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So, why are Games Workshop products so expensive, anyway?

vivsavage

Independent Procrastinor
Validated User
Everyone complains about the cost of various GW products (myself included). I thought the new resin models would reduce the prices from their metal figures, but that hasn't been the case. Their new hardcover codex books are beyond expensive ($58 for a 175 page book). My question is, why? In looking at the products of other companies, while still expensive, the cost of their stuff doesn't strike me as punishing like those of GW.
 

Cessna

Gritty AF
Staff member
Administrator
Moderator
RPGnet Member
Validated User
Because people are willing to pay that much. Also:

 

Randall

Registered User
Validated User
Because Games Workshop customers or fans are not afraid to pay those prices.

Also, for every customer they lose because prices, they gain one or two (or more) because "hey, everyone plays Warhammer" or a returning customer that used to play, stopped because high prices and returned because they have available money now.
 

Ace the hero

Waaaghboss in Training
Validated User
Shouldn't this go in Other Games?

As for your question, it's been asked lots of times, and the credible answers usually boil down to:
a) GW charge that much because they can. They are the biggest miniature company in town and despite some recent issues, plenty of people are still willing to pay their prices, so why change.
b) GW not only run the biggest company in town, they also own a store chain, and a business of that type and size comes with high overhead. Therefore, GW charge that much to cover the losses in other parts of their operation.
Realistically, it's probably a combination of the two. Also, there's plenty of miniature companies that are pretty close to GW's prices.
 

Sabermane

Proud Fianna knight of hope and peace
Validated User
If you'll note, going to their site has rapidly shown that there is apparently enough demand for gigantic purchases in massive quantities, such as the "here's an entire chapter".

The only thing I can assume is that GW is no longer interested in the small-time temp gamer market, and that the entire company is instead being supported by lotto-winning madmen, tournament professionals, and Kuati Oil Barons.

But apparently it's keeping their company afloat, so more power to them...
 

SibKhatru

Registered User
Validated User
Let's use Porter's forces analysis, and you'll discover that GM is positioned in a market that is far from highly competitive: (1) there are some entry barriers, especially high investment costs needed to get the design, manufacturing, and distribution factors into place that GW now has, (2) there are only a few perceived substitutes for their products (if any, i.e., GW fans are very loyal to the brands offered), (3) buyers have switching costs due to heavy investments and the social aspects of playing the GW brands, (4) sellers to GW don't have a lot of market power, so any surplus that arises from transactions with GW on the input and output sides tends to stay with GW, and (5) substitutes are not well-positioned in terms of the social and collecting/painting aspects of the hobby--the fantasy and scifi stuff is pretty locked up with GW as the 900 pd. gorilla...

All this leads to non-competitive markets, and thus, demand inelasticity...
 

Requiem_17_23

Mrglglglgl
Validated User
GW's investors were sold on the idea of the games company as similar to a utility supplier. The barriers to entry in the market are high, and customers suffer somewhat of a barrier to exit: nobody else can supply *GW* games, just something a little like it, which their mates won't necessarily play. Thus, basically, there's no financial incentive to provide lower prices or higher quality products - they are in a pretty inelastic region of their demand curve, whatever it looks like at a lower price point. And there's nobody at the lower price point proving that it's more profitable (if indeed it is) so even if management wanted to go that way, the business case contains a bunch of risk that nobody who invests on a 'utility supplier' model is willing to take.
 
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