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Cruentus, yes, you've reached the non GW end of the hobby trumpet. They are no longer chasing you.

Exchange rates aren't arbitrary either, they are just old.

Exchange Rates alone don’t take into account the cost of getting your wares into a given location.

Doesn’t mean, and I’m not arguing, that such prices are therefore fine. Just illustrating that once again, things are more complicated.

Recent Tariffs are an interesting one. We know GW has production capacity in the USA. But how extensive I for one dunno. One could argue “just expand that”, but who knows how long the Tariffs will last? Does the current factory facility there have room to expand? Can they get the skilled staff needed? All sorts of what-ifs there to feed in.

And that’s where I’m leaving comments on that specific thing.

I'm sure plenty of us are old enough to remember when GW fixed their international exchange rates and started to stop people being able to shop across regions.

Something like if UK = 1, US = 1.6, AUS = 2.2 which were pretty much the exchange rates of the time.

Then instead of changing with the exchange rates they all had their fixed regional model which then got raised independently of each other.

Makes sense since if a US customer is willing to pay $60 for a tac squad when GBP = 1.6 USD then they'd be willing to pay $60 when GBP = 1.3 USD since the strength of the pound is meaningless to them.

It just looks worse for non UK people because we Brexited ourselves in the foot and tanked our currency so the fixed rate is not in their favour compared to the UK. As the US Trumps themselves in the foot over the next 4 years it might look less bad for them.

 insaniak wrote:

 frankelee wrote:
... but the reality for Warhammer like for nearly everything else is that existing customers provide 90%+ of their revenue. ..

I'm curious as to where you're getting that figure, to be honest.

The thing is, those of us who interact with other hobbyists get a bit of a distorted view of what the market actually looks like. The reason GW has historically focused on the new customer is because in wargaming the new customer is more likely to actually spend money. For every grognard who is constantly adding to their collection, there's a whole bunch of others who have completed armies and rarely buy anything new, or don't even actually play any more and just hang around the forums out of habit. The newcomer, though, will walk in and buy a starter set, and an army, and books, and paints and brushes and glue and a tshirt... and then as likely as not tinker with it all for a few months and then never touch it again. And so they're replaced with the next newcomer to walk in the door.

Veteran players are a valuable resource for keeping a game visible and being played... but the newcomers are the ones more likely to actually spend the money.

At least, that's GW's view, and it holds up with what I've seen of gamers over the decades.

To be clear, I'm not citing any internal data I have from Games Workshop, just generalizing from sales data from retail companies I have seen. The same way I might say, I haven't looked at French crime data, but I would confidently assume less than 10% of the French population have a felony drug charge. Or that less than 10% of the German population personally own four or more automobiles. And the importance of repeat customers at upper end shops was something I specifically had pointed out to me during training while working at one, complete with the full sales numbers. Most people just have a hard time intuitively thinking about scales of time, focusing more on important specific events and underestimating the boring times in-between. Existing customers provide an ongoing churn of purchases by a larger cohort than new customers represent.

Now you do have to define what a new customer is, someone's first day, first month, first year? In this case it probably doesn't matter because my less than 10% is so broad, that gave me a huge amount of range. But I was thinking more like, the first month or couple months. Like I said, I don't have specific data, it's just where I'd lay my money on the table, and I guarantee you my bet would win. It's not that new customers aren't important, but people on hobby forums seem to greatly overestimate their contribution to sales compared to what I would think is realistic.

 Mad Doc Grotsnik wrote:

Recent Tariffs are an interesting one. We know GW has production capacity in the USA. But how extensive I for one dunno. One could argue “just expand that”, but who knows how long the Tariffs will last? Does the current factory facility there have room to expand? Can they get the skilled staff needed? All sorts of what-ifs there to feed in.

I thought they'd stopped manufacturing things in the US like 10+ years ago.

If you still want to call that "capacity" because they own a building that was formerly a factory.... maybe.

You are correct. The US factory shut down in like... 2011? They dont have production capacity here anymore.

Biggest issue with manufacturing this stuff is making a second mould isn't going to be that much cheaper than the first. the tool cutting is still going to take just as long even if the design cost isn't there. You've still got to have the massive machinery in addition to the dies.

I don't think GW wants to spend double the tool cost to ship one over and produce it in the US. The expense of importing would have to really skyrocket for it to be worth that cost IMO.

At the same time the USA is a massive market on its own. Cutting out the need to ship product across the ocean means that GW can keep production and restocks faster for the USA market instead of having to wait for big shipments to head overseas.

With tariffs, shipping costs and time delays that could all be a saving on operational costs.

Ergo GW could make the investment from profits and allow easier and faster expansion of their US division.



I seem to recall when we've spoken of this before the big problem they had was no costs to setpu but upkeep and support. Having to fly staff and machines back and forth when things broke down because they didn't internally have enough skilled staff and the USA didn't have/GW didn't find/get applicants to manage the support of their machines in the USA.

Of course Tariffs might be a 4 year thing; shipping costs might eventually come down (all we need is some new go-getter firm to start slashing prices to pre-covid levels to compete and steal the market... we can dream at least!)

Didn’t realise they’d shuttered US production.

But, on the scale of market etc. I’d imagine there’s a tipping point where sales in the Americas will be sufficient to make such a facility cost efficient.

Because it’s not just the machines. Do you buy or lease the premises? What’s the going rate to make the roles created attractive to suitably skilled persons? What are the tax implications, and are they generally stable? What sort of management structure are you looking at? Will it better insulate your overall takings compared to an increase in tariffs? All costs are ultimately passed on to the consumer in the end, no?

But that I guess is a whole thread unto itself.

Having 2 factories allows for system shutdowns, and allows for breakages. If a mould gets damaged, ship stock from factory B.
If this Tariffs thing continues, and shipping stays at silly rates, having 2 of everything probably works out in the long run.

May also give you some protection against other trade wars.

For instance, if the UK and Australia have such a falling out, and impose trade tariffs tit for tat.

If you’ve a substantial production facility in the US, who isn’t in this scenario in Australian Bad Books? You could fulfil demand from there?

Even when US production was going, the US did not have the ability to fulfill the full range of products. The US factory was furnished with sets of molds for the top 100 or so best selling products at the time, anything beyond that was imported.

 Skinnereal wrote:
Having 2 factories allows for system shutdowns, and allows for breakages. If a mould gets damaged, ship stock from factory B.
If this Tariffs thing continues, and shipping stays at silly rates, having 2 of everything probably works out in the long run.

This area happens to be in my professional wheelhouse, and I can say that in GW's case there are several reasons why that approach would be unlikely to happen. But rather than bore everyone with a long explanation why, I'll just comment on the tariffs part:

Due to their current manufacturing & distriubtion setup GW have a lot of control over the US tariff costs they pay. As I understand, their facility there is setup to package some (but not all) products. For example bulky game starter boxes like Leviathan may have sprues cast in Nottingham and shipped over in bulk, packaging printed locally or in China, then the two are combined at a packing dept in Memphis. This reduces container costs and is effective because the sales volumes in the USA are high enough.

In that situation GW can quite easily declare a much lower raw material value on sprues shipped over from Nottingham (perhaps just a few cents, as raw plastic is very cheap), pay a fraction of tariff costs, then suddenly once placed into a box those $0.10 or $0.20 sprues become a $60 product . Any profit made can be billed as "IP charges" to a global holding company somewhere with a lower rate of corporate tax than the USA.

The most likely outcome if this all continues is that GW will simply expand the packaging aspect of Memphis, and ship a wider range of kits in from Nottingham as sprues.

'Made in the USA', when all it is is boxed there. Yep, I get that.
Factories are expensive, and shipping crates of cheap sprues are cheap to import.
Business is a funny thing. Factor in insurance for mishaps, and you're rockin.

And once again Dakka provides nuggets of interesting information. They might never end up helping me in life. But I love learning them all the same.

 Hellebore wrote:
Biggest issue with manufacturing this stuff is making a second mould isn't going to be that much cheaper than the first. the tool cutting is still going to take just as long even if the design cost isn't there. You've still got to have the massive machinery in addition to the dies.

I don't think GW wants to spend double the tool cost to ship one over and produce it in the US. The expense of importing would have to really skyrocket for it to be worth that cost IMO.

I thought I read somewhere that Wargames Atlantic sends their moulds back and forth between their US and UK locations. GW could probably figure that out if they needed to.

They’ve been advertising a lot over the last few months for factory shift workers etc in the US so something is happening, either full production or expansion of packaging.