Some additional insight

[travis]

Gary Ray runs a successful game store in California. His blog is solid here is what he says about the GW prices increase:

The chart doesn't translate here but it shows Tin prices going from 6 dollars a pound in MAY of 2009 to 14 dollars a pound in May of 2011.


“It’s not like we can be clever and somehow work around the price increase of silver and these other materials, we have to pass it on to our customer, or go out of business.” Source


Metal miniatures are made primarily of tin and as you can see from the chart above, the price of tin has skyrocketed. Tin has doubled in the last year alone. Worse, it's expected to continue to rise for the rest of the year as Indonesia tweaks supply and China and other manufacturing countries suck up demand for use in electronics. This has really put the squeeze on miniature companies. Some have steadily raised their prices over the years. Others, like Reaper, have started doing some miniatures in lead again, like in the old days. The modern alternative to tin has often been plastic, but the cost of oil has also skyrocketed, so there's no refuge there.

Games Workshop has decided that tin is not in their future. Yet, plastic has a very expensive start-up cost for a model, along with that increase in oil, so the metal miniatures, which almost by definition of their being cast in metal, sell less than plastic, are not good candidates for true plastic sets. They want to instead do something else, some sort of resin or cheaper plastic, or hybrid. It's all rumor, because they haven't communicated their strategy. Instead, metal models have simply begun to disappear.

That means those racks of blisters we sell are going away, along with many of the box sets. For now, those models are just not available. We can order them, but they don't come. Almost everything metal that's not a recent release seems to have been sent to the direct side. Worse, the supply of those metal models is dwindling, and according to my sales rep, there are no more coming beyond whatever is on the high seas. A shipment or two may be on a boat somewhere, but if I'm told a model is not available today, it's probably not going to be available anytime soon.

The dilemma for me involves a couple issues. The first is the natural instinct to horde stuff that sells well. I don't sell metal models out of a sense of loyalty, I actually make money on the vast majority of the 40K metal. We stock every 40K item in production, and that includes a ton of metal models. I very much want them in some form or another. However, I was told it was not in my best interest to horde and that something else would be along soon. But when? So for now, I'm letting my racks go bare. It's also becoming clear that the opportunity for hording is probably over.

The second part of that dilemma is very retailer centric. As existing metal models sell and there are no replacements, the inventory dollars naturally shift to other areas of the store. If I was Wal-Mart with a sophisticated open-to-buy program, I could horde that GW cash for when the tin replacement arrives. However, being a small time operator, that money goes towards other things, the flavor of the day, like new CCGs. When those non-metallic replacements finally arrive, I won't have the resources to suddenly bring them all back in, although it's unlikely they would arrive in such a fashion.

This also means that our number two game, 40K, is going to naturally see sales flag, as there is simply less product to sell.

As a store owner, I hate blisters. They're expensive, small and easy to steal. Plastic is clearly superior to metal for assembly and modifications. I welcome the move away from metal, but I was hoping for a more orderly transition. I'm sure the sales reps at GW had also hoped for something more orderly, as they're likely tired of giving excuses as to why Games Workshop hasn't communicated their strategy. And now you know everything I know.

[MajorSoB]

Thanks for the insight Travis. Here are a few reaction from a somewhat typical GW customer:

1) Cost and global economics: Yes, I as a customer get it. Everything costs more, gas, housing, clothing, food, and why shouldn't my hobbies also cost more. I understand GW is a business and they exist for a singular reason, to make a profit, not to provide products to the gaming community. They are profit driven not service driven, I get it. I too understand that the price of raw materials have gone up as well, but GW also needs to understand that its customers are not stupid either. We have a reasonable idea of just how much raw material goes into any given product. We also are somewhat dismayed when the price of our hobby increases faster than our paychecks.

2) Metal vs. Resin: Hey I get it, metal is more expensive to ship, the raw materials have doubled, its harder to convert and paint, I like that GW has decided to phase it out. My complaint however as a customer is the void GW has created in this shift away from metal. This game works as an integrated system. Each army depends on the availability of all the products to be playable and functional. My complaint isnt that metal is going away but that GW has not made its move systematically, kept its customers and retailers informed, and lastly has increased the cost of its former metal models while substituting a much cheaper material ( resin) in its manufacturing. Shouldn't they now be cheaper, or at least the same price?

3) Communication: Month after month I buy the GW catalog called White Dwarf. Its overpriced, devotes almost all its content to marketing its newest crap, rarely has anything decent to add to the hobby, but its shiny and has glossy 4/c pictures so I waste my money every month buying it. I also visit the GW website that markets its newest products and does a decent job of making the same old same old sound new again. I ask, shouldn't either of these places informed us as customers about the decision to go to metal and its implications? Sure they did the whole "Fine Cast" marketing b.s. but no one ever explained the hows and whys of the decision, and how GW was planning on moving forward. Information is valuable. As a customer I want some type of assurance that the game I invest in is viable and will be there to support the hobby. As a retailer I would hope that the company whose sales equate a livelihood would be there to stock its inventory so you can sell it and turn a profit.

4) Introductory cost and new player development: I am somewhat confused where GW stands on this now. For years GW sold its started boxes at a somewhat reduced cost to help bring in new customers. Most all good business models depend on the recruitment of new customers while maintaining its established base. Currently the starter sets have skyrocketed to 100 dollars. It seems like a hard sell now when you ask a parent or younger kid to drop a hundo on a box of plastic and some rules that they may or may not like. Worse yet is when you explain to someone who is clearly interested that the first hundred is merely the tip of the iceberg and that you will spend another four to five hundred to get a decent army together, its no wonder that anyone starts the hobby now. If that wasnt bad enough you can now couple the ambiguity of GW commitment to produce and supply models needed for its game. Personally you know I dislike CCGs but they seem to produce as many cards as their players want to buy. I dont think I have ever been at Millennium or Boldos and heard " Yeah we are waiting on our Magic shipment, Wizards of the Coasts is unsure whether it wants to print cards on paper since the price has climbed in recent years, but when we know you will know. Be patient I am sure they have a plan...". It is not remotely fair to the retailers and player base to keep them in the dark as often as GW likes to.

5) Game development: Along with the terrible communication of its product GW also is notoriously horrid in its play testing and game development. Let me introduce this once proud subject who has now become a white rhino, yes its the mythical Fantasy player! Where did they all go? Were they all sucked up last weekend in the rapture? Why have their numbers shrunk to the point that their is barely a viable population locally? Isnt the simple answer 8th edition? Somewhere back a few years ago GW started its new sales strategy of making the latest the greatest. Fantasy went from a workable balance to the newest armies being way out of hand in relationship to whatever else existed. First Daemons, then Vampires, Dark Eldar, Lizardmen, etc. Sure they release an army book here or there that was balanced or worse underpowered (Beastmen) but they had changed the landscape so much that the game needed a total overhaul to fix it. GW sped up its rewrite and released 8th edition. Sure it nerfed some of the problems it created when it released its uber army books but it also created more. The net result was that the casual fantasy players shelved their armies. I personally see GW doing the same exact thing in 40K by it constant one-uping codex policy. So far it hasnt ruined 40K completely (and I hope it doesnt). What would be wrong in balancing this game? What would be wrong with asking your core players and customers for help and input in the produces they consume? Peal back the curtain of secrecy and communicate with your core audience. Its possible you might not make the game mistakes to 6th edition 40K as you have done to 8th edition fantasy. Its a suggestion...

I guess what I am saying is I feel your pain Travis. I understand your struggles to work with GW and bridge the gaps between your customers and your suppliers. I also understand that with this hobby and in life not everything will be to my liking and done to please me. I get that, but I also understand that there could be a better way that the current GW status quo. Keep us informed, thanks!

[skyth]

Wow...For once I actually agree with Doug...

[netter]

Interesting thread.

In Canada, the price increase hurts, too. It only makes worse the fact that our prices are 20-30% higher than than US. With the dollar roughly at par, this hurts a lot. GW offers no explanation.

As a veteran gamer, my concern is about the growth and sustaining of the hobby. What I don't understand are the price increases on introductory items like rule books, army books/codices, starter sets, etc. These are items that new players need. The books in particular bother me. Their price has nothing to do with retooling for models or model ingredients.

I have the feeling that GW is simply trying to hit the pricing 'sweet spot.' I hope the local retailers can hold fast because they do most of the real work.

netter

[travis]

Skyth agreeing with Doug. I guess I will need to look closer into the updated date of the impending apocalypse.

[Staff]

Quick, someone gets some finecast model sets and a listing of the old metal models pricing plus the postal addresses for Hamas and the Israeli government... I have an idea

[travis]

Doug,

I appreciate the feedback on the post. I will address a few of the points you bring up.

"They are profit driven not service driven, I get it." I would disagree. Profit is hurt if service is too poor. There service is far better then any other miniatures company out there, especially given their size. Sure you might have a guy that spins his own stuff in England and will call you on the phone while making your parts but that's not feasible for them to do. Part of the reason they keep everyone in the dark on everything is our own fault. We spent years and years female doging every time they said something was coming out and it didn't. Now they don't say anything about anything until it's done and ready to be sold. As a retailer I have less knowledge but also less frustration and disappointment.

Resin is Cheaper then metal. The problem is that the cost of the machinery is not free. They needed to buy equipment to make resin and it had to meet their standards. I am less hesitant to call foul on the new stuff being more expensive for now. I will female dog if the resin stuff goes up in price without a reason next year.

New Player's- They sold the starter box set for an amazingly low cost of 60 dollars during one release. They didn't sell anymore of it at that price then they did at $100. Sure you could argue the rules weren't as good and go and on and on, but why give 40 dollars away. I addressed the books and paint in another post but to address it again, they don't make either in house. They adjust there prices based on what they cost them to have them made. Some of this falls into some hobbies aren't for everyone. If you look at the starting price for this game and truly compare it to other games it's not out of whack for what you get. The difference is you need to take the time to paint your army.

Game Development - First off Fantasy is England's game 40k is ours. If fantasy was doing poorly over there, they would change it. It's there cash cow on their home court. 40k being the latest is the greatest is a stretch at this point. The tourney seen locally and nationally is not being dominated by Grey Knights. It certainly wasn't dominated by Dark Eldar. Blood Angels and Space Wolves are tough, is anyone surprised. Blue Marines were good before now you have all the stuff blue marines get along with your chapter specific stuff. Nids certainly are not hurting anyone's feelings. We have different armies that win every month. New seems better because its just that, it's new. You haven't put it on the board and played it or played against it. It takes time.

Lately I have heard less female doging about balance in 40k then all the years I have been in the industry. Complaints come from Tau and Necron player's and even they know that a new Dex is coming. Followed closely by Chaos Space Marine player's. They want a more diverse list and I understand and respect that. The book is old it's time for something new. Eldar as well for that matter. I realize the army still competes but some more depth would be great. Being able to build a "Hard" list doesn't mean that a codex is good.

Games Workshop has certainly been much better with FAQ's and updates. Three years ago they would have never done what they did with Dark Angels and Black Templar. Now you could argue that they should have done those updates three years ago, but it's a step in the right direction.

Thanks for understanding. I think I speak for a number us in saying that we like the rational Doug much more then the emotional, knee jerk Doug. Good to have you back.

[skyth]

May 31, 2011 14:38:36 GMT -5 travis said:

Part of the reason they keep everyone in the dark on everything is our own fault. We spent years and years female doging every time they said something was coming out and it didn't. Now they don't say anything about anything until it's done and ready to be sold.

I think a bigger reason to keep us in the dark is because if something is being removed and/or nerfed from the newest army book, we aren't likely to buy it if we know we won't be able to use it come next month.

[travis]

That's a fairly cynical and short sighted way of looking at it.

If they make the book and know that certain units are going to be less effective wouldn't they produce less of that model given that it will sell less. By the time a new codex has come around they have either made their money on a model or not. If not they melted down the old and went from there.

Can you name a time when they did the converse. Let's make a certain unit good just because we have a warehouse full of those models sitting around? If a model wasn't good and will be good usually they make a new model. Is the new model better? I certainly hope so. If you bought the old model, you should rejoice. Man this thing used to suck and I spent my money on it anyway. Now I can play it again. Hooray for a game that you can re-use old parts without having to buy new ones.

It certainly is easier to come up with a different reason if the one already posed, hits too close to home though.

[skyth]

I think the biggest disconnect is that Games Workshop is basically a power gamer. They are in the game solely for the win (IE profits) and could care less about the hobby. They promote the hobby only so far as they need to (IE only to the extent that it allows them to play - Similar to the guy putting 3 dots of different colored paint on his Space Marine so he can say he meets the 3-color minimum to play). However, by encouraging other people to be hobbiests first and gamers second, they make it easier for them to win.

They also are rules-lawyers (In that the repeatedly sue people that can't afford to defend themselves. It will be interesting how the Chapterhouse lawsuit turns out.)

Combine all that and you have the disconnect and the people upset with GW. It can be seen as hypocrisy.

[travis]

I agree on the premise, that they could be doing things better. I also understand their picking at people trying to profit from them and their game. I am more interested to see what happens when Mantic releases their Sci-Fi game.

The big guy always tries to keep the little guy down. That's how he stays the big guy for so long. It's not uncommon for bars to run really cheap prices for the first month or so when a new bar opens near by. Why would they want to share the pie when they have the whole thing.

There are other games that are cheaper. Games like MERCS are catching on a bit. But the issues that you deal with when you play GW stuff is nothing compared to the stuff you deal with when it comes to smaller companies.

What would you say is the largest miniatures competitor to GW? Privateer Press is second in terms of time in the market and number of models not counting Reaper that was bought out a few months back. Privateer Press just moved back all of their August releases. You know why? They can't keep enough models in stock at each of their distributors.

This is how it works with them. A distributor places an order 4 months later they get their stock. They will not get anymore for another 4 months. How can you grow a customer base without knowing how much stock you can actually sell. As a retailer I order from a number of distributors. If my two main distributors don't have Privateer then I don't order it. Outside of a few models here and there this never happens with GW.

Smaller publishers are even worse. I realize that the big guy always get the most criticized too. Of course they do more people have there money invested in them. If you wanna root for the little guy that's fine too. I just hope the little guy you buy from doesn't turn into Confrontation, Warzone, Battlefield Evolution, Starship Troopers, Mage Knight, D&D mini's, Heroscape, Judge Dread, Chainmail, Vor, Mighty Empires, CAV or Warlord.

I played nearly all of those games and had fun doing it. They take up a bunch of space in my basement. I am sure some of my friends still have some figs and we could get together and play but realistically that's not gonna happen.

They have to care about the hobby, they are the hobby. They don't do as much as they used as far as events go but the business isn't what it was before either. Profit is a big part. It should be. Without it they wouldn't exit and what would we have to complain about.

I don't like the stuff they do sometimes too. I don't like that they took the retailer page out of White Dwarf. It was 3 pages in a $9 magazine, that listed all of us hobby stores. It sucks. They did give me an out though. If I give them a list of the events I am going to run 6 months in advance I can get in the magazine. Just like if you don't like the fact that there are fewer GT's start your own. That's what the guys here did. Games Workshop gave them a healthy amount of prize support for their event too.

The prices will come hold when people stop buying there stuff. Unfortunately a good amount of retailers will fold then too.

[MajorSoB]

May 31, 2011 20:20:32 GMT -5 travis said:

The prices will come hold when people stop buying there stuff. Unfortunately a good amount of retailers will fold then too.

This is the sad endgame that I envision. Here is the whole discussion in a nutshell. I like this game. There are times I am more enthused than others, there are times I play the crap out of my armies, other times I may go weeks without touching them but in the end I like this game and the people I have met who share my passion. To me its a hobby, something fun and enjoyable to do while I share the time and company of my friend. I have liked and disliked the direction that GW has headed throughout my time supporting their products. I am often vocal with my opinions. I do try to look at it from GW's perspective as well as my own. These past few decisions have me confused.

Let me apply my own perspective in viewing this subject. I work at a successful manufacturing business who specializes in packaging. Throughout this dark recession I have seen my company grow. How did this happen, after all many businesses have failed and closed. Its quite simple, we have invested in our future and actively showcased our talents to perspective clients. We have lured some in with low introductory pricing so that we have an opportunity to display our talents and then let our customers come back if they are happy with what they have received. While others have tightened their belts we have spent money to but new equipment that will increase our competitive edge while others have limped along. In the past two years we have spent over 10 million dollars retooling. We are profitable because of it. We have paid off our loans and have booked out many new accounts, customers that otherwise would not have given us a chance had we not catered to their needs.

Now lets apply this same type of thinking to GW. Throughout the past few years GW has cut back. Travis your have told me yourself that in times when money tightens up that the hobby industry usually remains stable since people seem to invest in a hobby ( like board games, 40K, etc ) that has reusability and will offer hour of entertainment rather than a one shot deal like dinner or a movie. I understand the increased cost of energy, raw materials, retooling, etc. These our costs shared in the industry that I derive my livelihood from as well. The difference is that we take these cost and spread them out rather than demand a 20 to 30% increase from our customers to cover cost associated with our business that we should anticipate and budget for. If we were to pass on the large increases to our base customers they would go elsewhere. We produce products that our essential to their businesses but if we attempted to strong arm our consumers into paying for our poor planning and poor business structure they would go elsewhere. We exist to make a profit just as any company does, that is rule 1 in Business 101. We however have to be understanding of our the changing needs of our clients and be ready to serve their wishes and needs. Again if we are not, they will go elsewhere.

GW has always ( since I have been in the hobby, 10 years ) seemed to march to their own drummer and do what they like. They decide what direction their game will move in, and they have decided what is best. They have insulated themselves from criticism and feedback from their independent retailers and customer base. Often I have had the conversation with you Travis about what they have planned and usually you know as little as I do. GW seems to thrive on the cloud of misinformation and speculation that it has weaved around itself. They have adopted an arrogant stance that the few people running their design team are such great visionaries that whatever creative gems they produce we as loyal GW serfs will devour ravenously and wait patiently for the next time that master throws us some scraps from its table. We will gladly accept the increased cost of this hobby, even when it is double or triple what are paychecks have increased by in proportion. GW has operated on the assumption that we as customers will blindly follow no matter what direction they lead.

Now we are at a crossroad. While it is true that year after year when GW rolls out is annual price adjustments ( which always go up! ) people complain. Yes I have complained with the best of them too. But this year something else has occurred that sets it apart from previous years. GW has flexed its muscle and started to dictate to retailers how, where and when it can ship to international companies. They have also increased prices disproportionally dependent on the country you are now forced to buy within. While I understand some of the reasons for their decisions, I also understand the impact as well. Our friends in NZ and "down under" have suffered by far the biggest jump in their already inflated prices. While I do not claim to be a global economics major, I cannot see anything other that lower sales and a movement away from the hobby by many of its once loyal customers there. The US and Canada have been hit with increases as well. While our pricing structure is a larger increase than I feel is warranted, it is less than what Canada has to incur. Maybe the US customer will not openly revolt with pickforks and torches, but I know in my mind my spending will drop. I cannot see how I am so different from any other customer. I also am deeply concerned with the hobby's ability now to attract new players since GW has made the cost of getting started double. ( Starter box was released at $50 in the beginning of 5th edition, what is it now? ). The Euros seem to have faired the best since the European union has laws prohibiting Great Britain from restricting its retailers fair trade and global distribution within countries of the EU. All these concerns leave me scratching my head wondering how this will all play out. This time I believe that some of the gamers who have threatened to walk away from GW in the past may actually do so, if they have not already.

I do not want to see any retailers fail due to bad decisions by GW. This means everyone from Millennium to Boldos to Pair a Dice. I want to see them all succeed in their own right, not just because I care about the people deriving their living from these places but also for myself as a gamer it increase the player base here and the people I can have a friendly game with. If one or more businesses fail, some of their gamers make the transition to another store but a good majority end up lost. This also translates to lower sales by GW so the next time they increase prices it in turn will be that much more sever as GW struggles to regain lost sales as well as lost profits. The cycle picks up speed from there until eventually GW cannot increase prices enough to sustain its status quo.

So what would I like to see happen?

Simple:

1) I would like GW to do what everyone else does in regards to increased cost. While raising pricing is fine to some degree, GW also has to do a better job controlling its costs without just passing them on to its end consumer.

2) I would like to see GW communicate better with its base customers in regards to its rules, releases, tournaments and overall direction. Dont force down our throats rules that we may not like overall ( like Fantasy 8th edition) and drive us away from the hobby we love. Make us once again excited about upcoming releases rather than fearful of what crap the next codex will unleash and when the next price increase will occur. ( I know, I am dreaming with this one huh?)

3) Help retailers to attract new players. GW used to have Outriders, GW used to sponsor its own events, they used to provide affordable sets to show interested people the value that this game has, as well as allowing them a small sample of the fun that they could have with a moderate initial investment, not $100 plus dollars and "maybe you might like it."

4) Help the retailers to stay stocked with your products and informed on upcoming business as it pertains to them and their customers. It is inexcusable for GW to not meet demand and have the retailers take the heat for their poor planning. If a problem occurs ( like underproduced Hive Guard for example ) explain the situation to your retailers and customers alike and offer a time when you see the problem corrected. A little basic customer service could go a long ways sometimes.

5) GW, stop trying to sue everyone whom you think in encroaching on your IP and copyright. If you will not produce a product and an independent company does use your capital to outproduce them, not your lawyers to strong arm them with crease and diciest orders. Pretend like the free market still exists and remember that if you are unwilling to do something, don't expect your competition to respect that void and allow an untapped market to be left alone.

6) Lastly, treat the people the support your company like they matter. Offer a free mini every once in a while for purchases over a certain amount, send out a survey ( online is fine ) asking what we might like, what you are doing well, what needs to be improved, etc. Treat us like you care about us ( even if you do not ) and make us feel like we have a small part in the way that this hobby might evolve ( again, even if we do not ). Do the little things that will keep us from moving to other games ( that are cheaper ). I still enjoy this game, show me that you still want me as a GW customer that's all I am saying.

Again Travis thanks for the time that you have taken to share and to comment. I understand and respect your position in all of this. I do hope that a workable solution arrives and that my fears are left unrealized. Until then lets hope Magic keeps printing cards!

[DoubleTap]

I'm new to this, so maybe I'm wrong, but look at GW's website and check out the prices of some of the Heavy Support vehicles. I was looking at the IG and SM pieces, and I swear these used to be $99, and now they look like they are ranging from $49 to $66...

[inzeos]

Jun 1, 2011 14:15:36 GMT -5 DoubleTap said:

I'm new to this, so maybe I'm wrong, but look at GW's website and check out the prices of some of the Heavy Support vehicles. I was looking at the IG and SM pieces, and I swear these used to be $99, and now they look like they are ranging from $49 to $66...

There used to be some special packaging of heavy vehicles when 40K apoc was released, which retailed for around ~$100 USD if I recall correctly. They also still have some super-heavy vehicles for apoc that retail for $100 USD.

Regular heavy units are significantly less.

[MajorSoB]

I'm not sure specifically what you are looking at. I checked out both the Space Marine heavy choices as well as the Imperial Guard Heavy choices. Everything is much more expensive with a slight exception to the Space Marine Devastator Box set ( due to GW switching it from metal to plastic a few years back). All the vehicles have increased in pricing throughout the years, most notably the land raider that used to be around $45 when I started playing, now its currently priced at $66.

GW has managed to hold the line on its super heavies though. I believe the baneblade were $90 when first introduced, now currently are $99, only a net 10% increase.

On a side note I did physically see one of the Fine Cast models, specifically a Zoenthrope. It has great detail, is considerably lighter and should be easier to work with that metal, but $25 still seemed quite unreasonable for maybe 50 to 75 cents of resin. Just my thoughts thats all,