View Full Version : Can GW Lower Prices?
jorz192
02-03-2014, 09:09 PM
I saw the report that GW's sales were down by 12% and know that I personally stopped buying models and
books after the release of the Chaos Space Marine Codex. The codices simply became to expensive to
justify buying them.
I am curious as to whether a business like GW can actually lower the price of already released products without
really hurting their retailers and creating a marketing disaster.
AdamHarry
02-03-2014, 09:20 PM
I am curious as to whether a business like GW can actually lower the price of already released products without
really hurting their retailers and creating a marketing disaster.
Let me ask you this: Why would them lowering prices hurt their retailers or create a marketing disaster?
jorz192
02-03-2014, 09:46 PM
If you lower the price of already released products then there will be a set of the same products on the market that were obtained from the manufacturer at a higher price.
The retailer is forced to sell the products they already have at a higher price than the ones now available from the manufacturer. They would have to take a loss in order to match the price of identical products available directly from the manufacturer or from new retailers entering the market.
ElectricPaladin
02-03-2014, 10:21 PM
If you lower the price of already released products then there will be a set of the same products on the market that were obtained from the manufacturer at a higher price.
The retailer is forced to sell the products they already have at a higher price than the ones now available from the manufacturer. They would have to take a loss in order to match the price of identical products available directly from the manufacturer or from new retailers entering the market.
Is there any precedent for offering your retail partners a rebate, discount on future purchases, or some other way of softening the blow? I can't imagine that every manufacturer for all time has been locked into "this price or higher" for all time. "Sorry, we decided that our prices got out of hand, but here's a $X credit on future purchases to make up for it."
I see the quandary GW is in... but there has got to be a way out.
DarkLink
02-03-2014, 11:14 PM
The better question is, is GW willing to accept that they'll need to actually work with retailers instead of against them like they normally do.
GrauGeist
02-03-2014, 11:31 PM
GW could reduce (some) prices slightly, and raise other prices to "rebalance" things.
But a significant, wholesale reduction? Nope.
Besides, last year, GW's gross margin improved, so there's not that much need to convert back to a higher volume & lower unit profit model.
Baneblade
02-03-2014, 11:40 PM
Most likely way to lower price will be through inflation. If GW kept the nominal price level (the current price tag you see) at the current level, over time the effects of inflation will reduce the real price. We saw it last year when the time when price changes happens and that most if not all items remained the same price. However that stable price did not translate into the newer releases, with the Dark Elf Witch Elves being the most obvious offender. Maybe GW saw the effects of that poor price structure for the kit and adjusted with the upcoming Hammers/Longbeard kit.
DarkLink
02-04-2014, 12:01 AM
Besides, last year, GW's gross margin improved, so there's not that much need to convert back to a higher volume & lower unit profit model.
Last year, yeah, but this last quarter saw a massive drop in sales and profits. Sacrificing customers in favor of jacking up prices might not carry them any further.
Fanboy
02-04-2014, 12:51 AM
Could GW lower prices? Yes they probably could, but like any organization its about profits and keeping the shareholders happy. Its not about the customers....... Synical....maybe.......but thats the way I see things sometimes.
I understand the need for profits to pay salaries, develolemnt costs, cost of sales and logistics and marketing, etc, etc. So, i may be able to accept the 'high' cost of miniatures, but then at least have a decent/solid ruleset, and proper games/rules testing. 6th Ed, along with higher prices is single handedly killing GW. How can I say this, well have a look at the wonderful results GW posted in the previous 6th month period. They can spin us whatever story they want, the reality is a poor BRB, namely 6th ED, and far too many codex and rule supplement releases over a short period of time. I know we have always complained that GW was slow to release new material (E.g. 15 years or so for a new dark eldar codex), but at least the rules worked. The sudden flood of over powered codices to drive sales, additional rules supplements and high prices have finally pushed the 40k player over the edge, and the market is pushing back by not purchasing, and potentially leaving the hobby for other table top/gaming hobbies. But GW continues to blame their retailers and stores. I cannot believe a company that has been around since approx 1986/7, with a strong track record can employ such stupid marketing people, and make such bad decisions.
The basis of this hobby is a solid rule set, not the 6th Ed drivel we currently have, and all the over powered, untested codices, and additional supplementary rules. Have a solid basic ruleset, with occassional rules updates/options (e.g. options for flyers, options for allies, options for MFC) and balanced codex releases, and the models will sell themselves.
There is ever increasing competition out there, with gamers having more choice than even before for toy soldier wargaming. GW is no longer the only company out there, and maybe its time they realized this. Switching costs from one system to another is not that difficult, and hey, i could even use my GW minis in the other systems. And then there is the ever increasing market of PC/console/online gaming, another competitor for GW to consider.
So, increased prices for minis I can accept to a degree, but GW needs to get their act together with a solid ruleset, and balanced codices. They got it right in the past with 4th and 5th Ed that did have some shortfalls, and needed a tweak here and there, but 6th Ed is just terrible and the current sales/profits are showing this. Maybe its time to bring back some of the old team, and get things back on track......
ElectricPaladin
02-04-2014, 12:55 AM
Could GW lower prices? Yes they probably could, but like any organization its about profits and keeping the shareholders happy. Its not about the customers....... Synical....maybe.......but thats the way I see things sometime.
I think it's remarkable that you are simultaneously critical of GW and falling into the same flawed logic that is killing the company. GW is about the customers, because we are their meat and drink. Or, rather, our money is. When GW forgets that, they court abandonment. They are not the only game in town - now more than ever - and if they forget that, they will die.
GW needs to remember that our patronage is how they survive. If they want to exist in the long term, they need to create a solid product that their customers will continue to enjoy, and consume, in the long term.
Fanboy
02-04-2014, 12:59 AM
correct, thats what I have said in the remainder of my post..........
Wildeybeast
02-04-2014, 01:23 AM
This needs to be in the corporate section, where, there are already similar conversations taking place.
Fanboy
02-04-2014, 01:56 AM
Really!! We are talking about price.....
jonsgot
02-04-2014, 02:05 AM
GW could reduce (some) prices slightly, and raise other prices to "rebalance" things.
But a significant, wholesale reduction? Nope.
Besides, last year, GW's gross margin improved, so there's not that much need to convert back to a higher volume & lower unit profit model.
I'd quite like to think I will see 40p per share, that's why.
DaveTycho
02-04-2014, 02:11 AM
Just as much as anybody, I want to see GW drop it's prices, but I'm not sure how viable it would be. However, dropping prices wholesale isn't the only option GW has. They could always have discounts at certain times of the year say Christmas or store birthday sales. Or how about bundle deals such as buy three or more boxes of the same army in store and get a discount on the whole deal or at least on the cheapest box. These methods are used by any other regular retail store in the world, why can't GW adopt them too? This could solve a lot of problems for GW as customers would feel that they are, at least some of the time, not being ripped off and might even bring back customers.
Wolfshade
02-04-2014, 02:31 AM
Off to Corporate Discussion
These methods are used by any other regular retail store in the world, why can't GW adopt them too?
While generally yes, lots of retail stores do this, however, those sorts of stores have a customer base of the whole population. But consider things which market themselves as premium goods, the high end clothes stores near me never have a sale, Armini discount suit anyone? Nor the Tag shop, or some of the more esoteric shops. That is why. For GW there is no competition, now people cry out and point to mantic or what have you and while there are pockets of players no where near the number as GW's core range.
GravesDisease
02-04-2014, 07:54 AM
Can they? Sure. But it won't be as you imagine - they aren't just some single shop retailer that can go "-20% off everything!!" and worry about the margins later. They are producers as well, whose prices are composited from a multitude of costs with some being fixed. The price drops, if any, we might see will take the form of bundle SKUs like the new tyranid brood boxes which take the prexisting sprues and offer a bulk discount.
Mr Mystery
02-04-2014, 10:29 AM
Can they? Sure. But it won't be as you imagine - they aren't just some single shop retailer that can go "-20% off everything!!" and worry about the margins later. They are producers as well, whose prices are composited from a multitude of costs with some being fixed. The price drops, if any, we might see will take the form of bundle SKUs like the new tyranid brood boxes which take the prexisting sprues and offer a bulk discount.
Yep. This.
You can cut prices without actually cutting prices. Offer deals. Illusion of value, and people buy more than they might necessarily need.
Wolfshade
02-04-2014, 10:34 AM
Yep. This.
You can cut prices without actually cutting prices. Offer deals. Illusion of value, and people buy more than they might necessarily need.
Like the supermarkets, buy two save 0 deals ;)
Deadlift
02-04-2014, 11:33 AM
I've said it before, money off vouchers that are within the WD or Visions Magazine. Easy enough and encourages the sales of the mags as well.
DarkLink
02-04-2014, 11:43 AM
I think it's remarkable that you are simultaneously critical of GW and falling into the same flawed logic that is killing the company. GW is about the customers, because we are their meat and drink. Or, rather, our money is. When GW forgets that, they court abandonment. They are not the only game in town - now more than ever - and if they forget that, they will die.
GW needs to remember that our patronage is how they survive. If they want to exist in the long term, they need to create a solid product that their customers will continue to enjoy, and consume, in the long term.
Right. For a long time, because they were the only game in town, they didn't need to do any real work to build up a community or promote their game. That pretty much just happened on its own.
Now that there are a dozen decent-sized competitors out there (Infinity, Warmahordes, Drop Zone Commander, X-Wing, etc), GW is going to have to start community-building again, or it's going to lose customers who are pissed off at GW's lazy rules and then see how well written a lot of these other games are and leave for greener pastures. Otherwise, they will lose market share.
Deadlift
02-04-2014, 02:42 PM
To be fair Darklink, I think we've already begun to see GW lose some market share. I know in my gaming group we've not touched 40k for a couple of months now. X-Wing on the other hand we've been playing every week since Christmas. Now we've started to spread our gaming wings the talk is turning to Warmahordes (at last) and Infinity. This is just our experience but frequent other forums enough and there are plenty of folks who seem to be doing the same.
DarkLink
02-04-2014, 04:16 PM
I'd agree. We have a huge local tournament scene. Last year, we had 90 people show up for the 1250 in January (it increases 250pts every other month up to 2500 in November). By the end of the year, attendance had dropped to maybe 2/3 of the previous year, and this January we only had about 50 show up for the 1250. Some of the whinier local complained that it was all because there was no comp last year, but then they reintroduced comp this year and attendance is still down big time.
Conversely, Warmahordes and Infinity now have sizeable gaming groups that are only getting bigger.
That said, there are other tournaments that are only growing. Frontline Gaming and the Las Vegas Open is on track to grow to Adepticon-size if they keep the pace up.
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