Games Workshop: Difference between revisions
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==The Beginning of the end?== | ==The Beginning of the end?== | ||
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Recently, Games Workshop has been making changes. They have started making supplements to armies besides Space Marines in Warhammer 40k, started increasing the amount of plastic models and, once or twice, making them reasonably priced. This sounds good, although long overdue, but one must ask; Games Workshop hasn't made these changes despite years of complaints or demands, why are they doing it now? The reason is simple. There are cracks appearing in Games Workshop's foundation, and these tidbits are too little, too late. Their poor treatment of their customers is finally catching up and hitting GW where it hurts. So many customers have said "enough is enough" and washed their hands of GW's merchandise that they're starting to lose revenue. For example, many GW shops in Australia have moved from upscale shopping centers to smaller stores in less-expensive locations as it's cheaper and easier to control. | Recently, Games Workshop has been making changes. They have started making supplements to armies besides Space Marines in Warhammer 40k, started increasing the amount of plastic models and, once or twice, making them reasonably priced. They've even released discount box sets from the new IG stuff. This sounds good, although long overdue, but one must ask; Games Workshop hasn't made these changes despite years of complaints or demands, why are they doing it now? The reason is simple. There are cracks appearing in Games Workshop's foundation, and these tidbits are too little, too late. Their poor treatment of their customers is finally catching up and hitting GW where it hurts. So many customers have said "enough is enough" and washed their hands of GW's merchandise that they're starting to lose revenue. For example, many GW shops in Australia have moved from upscale shopping centers to smaller stores in less-expensive locations as it's cheaper and easier to control. | ||
The reason for these supplements and attempts to improve model quality is most likely to ensure a profit rather than the satisfaction of their customers. Their Chairman Tom Kirby mentioned in a 2011 press release that they were increasing cost cutting measures and making more products while avoiding mention of actual profits (note this is a summary, not his exact words). If their profit was growing, they would be more likely to announce it. If their profits were stable, considering cost cutting measures, that suggests a decrease in the actual profits (the decrease offset by the money saved from cutting costs). Just as the Imperium is starting to come under increasing threat in 40k (ie; their stagnation, Chaos starting get its shit together, Necrons reawakening, the Tyranids rushing towards Terra), Games Workshop could be in their final days. Since this is real-life, they don't have the plot armor of their Creator's Pet "Imperium of Man" and are less likely to survive. (More on this can be found here [http://thefrontlinegamer.blogspot.co.uk/2011/09/is-imperium-metaphor-for-games-workshop.html]. It would make alot of sense that the reason The Imperium in 40k is GW's favorite faction is they have a lot in common [and that's not a compliment]. The article is old, but it's still relevant today). | The reason for these supplements and attempts to improve model quality is most likely to ensure a profit rather than the satisfaction of their customers. Their Chairman Tom Kirby mentioned in a 2011 press release that they were increasing cost cutting measures and making more products while avoiding mention of actual profits (note this is a summary, not his exact words). If their profit was growing, they would be more likely to announce it. If their profits were stable, considering cost cutting measures, that suggests a decrease in the actual profits (the decrease offset by the money saved from cutting costs). Just as the Imperium is starting to come under increasing threat in 40k (ie; their stagnation, Chaos starting get its shit together, Necrons reawakening, the Tyranids rushing towards Terra), Games Workshop could be in their final days. Since this is real-life, they don't have the plot armor of their Creator's Pet "Imperium of Man" and are less likely to survive. (More on this can be found here [http://thefrontlinegamer.blogspot.co.uk/2011/09/is-imperium-metaphor-for-games-workshop.html]. It would make alot of sense that the reason The Imperium in 40k is GW's favorite faction is they have a lot in common [and that's not a compliment]. The article is old, but it's still relevant today). |
Revision as of 16:05, 23 April 2014
This article is about something that is considered by the overpowering majority of /tg/ to be fail. Expect huge amounts of derp and rage, punctuated by /tg/ extracting humor from it. |
- Games Workshop is in the business of selling toy soldiers to children. - Tom Kirby, Chairman of Games Workshop PLC
- Games Workshop is in the business of fixing itself from the piece of shit Tom Kirby left me with, I mean have you see our stocks lately? - With any luck the next Chairman of Games Workshop PLC
Games Workshop used to be good. See Beakie, Rogue Trader and Talisman.
They started out making shit that you could use in other publishers games, and printing American RPGs up in jolly olde Angleterre. Soon they made a wargame and a few board games and people began to take them seriously as something other than a magazine publisher.
Laughably, Games Workshop are extremely precious about their intellectual property. This is funny because you can count the number of original ideas in their core games on one hand. Perhaps noteworthy as a few of the original ideas they've had were disgusting; such as the Rak'gol (a cruel insectoid, reptilitan race that loves torture, pillaging and scavenging other's technology; think Dark Eldar crossed with orcs minus the sleek sexiness of the former and the lulz of the latter) and the Fimir (formerly a race of grotesque looking human-daemon hybrids who could only reproduce via raping captive women of other races and now the rejected chosen of chaos). The vast majority of backstory in Warhammer and Warhammer 40,000 is a rehash of established fantasy/sci-fi literature, padded out with stuff the writers half-remembered from A level history lectures, this is particularly true in the case of Warhammer Fantasy, which actually makes sense when you realize most of GW's founders actually had History degrees.
The PRICE$
GW is infamous for their steep prices, and they would have been replaced by a more reasonable company for gaming dominance if their popularity wasn't XBOXHUEG compared to competitors. They have a nasty habit of making prices proportional to how good a model/unit is in game, rather than the actual cost of materials and manufacture. Of course, if we really want to stop the price hikes, /tg/ should probably start a legitimate campaign to bring focus and shine the spot light on other wargames like Warmachine. Of course, /tg/ can't actually get REAL shit do-*BLAM* HERESY!
More about
Games Workshop Real Estate section, the site most of the hobbists probably have never ever visited yet may allow you to see GW plans and beliefs.
And also the Investors Relations, for knowing how they handle the business.
It is a well kept secret that the Board of Directors of GW are in the same situation as the God-Emperor of Mankind from Warhammer 40,000. Their defiled corpse-bodies lay dormant upon their Publishing Thrones, maintaining only the smallest semblance of life due to the constant influx of money. It is unknown what would happen if the Board of Directors were allowed to truly die. Some say Games Workshop would collapse in on itself, ceasing the production of all that is good and expensive. Perhaps Games Workshop would be free from the necrotic collar of the Directors' irresistible will, and the company would be free to explore new areas, such as advancing the story of the Warhammer 40,000 universe, or reviving older "specialist" games like Space Hulk and Blood Bowl.
Much to the embarassment of the entire rest of the industry, they are the biggest single seller of military miniatures. But these are not scale mini-chures, so modelling neckbeards ignore them and get back to folding 1:35 scale photo-etched hydrogen molecules for their dioramas.
Games Workshop also has a ridiculous hard-on for heavily armored armies, Space Marines (who are also heavily armored) and Imperialism (the latter's ironic since the company originated from Britain). Regarding the latter, the go-to human faction in Warhammer Fantasy is simply called the Empire. The other playable human army in Fantasy, Bretonnia (named after Brittany, a region of France and incorporates a mixture of medieval English and French pseudo-history), is currently being neglected by GW. The non-playable human faction that gets the most attention from GW in WHFB fluff is the EMPIRE (note the pattern) of Cathay (it's ruled by an Emperor and based on ancient China). GW has designed WF's map to resemble the real world, and have shamelessly made Britain the High Elves (come on, Ulthuan is Atlantis; the WHFB equivalent of Britain is Albion, a land of swamps and tribemen) Then again, the USA is Naggaroth (land of the Dark Elves) geographically and there are parallels (people leave Britain and head to the US, committing borderline cultural genocide on the Native Americans; The elves of Nagarythe leave Ulthuan and take over the continent that becomes Naggaroth, also note both Dark Elves and the colonial North Americans practice/d slavery). (. As for 40k, nearly everyone knows how much favoritism the Imperium gets from GW. We also have the Tau EMPIRE, the Necrons are referred to as having an EMPIRE even though its ruler was called the Silent KING, the ancient Eldar EMPIRE (though we don't know how their leadership worked), and even an Ork EMPIRE (though Orks live in tribal "Might Makes Right" societies that wouldn't have leadership elections).
History
The Age of Munchkins
After the awesomeness of Warhammer Fantasy Battle and Rogue Trader at the dawn of time, Games Workshop came out with Warhammer 40,000, normally called Second Edition. Both systems were built around small units of infantry supporting ridiculously munchkinized special characters with complicated rules and wargear and appropriately pricey lead models (Warhammer was often referred to as Herohammer because of this), but at this stage Games Workshop actually cared somewhat about customers; models were made in plastic or wallet-friendly, Roman-Empire-collapsing lead, game sets included serviceable army lists and collections of miniatures, and paints were provided in 20ml pots, later 17.5ml. This switch was perhaps the first sign of the next age (and every other age, by the looks of things as paints are now just 12ml per pot).
At some point it was determined that the stock army lists weren't enough, and so Army Books (for Warhammer) and Codex Books (for 40K) began to come out, each bringing new models and rules into the game. The last round of these for 40K (Codex: Tyranids in particular) tended to make the army ridiculously overpowered and make everyone else want a new Codex to rectify the balance. Perhaps the ultimate example of Second Edition philosophy was the last book, Codex: Assassins, which consisted of nothing but four hideously powerful special characters. These included this asshole who caused the psychology effect Terror to all psykers, regardless of anything, meaning Greater Daemons and Hive Tyrants would occasionally shit themselves and run for the hills when faced with a normal-sized human.
One notable aspect of this period was that Games Workshop hated trees, and would thus include several million cards in every boxed set if given the slightest provocation; the core sets for Warhammer and Warhammer 40,000 both received an update governing the magic / psychic system which consisted solely of cards and templates (which were card). Some entire games (Doom of the Eldar, Battle for Armageddon, Horus Heresy) came out in this period which consisted of nothing but a board and lots of high-density card counters to lose down the back of the sofa or inside the dog.
The Age of Stealing Your Money
Sometime in the run-up to Third Edition it was decided that models should switch from toddler-murdering lead to safe, pointy pewter (or "white metal" as the industry [not just GW] insisted on calling it). This led to a 25% cross-board increase in all metal mini costs, even those ordered through Citadel's back catalog. At this point, it seems, something clicked in the heads of GW's management; they had just made a ton more money without actually doing anything. Perhaps they could do that again.
Third Edition 40K and the new Warhammer soon came around, both reducing the dominance of single munchkin characters in favour of large armies, conveniently meaning players had to buy far more models. Then along came the fucking screw-tops, and proof that any pretense of caring about the customer had been cast aside.
The "problem" with the older paintpot designs was they actually kept paint usable for a long time; while the fliptops suffered from shit hinges and opening tabs which would both break after about four uses, unlike the screw tops which were good for years of storage. Obviously this was no good to GW, and so a new pot, the Screw(you)top, was designed which would gunk up its own thread and either glue itself shut forever or prevent an airtight seal forming after a couple of uses. Apparently forgetting every other company in existence that made model paints, GW also raised the price of these new and terrible things; clearly justified, since they contained a mere 30% less paint than the old design. It was also around this point that photographs of the 'Eavy Metal studio started to vanish from the pages of White Dwarf (along with all other content that could be considered useful for anything at all) since they kept forgetting to hide all their non-Citadel gear for photoshoots. Even though, of course, everyone had known for years that the painters didn't "mix Snot Green with a little Chaos Black" to get a paint shade that was in Tamiya or Vallejo's stock range. Nowadays we can get the good stuff for cheap from Privateer Press (problem, GW?), but back then it was just fucking terrible. GW managers and staff also suffered a change in personality, anything other than GW was a plague, and it was treated as such. Saw you just bought some Knights of Minis Tirith, well, what about a Stompa?
Prices began to ramp up ridiculously as GW realized they could charge whatever the hell they liked and people would still pay. While GW was never particularly cheap, their chunky kits ended up in the same price bracket as top-quality scale miniatures by other companies; today, a Citadel Leman Russ (a 95-part kit entirely cast in plastic) costs about the same as a Dragon M1A2 Abrams (an 817-part multimedia kit including 98 in etched brass and a turned metal gun barrel). At some point, someone remembered that back in Second Edition days they actually had people willing to pay for gigantically expensive, limited-edition lead Thunderhawk Gunships. To hit this niche of "people with more money than sense," Forge World was created; all you had to do was get mom and dad to sign that second mortgage and stop being so damn selfish and a 40K-scale Titan would be yours.
The Fall of Warhammer
It's finally fucking happened. As of May 11th, 2011, Games-Workshop's new terms of use restricts sales of all of their products to the European Economic Area, (EU + Norway, Switzerland and Iceland). Obviously, this means that GW's English-speaking customers outside the EEA - Canada, Australia, New Zealand, and the US, as well as customers in other countries who are fans of their products can no longer obtain them through FLGS or online wholesalers (Actually, I think this is incorrect. I believe it just means they can't order online from outside their country but needs reference). It IS incorrect. It only applies to online stores. FLGS can continue to buy and sell GW products at their normal (read: "jacked up") prices.
So enjoy spending 30-80 dollars on shipping for your order, which can no longer have free shipping for bulk, since you're now ordering international - if you can even order the fucking things at all in your region. Except not, since certainly you can buy from the FLGS if you can heft your neck girth into a wheelchair. Oh, and they spiked the prices another 10-15% for most models.
Additionally, all metal models are being discontinued, to be replaced with much more expensive Resin kits. Unlike the pewter kits (which are basically tin), the resin kits are loaded with carcinogens; strange, since last anyone checked the reason for switching to pewter in the first place was that lead was toxic (and nothing to do with hiking the price). And they are actually much, much cheaper to produce than the pewter models because plastic is a hell of a lot cheaper than metal. And they also break fairly easily so that all the little ten year old Smurf players have to buy new ones when they snap them in half. So essentially, Games Workshop not only ruined the quality of their models, they jacked up the prices and made it nearly impossible for anyone outside EU to obtain it. Kinda like going from fine French wine to your corner-store cheap beer.....and the beer is more expensive than the wine. Yes, we're also wondering how much more retarded GW can get.
Because Games-Workshop fucking hates you, about the only way this could be made worse is if GW decided to forcefully shove a RAPEX onto your dick each and every time you placed an order, and even that's debatable.
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 is rapidly emerging as a viable challenger to GW's monopoly. They are the tau to GWs 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 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).
One can only hope that these new upstarts will beat down GWs monopolistic hold on the wargame market.
The Second Impact
In 2013, Games Workshop decided to transfer their sales restriction to Canada, just as they had to Europe. As the United States had already had international sales cut back in 2003, this had lead to a large online market for Canadian retailers, selling their products at discount sales to US customers. However, with this new change, all international sales in North America are now completely gone, as GW once again decided to fuck over long term customers and local retailers in favor of luring more small children with disposable income to their overpriced, neckbeard-run stores.
MiniWargaming, a well known FLGS with an extensive online store, has decided to close shop because of these new rules. Their store manager made an entire video explaining their reasons and going over just how asinine Games Workshop's new rules are. [1] Between jacking up prices, locking down international sales, and screwing over online sales and bitz sales, Games Workshop is on the fast track to running itself into the ground in the eyes of long term followers. Probably due to their apparent belief that removing the entire world (excluding European Economic Area and, I guess, Canada) from their consumer base. But they won't care, so long as the almighty dollar of impressionable twelve-year-olds and spoilt (by GW and Forge World) Space Marine fans keeps them afloat.
The Digital Age (And Completely Missing the Point)
Games Workshop would sign a deal with Apple to sell eBooks on the interwebz, instead of Amazon, because then the books would have to be cheaper. Games Workshop refused to understand the fact that eBooks almost always cost less than what they would if bought from a book store. That 1 pence discount doesn't count. (From GW point of view, even tho it's stupid to put the same price on eBooks as the Hardcover Armybooks/Codices, it makes sense. Because if they were to sell them cheaper, they would sell much less books, meaning they'll lose money from the traditional books. Yes, it cost $80 in Australia for both the eBook and the Hardcover, which again is bullshit.)
Another "fuck you" was the release of the White Dwarf Ork flyers and Storm of Magic monsters data sheets. Yes, they cost 2 pounds, but I still have to buy a two hundred and fifty pound iPad to actually use them.
Why Games Workshop is Bad and it Should Feel Bad
When speaking of a company, a person is tempted to think of a large body of human beings coming together in an efficient group. The group is governed, and it is thought that someone is there to ascertain the best possible choices are being made granted the information available at hand. However, this perspective, like most of 40k's explicit war “tactics”, is absolute nonsensical trash.
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 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 GW 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. 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 are not going to nag nearly as much after you've had them for a little while, so it's totally a tough call.
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 they need to shoo Matt Ward's putrid, corrosive stench away from. 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.
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 – she's not nearly as pricey and they'll deal with her constant bitching. Actual revenue is at an all time low.
Believe it or not, companies really do make this mistake, albeit not to this extent (unless you check out Forge World, anyway. Anyone want a Tau Manta? Only costs more than $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, 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.
B. They are price gouging their players to fill the pockets of the people who run the company.
C. Their pricing is not directly related to their costs, and anything they say to the contrary is a big fat lie.
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
This article also explains the problem with Australian prices, in a slightly less detailed manner; [2]
The Beginning of the end?
Recently, Games Workshop has been making changes. They have started making supplements to armies besides Space Marines in Warhammer 40k, started increasing the amount of plastic models and, once or twice, making them reasonably priced. They've even released discount box sets from the new IG stuff. This sounds good, although long overdue, but one must ask; Games Workshop hasn't made these changes despite years of complaints or demands, why are they doing it now? The reason is simple. There are cracks appearing in Games Workshop's foundation, and these tidbits are too little, too late. Their poor treatment of their customers is finally catching up and hitting GW where it hurts. So many customers have said "enough is enough" and washed their hands of GW's merchandise that they're starting to lose revenue. For example, many GW shops in Australia have moved from upscale shopping centers to smaller stores in less-expensive locations as it's cheaper and easier to control.
The reason for these supplements and attempts to improve model quality is most likely to ensure a profit rather than the satisfaction of their customers. Their Chairman Tom Kirby mentioned in a 2011 press release that they were increasing cost cutting measures and making more products while avoiding mention of actual profits (note this is a summary, not his exact words). If their profit was growing, they would be more likely to announce it. If their profits were stable, considering cost cutting measures, that suggests a decrease in the actual profits (the decrease offset by the money saved from cutting costs). Just as the Imperium is starting to come under increasing threat in 40k (ie; their stagnation, Chaos starting get its shit together, Necrons reawakening, the Tyranids rushing towards Terra), Games Workshop could be in their final days. Since this is real-life, they don't have the plot armor of their Creator's Pet "Imperium of Man" and are less likely to survive. (More on this can be found here [3]. It would make alot of sense that the reason The Imperium in 40k is GW's favorite faction is they have a lot in common [and that's not a compliment]. The article is old, but it's still relevant today).
Whether Games Workshop will actually fall and go out of business is unknown for now. They may survive another twenty years, or less than five. There's a possibility (however unlikely) that they may pull their heads out of their asses and revamp everything about the hobby; from supporting expansions (such as Blood Bowl) to charging lower and more reasonable prices for their products, and maybe even advancing the plots for Warhammer Fantasy and 40k (yeah right!). Whatever Games Workshop's ultimate fate, none can deny that the ground is shrinking beneath their feet. As the old saying goes "Fist of iron, feet of clay"...
...And then it happened. Games Workshop's stock as of Thursday the 16th of January 2014 took a nose dive of 24 percent . Adding to this, it's now been rumored that the GW Headquarters in Germany, France and the United States will be closing down, too.
It is also believed that 3d printers are going to be affordable for the layman in the near future. This will probably lead to pirating models (and in fact it already has). The End Times are nigh...
GW The Bully
Games Workshop has long had a history of being one of the most litigious companies in regards to its IP in existence. One needs look no further than our own Pauldrons article to get an idea of how bad it is, in that it uses its designs to openly fight any company that dares have any remote similarity to its own models in any way, shape, or form. You have any wargame with armored dudes with big pauldrons? Lawsuit. Unless you actually have the money to take on GW in a lawsuit and win; then you can get away with basically copying entire game systems without being called on it.
You run a company that makes third-party components for existing models? Lawsuit. You make anything remotely resembling any GW IP ever and aren't a massive company that could actually contest the giant copyright stick GW is swinging around and make them look like the idiots they are? LAWSUIT.
Whilst GW has a lengthy history of overstepping boundaries in its war to enforce its copyright, it only recently decided to go nuclear. GW is now claiming that it owns the phrase Space Marine, ignoring that sci-fi has used the terminology for the better part of eighty years. To be precise, the term 'Space Marine' was made famous in 1932 by sci-fi author Bob Olsen (real name; Alfred Johannes Olsen), who may be the true creator of the term 'Space Marine'. He first used it in his short story "Captain Brink of the Space Marines" from his "Amazing Stories" series, far predating anything Games's Workshop has done. Warhammer 40K as it's known today came about in 1993 during the Second Edition as the successor of Rogue Trader; Rogue Trader was released in 1987. Games Workshop itself was founded in 1975 and, if you want to go really far back, it's oldest founding member Ian Livingstone was born in 1949. In conclusion, the term Space Marine predates Games Workshop's oldest founding member by over a decade and was used for FORTY-THREE YEARS BEFORE GAMES WORKSHOP EXISTED.
Also if you'll like to know the Story in question "spots the space marine" Is about a middle age housewife, nicknamed Spots, being recalled back to the Marine corp (ie a Real Marine,in space) to fight giant enemy crabs (in space). It has nothing to do with GW's Space Marines.
This means that what GW tried to do was PLAGIARISM, which is a huge violation of copyright law. Games Workshop's strategy is to make "space marine" less generic by launching high profile, bullying attacks on every professional author or artist who isn't associated with a huge company who uses it, so that there may yet come a day when people hearing the phrase immediately conclude that it must be related to Games Workshop, because everyone knows what enormous cocks they are whenever anyone else uses the phrase. These attacks will not, again, be targeted at any opponent that can credibly fight back; this is because if it actually came to attempts to litigate over the phrase, GW would be laughed out of court. It's not going to stop GW from being cocks, though. In fact, as of 2014, Games Workshop's website still has 'Space Marine' listed as one of their copyrights.
GW would after the failure and fiasco of the spots the space marine post a lengthy and self defeating rant on their own Facebook page, which basically displayed the ignorance of those writing the post. Shortly afterwards, the Facebook page went down after the backlash caused. Several who queried GW over the pages removal were told that GW wished for the experience with the fanbase to be more personal, thus people should be following their own GW stores.
Recently, their bullying came back to bite them in the ass after a failed attempt at suing the third-party manufacturer Chapter House; when they refused to back down from GW's threats to sue them for making unauthorized models (specifically Mycetic Spores, the Doom of Malan'tai, and the Parasite of Mortrex), the lawsuit went to court- and GW LOST. Apparently just writing up the rules for a model doesn't give you the sole rights to making that model after all. Undaunted, GW did the next best thing-they removed the offending models from the Tyranid codex, cutting off its nose to spite its face. Way to put the customer first, GeeDubs.
And now there are rumors that GW has been bought by the same corporation who owns Hasbro Toys. Expect "My Little Space Mar(in)e" to follow if true.
Things GW should do if it wants to survive
- privatize the company so that needs of the share holders do not overrule the needs of the customer.
- Fire the whole management staff, their obsession with the bottom line is slowly destroying the company.
- Yet the Board of Directors right up to Tom Kirby himself may share this obsession too; that or they don't care what the company does as long as the dollars of gamers fill their pockets. How would you get rid of the Board of Directors?
- Allow the setting to progress and change, even if this involves killing off special characters or even removing entire factions. As wide and encompassing the 40k universe is, the cracks are growing increasingly apparent with time. (These changes to the setting need not affect the crunch; for example, in the present day point of the Warhammer Fantasy timeline half of the Vampire Counts special characters and half of the Orcs & Goblins characters are as dead as they can be, but you can still use them in the Games).
- Get over their fucking hard-on for Space Marines and (Germans?). And every army should get an update in each edition, lest any of them be left behind (e.g. Orks, Dark Eldar, etc.)
- Have a better representation of other ethnic groups in warhammer 40k, they don't stop existing during the setting and having them included would be good for sales.
- Encourage players to build their own armies with cool themes and feature these armies in books and white dwarf; allowing games workshop to save money and at the same time let the players feel like they contributed in some way to the overall fluff.
- They finally did that with their new magazine "Warhammer Visions."
- Stop trying to monopolize things like terrain and game boards. It was a lot more fun and interesting when GW encouraged people to make their own stuff from scratch, but now they seem to think everyone has to have a Citadel Realm of Battle board and use only the plastic terrain kits that are sold at GW. This pisses off all us proper gamers who like to make things that look unique and original. Also, they really should stop selling those stupidly overpriced movement trays for Warhammer, they're cheaper and easier to make using sheets of plasticard and trimmed down sprues! Also, everyone knows "Green Stuff" is "Kneadatite" or simply "Modeling Putty," and that every other hardware company in existence sells it more cheaply than GW does.
- Many players remember the days when paper scenery was included free with issues of White Dwarf and both that and plastic scenery was included with starter sets.
- Stop charging ridiculous prices for cheap and nasty tools with the Citadel brand on them. The £20 novelty flamer airbrush is inferior in every meaningful way to a £5 Silverline. The Citadel Razor Saw with a fixed, low-quality blade costs more than a decent razor saw with interchangeable blades (hell, some places will hook you up with a Tamiya saw with two blades for £10). The "Citadel Hobby Vice" is utterly useless. People do not automatically come to GW for every single thing the hobby requires because they realise GW's idea of service is sticking its dick in their wallet and fucking their credit card to death.
- Cut the production costs, thus reducing prices of their products. This is a good business decision as it would increase volume while retaining profit margins. Lowering prices increases accessibility while also increasing demand, and when you have more customers buying shit at worst you suffer minimal profit loss if you decrease the prices by the right amount.
- Start advertising. Without the infamous "In the grim darkness of the 41st Millennium there is only WAR!" ad we never would have the term "grimdark". Also promote Warhammer Fantasy more. Without it there would have never been a Warhammer 40k in the first place.
- Support independent retailers. They started as one, after all.
- GW won't support independent retailers. Games Workshop see them as competition to squash if they grow for fear that they'll take GW's customers. Given the state of the Imperium, Games Workshop should learn their lesson.
- Hire more competent writers for both the fluff and the crunch then get rid of the incompetent ones. GW itself may not care much about tournaments, but the players certainly do- and consistently poor codexes and updates have driven off quite a few of these competetive players. And it says a LOT that their best fluff writer has spent nearly all of his non-Warhammer 40k career writing comic books, and even he's made more than his fair share of really stupid moments (e.g. the Cabal).