Is Warhammer getting too expensive? Or is it actually an affordable hobby?

[Gamiel]

You also don't need to start with an army if you want to play, we have games like Necromunda, Kill Team, Warcry, Underworld, and similar where you only need one box of minis to play. 

[Rogue]

14 hours ago, Arkhanist said:

The original RTB01 box of 30 mark VI marines was £9.99 RRP in 1987 for 30 marines. Adjusted for inflation (264%), that's £26.43, or 88p per marine. The new heresy box of 20 mark VI tactical marines is £47.50 RRP for 20 marines, or £2.38 per marine. That's a price change of 270% over inflation - literally double the rate of inflation from 1987 to 2022. Plus you'd need to buy additional special and heavy weapon sprues (e.g. £26 for 10 missile launchers and 10 hvy bolters) but I'll ignore that.

 

(from here and here) Average gross weekly wage for all men, all ages was £220 in 1987; accounting for inflation, that's worth £581 in 2022. The same cohort earned £809 per week in 2022 (so far), so average pay is worth 139% over inflation for the same period. This is partly explained by the significant transition from manual workers to non-manual workers in the same period, and some percentage of productivity improvements being passed on. Wage growth has obviously shrunk substantially for the last decade, and in some cohorts (e.g. public sector workers) is even negative over the last decade. Assets value has increased far, far more than income over the same period, but I'm not going to calculate that because it's too depressing.

 

So to summarise; GW prices have changed 270% since 1987 over inflation for marines, while men's wages have changed 139% over inflation. To buy marines, you're now paying, in comparison to income, basically twice as much as a hobbyist who started in 1987 did (I started in '89, for reference)

 

Measuring pricing parity overall is hard, because cost of living has also changed substantially; for example, house prices (and thus rents) have soared. After adjusting for inflation, an average house in 1987 was just shy of £145k; in 2022, it's £271k.

 

However you slice it, the hobby is substantially more expensive than it was in the late 80s compared to income on a very basic comparison. But models are also substantially more complex, detailed, and bigger, so how much of that increase represents a better *value* is entirely subjective.

 

(Yes, the latest 5.8% price increase only affects 3rd party traders; but don't forget GW retail prices went up by between 5% and 20% in March, and likely will again in 2023)

 

 

 

 

That's erring on the generous side. 10 tactical marines (arguably the closest current equivalent of the RTB01 marines) currently cost £32.50 for ten, or £3.25 per model, so almost £1 each more than their Heresy brothers. And intercessors are £36 for ten, or £3.60 per model.

[Axineton]

14 hours ago, Arkhanist said:

Average gross weekly wage for all men, all ages was £220 in 1987; accounting for inflation, that's worth £581 in 2022. The same cohort earned £809 per week in 2022 (so far), so average pay is worth 139% over inflation for the same period

Love your research @Arkhanist always read your posts as I see you have a lot of savvy.

 

I’m just wondering what the average wage was back then and today for a working class person as I am. I’m fortunate enough to be on a decent wage nowadays for what I do, but back in the 90s when I started working I was getting around a £100 a week so that would have been well below the average wage. 

[Brother Captain Arkley]

For me no its my cheapest hobby.

 

I collect Vinyl, Nice Whiskey and Primaris.

 

GW stuff is by far my cheapest.

 

Case in point below.. :)

 

Edited November 27, 2022 by Brother Captain Arkley

[Isengrin]

For me personally, no. The main reason for not buying more is time not money. Like Brother Captain Arkley, I collect vinyls and whisky, but additionally I'm into mountain biking and photography. Getting a nice bike or a sharp lens can get crazy expensive quickly. 

 

But considering the current cost of living issue one has to wonder if veteran customers are getting priced out of the hobby and if potential beginners are discouraged by the cost. I don't think GW charges unreasonable prices, because for a high quality product designed and produced in Western Europe it's quite ok. Still, Warhammer was never a cheap hobby and it didn't get any cheaper over the years plus now we have a whole bunch of huge kits well above 100€ that didn't exist when I started playing. Like I said, I don't fault GW for their pricing, but at the same time a lot of people have to tighten their belts. And that sucks.  

 

6 hours ago, Brother Captain Arkley said:

For me no its my cheapest hobby.

 

I collect Vinyl, Nice Whiskey and Primaris.

 

GW stuff is by far my cheapest.

 

Case in point below.. :)

 

Oh yeah, that's the good stuff. 

[Brother Captain Arkley]

37 minutes ago, Isengrin said:

For me personally, no. The main reason for not buying more is time not money. Like Brother Captain Arkley, I collect vinyls and whisky, but additionally I'm into mountain biking and photography. Getting a nice bike or a sharp lens can get crazy expensive quickly. 

 

But considering the current cost of living issue one has to wonder if veteran customers are getting priced out of the hobby and if potential beginners are discouraged by the cost. I don't think GW charges unreasonable prices, because for a high quality product designed and produced in Western Europe it's quite ok. Still, Warhammer was never a cheap hobby and it didn't get any cheaper over the years plus now we have a whole bunch of huge kits well above 100€ that didn't exist when I started playing. Like I said, I don't fault GW for their pricing, but at the same time a lot of people have to tighten their belts. And that sucks.  

 

Oh yeah, that's the good stuff. 

I would love to say its my most expensive bottle I have bought but thats a damned lie :).

[templargdt]

Lots of great replies in this thread.  Overall I'd say:

- GW has raised prices well outside of inflation levels.  GW prices have doubled since well before we had this current run of high levels of inflation in the Western world.  It wasn't that long ago a box of tacticals was 30 bucks.  I was shocked when they went to 40, and just looked and saw they are charging 55 bucks(!) for 10 Space Marines on the GW site.  That's absurd.

- The high levels of inflation have significantly cut into people's discretionary income.   When food, fuel, and energy have gone up as much as they have, people are going to have to cut back on things like plastic toy soldiers.  Especially if you have a family to feed, get to school, keep warm, etc.

 

On the plus side, the game is much, much better than it has been in years and GW's overall performance is light years better then in the bad old days of Mat Ward writing crazy town books and GW randomly kicked out a terrible FAQ once every few years.  The organization and communication alone is night and day.  

[Jorin Helm-splitter]

I think when viewing whether GW is too expensive or affordable compared to other hobbies there are a few key factors.

 

1) Your budget and interests. Your budget and probably your friends is going to influence your thoughts on this topic a lot. The same goes for your other interests more so if your budget forces you to pick.

 

2) how much time you can actually enjoy the hobby. The more time you spend using the kits the easier it is to justify the price. This can get complicated because this is a social game it needs two players. Your army is going to feel really expensive if you only use it a handful of times a year, unless you really like the modeling and painting component of the hobby.  

 

3) how you value the product compared to the price. For example, I've found GWs minis to be a higher quality than their competitors, but I've found the supplements and campaign books to be disappointing for the most part. I've found all of the 9th edition chapter approved to be very underwhelming which is unfortunate for GW because if they were better at internal balance, I'd probably have a lot more kits that I liked but didn't love enough to make up for their rules.    

[Isengrin]

26 minutes ago, Brother Captain Arkley said:

I would love to say its my most expensive bottle I have bought but thats a damned lie :).

Ha, I know that pain all too well. 

[Inquisitor Eisenhorn]

23 hours ago, Arkhanist said:

So to summarise; GW prices have changed 270% since 1987 over inflation for marines, while men's wages have changed 139% over inflation. To buy marines, you're now paying, in comparison to income, basically twice as much as a hobbyist who started in 1987 did (I started in '89, for reference)

 

Measuring pricing parity overall is hard, because cost of living has also changed substantially; for example, house prices (and thus rents) have soared. After adjusting for inflation, an average house in 1987 was just shy of £145k; in 2022, it's £271k.

 

However you slice it, the hobby is substantially more expensive than it was in the late 80s compared to income on a very basic comparison. But models are also substantially more complex, detailed, and bigger, so how much of that increase represents a better *value* is entirely subjective.

 

(Yes, the latest 5.8% price increase only affects 3rd party traders; but don't forget GW retail prices went up by between 5% and 20% in March, and likely will again in 2023)

 

 

 

Thank you for these numbers Arkhanist! 

[MegaVolt87]

GW is expensive, always has been. Personally, I have managed this by skipping most of the range. I have always been a mono faction guy (CSM) and even then only buy things I like or will use. I have been playing since 3rd ed and never owned a xenos army. New HH has been what I have really wanted, so I have been spending there. I see that as a bit of catch up since the hobby budget has just been sitting there for several years now unspent. Comes with age, you know what you like and are not easily swayed by the newest thing in the newest range etc. I never understood the person who buys a stack of specialist games, their 40k armies, an AOS starter etc then say they have nothing to play/ paint because they haven't got what they actually need. As a customer, this is GW's ideal I suppose, but as a hobbyist it must be a nightmare. Don't mind me, I have some mk III bolter guys in the freezer that need heavy weapons for HH because I won't be using actual CSM bolter guys in the current lost and the damned codex/ CSM codex (and there is no mk III tac marines in stock in Australia)... 

[Inquisitor_Lensoven]

On 11/25/2022 at 6:29 PM, Doghouse said:

As one of the older players I'd say yes coming from a time when you could get three rhinos for a tenner, two land raiders for fifteen quid and marines came in a box of thirty six for ten quid.

 

But that's just my personal experience and perspective and newer players may see it differently. My mind is still in the age of racks of metal blister minis and saving pocket money when it comes to the hobby in general and not the corporate behemoth that it is now. The Enid Blyton view of wargaming I guess by today's standards.

 

I think a better question to ask might be is do you think Warhammer good value?

I think the rhino is one of the few non-character kits that’s increased in price significantly beyond what inflation can account for.

 

Some extra thought ms to pile on to my previous comment.

 

idk about the UK, but in the US wages have largely stagnated across the board.

minimum wage here has been stuck at $7.25/hr since the mid 00s. That means a teen working so they can buy 40K stuff has to work 9 hours to afford a box of intercessors, or around 4-5 hours for a character. So for younger people in the US, isn’t going to be something most kids stick with for long.

[Halandaar]

On 11/26/2022 at 7:06 PM, Arkhanist said:

The original RTB01 box of 30 mark VI marines was £9.99 RRP in 1987 for 30 marines. Adjusted for inflation (264%), that's £26.43, or 88p per marine. The new heresy box of 20 mark VI tactical marines is £47.50 RRP for 20 marines, or £2.38 per marine. That's a price change of 270% over inflation - literally double the rate of inflation from 1987 to 2022.

 

So to summarise; GW prices have changed 270% since 1987 over inflation for marines, while men's wages have changed 139% over inflation. To buy marines, you're now paying, in comparison to income, basically twice as much

 

Now I may not fully appreciate the economic principles here, but surely a significant part of the 270% is accounted for by the 139%, right?  Because the 1987 kit was designed by people earning a 1987 wage and the 2022 kit was designed by people earning that much + 264% inflation + 139%. As are the production staff, warehouse staff, store staff, admin staff etc.

Edited November 28, 2022 by Xenith
Mobile skin does not like trying to delete quotes!

[de Selby]

I think that in recent years GW has been struggling to release and supply models at the rate people want to buy them, so from their point of view they are leaving money on the table if they charge less.

 

Personally I restrict my purchases mostly to ebay and bargain bundles and I still buy faster than I can paint.

 

For new players and kids I think that the weekly magazine (£8.99) has replaced the £6 blister as a pocket money purchase, and you can actually start kill team or warcry with one cool infantry box if you already know players who have the rules. Disposable rulebooks are actually the main waste of money in the hobby IMO.

 

There is still sticker shock associated with GW products and I am not sure if they are recruiting now the way they were at the beginning of 8th ed. I know one guy who has taken up miniatures modelling as a hobby and almost the first thing he did was buy a 3d printer.

[Inquisitor Eisenhorn]

15 minutes ago, de Selby said:

I think that in recent years GW has been struggling to release and supply models at the rate people want to buy them, so from their point of view they are leaving money on the table if they charge less.

 

Personally I restrict my purchases mostly to ebay and bargain bundles and I still buy faster than I can paint.

 

For new players and kids I think that the weekly magazine (£8.99) has replaced the £6 blister as a pocket money purchase, and you can actually start kill team or warcry with one cool infantry box if you already know players who have the rules. Disposable rulebooks are actually the main waste of money in the hobby IMO.

 

There is still sticker shock associated with GW products and I am not sure if they are recruiting now the way they were at the beginning of 8th ed. I know one guy who has taken up miniatures modelling as a hobby and almost the first thing he did was buy a 3d printer.

Yeah there was a thread on here a few years ago about 3d printing being a threat to GW’s business and I was roundly dismissive, but here I am a year or so later and I’m happy to admit that I’m eating a bit of crow on that subject.  I have a friend’s son who has gotten into miniatures through DnD and in spite of me showing him my fairly insane warhammer collection he has like zero interest in buying kits but will endlessly send me links about fairly (imo) poorly designed 3d files and is excited for his dad to buy him a printer this Christmas. If he’s at all representative of where the kids are at these days, that seems like it bodes poorly for a premium model company like GW.  

[jarms48]

18 minutes ago, Inquisitor Eisenhorn said:

Yeah there was a thread on here a few years ago about 3d printing being a threat to GW’s business and I was roundly dismissive, but here I am a year or so later and I’m happy to admit that I’m eating a bit of crow on that subject.  I have a friend’s son who has gotten into miniatures through DnD and in spite of me showing him my fairly insane warhammer collection he has like zero interest in buying kits but will endlessly send me links about fairly (imo) poorly designed 3d files and is excited for his dad to buy him a printer this Christmas. If he’s at all representative of where the kids are at these days, that seems like it bodes poorly for a premium model company like GW.  

 

There's some amazing 3d files these days. Ones that match the same quality as GW's and if you have the right printer settings come out at the same level of quality too. 

[Inquisitor Eisenhorn]

39 minutes ago, jarms48 said:

 

There's some amazing 3d files these days. Ones that match the same quality as GW's and if you have the right printer settings come out at the same level of quality too. 

Absolutely. My friend’s son has just been really captivated by some really sub-par stuff for Dnd though, so I just meant that it seems like just the notion of printing his own stuff seems to outpace his  interest in the particular quality of miniatures he’s printing.  I was just wondering aloud if youngsters as a whole see the printing more as the hobby now.  If they do you have to wonder how GW will adapt.  

[Arkhanist]

10 hours ago, Halandaar said:

 

Now I may not fully appreciate the economic principles here, but surely a significant part of the 270% is accounted for by the 139%, right?  Because the 1987 kit was designed by people earning a 1987 wage and the 2022 kit was designed by people earning that much + 264% inflation + 139%. As are the production staff, warehouse staff, store staff, admin staff etc.

 

 

(technically, they're multiples, i.e. '87 wages * inflation * 1.39 = 2022 wages, a 139% change after inflation; or a 39% overall increase (if it was below 100% change it'd be a cut), while the price for beakies have increased 170% overall)

 

Generally, cost of wages is already reflected in inflation.

 

e.g. the wage-price spiral the Bank on England keeps harking on about - wages and/or supply costs go up, businesses raise their prices, those price rises averaged out across all sectors = overall inflation, so other workers demand wage increases equal or higher than inflation so their pay isn't falling in real terms. *Those* business have to raise prices again leading to yet higher inflation etc. That's the theory anyway. Currently, average wages are generally not even close to keeping up with inflation, so real wages are falling a lot this year compared to the cost of living (my own pay raise this year was a measly 2%, or an effective 9% pay cut with 11% inflation. Yes, I'm pissed off).

 

But in summary, that 139% wage change is included in the 264% inflation, not the 270% price change over inflation.

 

It's also been pointed out I've been pretty generous comparing '87 beakies to '22 beakies. If you compare to say, newish troop choice gravis intercessors at £5 per model, then the price change is a pretty steep 560%, or a 460% price increase model to model after inflation. I believe characters have increased even more, but I haven't got time to check  that just now. And of course, army sizes have signficantly increased since the Rogue Trader days, so you need more models on the table to have a game.

 

But if you'd rather have one gravis intercessor than five '87 RTB01 beakies, then that intercessor still has more *value* to you than the old models. So while prices have increased very substantially in what it costs to to have a game of 40k in real terms, whether you're getting value-for-money is a different question that is much more personal. Purely personally, I pretty much only buy the discounted bigger boxes nowadays, or the boxed games as otherwise I don't feel I am getting value for my money, and I've bought a 3d printer to replace my outsized bits bill. The "dark side" of printing alternative models entirely for a few pence each (distinct 3rd party designs, such as The Makers Cult) is definitely getting attractive, even if I can't use them in a GW store. If you're choosy about sticking to good designers, you can easily print stuff on a modern resin printer that's indistinguishable from GW plastic in quality, and covers a whole range of stuff GW doesn't do (I'm so tempted to print a feudal Guard army!)

Edited November 28, 2022 by Arkhanist

[Xenith]

13 hours ago, Halandaar said:

That's a price change of 270% over inflation - literally double the rate of inflation from 1987 to 2022.

 

And that's about right, right? Most companies need to make a profit, and if all their costs are increasing by 3% per year due to inflation, they add 6% onto the prices to continue to make that profit, which is an RRP increase of double inflation - that's just to maintain the same profit levels. 

 

It's the same reason oil companies are making record profits - if they just take all their costs and stick 20% on to them, they always make money regardless of the cost of production. The % profit remains the same, however the absolute amount of profit is higher, as the cost of priduction is higher. 

[Arkhanist]

3 hours ago, Xenith said:

 

And that's about right, right? Most companies need to make a profit, and if all their costs are increasing by 3% per year due to inflation, they add 6% onto the prices to continue to make that profit, which is an RRP increase of double inflation - that's just to maintain the same profit levels. 

 

It's the same reason oil companies are making record profits - if they just take all their costs and stick 20% on to them, they always make money regardless of the cost of production. The % profit remains the same, however the absolute amount of profit is higher, as the cost of priduction is higher. 

 

No. That's not correct. If you have a fixed percentage profit margin, say 10%, and your costs go up 5% e.g. inflation, and you also raise prices by 5%, your 10% profit margin remains intact. You don't need to raise prices above inflation unless your costs are dramatically out of line with general industry costs. (E.g. you're a steel mill and energy costs are a much bigger percentage of your costs than a standard manufacturer right now, or you are very reliant on eggs and the bird flu caused shortage is causing your costs to skyrocket)

 

Yes, your gross profit will increase in strict monetary terms, all else being equal, but that money is worth less. So it evens out.

 

If you increase prices more than your costs are rising, i.e. above inflation (on average), then you're increasing your percentage profit as well as your gross receipts. Also known as profiteering. But that assumes the goods you're selling haven't changed. 

 

This is incidentally something a number of companies have been accused of lately, such as fossil extraction and refineries, and supermarkets, where their prices have allegedly increased well above costs to increase profit margins - to compensate for lost profits during COVID.

 

But it's complicated because the goods GW make aren't the same as they were 35 years ago, but then neither are their costs. To take one example, computers have absolutely plummeted in price in real terms (after accounting for inflation), because cost of production has also fallen massively. Computerised assembly lines, better inventory control, and substantially higher productivity has lead to many manufacturered goods prices to fall heavily in real terms (plus offshoring and material quality cuts, admittedly)

 

Certainly other model making companies don't appear to have increased prices anywhere near as much as GW, though I'd have to find out some historical numbers to actually confirm that.

 

The thing is of course, much of that theory applies to commodity goods where you're competing with other manufacturers. If you're producing a luxury good that nobody else makes a direct equivalent of, then your prices -and profit margin - are set based on what the market will bear, not how much your costs fluctuate. Apple charges the prices it does for iphones because that's what people are willing to pay for them. Reducing costs increases profit, rather than lead to a real-term fall in prices to gain a competitive advantage. 

Edited November 28, 2022 by Arkhanist

[Inquisitor_Lensoven]

On 11/27/2022 at 11:57 AM, templargdt said:

Lots of great replies in this thread.  Overall I'd say:

- GW has raised prices well outside of inflation levels.  GW prices have doubled since well before we had this current run of high levels of inflation in the Western world.  It wasn't that long ago a box of tacticals was 30 bucks.  I was shocked when they went to 40, and just looked and saw they are charging 55 bucks(!) for 10 Space Marines on the GW site.  That's absurd.

- The high levels of inflation have significantly cut into people's discretionary income.   When food, fuel, and energy have gone up as much as they have, people are going to have to cut back on things like plastic toy soldiers.  Especially if you have a family to feed, get to school, keep warm, etc.

 

On the plus side, the game is much, much better than it has been in years and GW's overall performance is light years better then in the bad old days of Mat Ward writing crazy town books and GW randomly kicked out a terrible FAQ once every few years.  The organization and communication alone is night and day.  

For legacy models that’s just not true. Characters have gone up in price beyond just inflation but most if not all multi-model infantry units are actually cheaper when accounting for inflation.

 

22 hours ago, Inquisitor Eisenhorn said:

Yeah there was a thread on here a few years ago about 3d printing being a threat to GW’s business and I was roundly dismissive, but here I am a year or so later and I’m happy to admit that I’m eating a bit of crow on that subject.  I have a friend’s son who has gotten into miniatures through DnD and in spite of me showing him my fairly insane warhammer collection he has like zero interest in buying kits but will endlessly send me links about fairly (imo) poorly designed 3d files and is excited for his dad to buy him a printer this Christmas. If he’s at all representative of where the kids are at these days, that seems like it bodes poorly for a premium model company like GW.  

I was kinda thinking about this earlier while painting.

i think GW at some point in the nearish future will have to more or less completely change their business model.

 

in the 90s-10s using novels, and video games to spark interest in their universe was a great way to funnel people to the minis. However now games like dark tide and total war are very high quality games, and compared to the table top game they’re much more affordable ways to interact with the universe. I’d be all about rogue trader if the combat wasn’t turn based.

 

idk what the answer is, but it seems like selling STLs is almost going to be a requirement if they want the table top portion of their business to remain relevant.

 

i have a printer but I am avoiding printing models, and use it to print my own non40k related designs, and to print my own terrain or other free terrain STLs.

[Special Officer Doofy]

9 hours ago, Arkhanist said:

If you increase prices more than your costs are rising, i.e. above inflation (on average), then you're increasing your percentage profit as well as your gross receipts. Also known as profiteering. But that assumes the goods you're selling haven't changed. 

 

Profiteering? Really?

 

"the practice of making or seeking to make an excessive or unfair profit, especially illegally or in a black market" 

 

Dude it's plastic toy soldiers. It's not a pharmaceutical or energy company. There is no unfair profit to be had. Warhammer is so far from a necessity.

 

Maybe they value their product more now then they did in '87, and since the hobby has grown substantially since then, they are increasing their prices beyond inflation instead of leaving money on the table.

[Noserenda]

Its fairly obvious GWs costs have shifted significantly more than inflation reflects, they are a vastly bigger entity supporting an industry far beyond the wildest dreams of their 1987 employees and the production is significantly more advanced and detailed even if the core processes are the same. That said a lot of that tech has made things more efficient or profitable and most work is entirely in house. The RTB01 sprue was a major financial decision and investment but nowadays they are knocking out plastic sprues for everything they possibly can, even recutting them at times. 

Id be reasonably certain on those particular kits sure, GW is making more money, but almost nobody buys an army by assembling boxes unit by unit at full RRP and thats where its made more affordable as a hobby; starter sets, discount boxes, LGS discounts, second hand markets and friends all help to mitigate costs and get one more toy soldiers. 

Hell, tis the season to get those army deals even. :D 

Speaking personally, having my career ended by disability means i cant just buy all the things i want anymore and have to be a bit canny, but i can reliably get enough to keep me turning over. Though i do also have the advantage of quite a mountain of hobby supplies to be fair, like, my initial thoughts on this topic were sparked because i dug out a pile of Rogue trader era kits to strip and do a lil project a while back, but handling the actual models dispelled the rose tinted specs! 

[Arkhanist]

7 hours ago, Special Officer Doofy said:

 

Profiteering? Really?

 

"the practice of making or seeking to make an excessive or unfair profit, especially illegally or in a black market" 

 

Dude it's plastic toy soldiers. It's not a pharmaceutical or energy company. There is no unfair profit to be had. Warhammer is so far from a necessity.

 

Maybe they value their product more now then they did in '87, and since the hobby has grown substantially since then, they are increasing their prices beyond inflation instead of leaving money on the table.

 

"the practice of making or seeking to make an excessive .... profit"

 

Yes, really. I don't say that judgmentally per se, most companies would seek to do it if they could get away with it - that's the nature of capitalism! It's why monopolies for commodities are usually bad, because it removes the market-based incentive to not to do so, i.e. competitors will steal your customer base if you try it. And why gov regulation is usually required in key markets e.g. inspection of mergers that would substantially reduce competition, or the imposition of regulated pricing on energy suppliers in the UK via OFGEM. But as you say, GW models are not a commodity, and definitely not an essential good where profiteering is directly and obviously harmful to the public good.

 

For luxury goods, which GW basically is, it's pretty much de rigeur - you're seeking as much profit as you can get away with without cratering your sales, because you're generally targeting a wealthier customer, and accept that your overall market penetration is not usually going to include the poorest. Returning to the Apple example, their profit margin on the iphone is a whopping 119% - i.e. they sell the iphone for more than twice that it costs to make. (Samsung makes something 50-60% on their various high end models, and most of the other android handsets are much lower, those that are still in business!). Yet Apple's overall gross profit is around 40%, e.g. they do use the iphone profits to subsidise other parts of the business and promote lock-in to the ecosystem. Capitalism at work, and it continues to deliver extremely good money to their shareholders. (Capitalism, pretty much by definition benefits those who own capital most. Benefiting the customer or employee is a side effect at best.)

 

None of this affects *value*, as I've said twice now; if people think GW models are worth the prices, a subjective judgment, and continue to buy despite high profits, then everybody comes away happy, and why iphones dominate the US market despite also being priced far higher than they need to be on a strictly cost-driven basis. For luxury goods, high prices can somewhat ironically make them even more desireable. The fact that a cutting edge hypercar costs sooo much is part of the attraction, as it means owning one shows you are substantially wealthy and can flaunt it!

 

Speaking personally, I think GW have raised prices such that their value (to me) is getting questionable beyond the discounted 'big' boxes, and continued raises above core inflation (especially given the cost-of-living crisis and looming recession) risk repeating the mistakes of the early 2000's when they priced new customers out and their sales and then profits plunged and nearly sunk the company. Especially as 3d printing is looking increasingly viable as a way to cut costs of production for more bespoke or small model makers to enter the 'cool looking detailed gothic models' market - you don't have to print stuff *yourself* for that to be true, you only have to look at the healthy ebay market for 3d printed alternatives, or shapeways etc. But value is such a subjective judgment, you're always going to find counterexamples - and GW sales remain extremely healthy for now, so clearly they've not reached that point yet as far as the broader market feels.

Edited November 29, 2022 by Arkhanist

[TrawlingCleaner]

=][= This thread needs a cool off for a while =][=