Monday, April 27, 2009

On the price increases...

OK, I got good dose of the latest internet outrage doing the Blog and Forum surf this weekend. Everyone seems to be pissed off about the GW price increases to the point of several people have started organized boycotts of GW product. While the boycott isn't anything that will have any effect..organized boycotts do not exactly spread goodwill in a time when all you have done is create Ill Will among your customers over the last 6 months. It's one thing to increase prices over time, in fact its pretty much a business necessity but Games Workshop seems to go about in their own special way. First they announce a price increase on metals and some plastics late last year, then they announce another price increase on the plastics this year within 6 months of the last one. Sort of a "we screwed up and didn't raise prices enough" (I'm seeing that as a general theme here) Then several high profile products had their prices increased after being advertised at a lower rate. (Realm of Battle, Valkyrie) Now we have the fancy new Empire Release in June featuring the "new" plastic prices. People in general have spitout their morning coffee when they got a look at that one. As an Empire player I am not happy, not so much because the prices are crazy expensive but because there is no rhyme or reason to the price increases. The 10 man Greatsword box, that I assumed was going to be $22, (the same price as 5 metal ones) is now $41.75! Apparently there is ton of stuff in the box as in its three or four sprues so it was intended to be a $35.00 box, which is a 19.3% increase..that better be the case otherwise its almost 100% increase and how do you justify this? this kind of kills the kit for me. While I am not one to quibble about price on something I want...considering I already have 15 Greatswords and 4 converted ones I really only need 5 more...so I am better off just scoring some old metal ones. The 10 man archer set..is up from $22, to $24.75..that seems like the only reasonable price increase at 12.5%, If they had stuck to a 12.5% increase across the board..I don't think we would have heard much complaint. But then we have the Steam Tank..so much for the big savings over the metal one..at $57 and change its now $7 less then the old metal one, granted its a much better kit and I am buying this despite the 15% increase. That's 15% IF this was originally a $50 kit. Well its allot less plastic than say a Valkyrie which was initially a $50 kit too..in reality its on par with Stegadon meaning the new Stank should have been a $40 kit so its probably an over all 40% increase!!!!, when you slap a 12.5% increase on one new product you predict is not going to sell as well as another product then put a 40% increase on the one that is going to be more popular..this doesnt let your "times are tough we need a marginal price increase across the board to help support the company" argument stand up to scrutiny

Point being here, GW is all over the map with the price increases. When you are not consistent, it comes off bad, as either price gouging or blatant taking advantage of customer loyalty. There was a rumor a week or so back regarding the now Chinese manufacturing of GW product..if that's true, isn't the point of going to China to lower costs?..so letting that cat out the bag at the same time as the price increase announcement, will most certainly rub people the wrong way.

This "Screw you" mentality that GW puts forth toward its customers is just another in a long line of serious head scratchers in the last 6 months..from the mysterious and inept canning of the official tournament scene, the botched product releases, the staff and store management shake ups, making it no secret of purposely trying alienate hobby veterans, the shenanigans during Adepticon and now these nasty arbitrary price increases- these guys seem to be their own worst enemy. I understand they are public company and liable to stockholders but when you start treating your loyal fan base of customers in the "us" versus "them" the stock price is eventually only going to go one way. If I were a stock holder of any magnitude I'd be demanding GW's CEO resign out of utter incompetence or least as a result of signing off on having a public relations department that operates like a bunch cast extras from "the Road Warrior". I hate to seem to always be writing negative things about GW, but I have to call them like I see them...I'd love to talk about something "great" they did...but they seem to be working extra hard to toxify their relationships with their customers..well at least thats working!!!

Edit: I just read that there is speculation that the new Empire Heraldry book and they Greatsword box got their prices accidentally swapped on the website..which makes one hell of alot more sense meaning the greatswords and archers are the same price with a 12.5% price increase. The Stank is still very expensive...but if this is the case...GW gets a pass on this one...there are still numerous issues..but the price increases for the most part are acceptable. although, you think they would have caught the error by now?

14 comments:

Peter said...

It's hard not to be *beepep* off with GW with two price increases (like you said) in 6 months is supid and they're not even raising it consistantly obviously aiming for the 'theroried' more popular kits to make more money, I was considering buying a valkarie from GW but screw that I'll find a twice as awsome twice as cheap one from elsewhere.

Way to go GW!

eriochrome said...

Well, if they do a 15% increase on most kits then the 5% on the battleforces will make them more of a "bargin". I have an email into my FLGS to see if they have gotten the details so I can order things before the increase if I want to.

Also the new prices are just whacky. Maybe they have a new pricing scheme based on actual production costs or something since we know that they have been sticking it to use for years on the terminator plastics and such.

closet gamer said...

You should email them with your concerns because they do appear to listen. I mailed them last year or the year before about the cost of the Vampire Count's Blood Knights (£40 for 5 models) and I did receive a response with what appeared to be some justifiable answers.
I do agree with the outrage amongst some about the extortionate price rises though - perhaps more needs to be done to tell GW about the impact it's having on their core market?

Tim Kulinski said...

Hmm,

So lets look at the world economy for a minute, everwhere is bad, including the UK, so what does GW do, they decide in this tough economic time to raise prices. They say its to cover rising costs in production, but I am not buying it at all.

It looks like GW is just out to get as much as they can from the consumer and they beleive that they can do whatever they want to the customer. But I got news for them, customers will turn to other cheaper games.

I used to think GW was like GM, it was the worlds leader in its industry. But we all know where GM is heading! You start charging too much & people will walk away. My Dad used to be a die hard GM auto guy, but now he has bought his first Toyota ever because GM's price and quality are crap!

So I hope the buying customers open there eyes to what GW is doing to it's customers. I for one will look to E-bay & Bartertown for any GW products in the future, you always find the latest & greatest there at half the price!

Jason Dyer said...

Strangely last year in Canada prices came DOWN - but this was because we were being screwed on the US$ exchange rate (the bases for our prices) in the previous 2 years!

ZeroTwentythree said...

You failed to mention the $30 single metal horse-mounted character, too. (I thought they were overpriced at $18 per figure!)

As far as the potential that the prices were screwed up, if it is, their own organization still doesn't know it, because everyone who's called to ask if that was the correct price has been told that it is. :/

Felix said...

The only thing to really do is to keep your budget consistent and not spend more just because they raised prices.

I use it as an excuse to load money onto other companies.

John@Plastic Legions said...

@023
yikes...I did forget the $30 for a single cav model...certainly ways toward my original argument over the swapped prices possibility..what a trainwreck either way

Bill Sullivan said...

Part of the problem is the demand for more information earlier, and the lack of communication between the webteam and localized sales organizations. The Valkyrie was priced at $58 WELL before the preorder went up on the website (staff received notifications, etc), and they still put it up at the wrong price.
As for the price raises, GW announced "annual reviews" of prices every June several years ago (I don't remember precisely when, but I was still working at HTU). The September raise this year was unexpected, and a pain in the ass, but anyone who didn't see this one coming wasn't paying attention last year. The prices on the empire stuff across the board is a little wonky. I wonder if all the fractional costs are based on a direct currency conversion, and if they'll be tweaked, as GW hasn't used those in a long, long time.

And $30 for a metal hero is no big shocker... the $18-$22 heroes all have plastic horses. The Averland guy is clearly a new horse sculpt. The part that puzzles me is, why is the studio model painted with red cloth? The Averland colors are yellow and black.

Albrek said...

Opening note: www.waylandgames.co.uk - cheapest place I have found for GW minis, they ship internationally, service is awesome.

Seriously, I don't mean to be a killjoy, or create any kind of negativity, but welcome to the consumer/capitalist world.

I don't like shelling out my hard earned clams as much as the next person, but thats the reality of the world we live in. There is no unilateral "markup" percentage, flating mystically as unique flotsam in the marketing universe.

Pricing is set based on how much the company believes you are willing to pay for a product. Games Workshop are in a unique position whereby they do not have alot of direct competition. It's like Dungeons and Dragons - sure there are other options out there, but if you want to play D&D as its your favourite D20 system, you won't go and buy Mutants and Masterminds, will you?

I have found that over years of playing Warhammer 40k, that while im buying, my yearly outlay on miniatures has remained mostly the same percentage of my wages at the time. Even when I was young and Dad purchased them for me, again he spent about the same as I did when I started working. The only difference is, I couldn't afford as many miniatures.

so in practice, Games Workshop will continue to rake in the same amount of money from everyone, regardless of the prices they set.

Even if you see my opening note, and purchase your minis through Wayland Games at reduced prices - you will probably find most people will pay less per mini with Wayland, but overall will spend the same amount, if not more over time with them on GW models.

GW obviously sells them the product, and so they still get profit via Wayland Games. And because you spent more money because it's so cheap, thier profitability remains about the same.

Anyways - point is that they're not pricing themselves out of the market, so they're going to do it regardless.

Anyone remember the Razor Scooter? I used to work for a toy store so here's some insight for you. They used to sell for around $80AUD in stores. We used to buy them for $7AUD including shipping from the manufacturer. It probably cost them about $0.50c a scooter, if that, to mass produce. There are thousands if not millions of products on the market with this kind of markup or more. Put it all into perspective and GW really don't make that much money compared to alot of other manufacturers.

Sorry if that sounded like a bit of a rant - its not intended that way.

All in all good post and very informative, having done the number crunching is good, thanks :)

-Albrek

Anonymous said...

Am I right in thinking that the metal miniatures are made out of bismuth and tin ? I think they got rid of all the lead.

If so, I believe the raw materials price has roughly halved since April 2008. Tin is roughly the same price it was in April 2007.

I know we#re talking about plastic here but they also put up the metal prices a few months back.

A disappointed gamer.

Senexis said...

Meh. I worked for GW back in the late nineties and they had the same "fuck you" attitude towards customers and pricing.

The common corporate attitude was "It's first-rate stuff so the fanbois will pay through the nose for it"

Not the only "fuck you" attitude they had, either...

Anonymous said...

Price increases are rarely lauded or enjoyed. I rarely buy anything new. I depend on trades with a good network of gamers, I've met over the years. One persons junk is often some others treasure.

Mark Thomson said...

There's no arguing GW is making some really good stuff, but they'll only get what people are prepared to pay. And at some point, probably pretty soon, people are going to say too much! I've already held back from buying some of the newer stuff simply because it's getting too expensive. $96 for the Valkyrie is getting hard to justify. It was bad enough when the 5th Ed Rulebook was $85, but now your getting codexes at $40+ ... it's just getting too much... I'll be heading back to the second-hand market for people's cast off minis...

 

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