MWG Closing

[Defenestratus]

Of the last couple LGS' that I've had the pleasure of being a customer of, all of them pay the rent with MTG.

GW sales are paltry compared to the revenue generated from MTG (for those stores at least)

[Mr Mystery]

I think we are all clear on the concept. Some of us are making the argument that these are very short-sighted methods that have been tried by others and didn't work out to well. Nobody begrudges anyone wanting to make profit. There is a point at which, however, you are not serving the customers enough to where they will keep paying you.



This is patently FALSE. Sales grow the hobby. The more models, books, and so on which get sold, the more players which correspond to those models/books/etc. are out there. While I agree that brick and mortar stores are helpful in providing access, it is rather silly to say sales (which will be more diverse as prices are lower) isn't growing the hobby. The more expensive they make it by cutting back access points, sales, and so on the fewer people can get their foot in the door. In short "that dog won't hunt."

*To summarize, lower prices result in a lower barrier to get into the hobby and thus more people are likely to get in the door. Removing those options which allow lower prices by DEFAULT cannot grow the hobby more.

It's not about price as such. GW make the same money from a third party web sale as they do a third party store sale. Difference being the chance of a web sale being made to an entirely new customer are far less than if its in store. Again this is a relatively straight forward issue.

FLGS cannot compete with the discounts offered by web traders. GW's future rests more on healthy FLGS than it does web stores. As such they have chosen to support the FLGS by taking steps to remove the issue of higher discounts.

FLGS can still set their own price, as they always have done. Nowhere in the document does it say 'you must sell at our price'. Discounts will still be available. GW will get the same cut they always did (it's my understanding tp sales are 60% of GW retail. I may well be wrong, as this is based on interwebular observation).

There seems a misconception out there that any discount, whether 1% or 20% or what have you somehow hits GW. It doesn't. They've been paid already, and that amount is the same regardless of what the item eventually sells for.

As for what provides the biggest profit is also a peculiar argument. Even if GW sales only account for say, 10% of your profits, losing even that much, with precisely no guarantee it'll be made up elsewhere, is enough to kill a small business. It can of course be survived, especially if there is a long term strategy to wean players onto different games and that, but then that's a lot of effort, when the alternative is simply to continue on your current margins, and make do.

[Caitsidhe]

Of the last couple LGS' that I've had the pleasure of being a customer of, all of them pay the rent with MTG.

GW sales are paltry compared to the revenue generated from MTG (for those stores at least)

Yup.

[NockerGeek]

Of the last couple LGS' that I've had the pleasure of being a customer of, all of them pay the rent with MTG.

GW sales are paltry compared to the revenue generated from MTG (for those stores at least)

Oh, definitely. MTG definitely pays the bills in our area as well.

And really, what I think this all comes down to, and what separates GW from all its competitors in the wargaming market, is that GW has retail spaces and is trying to push product at those retail spaces. Think about your FLGS - it'd be a total dick move to learn about and/or play a game at your local store but refuse to buy anything there because you can get it cheaper on Amazon. For GW, they see that on a massive scale, with every one of their retail outlets perceived as suffering from online sales that aren't directly theirs (and it's no coincidence that GW is all too happy to let you order online from within the store). This is something that Privateer Press, Wyrd Miniatures, Corvus Belli, et al, don't have to deal with; online vendors are their friends, because from their perspective a sale is a sale is a sale, and the groundwork is done at local independent retailers.

If you think about it that way, then the rest of GW's policies make some kind of sense. The increasing numbers of GW Hobby Centers opening up in the US, the price increases to counter the profits they feel they're losing from third-party online sales, the insistence on selling domestically, the policies against third-party online sites: all of these things make sense if GW is trying to protect their retail business, whether warranted or not.

What is the solution, though? Should GW just drop the retail arm of the business and depend on online sales (both first- and third-party) and independent stockists? Should GW continue to run retail locations, but treat them as basically loss leaders to get people into the hobby? Should they keep doing what they're doing?

[daboarder]

This is just an alien idea to me. You are buying the same bits of plastic as we are over here. It has no more value in Australia than it does here but they think YOU should pay more. In America we call this discrimination. It wouldn't be legal here because it is clearly based on on where you come from. They might as well be saying, "Screw those Australian guys. They make too much money."


You should be worried. Everything Games Workshop has been doing as well as an EDUCATED look at their quarterly reports indicates a company that is in trouble. They have offset losses by closing stores to try and make themselves look in the black. They invested big in Tolkien brand (and that wasn't cheap I assure you) and have yet to see a real return. They are engaged in more and more legal debacles and bad press. All of these things are a desperate kind of flailing around to secure the old dynasty, an unwillingness to accept the market has changed and they must change with it.

Thank you so much for both those statements.

The only good thing about the second one however is that the IP has proved to valuable to be allowed to let slip into ambiguity, someone will buy it when GW goes bust.

[Tynskel]

I don't compare Games Workshop to other models - I compare it to other minis games. I've heard GW's claim that they are primarily a minis company, but I don't buy it. It's not how they market themselves. It's not how they make money.

Even then, GW game is better. Sure their rules aren't necessarily as 'tight' as something like privateer press. But, who wants to play with someone that plays Warma-hordes. Every time I bust my Cryx out, I am dealing with a rules nutcase. Every time I bust out my bugs or marines, I am dealing nuclear strikes, heroes, or single lone guardsman that saves the day. Much better atmosphere in GW's design.

Again, the models are better. That's a huge boon, especially considering most people out there just build n' paint.

[TheBitzBarn]

"It's not about price as such. GW make the same money from a third party web sale as they do a third party store sale. Difference being the chance of a web sale being made to an entirely new customer are far less than if its in store. Again this is a relatively straight forward issue." - Mr Mystery

I have to take issue with what you said the high prices and in some areas LACK of stores drive people to the web. Why is Amazon so big they sell same books as Barnes and Nobles? People care about price points. Stores are GREAT but they have to be Great and that is RARE. They also have to be around you I sell to a group in Montana and they have no store in 100s of miles. So should they be deprived product and if it was not for me they would Buy MUCH less Product. This boils down to they want to CONTROL all web sales they have 1800+ product that are ATO or Direct as they use to call it and Stores cannot get this stuff. Why? Cause they want the sales directly via web. I hate this policy as much as the next guy.

Quote Originally Posted by Caitsidhe View Post
This is just an alien idea to me. You are buying the same bits of plastic as we are over here. It has no more value in Australia than it does here but they think YOU should pay more. In America we call this discrimination. It wouldn't be legal here because it is clearly based on on where you come from. They might as well be saying, "Screw those Australian guys. They make too much money."

I am sure you have heard of the Cost of doing business. All Product has to be shipped form Memphis Tennessee or Nottingham England. there are only 22 million of you so makes NO sense to build a Plant. Factor in shipping cost, Factor in CRAZY import Tariffs (yes they exist I get customers telling about the weekly), Factor in Tax Structure of Australia, Factor in CRAZY wage rules, Factor in High Rents (cause only like 8% of the Land is livable) and you have all the reason this items cost more in your country. Minimum Wage is over 14.00 dollars and Hour that is insane. that right there cause the overhead to import, staff and sell products by 100% compared to US.

I am not try to start an argument just wanted to respond PLEASE do not think this is a personal attack on either of you. You both sound passionate and intellegent .

[daboarder]

Quote Originally Posted by Caitsidhe View Post
This is just an alien idea to me. You are buying the same bits of plastic as we are over here. It has no more value in Australia than it does here but they think YOU should pay more. In America we call this discrimination. It wouldn't be legal here because it is clearly based on on where you come from. They might as well be saying, "Screw those Australian guys. They make too much money."

I am sure you have heard of the Cost of doing business. All Product has to be shipped form Memphis Tennessee or Nottingham England. there are only 22 million of you so makes NO sense to build a Plant. Factor in shipping cost, Factor in CRAZY import Tariffs (yes they exist I get customers telling about the weekly), Factor in Tax Structure of Australia, Factor in CRAZY wage rules, Factor in High Rents (cause only like 8% of the Land is livable) and you have all the reason this items cost more in your country. Minimum Wage is over 14.00 dollars and Hour that is insane. that right there cause the overhead to import, staff and sell products by 100% compared to US.

I am not try to start an argument just wanted to respond PLEASE do not think this is a personal attack on either of you. You both sound passionate and intellegent .

Pssh the cost argument is and always has been a BS excuse, along with the higher wage crap (just because other countries have horrible work standards) I for one am glad that price gougers are being run through the ringer today by a commission, if things go the way they should companies should be regulated into offering international prices to aussie customers or get the hell out of our country!

Latest quote from Microsoft: "we charge Australians more because we can...." pretty much says it all.

Until they realise the we wont stand for heavy handed embargo attempts people will pirate more and more, unless GW engender good will with the community 3D printers mean their days are numbered, then again perhaps this is an attempt to maximise profits before the inevitable.

for those willing to read into the real cost of running large business in Australia Apple, Microsoft, Adobe and other technology giants have been so far unable to provide financial justification to a government inquiry, for the "Australia tax" which says it all really, if the cost of business was an issue they'd be more than happy to show that, the fact that they haven't puts the lie to that argument.

[Wolfshade]

As for accessibility, that is the point of this move. Internet sales do not grow the hobby. Bricks and mortar stores do, through intro gaming, running events and generally encouraging play

This is patently FALSE. Sales grow the hobby. The more models, books, and so on which get sold, the more players which correspond to those models/books/etc. are out there. While I agree that brick and mortar stores are helpful in providing access, it is rather silly to say sales (which will be more diverse as prices are lower) isn't growing the hobby. The more expensive they make it by cutting back access points, sales, and so on the fewer people can get their foot in the door. In short "that dog won't hunt."

So if I was the only person buying things, but buying the equivalent of the world sales you would say that that was ok because there are more sales and therefore the hobby is growing?
The hobby isn't the revenue, it isn't the number of kits sold, it is the number of people playing it.

The corrolation between the size of the hobby and the number of sales is not so straight forward. We do not know if 10 dark vengance sets being sold relates to 10 new players (20 new players as they have gone in halfs with their friends) or 1 pre-existing player who thinks the kit is exceptional value.

*To summarize, lower prices result in a lower barrier to get into the hobby and thus more people are likely to get in the door. Removing those options which allow lower prices by DEFAULT cannot grow the hobby more.

The BoLS front page article to which I linked showed that lower prices does not necessarily mean more sales or more profit.

Indeed as has been explicity said a lot of people have a budget for the hobby and will spend that on what they like but that total cash spent is not going to change because of price. By reducing the cost that person buys more, but the overall profit is going to be less, since the individual margin per kit is lower.

As regard to the higher prices in parts of the world we have had threads from way back in 2010 bemoaning the costs and yet people continue to pay and play.

[Caitsidhe]

I am not try to start an argument just wanted to respond PLEASE do not think this is a personal attack on either of you. You both sound passionate and intellegent .

I don't take offense. You are making arguments, not personal attacks. I respect that. I can even accept increases based entirely on shipping (although that should only show up in shipping) costs, taxes and tariffs. I don't accept (and find repugnant) the notion that because they have a higher minimum wage, they should be charged more. I am one of those people who won't buy a car if I walk on to the lot and there are no prices already on the vehicles. The cost should not vary based on what they think I can pay. I only buy from locations that charge the same for everyone. The value of an item has to be static to be fair. The problem with the arguments you are making is that they don't quite hold up. If (and when) I buy something for a friend and ship it to Australia, I encounter the same shipping costs and so on that you talk about but they don't even come CLOSE to the increase Games Workshop is applying. In short, they are gouging the Australians just because they can.