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

Xeno

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To be fair to GW, right now they are switching their entire line to plastic, and considering they have, what, 30 or more armies that comprises, between them, a few hundred kits, that's not cheap - we're talking in the range of 10-20,000 or more per kit, minimum (not including costs for sculptors, marketing, packaging, etc). They also release a large number of these kits every single years, and have done so for the past few years. While some of those kits, like Space Marines, probably sell enough to pay for their own costs many, many times over, others, like plastic sprues for individual hero units, probably won't sell that many (maybe one to each player of that army at most) hence a higher price to make up the cost.

Additionally, as a publicly-traded company they have a legal obligation to maximize shareholder value (i.e. stock prices) and so couldn't reduce prices, or at least slow price increases, if they wanted to - if the company's leadership lets the company's value fall, even if that might be for the long-term good of the company, the stockholders can sue the bejeezus out of it . . . though I am not a finance lawyer, so perhaps someone can step in and confirm, deny, or tell me I'm full of horseshit ;)

In any case, they priced me out of the GW hobby long ago. I don't even bother to look at their products anymore because I know for a certain fact that, whatever they offer, it's too expensive for me.
 

Spectralent

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That doesn't necessarily hold even under a rational analysis; I'm also no stock lawyer, but it's perfectly reasonable to believe you'll make more money selling 1000 toys at £5 than it is selling 100 at £20; that would still be increased profits, but doesn't necessarily hold you have to continually sell things at higher prices on to infinity (and I'm fairly sure even the crazy "must maximise short-term profit" laws have clauses like good faith that suggest if the leadership took a move they thought was a good idea but turned out not to be then there's no issue, but that I'm less sure of).
 

Thrund

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That doesn't necessarily hold even under a rational analysis; I'm also no stock lawyer, but it's perfectly reasonable to believe you'll make more money selling 1000 toys at £5 than it is selling 100 at £20
They may be a public company but they're a UK public company, so they don't have nearly as much exposure to legal action from their shareholders as they would in the US. That doesn't stop people selling their shares if they don't like what's happening, of course.

If they were going for the pocket-money sales that they like to pretend they are, then lowering prices would make sense, but if you're selling 5000 Space Marine chapters at whatever the hell they go for these days, then anything you do to make those customers think you might not be the premium product is going to be a problem.

What they really need to be doing is moving away from the store model that pushes their costs up, and the suspicion is that they'd like nothing better than to do that but are tied into a lot of long-term leases.
 

Cessna

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Additionally, as a publicly-traded company they have a legal obligation to maximize shareholder value (i.e. stock prices) and so couldn't reduce prices
So a publicly traded company can't reduce prices?

Sorry, no, that's incorrect. A publicly traded company most certainly can reduce prices in order to increase sales, and they do so often.
 

CrazyIvan

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So a publicly traded company can't reduce prices?

Sorry, no, that's incorrect. A publicly traded company most certainly can reduce prices in order to increase sales, and they do so often.
But, as has been noted with the utility model, there's not necessarily a competitor in the same type of business (Space Marines as Utilities) with lower prices, so there's no proof that lowering prices will help. It *might*, but GW is a risk-averse company, and if raising prices got them to where they are, it's not insane to think they'd keep trying that.

Inelastic demand goes both ways.
 

CrazyIvan

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That doesn't necessarily hold even under a rational analysis; I'm also no stock lawyer, but it's perfectly reasonable to believe you'll make more money selling 1000 toys at £5 than it is selling 100 at £20; that would still be increased profits, but doesn't necessarily hold you have to continually sell things at higher prices on to infinity (and I'm fairly sure even the crazy "must maximise short-term profit" laws have clauses like good faith that suggest if the leadership took a move they thought was a good idea but turned out not to be then there's no issue, but that I'm less sure of).
You're assuming they'd sell 1000 at £5.

What if they only double their sales?
 

Croquemitaine

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but it's perfectly reasonable to believe you'll make more money selling 1000 toys at £5 than it is selling 100 at £20;
Possibly, maybe even probably, but don't forget that you'd have to manufacture ten times as many toys in order to do that, cutting heavily into your profit. And as CrazyIvan points out, there's no guarantee that you'll actually sell that many more units at the lower price. There is a finite market for these things, after all. Judging price vs production cost vs market size is a complex task and I for one am not qualified to say where GW should be drawing the line, but I do know it's not as simple as it looks.

However, it is my belief, or let's say hope, that as the miniatures industry switches more and more to plastic with its largely up-front production costs, we'll see more figure lines priced to sell in quantity and fewer "premium" costed items.
 

Crumbs

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Even if they lowered prices it wouldn't increase sales to most of their customers. It would just mean their customers buy more in one go but there is still a practical stopping point in purchases.

I have a full company of Dark Angels along with a ravenwing and deathwing companies and an empire army for WHFB. Even at half the cost I have no practical reason to buy anymore and at lower prices they would have made a significantly lower profit on my purchases. Outside of starting new armies GW will not be getting anymore money from me.

So for GW it's sell something at $40 to one person which they know they can do or hope they can sell two things to two different people for $20 which they don't know they can do.
 

komradebob

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I think I may be missing your point there, Crumbs.

Why wouldn't you( general you, not you specifically) just buy bigger armies and several different armies?

That's certainly been my pattern with Bolt Action by Warlord ( notably made up of Ex-GW guys) where the prices are a good bit lower, but the armies are similar in numbers and types of figures ( albeit historical), and the general style of game is similar ( codexes, etc)
 
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