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You often wonder if the multimillion pound international company has people who are better at analysing business related things like price and demand, or if a gamer with no experience in those matters would do better ;-)

As someone who is confounded by the marketing department ("Do you even know what the product does?!"), I think the latter might actually be more successful.

In the gambling industry it's called chasing.
It's where someone making losses keeps increasing their bet to try and cover their previous losses.
Only difference is that in GW's case it is the cost of the product rather than a bet that they are increasing.

Please take a look before starting a new thread as this has been spoken of MANY times. It's because they wish to recuperate from their decrease in profit gained after the LotR line died out due to film hype subsiding. Theory_Man, you're price of tin theory (not meant to be a repitition, but oh well) is credible, but doesn't explain the plastic prices. If anybody says it's because of oil prices, it's untrue. Oil hasn't significantly risen, taxes upon it have (in petrol at least). As for £12 for 5 (I'd like to point out mounted and IMo beautiful) models, is actually a good deal compared to a lot of things, I feel. Would you rather pay £12 for the equivalent of 10-15 models (I.E. 5 mounted) or £20 for a single metal one, mounted (about 3-5 miniatures worth of metal)?

Yes, but this is true in anything.

See above (not necessarily the same equipment, but research is constantly being done for any company).

Molds are a part of the process of making the models and have been a static cost that wouldn't increase beyond inflation rates and this extra cost is applied each time they buy a new mold, not constantly.

Personally, I prefer the older plastic as the new stuff doesn't work so well with plastic cement nor if you don't bother to undercoat it first. I agreed with the tin though

Packaging prices can be reduced by not using the cellaphane wrap on the boxes (of which not all of them have anyway) and not using the plastic compartment trays inside the box. However, packaging hasn't risen in cost beyond rate of inflation either.

Petrol price increases, most of this is due to taxation and in most countries, there is a SLIGHT reduction (not noteworthy IMO) for businesses. However, I do agree here still.

Advertisement? We pay £4 for their advertisement. At the moment, the only other advertisement they get is word of mouth/internet and from their games, which we pay for as well. (Yes, WD isn't a cost-free venture, but they still make a profit from it and we pay for the advertisements within it.)

Overall, they have had to increase prices due to tin increases, which would be felt elsewhere in other markets. Plastic has slightly risen in cost also, but again, this is felt elsewhere in other markets and lastkly, fuel prices are being flet across the board. Their price increases are beyond the rates of inflation and beyond the "add-on" cost increases of other things. they are raising prices in an attempt to make up for profit lost from LotR no longer doing so well.

Ultimately, it seems like this is just about working for them, but if they continue to do it, they shall quickly start to lose total revenue. With fixed costs as high as theirs, losing out on units sold is not good in the slightest as even a small drop (at the revenue they would've received instead) can be dangerous to them.

That said, it seems they may be changing their minds with the plastic cold one riders. The current common example is the two extremes of cold one knights and blood knights with a price difference of £28 due to the blood knights being metal (however, these will have less spare parts and, IMO, aren't as detailed or well done). Even so, a box of Chaos Knights is (IIRR) £30 which is still £18 more than plastic equivalents... Now, the cost differences between pewter (and/or its components and processing) surely isn't representative of such cost differences?

A barrel of oil is twice what is was last year, and ten times more than 10 years ago.  This is before any taxes.

For the main part, a business will intend to generally make between 10-20% of it's turnover in profit.  More turnover, more profit.  Adjusting the price can also make more profit, but only as far as the market allows.  The market is mostly teenage boys, who have been getting record amounts of pocket money and presents each year.  As long as the prices of models keep within the limits (and the quality doesn't differ)  then GW will do okay. The amount that people buy is still limited largely by the amount people can/will paint or put together, so dropping prices won't cause a large amount of extra sales.

It was only 6 months ago that people were discussing how poorly GW have been doing by looking at profits and stock prices, so it is funny to see more complaints about prices.

Oil prices have risen at a steady rate of 200% each year for 10 years then. this would have been incorporated each year for the past 10 years in such a case if it affected them that drastically. I'm aware that adjusting the price adjusts profit earnt and sales sold, but it depends upon the elasticity of demand before anything else and if they continue to increase prices with their current elastic demand curve, they will soon lose out on profit (not be at a loss, just reducing the amount of profit they are making). As for it being limited by what people can mkae and paint, I can't recall the last time I knew of someone that didn't have more stuff than they could make and paint (this includes the internet, particularly on threads involving "you know you're a veteran wehn...").

Those 6 months ago, it was pointed out that they weren't doing poorly at all, in fact, they were doing better profit-wise than they had pre-LotR and profits were rising. The stocks fell sharply, but remained higher than pre-LotR, because the hype of the films died down and their free advertisement of LotR things died out and people no longer cared (as much) for that type of stuff.

Frankly, the reason why prices are increasing is not the problem.
The real problem is the fact that GW's customer base cannot keep absorbing price rises indefinitely.  Eventually it will reach a point where GW price themselves out of the market and Warhammer begins to die.

I don't think it would die, so much as stop progressing. Those in the hobby (seriously) with enough models to game and the required books would stop buying new books (assuming they can't afford it) and just play with the older editions (which they own). But, I do agree, wallacer, that the fanbase can't abosrb it indefinitely...

Anyone noticed the completely new units in each army update?  Even the veterans have to buy new models if they want to keep up.

Metal molds are surely no cheaper to make than a plastic one? In fact, due to higher temperatures etc, I'd have thought they'd cost more actually. What I mean is, if the prices of plastics are rising so quickly, why haven't the metals? They are creating larger profit from the plastics than metals is what I'm "getting at".

As for needing to reclaim at least double the cost, it is still a once-off cost is the point I was making. Whereas the plastics of the models are constant (as is rent, but that would need to be paid whether they made the models or not).

Saying they are a monopolistic market (which I would think they are. Certainly a completely monopolistic one for Warhammer) does mean that they have to generate their own demand, but they have been reducing it recently (although there have been a few bonuses to be fair). Their supply hasn't decreased to my knowledge. If anything, I'd guess (again, it IS a guess) it would have increased, which technically (but no necessarily) devalues the product, meaning it should be priced lower.

Still, it's not the way they run it, but such is life. cornixt is right: they are doing good business by making a new unit each time, so the vet.s are still interested somewhat.

I remember reading an interview with (I think) Sid Meier, the computer game designer.  He said when you release a new version of something (in his case, computer games) you keep 75% the same and make 25% new.
That seems to make sense.  It keeps things interesting and fresh and encourages vets to renew their interest (read: spend money) in an army that they have already collected.

It certainly motivated me to spend money again on my first army, Chaos.

Apparently the master for plastics is more expensive than for metals, but their then cheaper to produce once you have the moulds.  Hence why they usually only make plastics for units they expect to sell well (or else give it a rediculous cost to recoup the difference as is the case for the larger tanks)

There is something on the GW website about a price rise for metal models at the end of the month due to the price of tin 'more than doubling' within the space of the last price rise.

GW is a british based company and as such is embroiled in the current UK credit crunch, and as the chancellor says, the worst economic crisis in 60 years.  The price of everything in the world is going up right now.  

When I could buy a single lead miniature from GW for £3, I could also buy a mars bar for around 22p, and the price of a very good family car was under £10k, my mum bought her house for £19k.

Now, a white metal single miniature which is none toxic, far more detailed and part of a wider choice costs me £5, A mars bar now costs me over 60p, my reno scenic cost me £18.5k and my mum is selling her house for over £100k.

It's easy to accuse GW of succering us for more money, but the prices of everything has gone up since the good old days, due to all sorts, not to mention GW employees demanding higher wages to pay for their more expensive food and petrol and homes.

Plus, look at all the stuff you get in BFSP and AoBR for £40? New cold one knight unit for £12!

The good news is for now only the metal models are due for price increases, but it is only a matter of time before the plastics succome to the increasingly difficult economic climate.

two_heads_talking, in that case, at a rough guess (no attempt at maths ), according to Theory_Man, it'd be something like 32 units per store, which I guess would take something like 3 months on average (dependent upon model).

Lord zarkov, thanks for the correction. In that case, ignore my statement about the molds costing the same to produce

Hammerhand, you're damned lucky to have got a house for £19k! Just so I know, what sort of year are you talking about? I do agree that prices have risen everywhere and, yes, it's beyond inflation rates in a lot of places, but it doesn't change the fact that GW has risen prices beyond even those rates. A pack of Nurglings cost £3 when i started this hobby (7 years ago) and the last lot that solf for one base, came in at £7. That's a 233.3 (recurring)% increase in price, whereas that inflation is supposed to be closer to £3.61 (including the almost twice as high inflation rate in the past year). Again, I agree with those box sets, but they've always been better value than other boxes, making savings of up to (estimate)£30+ in the past. The Cold One Knights are certainly a turn in the other direction and I hiope that it becomes a trend. Alas, your good news isn't as good as you think as they said they're also raising the costs of publications and paints. Basically, it's only plastic miniatures that won't rise (which is the only upisde to this).

Viskar Zhragoth, I'd like to see the source that gave you this 1% profit pre-once-off costs, please, as nowhere I've seen has implicated that in the slightest.

Godbob, I agree wholeheartedly.

I agree with HB, GW prices are well above inflation rates and yes this is due to greed not the global market/UK "credit crunch". Prior rises have been because they got greedy and then based their plan/development on this inflated price. There's no need for, in HB's example, a 233.3% rise in 7yrs, but because they've adopted it as a business plan now, they are not able (nor want) to either backpeddle nor incorporate the rise in the price of the raw material.

Therefore, prices get pushed on the consumer. Which in light of the recent economic downturn, increases the possibility of them not buying it, harming them further. GW has (and will continue to do) some very silly things, it all depends on how much they can push their core market demographic before they're more willing to buy a plastic kit and greenstuff to make the metal option themself.

In that case, won't the company be forced to increase the price of plastic kits in order to compensate from their lack of metal sales?

Well, Nurglings are £8 for two bases now, whereas they used to be sold as a single base.  So that would be a 33% rise.
GW aren't rolling in profits, however you look at it.

Thair annual report says they make 12% profit

cornixt, I'm aware they now do them 2 for £8, so it's now £4 a base, which, as you said is 33%. It's still a 10% rise.

If they're profit margins are so low, they should consider changing other things than just price. Such as: reducing costs of production where possible.

It was an ex-council house bought in 1994. It was my mum that bought it, I'm bummed that my car + my TV cost more than my mums house!!!!

I know GW prices (in some cases) have risen higher than inflation, that is why I chose 4 distinctly different markets to show how each market rises differently.  In 1994 GW was cheaper than it is now, but so were lots of other things!

On the subject of paint pottles, I see the cost of them is surging as well.  Locally, GW paints will be going up by a third, which means I'll probably just permanently switch to using Vallejo paints now.

Theory_Man, it was just a ballpark guess for 3 months, if I'm perfectly honest, but it seemed like a reasonable amount of time...

slev, that'd be hilarious

Unfortunately for me, I'm too lazy to look at cheaper paints. I guess that's something GW rely on: brand loyalty... Alas, when the prices are getting as high as they are, even those loyal to brand are at least tempted to other, cheaper, sources.