores just close up shop or are on very tiny sites with hardly enough room to showcase a good portion of models let alone have any table/play/display space.

My impression is that the USA is a bit different and seems to have a stronger store coverage. I'm guessing things like comics and magic have a stronger hold there and thus are able to support more geek focused stores.

 Overread wrote:

 Azreal13 wrote:
, so why should they care if they contribute to driving GW's prices up?

In my experience a lot of people don't really care about production costs. Heck just look at how many complain if a computer game is more than around £20 or so. Though I think a part of it is that most people decide what is fair in their own mind and don't really want to nor know how to work out the ins and outs of how many things are actually made.

All fairly self evident, but the discussion was specifically about what the SM Tac Squad (and by dint of that, their stuff in general) costs to produce.

As for stores I think it might vary country by country. I think in the UK if GW rolled up and closed their stores the wargame scene would be in a very bad state right now. Their schools program might keep it going at some schools/universities; but beyond that I'd expect widespread death outside of anywhere but the biggest urban areas. Mostly basing that on the fact that I've seen quite a few local hobby/geek stores just close up shop or are on very tiny sites with hardly enough room to showcase a good portion of models let alone have any table/play/display space.

My impression is that the USA is a bit different and seems to have a stronger store coverage. I'm guessing things like comics and magic have a stronger hold there and thus are able to support more geek focused stores.

Short term there'd be an issue, assuming you play and buy GW games in a GW shop of course, but if there's a market for something then it will be catered to. We had an excellent FLGS that closed when the owner decided to move onto a new career (not financial but a QOL thing) so GW then opened a branch in the town. The GW closes then the reverse likely happens. But GW won't do it, so the discussion is moot.

Let's be honest, pricing based on costs is quite old fashioned. They aim to put prices as high as the market will bear whilst driving down production costs to maximise profits, that's the way of successful business I'm afraid.

On the other hand, as customers we should always be asking for a better deal!

 Kroem wrote:
Let's be honest, pricing based on costs is quite old fashioned. They aim to put prices as high as the market will bear whilst driving down production costs to maximise profits, that's the way of successful business I'm afraid.

in fairness thats ALWAYS been how it works

We’re also paying for lore, marketing, YouTube channel, facebook page, pensions, warehouses, shops, warhammer world, all that extra stuff that we take for granted and would complain about if GW only produced miniatures and not the rest of the stuff. I’m fairly certain they commission writers, painters, sculptors and a few other artistic, yet non miniature related leads to build a better environment for the game.

I recall someone saying that GW has planned projects and development four years out. You can’t do that if you aren’t
investing in the future. Don’t people complain about kickstarters that take years to deliver purchased products. How long does it take to receive a miniature when you buy it at the store?

I’m personally happy they still have double digit profits. I remember when they weren’t doing well and had to increase unit costs.