GW and pricing, there's a problem.

[Dark Shepherd]

 

 

Can’t believe this topic is topic is still going

Just a testament to how much of an issue it is!

 

Is GW still trending up in profit?

 

I simply wonder how often this cycle exists for people. And what impact it has made/is making/will make for GW's trending growth. I don't think there is a good way to trend this.

Profits were up almost 70% in the last tax year and since 8th dropped profit growth not just profit has been increasing about flat 10% a year

 

The cycles are fairly common Id say. The big question is how much of the people who got back in to it during covid stick around/how many kids did they miss out on with stores closed/how many people will drift with offices and commutes and drinking and dating back? Or will there be a boom as people want to play their new armies?

 

Theyll want to raise prices too to cover shipping and materials costs

 

Potentially theyre looking at an inverted J curve for profit growth. Or they keep releasing stuff people have been screaming for for ages. Probably theyre looking at a soft landing for profit growth the way theyve been diversifying

[Karhedron]

I have been in the hobby for 30 years (yes, I still have my original copy of Rogue Trader) and I have contributed to online fora for at least the last 15 years. I have seen numerous threads like this over those years, each one prophesying that GW was on the brink and one more price rise would seal their doom.

 

Well those threads have come and gone. More price rises have happened and the sky has not fallen in yet. There is nothing in this thread that I have not read before. I see no reason to suppose that the doom mongers will be more right this time than all the previous times.

[Kastor Krieg]

I have been in the hobby for 30 years (yes, I still have my original copy of Rogue Trader) and I have contributed to online fora for at least the last 15 years. I have seen numerous threads like this over those years, each one prophesying that GW was on the brink and one more price rise would seal their doom.

 

Well those threads have come and gone. More price rises have happened and the sky has not fallen in yet. There is nothing in this thread that I have not read before. I see no reason to suppose that the doom mongers will be more right this time than all the previous times.

People said the exact same thing about climate change, you know.

 

Or to rephrase - the fact that one is speeding and hasn't crashed yet, despite all warnings from friends and family, does not preclude pancaking himself on a street light tomorrow.

[Dark Shepherd]

Genuine question for longer term players: were the price increases prior to 2016 as bad or as frequent?

Some kits have almost doubled in price since then

 

Prices have to be viewed in relation to profits IMO, company profits werent always rocket propelled

[LameBeard]

The perception of price rises being unreasonably large and frequent has always been there. The prediction was price rises would lead to falling sales and profits. This has not happened in the macro scale. A few products have sold poorly because priced badly, but overall, pricing decisions don’t seem to be the big driver of profits. There are threats to GW business model but I severely doubt a 20% price cut is the solution to those threats, as much as I’d like to see it.

[Guest Triszin]

The discussion on shipping delay/cargo delays is kind of a separate discussion,but it is still a factor in price considering the average cost of a full container has gone up 400-500%

 

I work in logistics and boy, it's bad.

[Karhedron]

Or to rephrase - the fact that one is speeding and hasn't crashed yet, despite all warnings from friends and family, does not preclude pancaking himself on a street light tomorrow.

There is a difference though. Crashing is a catastrophic event. If GW starts raising prices beyond what the market will bear, there will be plenty of warning signs and time to make course corrections.

 

The time when GW was actually looking vulnerable was shortly before the launch of AOS. Kirby was slowly grinding down the company and it had lost its #1 position to X-Wing. Kirby was kicked out and GW reclaimed its crown by creating more affordable entry points to their games.

 

Not everything was perfect. The total destruction of the Old World to launch AOS lost a lot of players but GW paid attention and the launch of 40K 8th edition was a much softer reboot with Primaris reinforcing vintage Marines rather than replacing them.

 

My point is that GW have proved they are savy enough to adapt and change course if necessary. They are raising prices by increments. I bet you that as soon as sales start to dip, they will ease off for a bit. It is not like their sales will crash overnight from a single price rise.

[Karhedron]

Genuine question for longer term players: were the price increases prior to 2016 as bad or as frequent?

Some kits have almost doubled in price since.

My recollection is that price rises have been fairly consistent across my hobbying time. A Tactical squad cost £10 in 1998 T the start of 3rd edition. They went up to £12 and then £15 in intervals over the next few editions. Around 2014 the squad got revamped with new weapon options and went up to £20. Then £25 at the start of 8th edition and £30 now. The rate of increase for "classic" units seems to have been fairly steady.

 

Of course new units seem to be priced above their classic equivalents. Just look at the price of the Impulsor vs the Rhino.

 

So GW prices do seem to have increased above the rate of inflation in general. But newer products tend to be larger and more detailed than old ones so it is not exactly a like-for-like comparison. Also I not noticed that price rises in the last 5 years have been markedly higher than in the 5 years before that.

 

One thing I have noticed is that there seem to be a much wider variety of starter sets at various price points than there used to be. That probably helps to bring newcomers into the game.

Edited October 2, 2021 by Karhedron

[Dark Shepherd]

Cheers. The price jumps on older kits are probably more offputting especially for existing stock and its not like Land Raiders have to be redesigned every year

 

The new varyingly priced starter kits is a good thing. But we have the odd scenario (by design) where basic units such as Necron Warriors are deliberately priced up so the starter boxes look great value. Dame with outriders.

 

Weve been over the artificial value/savings thing before especially with characters, but I suspect half the price hikes on olde kits like Rhinos is so Impulsors etc are only a little bit more pricey and give an illusion of better value. Its evil genius level stuff

[Bryan Blaire]

The old kits do still cost more money from time to time - prices for things don’t just stay flat once they are produced:

- tax costs on already produced material

- if you re-box an item - that has an associated cost in packaging

- shipping continues to increase

- you have to pay your warehouse staff (even if it’s for shuffling things around inside the warehouse) more year over year to cover raises or replacing personnel

- you have to pay your production staff more year over year to cover raises or replacing personnel

- you have to cover physical store rents year to year, even if nothing about the stock inside it changes

- you have to cover new development costs out of sales of old product until the new product actually hits the market, especially as your new development staff cost you more and more money due to raises, complexity, paying for training, replacing personnel, etc.

- I’m sure there’s plenty more I’m not thinking of

 

It’s not like prices can realistically remain absolutely flat on old products, and may have to increase beyond inflation just to cover “carrying costs” year to year, and it’s also not realistic to expect GW to charge you an old price on a product just because the existing product “hasn’t had anything done while it’s on the shelf” (such as a reboxing).

 

Do I like paying more?  No.  Does that mean that all price changes are unjustified?  No.

[Doghouse]

Genuine question for longer term players: were the price increases prior to 2016 as bad or as frequent?

Some kits have almost doubled in price since then

 

Prices have to be viewed in relation to profits IMO, company profits werent always rocket propelled

 

I remember a time when they did discount sales in stores.

[The Neverborn]

Was looking to get some new minis for my Daemons army and this topic came to mind.

 

Does anyone else google "X alternative" regularly before making a purchase? - I'd like to know

 

Since I came back for 9th Ed this has become part of my routine. I'm now using alternative minis for my Chaos furies.

 

In the market for a bunch of beasts of nurgle - Going to GW direct  27.50 for one model  around 20 GBP for 3rd party. I was thinking 2 squads of 3. That's 165 GBP. Little look around the net and I find these -   https://www.ebay.co.uk/itm/224433729882?_trkparms=amclksrc%3DITM%26aid%3D111001%26algo%3DREC.SEED%26ao%3D1%26asc%3D20160908105057%26meid%3D2f8494aa0dfc4b50adef4bea636c5b5f%26pid%3D100675%26rk%3D1%26rkt%3D15%26sd%3D224433729882%26itm%3D224433729882%26pmt%3D0%26noa%3D1%26pg%3D2380057%26brand%3DUnbranded&_trksid=p2380057.c100675.m4236&_trkparms=pageci%3A0f6dd479-23a3-11ec-a5d2-d637aa471a64%7Cparentrq%3A41f8859c17c0a49bd9886e92fffe7624%7Ciid%3A1

 

3 for 25 GBP. I think i prefer the models too. I'm sure someone will point out that they might not look like that when i get them. well maybe, maybe not. But my wallet will be 115 GBP heavier minus some bases. 

 

Will GW care about these, no probably not.

 

I think it's time for me to stop caring about what a corporation may or may not think. When I buy a 3D print I'm making a problem I perceive no longer a problem. Whether GW change their business model becomes irrelevant to me.  

 

Edit: If any admin can make that link shorter feel free. I've tired and failed.

Edited October 2, 2021 by Battle Brother Abderus

[Karhedron]

I remember a time when they did discount sales in stores.

Then you must have been in the hobby about as long as I have.

Does anyone else google "X alternative" regularly before making a purchase? - I'd like to know

I am more likely to do that if I dislike the model than the price but occasionally.

[Inquisitor_Lensoven]

Was looking to get some new minis for my Daemons army and this topic came to mind.

 

Does anyone else google "X alternative" regularly before making a purchase? - I'd like to know

 

Since I came back for 9th Ed this has become part of my routine. I'm now using alternative minis for my Chaos furies.

 

In the market for a bunch of beasts of nurgle - Going to GW direct 27.50 for one model around 20 GBP for 3rd party. I was thinking 2 squads of 3. That's 165 GBP. Little look around the net and I find these - https://www.ebay.co.uk/itm/224433729882?_trkparms=amclksrc%3DITM%26aid%3D111001%26algo%3DREC.SEED%26ao%3D1%26asc%3D20160908105057%26meid%3D2f8494aa0dfc4b50adef4bea636c5b5f%26pid%3D100675%26rk%3D1%26rkt%3D15%26sd%3D224433729882%26itm%3D224433729882%26pmt%3D0%26noa%3D1%26pg%3D2380057%26brand%3DUnbranded&_trksid=p2380057.c100675.m4236&_trkparms=pageci%3A0f6dd479-23a3-11ec-a5d2-d637aa471a64%7Cparentrq%3A41f8859c17c0a49bd9886e92fffe7624%7Ciid%3A1

 

3 for 25 GBP. I think i prefer the models too. I'm sure someone will point out that they might not look like that when i get them. well maybe, maybe not. But my wallet will be 115 GBP heavier minus some bases.

 

Will GW care about these, no probably not.

 

I think it's time for me to stop caring about what a corporation may or may not think. When I buy a 3D print I'm making a problem I perceive no longer a problem. Whether GW change their business model becomes irrelevant to me.

 

Edit: If any admin can make that link shorter feel free. I've tired and failed.

i definitely do. I got a Victoria minis autocannon team because I miss the old school HWTs.

 

And if the old world has lizardmen I’ll start a lizardmen army with one or two of the super cool alt models I’ve seen.

[Dark Shepherd]

The old kits do still cost more money from time to time - prices for things don’t just stay flat once they are produced:

- tax costs on already produced material

- if you re-box an item - that has an associated cost in packaging

- shipping continues to increase

- you have to pay your warehouse staff (even if it’s for shuffling things around inside the warehouse) more year over year to cover raises or replacing personnel

- you have to pay your production staff more year over year to cover raises or replacing personnel

- you have to cover physical store rents year to year, even if nothing about the stock inside it changes

- you have to cover new development costs out of sales of old product until the new product actually hits the market, especially as your new development staff cost you more and more money due to raises, complexity, paying for training, replacing personnel, etc.

- I’m sure there’s plenty more I’m not thinking of

 

It’s not like prices can realistically remain absolutely flat on old products, and may have to increase beyond inflation just to cover “carrying costs” year to year, and it’s also not realistic to expect GW to charge you an old price on a product just because the existing product “hasn’t had anything done while it’s on the shelf” (such as a reboxing).

 

Do I like paying more? No. Does that mean that all price changes are unjustified? No.

A lot of that is true/Id agree. Im not saying Im annoyed Land Raiders still dont cost £2 and 5d and 6p

 

The machine tooling is the biggest cost of any sprue, then probably design. So old kits cost a lot less to make than new ones. Theres also possibly improvements/efficiencies in production. But like you said there are other costs to making old kits

 

Increasing prices on existing stock is probably unsurprising but still sucks

Edited October 3, 2021 by Dark Shepherd

[Jukkiz]

155€ for new BT "kill team" sized box feels like too much... PLus don´t really need another redemptor and no oneto buy it off here...

[Domhnall]

Over the past couple of days I've been looking through the GW site so I can make use of my shiny £10 voucher. Sorting the character models by price (low to high obviously), and all the older models are cheaper than the new stuff. £10, £15, but generally under £20 for anything person-sized. The new shiny shiny stuff are all pretty much more expensive than the old stuff, which I would expect. The old stuff has had it's development, creation and is now old hat, so is sitting riding inflation at the bottom of the price range waiting for the day the last one goes off the shelf. 

 

New stuff needs to recover their development costs, so are more expensive relatively early in their life, but will also eventually 'increase price at a lower rate' until they to are at the bottom of the pile. 

 

Yes, GW models increase in price at an above inflation rate, but most luxury items do. When I got started in 40k, a Twix king size was introduced at about the same time, and it cost 32p for 85g bar (UK). Now it costs 85p for 75g! That's almost 3x the price! A tactical squad cost £10 then, and now costs £30. It's slightly more inflated, but it's still a 10 man squad. A twix xtra is 12% smaller! 12% smaller! 

 

Time to go and get myself a twix now. 

[alfred_the_great]

Twix reduction is a real thing…

[Valkyrion]

Being a Burnley fan, the price of a twix is of some consternation, as we are made to pay £1.80 for a twix on the concourse at half time.....

 

Imagine if GW pulled the plug on online 3rd party retailers - they'd still sell to trade but made it a condition of sale that those shops don't sell their products online. GW would, in effect, be raising prices by around 20% without raising a single price. You could still go the local store and buy it at a discount, just not online. 

 

If GW were to do that, would that make one stop the hobby? 

 

For me personally, it probably wouldn't, but I'd probably not do anything 'new'. I'd carry on adding to what I have, but I'd shelve the Imperial Guard idea or AoS army. I'd treat normal GW purchases as though they were forgeworld treats and budget accordingly. 

[MARK0SIAN]

Being a Burnley fan, the price of a twix is of some consternation, as we are made to pay £1.80 for a twix on the concourse at half time.....

 

Imagine if GW pulled the plug on online 3rd party retailers - they'd still sell to trade but made it a condition of sale that those shops don't sell their products online. GW would, in effect, be raising prices by around 20% without raising a single price. You could still go the local store and buy it at a discount, just not online.

 

If GW were to do that, would that make one stop the hobby?

 

For me personally, it probably wouldn't, but I'd probably not do anything 'new'. I'd carry on adding to what I have, but I'd shelve the Imperial Guard idea or AoS army. I'd treat normal GW purchases as though they were forgeworld treats and budget accordingly.

I don’t think they’d do that. We know a huge part of their income comes from sales to third party stores. If those stores couldn’t sell online they’d buy a lot less stock which would be less money going to GW and it’s unlikely that the missed sales from 3rd party would transfer directly to GW, especially with as (like you said) they’d be 20% more expensive.

[Jorin Helm-splitter]

Genuine question for longer term players: were the price increases prior to 2016 as bad or as frequent?

Some kits have almost doubled in price since then

 

Prices have to be viewed in relation to profits IMO, company profits werent always rocket propelled

 

The price increases were not as frequent but I would say they that felt worse. I can remember dire avengers going from a box of 10 to a box of 5 and costing about the same lol.

 

That said I don't think the price increases have fueled the profits. The game has been in a better place, people didn't like 6th as much as 5th, and 7th was a train wreck for a lot of people. 

 

I also think the pace of updating codex really helped them. It wasn't uncommon to wait four years for an update. Now you basically can expect a codex, a supplement, and a campaign in a 3 year cycle, and that isn't counting books like chapter approved. Personally even though I'm disappointed with the last chapter approved, and the day 1 dlc I still think its better than knowing your codex stinks, and you have a few years before they get to it.

[Dark Shepherd]

Oh for sure it was 8th/AOS that launched the profit graph upwards but the price increases are definitely sustaining it/keeping it going

[N1SB]

Hi guys. How're you? I haven't had breakfast yet.

Is GW still trending up in profit? I often wonder in the wider scope how individual hobbyist have changed over the years. In my younger days I started this hobby back in late 2nd/early 3rd as a kid. Around 4th/5th edition the chip was firmly planted in my head and I was buying stupid amounts of GW product and starting new armies left and right for the hell of it. A collection of forge world titans, on top of a large horus heresy mechanicus, sons, and iron hands armies. Too many side 40k armies. And....stupidly and admittingly a sea of unpainted grey or primed models. The joy of collecting and converting had overtaken me, but always too nervous to paint most of it for fear of messing these investments up. Even getting caught up in occasionally chasing metas. Silly times. The point being: dumping a lot of money into GW products for a time. It wasn't until a handful of years ago when I finally took a turn and figured out how to paint that I realized I had no real love for most of pet project armies I had. And I would likely be dead before I paint them all to the standard I wanted. I fell more in love with painting and the hobby over chasing metas.

I have sold off most of my stuff and I have since moved to focusing on keeping my cores armies. Vowing to only focus on them. It's funny how this change also is further flamed by the large price increases from GW. I nowhere near purchase as much as I used to. Not even close. A small trickle. Happy in just going at this hobby the way IMHO think the way it was originally intended. Working on units one at a time and improving your painting skill. It takes me a good month or 2 to finish a single unit. And this change has certainly helped my wallet. I regret all those purchases years ago.

I simply wonder how often this cycle exists for people. And what impact it has made/is making/will make for GW's trending growth. I don't think there is a good way to trend this.

Thank you for this soulful sharing. Your story, imho, is our story, and GW's story. To answer your question, experiences like yours has impacted GW, but perhaps not in the way you may think.

It's a positive impact, both in the numerical sense, but the customer experience sense. I've updated my chart:

Lots of numbers, too many numbers, but you want easy-to-remember numbers? Rules of thumb:

• On average GW's revenue (i.e. sales) goes up 20% a year
• On average GW's profits (i.e. profits, lol) goes up 40% a year (like Warhammer 40k)

This is an average that financial techpriests like me call the CAGR (which stands for "Compound Annual Growth Rate", but I've heard it pronounced "kegger" and even "Kay-GAR" like it's some kaiju or barbarian, omg Kay-gar the Capitalist Barbarian ahahaha, I'd watch that cartoon). Btw, in case it's not obvious, this isn't just trending upwards, this is, in professional parlance of financial techpriests like myself that secretly control all the algorithms that drive stock markets, trending UP THE WAZOO. GW's performance is good at any given time in history for any industry including Big Tech, but to do so now during the time of both Brexit and Covid isn't just amazing but miraculous.

Your story that resonates so much with our own about how you amassed 50 Shelves of Grey around 4th to 5th edition, was it, is around the start of this graph. Notice in 2007 GW had a loss-making year...they actually lost money selling Warhammer (which I know sounds crazy, like how can you actually lose money selling Warhammer considering how much we buy?) This was the time I'm pretty sure that GW fell into this vicious cycle of: GW's gradually losing players, so they squeeze remaining players even harder by upselling you more models, which only causes them to leave GW. It's a desperation tactic I've seen happen in other companies, they're squeezing so hard to stay alive, not knowing that very act is what's killing them.

Have you noticed how GW's stopped trying to sell you 2000 pt armies and trying to sell everyone smaller skirmish games? Lower barriers to entry attract more existing, new AND even lapsed players (who got burnt out and left the Warhammer Hobby, but return now that they don't have to buy and paint 2000 pt armies). This is far from the whole story, there's a lot more evidence, but regarding the question Brother Ahzek asked it's like GW knew they were burning out players like him or me or you, it also knew it was a bad idea, but that's what it needed to do to stay alive at the time.

Oh, i should also mention this:

I'll roughly translate this gibberish because I speak the archaic language of Kaygar the Capitalist Barbarian. GW says, "lots of crap happened because Covid, made making miniatures more expensive because we had to pay overtime and extra stuff for Covid precautions, but we actually charge so much for NEW releases compared to old ones (like have you noticed how expensive Heavy Intercessors are) that we're even more profitable now!" The "mwahahahaha" is silent.

The telling thing for me was the product mix. GW has always looked at their models sales as what-came-out-this-year vs. all-those-old-models. You know how it's hard to increase the price of existing models, like we rage when there's a price increase on Tactical Marines? Well, it's easier to price hike something completely new like Heavy Intercessors because it's a new release, it's the 1st time they priced it (and have you noticed how expensive those are?) So GW as usual has been increasing prices all around, but especially heavy on SOME of the new models...and it turns out we were buying those new expensive things that made their gross margin (a.k.a. the profit per model) way better than previously.

But TL;DR - GW's winning play imho is similar to all yours, with a caveat. I wouldn't say just decrease prices. I would say lower the buy-in costs. Brother Ahzek, other existing players like you and me, new players and returning players don't want to commit to a

[Karhedron]

Thanks for that brilliant post N1SB. Not only insightful but also backed up by figures rather than individual anecdotes.

 

This supported my hunch that GW were going from strength to strength and pricing does not seem to be an issue for them due to their diverse entry points. It may be an issue for us but we have to remember that individual players are less important than the overall customer base.

[The Neverborn]

That was a good post.

 

I don't see that GW are going from strength to strength though. Not to sound like morpheus. But 'everything that has a beginning has an end'. There will come a time when GW is even more niche than it is now.

 

These things don't happen overnight, they take years if not decades and typically start with something as innocuous as a 0.5% sales decrease.

 

As I've gone into before the normalisation of 3rd party models is a snowball and I just don't think it's reasonable that GW will be able to litigate everything.

 

It does seem that we can't see s fire, but I see an awful lot of cinders.