A guest blog by Sam White
It's that time of year. The Games Workshop price increase has struck our wallets once again. While there are now a myriad of articles
that explain the logistics behind what many of us consider to be price
gouging, I wondered if there might be some unseen factors that affect
the logic behind GW's decision. After some pondering, I came to a
fascinating realization: Saturation.
The very nature of GW's product causes an odd paradigm within a consumption based market. It's odd, you see, because it never expires. Any other product you buy, with few exceptions, go bad. They can go bad in many ways. Maybe it's something you consume bodily, or something that breaks, or even something that goes out of style. In any of these instances, you have to buy replacement product. That is not the case with Warhammer.
Any model you buy is will still be legal/acceptable in fifteen years, just as fifteen year old models are still legal/acceptable now. You can see this in occasional glimpses of older models that veteran players will bring out from time to time. While they may look a little different at times, they're still just as good. One of my personal favorites is the 3rd edition Space Marine holding a Missile Launcher. I love the look of the model, and have one in my army now.
It can, of course, be argued that GW can change this by writing new rules and Codexes that make older units (and their models) useless or even obsolete. However, this rarely happens and even when it does, the models are usually still usable for something else. But, you may ask, how does this affect price increases? Well, allow me to go a little further. When you build out an army, you only need so many of each unit. Once you have a certain number of unit x, y, or z, you've got enough to suit your play style, or the maximum you can use. For instance, I have 3 Land Raiders. Two of them were given to me, so without those, I may have only ever bought 2. The need for them isn't great, and if you magnetize or proxy, you can get plenty of use out of 2. So, I won't likely by any more of them. Eventually, every player reaches this point with any given unit/army. So here's my question, where does more money come from?
New players. We see cost increases mostly in Tanks, Monstrous Creatures, and Special Characters. These are all things that are primarily bought by new players. Once you have the number of transports and big monsters you need to play the way you like, you don't typically wind up with extras. New players, therefore, have to take up the slack. Where we see prices increase the least are in Troop units and supporting units.
It seems to me as though there is a method to GW's madness, even if I really disagree with it and am somewhat hurt by it. When you step back to look at it though, it just seems as though the price increases may have a dual role in partially compensating for the increase in used model exchange and online retail sales. For each of us that flocks to a cheaper method of obtaining big, expensive units, there has to be someone paying the difference. As we all know, it can never affect their bottom line.
At this point I think I'll stop myself before I take off on a rant about the management of GW twisting their mustaches in their white tower. What do you think? Could market saturation be a big factor in price increases, or is it simply gouging? With the price of video games almost up to $150 dollars a piece and a maximum operating span of about a year, I still think Warhammer is an excellent form of entertainment for its price, but tanks going over $60? Yikes!
The very nature of GW's product causes an odd paradigm within a consumption based market. It's odd, you see, because it never expires. Any other product you buy, with few exceptions, go bad. They can go bad in many ways. Maybe it's something you consume bodily, or something that breaks, or even something that goes out of style. In any of these instances, you have to buy replacement product. That is not the case with Warhammer.
Any model you buy is will still be legal/acceptable in fifteen years, just as fifteen year old models are still legal/acceptable now. You can see this in occasional glimpses of older models that veteran players will bring out from time to time. While they may look a little different at times, they're still just as good. One of my personal favorites is the 3rd edition Space Marine holding a Missile Launcher. I love the look of the model, and have one in my army now.
It can, of course, be argued that GW can change this by writing new rules and Codexes that make older units (and their models) useless or even obsolete. However, this rarely happens and even when it does, the models are usually still usable for something else. But, you may ask, how does this affect price increases? Well, allow me to go a little further. When you build out an army, you only need so many of each unit. Once you have a certain number of unit x, y, or z, you've got enough to suit your play style, or the maximum you can use. For instance, I have 3 Land Raiders. Two of them were given to me, so without those, I may have only ever bought 2. The need for them isn't great, and if you magnetize or proxy, you can get plenty of use out of 2. So, I won't likely by any more of them. Eventually, every player reaches this point with any given unit/army. So here's my question, where does more money come from?
New players. We see cost increases mostly in Tanks, Monstrous Creatures, and Special Characters. These are all things that are primarily bought by new players. Once you have the number of transports and big monsters you need to play the way you like, you don't typically wind up with extras. New players, therefore, have to take up the slack. Where we see prices increase the least are in Troop units and supporting units.
It seems to me as though there is a method to GW's madness, even if I really disagree with it and am somewhat hurt by it. When you step back to look at it though, it just seems as though the price increases may have a dual role in partially compensating for the increase in used model exchange and online retail sales. For each of us that flocks to a cheaper method of obtaining big, expensive units, there has to be someone paying the difference. As we all know, it can never affect their bottom line.
At this point I think I'll stop myself before I take off on a rant about the management of GW twisting their mustaches in their white tower. What do you think? Could market saturation be a big factor in price increases, or is it simply gouging? With the price of video games almost up to $150 dollars a piece and a maximum operating span of about a year, I still think Warhammer is an excellent form of entertainment for its price, but tanks going over $60? Yikes!
Sam White (Son of Dorn)
And make sure you check out Sam' blog Most Perturbatory
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13 comments:
Oooh. I'm famous on the internet. :)
I'll just note that GW's competitors all have army price points in the $150-$300 range.
Seriously, the German army I took to last weekend's FoW tourney would cost you about $150 to buy. A whole army, for what it would cost you just to get 3 Chimeras; or 2 Valks plus the FW Vendetta kits. As a bonus, you can easily carry it around in a small box lid.
And the game is just as much, if not more fun, than 40K; and has a supported tournament system to boot.
So, compared to the competition, 40K doesn't look like all that great of a deal. Unless you're feeling locked into it and have to keep spending just a little bit more...
I think that you are incorrect. The market saturation that GW worries about is not in models that any player has, it is in number of long term players. They can make the different armies and games compelling enough that people will buy way more models, games, and armies than they have any real use for. Very few people have just the one army and just enough units for that one list. They just keep buying units to give more options. Additional Codexes to learn about the enemy or pick up a whole new game.
What they have figured out the problem is that there are only so many people who are interested in this hobby for a variety of reasons. They probably sold more than twice as many models at their peak as they are now but those models did not generate long term customers. They took this to mean that they are close to the maximum player bases they will sustain. Hence they are managing their company for current cash generation as opposed to trying to grow the player base and future profits.
There core game product are not able to hold more than a very small minority of mostly white male adults plus a minority of teens. Unless they can transcend their current market limitations they see no reason to really work hard to gain a large expansion of customers and since shareholder will not stand for continuously falling sales as better games work away at their market dominance and 3d printing destroys their margins they have to raise prices.
You might want to give TCP Podcast Episode 7 a listen... Rather than guess at GW's market strategy & motivations, (which are unknowable to those outside of GW) you can examine how the market is reacting via the finical statements that GW has released.
I think that the release of 6th edition a mear couple of weeks after the price gouge was no coincadence. The new rules have changed the way many players will field units in their units in their armys.
For example furous chadge no longer grants I+5 so the allure of Khorn Berzerkers. So as you can see they did not raise the price on them. However, with the removal of 1D6 for slow and purposful and the addition of the new psycic cards, thousand suns are a whole lot more fieldable hence the new $41.25 price tag for only 9 'troop choice' modles. Now with the adition of 'moving flat out' vehicles have become much more effective. So because people will now decide to field units they might normally pass on hence the price gouge.
And that is only for starters. Of the long time players, who usually just plays games under 2,000 points? For me, 2,000 points is the min. I have a large collection of modles. I like to field them. Now with the FOC doubling at 2,000 points and the adition of allys to the mix. Regular hobbysts such as myself and the majority of the people i know and play with are planing on and going to dump a ton of cash into new modles. Having one diverse core army and possibly 2 or more diverse allyed armys. By the time that we have built these up to the way we like them and we really are not purchessing new modles, a new wave of codexes will come out, nurfing our favorite modles and making modles noone was buying more effective. Making us buy them.
Not to mention when a new codex hits, new modles hit. New modles ushually complament other modles that perhapse you wernt spending money on.
So in closing. In my opinion, these price hikes are intended to effect the core gamers the most. The people who play the most. You and i. I think that part of the reasoning might be that We have already invested so much time and energy into our hobby that were not going anywhere. And when we do.. the release of a shiney new bobble, coddex or edition will bring us right back.
-ChaosRob
"GW can change this by writing new rules and Codexes that make older units (and their models) useless or even obsolete. However, this rarely happens and even when it does, the models are usually still usable for something else."
WHFB 5th edition came with plastic Skinks with shortbows. This is no longer a legal option: now it's either blowpipe or javelin and shield.
I admit that such extreme examples are rare, but there are plenty of cases where weapons options that were good become either illegal or suboptimal. In 2nd edition one could have a whole squad of assault marines with power swords and plasma pistols. And plenty of people are complaining about re-modelling all their power weapons now 6th distinguishes different types again.
I think the individual product pricing is linked to how useful a unit is in the game.
Yet there are some influincing factors to consider:
- Rising costs in commodities which make logistics, production and packaging more expensive.
- the injection of money into circulation to 'save' our fnancial system, ruining the value of what money you have
- decrease in purchasing power of consumers
- luxury product status
These last two probably also mean that GW is forced to push the envelope with regards to price elasticity. Since the more price sensitive customers stop spending during the downturn, GW must compensate their total revenue by increasing their margin on less price sensitive customers who have a higher Willingness To Pay.
However this does seem to me to be a short sighted and inherent faulty strategy. Having said that, discounting certainky is not the way. It generally takesca luxury brand 8 years to recover old prices after lowering them during a downturn. What GW should do is introduce package deals in combination with rules change that stimulate people purchasing new armies such as the new allies and fortification rules, which are very sensible moves.
Product saturation is imho less of a factor than price sensitivity and purchasing powers as we all want as many options and armies as possible. No matter who we are, with the maybe exception of hardcore tourney gamer who are happy using th same winning army for a decade.
A step too far for me, I baulked at the price of the new rulebook, so sent the money to Sedition Wars kickstarter instead.
At ~$1 a miniature for 100 in a self contained game, from Mike McVey, a highly respected sculptor, painter and ex-Geedubber, there is just no contest.
I have 3 armies, 2500+ pts of Templars, Grey Knight and Orks, and I will play/proxy those, no more mins reqd. My higher Willingness to Pay has been reached.
Not sure if this is the right place to state the obvious, but ALL prices are going up.
Food shopping in the UK is now becoming a case of it's a £1.00. It's another £1.00. It's another £1.00. Why we have pence is a mystery to me.
Games Workshop have for many years been the most expensive models and equipment we gamers use. Why should it be a surprise if they remain so.
I very rarely use GW products (with one or two exceptions) and tend to shop around for cheaper alternatives.
Yes I suppose I am penny-pinching. But to keep my hobby viable I have to.
Tony
@ SandWyrm: Duly noted.
@ eriochrome: True to an extent.
@ Cornu Mortem: As you can see from the link at the top, I’m very aware of financially analytical breakdowns. However, GW uses those to paint themselves in a light that they want to be seen in. My goal here was simply to provoke some thought with the speculative nature of the article. It’s an aspect I’ve never seen covered before and I wanted to see what folks had to say. :)
@ Chaos Rob: You make some great points. In retrospect, I should have covered them as a viable opposing view when writing. Though at the time I wrote this article, the flood gate on rules changes and new rumors had not opened. Now I can look back with some more clarity about how they’ve changed certain rules/units. :)
@ Ben: Even in cases where this does happen, you can still throw some new bits on most of those models to make them legal/viable again. Heck, right now I’d take a bunch of those Assault Marines and run them as Vanguard Veterans. With the boost to Jump Infantry, they’d be a formidable force again. :)
@ CLBenarius: Very true! I’d be all over package deals. With the splitting up of the starter and inclusion of terrain within, it could be the direction we’re heading. With the reintroduction of the Megaforces last Christmas, maybe we’ll see some smaller package deals as well this winter. ^_^
@ caracharodon: Well, as a fellow 40k player, I’m sorry to see you go. Though I do hope you have a lot of fun in your new ventures. :)
@ Tony: I feel your pain, man. I’ve spent a lot more on used models and resin analogs for GW parts within the last year than I have since I began playing. I’ll keep making due though. :)
About 8 years ago (When I was in 7th grade) I had to do a writing assignment for English class. I wrote a letter to Games Workshop telling them that the hobby was too expensive for me to continue because I didn't have an income. I asked for GW coupons to see what would happen. A GW representative wrote me back justifying their prices and declined any special treatment for me :(
Well that's pretty crappy :( I wonder how there customer service has changed over the years. I had a friend who called in to complain about the expense of making a squad of lootas and they sent him a free box.
Well, fun as that sounds I have to say that sending people free products just because they ask for them isn't a very effective way to earn money as a company. You can't really blame them for not doing that.
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