Editing Games Workshop (section)

===Why Games Workshop is Bad and Should Feel Bad===
One anon's perpsective on why GW hasn't collapsed in on itself yet. Keep in mind that was written some time during the Derpening when reading this.
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Never mind that large groups are often less efficient due to the fact that most people like to agree and be part of a group, even if the group is wrong. Forget that the burden of hard work is often shrugged off thanks to the assumption that everyone else will be carrying enough of the real challenges to pull things through (and that when things go wrong, it's a flaw of human nature that people don't like to admit and accept when they screw up). Instead, focus on the fact that the people heading GW – or most large corporations for that matter – are successful, rich, ordinary men who are blessed by good fortune in an unfair universe and probably don't realize the reality. Further, examine the knowledge that, according to Sun Tzu and a variety of psychological studies, successful rich people with the aforementioned profound luck are the folks most likely to make stupid mistakes out of anyone!

Now you know why GW (or the entire world, for that matter) is run the way it is.

A source of some debate on /tg/ is whether or not it is actually charging prices that make sense for the hobby. All logic points to a resounding “no”, but another interesting social phenomena is this: fanboyism is an inbuilt human process. Whenever money is spent on a good, especially a luxury item, man has a way of increasing the illusionary worth of that item.

Imagine buying tickets to see your local team play football, and they lose. It's not even a good game, to be honest. People around the country were disappointed. However, those tickets cost a lot of money, and having spent all that money for so little in return makes a person feel stupid. We grope for other things, then, to make the tickets worth while rather than admit we were wrong (even if we were only wrong due to events beyond our control) and learn from it. Yes, it was cold, but your wife was there, so you bonded! The beer was too expensive as well, but they sold your favorite brand! You had an experience! It was fun! Yes, those tickets were worth it in the end.

We'll even do this with soft drinks. Even if brain probes reveal a man likes Pepsi more than Coke, going back and telling the man what he was drinking can actually ''alter his memory'' so that he remembers liking the Coke more. It's amazing.

GW products are exactly the same way. They're ludicrously expensive. Even people who support GW fervently wish they weren't. It hurts. In a rough economy, it's hard to play the game. You spend months, years – who knows how long waiting for that new codex, it turns out to be awful compared to expectations (hello, Tyranids!) (UP YOURS ASSHOLE.), and now you've either got to suck it up and keep playing (got to buy the new Trygons, I guess, even though they aren't ''that'' great), or take a huge monetary loss and give up. Fanboyism steps in and makes it all okay. You're not just buying the models, but the game and the network utility too, so 40k is still totally fun and cool!

Big corporations, and GW as well, are predators. They feast on fanboyism. Like the [[Dark Eldar]], they prey on your suffering and write sick, stomach-turning poetry about the flowing, green streams of vital wealth they siphon from your being. You are a toy (''moreso than the articles they sell''). [[Hot Chicks|That cute girl at the convenience store you see all the time?]] Thanks to GW, you have to choose between inviting her to the theater and buying that new squadron of Guardsmen. Those of you scoffing at the dilemma, shut up; those Guardsmen won't cheat on you, dump you for someone else or nag nearly as much after you've had them for a little while, so it's <s>[[Neckbeard|totally a tough call.]]</s>{{BLAM|'''*BLAM!* HERESY!!! NOT CHOOSING THE EMPEROR'S FINEST IS HERESY!!!'''}} 
But putty in their hands you may be, there are still some principles of basic economics that imply GW ''might not be earning enough revenue,'' and surprisingly, they can only lose more money by raising prices! There's no real way of knowing how things really are within GW without a look at the delicate, inner machinery of their business. But it does all come back to our first consideration: GW is run by the type of person most notable for making poor decisions – lucky, successful people, and a group, no less.

Whatever idiot wrote the following has no _actual_ business sense. Revenue ≠ Profit. Profit = Revenue - Cost... yes, but still give you a good idea about GW policy.

The situation is thus: there is more to money flow than just the bottom line, though often it's all we think of, but basically there's income, cost, and revenue. What is of most concern is revenue, which could also be thought of as [[profit]]. GW sells their models for a greater amount than what they cost, and the amount they make is revenue!

So now, there's revenue, and then there's marginal revenue. Revenue is just how much you make. Sell a thousand Guardsmen and make ten thousand dollars? Your Guardsmen revenue is $10,000! Marginal revenue, on the other hand, is how much you make ''compared to selling one less of the item''. In this case, the Guardsmen have a marginal revenue of $10. Each Guardsman made a profit of $10, and if you sold one less Guardsman, you'd make $10 less. See? Easy. Well, for this simplified example anyway (in reality there are a lot of fixed start-up costs, but point made).

Now let's raise prices. From now on, we'll sell half as many Guardsmen per box, and the boxes will cost the same. Now marginal revenue is $22, because every time a Guardsman is sold, we bring in $20 per Guardsman plus an additional $2 gets saved thanks to the Guardsmen we didn't make! This is cool – we're in business, just like GW, /tg/! Let's do that again – our customers are fans, they'll bear it! Now we'll sell five Guardsmen to a box, and we have a marginal revenue of $45!

Okay, wait, wait. I've got it. I'm a genius. Let's sell one Guardsman. Sell it for the same price we used to sell twenty of them! We're going to be rich! Marginal revenue is going to be amazing! Like, what, over a hundred dollars a purchase?

So what's our profit in the end? What! Negative? How!? We're making ''so much'' per model! The marginal revenue is ''so high''!

The answer is simple. Not enough people are buying one crappy Guardsman for $200 dollars. A few of the fans are sticking it out, hating us relentlessly, but newcomers to the game see the price tag and run screaming. People who can't afford it leave because they have no other choice, but they're happy in retrospect. Even some of our most loyal customers finally decided to just date that girl after all – one gets more of their money's worth from her ([[This Guy|one way]] [[Hot Chicks|or]] [[Promotions|another]]) and they'll deal with her constant bitching. Actual revenue is at an all time low.

Believe it or not, lots of other companies really do make this mistake, albeit not often to this extent (unless you check out [[Forge World]], anyway. Anyone want a Tau [[Manta]]? Under £1,000). It's because maximizing marginal revenue is very easy. It's simple arithmetic, and if your market base is rather inelastic (and GW's market base certainly is due to the high investment requirements of their games), a lot of times price changes won't have a huge impact, so it's easier to focus on. GW is at some point in the middle here, where it has started to become questionable.

It's hard to say if they're making right decisions or if their pricing makes the most sense. It's becoming the status quo that their games are really a hobby of those with absurd disposable income, which is not a quality described of the young men who are presumed to make up 40k's primary demographic. It's possible that they're targeting young teens with parents who will buy the models for them, but that's hard to say as well since parents will lack the dedicated fanboyism to continually invest in the absurdly priced hobby.

Mix in unbalanced rules that unfairly favor certain factions, long wait times between army updates, [[Casting|inferior model quality]] compared to what's provided to model hobbyists outside of the wargaming industry, and GW may have a recipe for a failing market.

In fact, by using some math and basic market theory, we can actually take a look at how much GW is supposedly spending to bring our hobby to us.

The list below will give us some basic numbers to work with. We know that GW currently sells its rule books at $74.25. What we don't know is GW's actual costs or how many books they're selling. These things have an impact on the math, but we'll sort of fudge it. Now, based on that alone, we want to price our book at twice what it costs to make the thing. In the real world all this nice math has the tendency to fly apart, but generally speaking that's the ideal manner of doing things. For example:

Quantity sold: 0 
Price of book: $0 
Estimated cost to GW: $0 
Marginal Cost: $0 
Marginal Revenue: $0
Total Revenue: $0

Quantity sold: 1 
Price of book: $74.25 
Estimated cost to GW: $37.13 
Marginal Cost: $37.13 
Marginal Revenue: $37.12
Total Revenue: $37.12

Quantity sold: 2 
Price of book: $74.25 
Estimated cost to GW: $74.25 
Marginal Cost: $37.13 
Marginal Revenue: $37.12
Total Revenue: $74.25

And so on. Since we're assuming that every book has a fixed cost to produce, we just get a rough idea of what it's actually costing GW to make rule books for us. Or so such is true only if we figure they're trying to price things according to a competitive market where the consumer sets the price. Basic economics says we want to have a marginal revenue equal to our marginal cost if we want to work with a price we can't really control, and that's what this does.

See, there's a few things to consider. The first is that, in a competitive market, people are just going to buy the cheapest product. That means whoever is selling cheapest kind of wins the day, but while GW could maybe sell their rule books at $20 each, they'd be suffering huge profit losses that are not directly proportionate to the change in price. Instead, they'll try to follow along with what the market is doing, and to their very best possible effort, they'll try to lower their costs so that the marginal costs equal the marginal revenue (or, again, their prices are basically double their production costs per item). That just simply maximizes revenue, since if they raise prices their competitors will undercut them and GW will be able to sell nothing.

But honestly, if you've read this far, then hopefully you're braced for this shock. According to estimates from a few publishers, it only costs about $3 per book to publish 5,000 hardback books, and that cost decreases as you publish in greater bulk. 40k books do have a lot of pretty pictures, so maybe that increases costs somewhat, but again, costs generally tend to get smaller as you order more of an item, and it's pretty likely that GW is not just settling for a measly 5,000 books internationally. They sell all over the world.

So where are all these other costs popping up that should cause GW to spend $37 on every single book they produce? In small production quantities, we'd consider the cost of labor. Who knows how much Matt Ward demands to be paid to lick every rule book before it leaves the factory! What do the photographers want in compensation? Actually, ''stop''. At GW's production rates, those expense considerations become almost ''completely negligible.'' You pay Matt Ward a salary to lick all the books. It's a yearly thing. You pay him once and you're done, so by the time you've produced a million books, even if you paid Matt a million dollars to slobber on every single page, Matt is only increasing the cost of the books by a dollar each.

Margins are all that matter. GW talks about overheads and so forth as an excuse, but that's insanity. In a perfectly competitive market you don't increase prices to cover overheads. You reduce the overheads because they're predictable annual costs that you more or less established on your own! Besides, you shouldn't be able to arbitrarily raise prices like that, seeing as how your competitors are supposedly keeping you in check! So really, what we can infer is the following:

A. Basically, GW has no competitors controlling their pricing right now. (This was especially true in the old days. Nowadays, this is less of an excuse as wargames and miniature companies branched out into all sorts of different fields. Thus, the monopoly GW used to have is no more.)

B. They are price gouging their players to fill the pockets of the people who run the company. (This scares off a lot of players, especially ones who have to buy a bunch just to keep up with the inconsistent update schedule or wish to start with a full army. Thus, the only people left are the people rich enough to afford it and those too ignorant to really think otherwise/the GWIDF)

C. Their pricing is not directly related to their costs, and anything they say to the contrary is a big fat lie. (This particular argument is used by Recaster supporters and proponents of 3-D Printers as they slowly advance in complexity to begin making more accurate and good-quality resin models.)

D. You could play another game, but all your friends are playing 40k anyway and you don't want to feel left out.

'''E. Fuck Games Workshop'''. ''' ''FUCK THEM WITH A FUCKING CHAINBLADE. NO. MAKE THAT A DAEMONHAMMER.'' '''

This article also explains the problem with Australian prices, in a slightly less detailed manner; [http://www.kotaku.com.au/2013/04/the-iron-fist-how-games-workshop-intends-to-monopolise-the-online-sale-of-products/]

Games Workshop have sat pretty at the top of the miniature wargames shit-heap for many years (indeed, the scale models industry tries to ignore that they're the biggest single seller of miniatures) and have abused this position to increase their own profits. However, fortunately for the long suffering gamer alternatives are emerging. [[Privateer Press]] for example produce the games [[Warmachine]] and [[Hordes]] and offers slightly cheaper models and starter sets. In the market for wargames Privateer Press and Coolminiornot are rapidly emerging as a viable challenger to GW's monopoly while Reaper Miniatures takes them on using the same tactics that made them in the first place; licensing IP's, and making things for other games. They are the Tau, Dark Eldar, and Chaos to GW's Imperium.

Also worthy of note is [[Mantic Games]] who produce [[Kings of War]], a fantasy battle game in a similar vein to Warhammer. The rules system was even written by former GW man Alessio Cavatore (essentially succeeding at what every frustrated ex-GW employee since 1988 has dreamed of) and it is fast, fluid and a lot more "fun" than Warhammer. The company is pioneering the use of plastic-resin alloy (or 'restic') as a cost effective alternative to pewter. Oh, and equivalent plastic models cost about HALF what GW charge (e.g. GW High Elf Spearmen (16 models) - £20, Mantic Games Elf Spearmen (20 models) - £13.99) the trade-off however is that Mantic models look like hammered dogshit. Mantic are basically the war gaming equivalent of Asylum films.

One can only hope that these new upstarts will beat down GWs monopolistic hold on the [[wargame]] market.
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