"Sales woe for Games Workshop" Topic

Here's an interesting perspective I haven't seen mentioned yet. I have a nine-year old son who would probably like to start a GW army or two, but I'm actively steering him away. Luckily for me he loves my historical figures, and my GZG etc. sci-fi figures. Now, if GW was even remotely sane in their pricing, I would probably bite and participate in the "GW Hobby" with him – as it is, it's simply not in the cards.

I think when people talk about price-point decisions, they should realize that it's not just decisions of whether to buy a single blister or box – sometimes it's a decision to get in or stay out.

This is starting to look like it could turn into an never ending thread!

Coincidently, I've recent heard some say the definition of insanity is; "To keep doing the same things and expect different results." Do any of you think that applies here?

"One online GW seller I spoke to, saw his sales drop from £2,000 a week to £200.00 GBP GBP after the recent price rise. He stopped selling and is doing something else instead.
"

GW will not survive this last price increase. Many many people warned them and were ignored. Now the chickens are coming home to roost for GW. They will either be taken over or be broken up in Bankruptcy court.

A real shame. Hopefully the new owners can do a better job with the company.

heck, one of my local FLGS owners warned them rather vocally when the boxed regiments went from $20 USD to $25. USD Why? For a kid (or most anyone) in this hobby, dropping a $20 USD bill is trivial money, but even $25 USD is a different thing. Psychologically it is much more than $5. USD Those same boxes are now $35, and this hasn't been that many years.

GW US put itself in the bind a few years ago with the crackdown on discounters and online sales. When this double whammy failed to increase their own web store's sales and didn't really help any of the B&M stores either, they should have taken note. They didn't.

GW US then took steps to alienate their persistent customer base by fighting the US continuance of the Fanatic/Specialist lines tooth and nail despite GW UKs apparently enthusiastic support of those games. That equated to almost a third of the Specialist market simply vanishing, as lines went on discount all over the US and restocks became impossible. I'm sure GW US points at the recent goings-on in the Specialist range and tells itself "See, that idea failed. Aren't we smart for not supporting it?" when they are pretty clearly culpable in that failure.

While that is a fairly small part of the GW profit-and-loss pie overall, it is strongly indicative of the attitudes and organizational issues the GW Group has, and why they are in their current straights.

—

On another topic, I agree to some extent with the fear that as GW dies, so dies the rest of the minis market. Historicals have already been cited as a counter to this, but those games have their most fervent fanbase among those who had WWII as recent history, regardless of which era they ended up playing. New players, the vital ingredient for keeping this hobby alive past 2010 (when the *youngest* of the Boomers will be 50), have to come from somewhere, and GW has been admirably serving as the gateway of the miniatures hobby, getting a new generation of players used to the idea of rules to go with the toy soldiers.

Several things to consider:

The whole gaming market, as a whole, is in a slump. Nothing is selling quite as well: board games, role playing gamers.

These things tend to run in fads. 25 years ago, D&D was where it was at. Warhammer really took off about 15 years ago (the breakthrough was really with Warhammer 4th edition). It may have run its course.

Now we have nice prepainted figures coming from China (e.g. the Star Wars and Dungeon and Dragons line). The bugaboo for gamers has always been the painting of figures. They can now be purchased pre-painted for a fraction of what GW charges for for an unpainted figure.

I suspect there will always be a demand for the LOTR figures — the LOTR is what got me into gaming years ago. Its just that we never had a nice line of figures. However, sales were bound to decrease once the boom created by the films faded. But the books and the films are here to stay.

GW lost me when they rewrote the Army Books for my Hi Elves (7000 pts) and Sisters of Battle (4500 pts). I object to buying expensive figures only to have them made obsolete by a "new" manual a couple of months later.

The gnashing of teeth when GW removed the Rhino from the SoB squads and "dumbed down" the toughness and initiative for characters and basic troops for the High Elves caused dental problems that are still to be addressed and drove me to HoTT, Void and back to historicals.

Over a space of four year I purchased in addition to the above 2000-4000 point armies of Space Marines, Eldar, Dark elves, Lizardmen and Empire. In the last two years I have only purchased paint and half a dozen blisters.

And, lets be honest, GW's plastic stuff is pretty poor in quality and finish compared to the figures and especially vehicles available from historical manufacturers. (Plus I'm a complete metal fan) For many moons my Warhammer and 40K armies have been rounded out whith other manufacturers products in which Celtos and Void figure heavily along with converted 1/48th scale armour.

I'll be sad if GW fold, but someone else will fill the gap!

I think their problems are twofold;

Firstly, the UK is having rough times for high street trading anyway and as others have said, hobbies are the first to suffer. Others who've suffered of late include car registrations (well down), clothing retailers and entertainment retailers (how on EARTH did MVC go bust in the middle of the Christmas run-up??) Brother-in-law-to-be who's in the mobile phone retail business says even that is currently having a crap time.

My personal opinion on this is that a lot of it's being driven by excessive tax take.

GW has another problem, and it's partly related to something other people have mentioned… no diversity in products.

Mom has two kids in tow. Shane wants to go into GW and have her spend money. In a traditional toyshop she can ditch Shane in the GW area and take little Kylie to look at the teddy bears. However if she goes into GW, little Kylie is going to get bored and tetchy in there and parents who are hassled aren't going to do that.

When they do stuff like aggravate a toystore into stopping carrying their stuff and then build a store in the area, they're moving themselves into a place where people have to choose to go in there, and know what they're going for. More people will walk into a toystore than into a GW store. And anyone in the retail business will tell you increasing "footfall" is a lot easier than increasing your sales conversion ratio or even your profit-per-sale. If you don't get people in the door you can't take any money off them at all.

Essentially, while they're in the toystores, they're leaving it to someone else to generate footfall — and some of those people have got big money to spend; advertising that drags Kylie (and her parents) into the store to buy Barbie will end up with Shane in the model kits section where GW stuff usually lives.

Buy having their own stores they're deciding to generate their own footfall — and when did GW do mainstream TV advertising?

Chris,

I daresay you are not a typical parent in this regard.

First of, you know (at least roughly) what a playable army will cost and how big an investment in time it is. Most 9-year olds who want to get into the game don't, nor do their parents.

You are not comparing the cost to typical alternatives, e.g. a gaming console and 10 first-line games (600-700 euros total).

A typical parent looks at this from a completely different perspective.

You know, this year my kids wanted B-Daman. Last year it was Beyblade. The year before that it was Ninja Turtles. Or Pokemon. Or whatever.

Do I tell them "no no, you got Beyblade last year, let's stick with it or you'll never be a Beyblade champion"?

Frankly no. I have no emotional investment in any of those things. They want something, I see how much it costs to make them happy. Whether they want more of the same or something completely new next Christmas is completely immaterial.

It is pointless to do long term cost analysis for kids' fancies because they are just that…

So far the only thing that has "stuck" at all is LEGO, but even that changes from Knight's Kingdom to Bionicle to whatever they come up with next…

When targeting 10-year olds and the like, GW is trying to lock in a customer base that is naturally very hard to lock in. Their likes and interests change in a snap, and since they have no personal investment in the stuff, they have no hesitation to dump a $500 USD army to start something completely different.

Even Lego is selling really bad lately.

All over Europe sales of everything are down. The introduction of the Euro doubled prices of about everything the last few years. For many people that's just hyperinflation and they can't afford luxury products anymore. Or at least think twice for any aquisition. GW clearly is a niche market pricing themselves out of the market. Especially in less well-doing zones in Europe. IMHO.

The whole gaming market, as a whole, is in a slump. Nothing is selling quite as well: board games, role playing gamers.
———————————————————

So PP's quadrupling of sales is an anomoly?

Couldn't happen to a nicer bunch of guys.
Pride goeth before a fall. Whom the Gods would destroy they first make mad.

"And yes, GW competes by getting you hooked to a rule set, but they change the rule sets every few years. What is the number of gamers they loose when they do this?"

—Sargonarhes

You make a very good point Sargonarhes. Why am I going to buy a ruleset or codex when I know it will be obsolete or replaced in 1-2 years? With the possibility of it obsoleting some of the figures I own?

When I see a ruleset in its 5th or 6th Edition, I think a company didn't spend enough time and make a decent ruleset from the beginning. There are many rulesets from games out there that haven't changed in 5-10 years. Why? They made a great ruleset from the beginning. And get this, some miniature ranges give you the ruleset free online! This is path I believe GW should take. I am more likely to buy minis from a company that gives away the rules for free. That way, even if the rules change, I just re-download them. I don't have to worry about my minis becoming obsolete, or shelling out $30-40 to get a "new" edition of a rulebook that is just re-hash.

"You need to get out more. There were Historicals LONG before GW, and will be around LONG after GW, when/if they fold their tent up and move on.

GW didnt make the hobby. Not by a longshot."

—Carmachu

Very good point Carmachu. Historicals and Napoleanics have been around years before GW or anyone else. I have the utmost respect for those gamers, when they had written their own rules and cast their own figures. Old school rulez.

I picked up two British wargaming magazines in a game store yesterday. Why? Because each one had a cool ruleset in them and great pics of Historical figures in it. I paid $7.50 USD for each and would have paid more. I paid $6 USD for the latest White Dwarf and just don't feel like reading the mag anymore. Why? It is the same old crud, articles about the latest 40K or WHFB army you need to buy, a game report where the latest army release always wins (how ironic), blah, blah blah.

I think if GW put more generic articles on wargaming or like little rulesets in White Dwarf that would be great. Or maybe I have hit that point where GW just doesn't excite me anymore.

And people who say the prices don't affect GW's success are crazy. It will cost you $300-$400 easy to collect a new army. I can buy a video game system and a game for that price. Gee, which one would I choose? Plastic little guys or electronics? The fact is, the video game market definitely affects the miniature wargames market. I play both equally, and price determines what I spend my money on that month.

In the latest UK WD there's an article on Dwarfs (the latest army) – to get a 2000 point army, you can buy the army box set and the battalion box set – combined cost – £175.00 GBP And most of the army is plastic. 2000 points is kind of hte 'standard army' size, so you can take this as an average army costs £175.00 GBP approx. That's a lot of money for their target audience – in fact I would say most kids would find buy the time their pocket money has paid for this, the army book/codex has changed and some of their stuff is no longer usable. Now, £175.00 GBP may not seem a lot, but that is quite an outlay to get a standard size army. I could get 175 E4M future troopers for that and do 2 armies – or even cheaper by GZG in 25mm (or more in 15mm) and do massive armies.
On a different note, the games club I go to mainly plays 40K and WHFB – and everyone agrees the games and armies are totally totally unblanced and the new army always sells well as it's got some rules that means it can beat most of the current armies. Of course, most people who like 40K etc will tell you it's all balanced and any army can beat any army, it's down to tactics (ha-ha).
An interesting thing is some of the older players (30+) play WHFB without the magic phase – they use some magic items but no mages. They say it makes for a better game.

Of the three rulesets, I like the LOTR the best, followed by 40K and then WHFB. What's 175 pounds in dollars, like $308? Then you factor in the rulebook, $30. USD Then about $30 USD in paint and paintbrushes (though you need this for any miniatures game). And of course those army/battalion boxed sets are just the start of an army. All I know is I can buy a heck of a lot more minis from other manufacturers for $308. USD

Agreed on the historicals thing, I'm starting to become interested in WW2 historical figures, but mostly for Pulp and Weird WW2 games. I do have a current GW project in the works, a Black Templars army, which a "Year in the making of" type project, and will have a monthly budget of $40. USD I don't need Forgeworld pieces or White Dwarf or even the bits service. All I need are the plastics (all plastic army, you see). This month was the building of the core army from christmas money and gift certificates, next month will probably be the addition of a heavy support vehicle. But I've been shifting my focus away from GW for the better part of a year, and once I complete this project, I will probably be out of GW for good.

Let's not blow this out of proportions. GW will be fine. They've enjoyed such successes over the years that they have 'peaked.' When you expand bigger and bigger, at some point you reach the 'saturation point,' and growth slows or even stops. Since its day as a garage operation in the late '70's, GW has come a long way by any measure.

Maybe it's time GW re-evaluates its business model and scale back. Do whatever it has to in order to survive, even if it means closing stores and laying off employees. Continue supporting its two flagship products, WH and WH40K and it will be alright. GW will still be heads and shoulders above the competition.

I don't much care one way or the other, but I agree it's too soon to write an obituary for Games Workshop. They may have made some decisions that turned out to be wrong, but they will most likely do some cutbacks, outsource some of their labor, etc. They may shrink, but I'd be surprised to see them go out of business completely.

"Or maybe I have hit that point where GW just doesn't excite me anymore. "

I think I have. I just cant get any energy to bother anymore. Even switching armies around doesnt help.

I mean, I have sisters, tyranid and tau, and frankly tau are the newish addition to my collection from bartertown, and I'm having some fun, but its still teh same old, same old.

I'm jazzed about the upcoming hordes form PP. Confrontation is feeling an itch. But GW just feels like the same old same old.

"But GW just feels like the same old."

Well, WH and WH40K have been around for what, 20-25 years in various editions. I play WH40K probably once every couple of months. If you play it every week you're bound to get sick and tired of it.

I'd sure burn a hole in my pocketbook if they ever put Space Hulk, Mighty Empires, Talisman, Heroquest, or Dark Future back on the shelves.

It's not that you burn out of it, it's that all the games play the same. I played in a tournament this weekend. All three games, I faced assault armies. I played Tau, who are 'stand back and shoot'. _I_ ended up going for short-range firefights, which is a high-risk operation. _I_ charged into hand2hand. Tau _suck_ in H2H. I won, because of number of dice thrown.

I want a _different_ game.

"It's not that you burn out of it, it's that all the games play the same…"

Funny how 40K plays like that but they have "so many armies" to choose from.

Yet Starship Troopers has "only" two armies but no two games have played the same, for me…yet.

Yet Starship Troopers has "only" two armies but no two games have played the same, for me…yet.

It'll be interesting to find out — after you've played it for a while — whether this is because you're not sure what works. Once the newness wears off, will the multiple tactical choices remain?

I've played a few games like that.

As for excitement, our group has dusted off our WHFB armies recently because we're playing a Lustrian campaign. The whole jungle thing has made the game different, and they didn't have to add too many rules. (Though our Bretonnian player has it particularly rough.)

I occasionally think that GW should re-release Mordheim, but in new locations. A Lustrian or Khemri set would work nicely.

"So far the only thing that has "stuck" at all is LEGO, but even that changes from Knight's Kingdom to Bionicle to whatever they come up with next…"

Here's a thought, why don't they come up with something completely new instead of the same old humanity desperately fighting to survive vs. the orks/chaos/tyrandis/skaven etc. Develop something new, I don't know what, but just something different.

See, that's why I always had a problem with the phrase: "what the market will bear".

Sure, it will bare with you for a while until there comes a time where it just won't, and usually it's the time when the disbanding is so big it's critical.

I've said it to many a client over new product pricing-meeting inside Marketing Planning sessions. Some heard, more than a few didn't care for my cautionary input… Quite a bit of these regretted it, even when most never told me so.

This should be a warning to many companies. FOW is no doubt on the rise now there seems to be a massive exodus of GW "captive" customers. Same goes for Warmachine, and on a smaller scale, SST.

But if they follow the same logic, the problem will arise… In a couple of decades, like with RP, FASA, TSR and now GW… If you milk you cows to the point of exertion, you'll just kill them. No milk, and certainly no meat to eat.

I believe that Black Tree should take notice too, as their repacking and newer pricing is certainly a far cry from their previous and most attractive quality: Good minis, in enough numbers at unbeatable prices. That is gone now that their figs are 1.5 pound a pop in most Fantasy cases.

Anyway, it's sad because I just know this will mean downsizing and people loosing their jobs is always a terrible thing for me to witness.

carmachu: "So PP's quadrupling of sales is an anomoly?"

Wrong. PP is being affected by the slump as well. Their growth was 17% down from where it should be: If it were a non-slump market, Privateer would have had a *quintupling* of sales… ;^)

That said, I'm kind of slumping out of Warmachine myself. Looking towards "loosely betwixt/during World Wars Pulp", and "free-form near-future/post apocalypse" games instead. Because then you can really just use any figure you want.

"Okay, this week it's Vampire Bikers versus the Denver People's Collective!"

GypsyComet 08 Jan 2006 7:06 p.m. PST

"heck, one of my local FLGS owners warned them rather vocally when the boxed regiments went from $20.00 USD USD to $25.00 USD USD Why? For a kid (or most anyone) in this hobby, dropping a $20.00 USD USD bill is trivial money, but even $25.00 USD USD is a different thing. Psychologically it is much more than $5.00 USD USD Those same boxes are now $35, and this hasn't been that many years."

Thats why drug dealers in Sydney dropped their prices from $25 USD for a couple of grams of grass to $20… noone ever had the fiver!

"I occasionally think that GW should re-release Mordheim, but in new locations. A Lustrian or Khemri set would work nicely."

I could've sworn that there was an online Lustria supplement for Mordheim that was featured in Town Cryer, and one for Khemri also…

icirclegames.com/lustria
or
link

Khemri…
grafixgibs.tripod.com/Khemri

I believe there was one in development for fighting in the Dwarven Kingdoms also…
link

Hope this helps.

Later,
Markus

carmachu: "So PP's quadrupling of sales is an anomoly?"

Wrong. PP is being affected by the slump as well. Their growth was 17% down from where it should be: If it were a non-slump market, Privateer would have had a *quintupling* of sales… ;^)

That said, I'm kind of slumping out of Warmachine myself. Looking towards "loosely betwixt/during World Wars Pulp", and "free-form near-future/post apocalypse" games instead. Because then you can really just use any figure you want.
——————————————————

So their letter in septemebr telling they were pushing back new releases one month so they could get caught up again because of quarupling of sales over the summer was a lie?

You know the letter on their own home page in September?

I like to see your facts please.

Carmachu: read my post again. Little winky emoticon = not terribly serious. Sorry you took it that way.

Or, in short:

You said- "PP sales grew 400%!"
I then said- "But they should have grown 500%!"

I must admit to being one of the TMPers who enjoys these protracted threads about GW's prices, their stock market prices, their business practices, etc., etc.,. I probably enjoy these threads more than their actual games.

When I was a student and was barely scraping buy I still managed to put together a couple 3000 point armies a year. I thought the price for what I got was fine (32 CAD per box at the time). When the prices went to 35, I slowed down considerably and went mostly into the used miniatures market with the occasional purchase of a box set to convert into Bloodbowl teams. When the price jumped to 38 and then to 40 in a very small time frame, I was done. So I fit in with those above who buy hundreds less a year because of a 8 dollar price increase on a box.

I'm also quite gainfully employed now. I think that if I didn't have a problem with GW's prices, and didn't have a problem with how they treated some retailers I frequented in my old city, how they treated some of their staff and their draconian online policies, they'd get a huge number of dollars for me.

As for the comments about GW's armies being balanced/not balanced and the newest always being the strongest— it's not quite that simple. The newest is often the strongest because people don't know how to deal with it yet. People have definitive ideas about what armies work and don't work. I loved it when people said "Army X sucks, they're a waste of time and can't win" or "Nothing can beat Y, they're new and the strongest." I'd usually build army X and utterly destroy their army Y. I loved ripping Tau a new hole with my Codex Catachans played only on non-jungle tables. I never actually lost with that "worst army ever."

Around 2 years ago, I was ardently opposed to GW. A friend of mine was wrongfully dismissed (this was resolved out of court) and GW opened to directly compete in a city already packed with RTT stores. Since then 2 of the RTT stores have stopped selling GW stuff and one has drastically reduced it. I did my best on web forums to make sure people new about alternative miniatures and alternative rules sets— not a lot here as there's already a high awareness of alternatives at TMP.

Since then I've calmed down a bit and have even considered getting back into 40k. Then I checked the prices again. And I also noticed that the casting quality of a lot of their figures has toileted. And they're maintaining the same policies that annoyed me in the first place.

It is FAR too early to be talking about GW being on the road to bankruptcy or being bought out (although my pet theory is that that's the goal of the higher ups at GW— a buy out plan that leaves them rich). They're sales are down, their revenue is down— but they haven't actually reported *losses* yet have they?

Or, in short:

You said- "PP sales grew 400%!"
I then said- "But they should have grown 500%!"
—————————-

Ahhh, missed that.

Just wait, in April they'll double again with Hordes release

It is FAR too early to be talking about GW being on the road to bankruptcy or being bought out (although my pet theory is that that's the goal of the higher ups at GW— a buy out plan that leaves them rich). They're sales are down, their revenue is down— but they haven't actually reported *losses* yet have they?
—————————————————————

I dont think GW is going out of businesss. But I do think they are ina rough time unless they get tehir head out of their rectum.

In some areas, yes, losses. US for one…..if I'm reading it right.

I'll second the complaint that prices discourage purchase.

Since I have more money than sense, I buy more figs even though I have many many unpainted ones at home.

I looked at the plastic boxed set of Skaven Rat Ogres. Kinda like it. $40 USD for tiny box. Put it back.

That being said, I'm probably not their target market. But I think they are walking away from a lot of well-off, solid customers worth $1-2k a year.

It's not that we can't afford it. It is because we don't perceive value for money.

''It is because we don't perceive value for money.''

Exactly!!

That's the overall effect I've been seeing in many gamers who were fanatically loyal to GW—being mainly "new" ones with about 3-4 years under their belts and their "discovery" of the games… And then their jaws drop when I get out my RT hardbacks, the original s Space Marine, the Space Marine (epic) "booster" boxes, etc.

Their comment are always the same: "Even the boxes were bigger!! I can't believe how many pieces/pages it's got!!"

Less pieces, higher prices has been slowly killing the interest and fanatical following.

I'll second Nathaniel's per theory…

For someone, the cash-out time is comming.

I could've sworn that there was an online Lustria supplement for Mordheim that was featured in Town Cryer, and one for Khemri also…

You are correct, but it's not the same thing.

What I was thinking is essentially a new Mordheim starter set — same core rules, different warbands, and terrain appropriate to the location. Take the old Mordheim off the shelf, and re-hook the old players with the new game.

>>The company would not make any more money unless I SPENT MORE CASH myself – in fact they would make less money if I spent the same $s amount and prices were lower as the per item cost of goods would be higher.

dsfrank,

Right now, and for the last few years, my gaming group has spent less and less on gaming miniatures. Right now, I spend almost zero on GW miniatures. If GW backed off their prices to what I see as comfortable, I would definitely drop more cash at their product.

Right now they are getting almost zero. I used to spend hundreds in a year. They've priced out all but one member of my gaming group. A drop in price would likely gain back a lot of FLGS shoppers like myself.

How many people saw TSR going down the pan when it was at its peak? Everything has to come an go, GW is just so bloody big it's like Microsoft, so I'd say it's going to be here for a good while longer.

Personally I just don't buy their stuff like I used to, I was always more into the painting side as I didn't have many people to play with and I certainly don't have anything like that time these days. To ber honest, a lot of their products just don't appeal to me, the LOTR stuff is nice, but I only buy the nice stuff of that, never played a game.

How many people saw TSR going down the pan when it was at its peak?
———————————

Apples and oranges. GW is a publicly trade company, we can see how and what its doing. TSR(and Fasa) were not, so its harder to see whats what with a company.

Bigger does not necessarily mean better. Companies like Eron were not so small, but where are they? Bigger can also mean bloated, and ineffecient. Slow to react.

But your last point is dead on: no one buys like they use to. I dont know one person who would or does anymore.

"no one buys like they use to. I dont know one person who would or does anymore."

Perhaps it's because we, and those we know, all getting older and growing out of it. The young uns coming in buy like we used too.

"Good business is to sell one of something at a high profit rather than three of the same thing at a lower price with lower profits which then combine to produce the one-item figure."

Sure, if you are selling a product of very limited desirability, or cannot be easily manufactured, in a very limited market.

However, if you want to grow your business and compete with the enormous variety of gaming options a gamer has available to them, you better make your game's perceived cost/value competitive with those other options.

GW has a monopoly on sci-fi/fantasy miniature hobby games. So what? Their market is not miniature hobby gamers, it is strategy gamers in general. There are very few miniature players who don't play computer games, board games, or collectible games. When their customers see the cost of GW no longer is worth the effort, compared to say Civ 4 or Warcraft 3 or Age of Empires 3 or whatever, they stop buying.

And it is far worse in the case of getting new players, who can easily get two or three years worth of computer games for the cost of a WH army that they will not be able to play nearly as much their computer games.

When you decide to "boutique" your product by kicking the price up to where only the most loyal fans want to buy it, you open yourself up to a state where a minor shift in opinion kills your profitability.

For instance, the example given "Good business is to sell one of something at a high profit rather than three of the same thing at a lower price with lower profits which then combine to produce the one-item figure" would lead you to believe it is better to sell 10000 items at a $15 USD profit than 30000 items at a $5 USD profit. That is silly. if your market will take 30,000 of your items, sell them. Otherwise, you leave room for a competitor to come in and build a business off of the people you have priced your product out of the interest of.

More importantly, in this case your are trying to cut back from a 30,000 market to a 10,000 market – what makes you think you can control that? What if your higher price actually drops you back to 5,000 units sold? Now you are losing money.

and even if you aren't trying to micromanage your customer base, the fact remains that having a larger customer base is a massive insulator to market changes. If 1,000 customers are enticed away, does it hurt you worse with a 10,000 customer base or a 30,000 customer base? Boutiquing your product makes the stakes so much higher for every single customer.

That is what GW is experiencing right now. They made a decision move a niche product into an even smaller niche, and they plainly thought the price increases would make up for it. Doing it at a time when most middle class people (their customer bases) are struggling more than ever was especially bright. This is failing.

Worse, GW IS the driver of the miniature hobby. Years of marketting the GW hobby leaves the majority of their customers with little interest in other games within the hobby as they drift away. Anecdotally, I've seen a lot of GW fans drift out of the hobby completely in the past year. The hobby was defined by GW, and whatever they didn't like about GW paints the rest of the members of the hobby too. GW's lack of support in building a miniature community vs. a GW community is coming back to bite them in the ass right now, because a lot of people who would have remained in their potential pool of customers are leaving the hobby for good, instead of finding other places in the hobby to hang out while GW adjusts.

I don't think anything short of a massive price decrease coupled with a fresh marketing approach towards building the hobby is going to save them. i don't think they will recognize this in time. And unfortunately, I'm not sure there will be enough of the hobby left after they collapse to sustain itself in any significant way. Most indy stores already know it is a lot less work to stock other types of games, and struggle to understand miniature gaming without being told what to stock. Distribution already doesn't trust miniature games.

There will be opportunities for other purveyors of the hobby, but I don't think they will look anything like hobby does now.

Just to complete the thought on "Good business is to sell one of something at a high profit rather than three of the same thing at a lower price with lower profits which then combine to produce the one-item figure" …

Miniatures are all about up front costs. It costs a lot of time to build a good game, but once its don't, its costs very little per unit to make it. Miniatures are the same way – the production costs for artists and moldmaking are very expensive compared to the item cost of production.

When you have high capital/low production costs, you want to sell as many units as possible to spread out the capital costs, making your product more affordable and competitive and afterwards making more profit after those costs are paid for. Shrinking your market makes the risk for each item not paying for its capital costs much higher. I suspect GW is seeing that right now, too.

Shrinking your market is bad, unless you are unable to keep quality up while supplying to the larger market and you are willing to be a niche player.

…"once it's done"… We need an edit button

Perhaps it's because we, and those we know, all getting older and growing out of it. The young uns coming in buy like we used too.
—————————————————————

Uhm no. I know guys who will drop enough on an army for the next GT. But as we talk about it last night, cant justify it any more at the current price.

I have 4K in tau I just got: But I got it all from bartertown, trading away older models. I have no problems starting a new one, and doing it whol hog, but I'm not paying what GW wants for it.

It doesn't surprize me to see that GW sales are on the decline.
Our GW sales have dropped more than 40% from 2004 to 2005, but our overall sales have increased by 9.5% for the same period.
GW's history regarding it's treatment of the FLGS has encouraged us to use their product as a means of drawing customers into our store in order to sell competing lines.
I've been loyal to a number of game companies who treated me fairly and with respect in the past and have promoted their product for as long as I could with the hope that their may a renewed interest in their product, but I doubt that I'll do that for GW.
My plan is to liquidate their product and carry the minimum and wait and see if they sink or swim.
I don't care either way, because if they swim someone else will come along another product that will take up the slack.

I've noticed an increase in board game (beer & pretzel) sales and it wouldn't hurt GW to revive Talisman, Warhammer Quest and a few of their board games to take advantage of the market trend.

GW's history regarding it's treatment of the FLGS has encouraged us to use their product as a means of drawing customers into our store in order to sell competing lines.
I've been loyal to a number of game companies who treated me fairly and with respect in the past and have promoted their product for as long as I could with the hope that their may a renewed interest in their product, but I doubt that I'll do that for GW.
—————————————-

Might I trouble you to expand on "treatment of FLAGS"?

Folks always seem to dismiss the critism as "folk stories" whenever the argument arises in some cases.

Excellent posts Thane! I think the most brilliant part was about how GW's in a larger market than just miniature gamers. They say it again and again in their corporate statements that they see video games and the like as their competitors.

So when GW ups their price to 5 bucks for a plastic figure, it's not just $5 USD for that figure compared to other miniature companies, but $5 USD a figure compared to a new Xbox. Compared to a PC game. Compared to an iPod Nano. Compared to a lot of things.

Their position as a boutique product now forces them to churn like there's no tommorow. They lose customers from their pricing to things like video games as well as to other miniature games like Warmachine or FOW. The revenue from these customers needs replacing— so the mall stores have sales targets designed around demoing the game to people who have never experienced it before (or experienced any miniatures game for that matter). They need to make up for lossed customers by marketting like made for new customers. If they can keep the incoming equal to or greater than the outgoing, they're fine. If they can't… then well… we might begin to see drops in sale numbers.

Oh wait, we do!

I just took a look at previous year's results (GW has been on my possible stock investment list for a while, but has never dropped to the point where I'd want to buy, so I have their numbers organized a bit).

If you take the entire time that they are selling LOTR and look at the proportion of the revenue that was from LOTR and levels of sales of other products, it looks like LOTR isn't exactly a bubble that's popping but a smokescreen that's fading away.

And what is it hiding? There has been NO growth of Fantasy and 40k since they started selling LOTR. Todays numbers minus LOTR sales = 40k & WFB sales numbers from before they sold LOTR. Within a few percent the same thing is true for the previous years as well.

So they used the money from LOTR to open a ton of more stores, build a US production centre and the like. Now if it took LOTR sales to expand like that, will they be able to maintain it without LOTR sales?

Their problem is not the popping of the LOTR bubble but the fact that sales of their main product lines have stagnated. The profit of LOTR has just hid that fact.