Welcome to Librarium Online!
Well I did a little research with a friend, and from we can see They arent that greedy.
Last year Games Workshops Take in profit at the end of the year was only $2.8 million after giving out $6 million in dividends to their stockholders.
So even though we complain about the prices of Warhammer and stuff, if they didnt charge as much as tey do, they wouldnt be in buisiness..
Just something to think about.
He's coming for you...
That seems to make sence, I feel an itch should by stock new units/larger campaign comming out soon. Hmmm i would like to se some of that six million. And if they carged less i am sure that they could easily double their customers cause at least in my area about half of the gammers dropped out because it was becoming too expensive so i think they could still make it if they did that but maybe it is wishful thinking mixed with optimism, a bad combination
Necorn Work In Progress Click Link
Indeed, it's the law of supply and demand. You have to charge at a price that will attract lots of customers, but still bring in profit, so usually companies do some experimental pricing before settling on a general price range. I, too, know many players who stopped playing simply because paying $45 for a squad was outside of their price range. If GW dropped their prices by $5, they could regain the lost money with more sales.
My gaming group's new motto: That army you're using is overpowered because it hurts my guys, codex is broken and needs a rewrite.
I suspect, although I'm only speculating that GW are working to specific profit margins rather than aiming for maximal turnover.
I guess they have a specific figure of profit percentage related to expenses worked out - 25%, 50%, 75% whatever it works out to be, I wouldn't dream to second guess their business.
Based on that they want to make x% profit on every pound they spend rather than just making 'lots' of money.
Consequently even if they shifted a vastly larger number of units at a lower price they would simply not make their %ages despite making more money overall.
Why would they not want to try to shift more product?
They have probably analysed the problem based on actual sales from their various sources and figured out how much of a customer base they have, how much that deteriorates with increasing prices. They will also use the numbers to speculate as to how much the customer base would increase with reduced prices and how much of that customer base would be likely to remain firm in numbers.
Basically they would check it all out and I'm sure they will have done so and probably realised that they are making the best level of profit for their investment right where they are now - anything more would result in more turnover yes but not necessarily a huge amount more profit to make it worthwhile for the company.
Like I said though, just guesswork.
I'm going to have to disagree with a lot of whats being said here. Do you guys really think that if GW reduce their prices, what is currently a niche hobby is suddenly going to become incredibly popular?
Everyone I know complains when GW increase prices but they have to increase it - its called inflation. If they don't increase prices, as the currency becomes weaker their profits will erode. I know this doesn't account for everything but it does go a long way towards explaining it.
As I said GW operate in a niche market. Normal rules of supply and demand do not work as well becasue their products are inelastic (demand is unresponsive to changes in prices). I think there are problems below the surface at GW and the $6 million dividends are a way of appeasing the shareholders, allowing management more time to solve problems.
Just my two cents
In my area most gamers have many armys, 2 guys at my club have 3k points in every army GW has. I am heading to GW tomorrow to start a 13th company army, most people I think don't get into a hobby they can't afford to go on with.I, too, know many players who stopped playing simply because paying $45 for a squad was outside of their price range.I agree.I think there are problems below the surface at GW and the $6 million dividends are a way of appeasing the shareholders, allowing management more time to solve problems.
I think games workshop prices are fair. They would make more money if you stopped producing certain items like collectors guides they are crap!
I think I'd tend to give them the benefit of the doubt and guess that they themselves knew that the bubble would burst too.Originally Posted by Deadly Nightshade
I'd certainly not for a second think that they were in any way stupid people and will know that once the immediacy and excitement of the films dissipated that the bulk of the fly-by-night players would lose interest.
I guess that at some precisely calculated juncture (after Hobbit maybe if it gets made?) LotR will go the way of Blood Bowl and BFG etc. and become mail order only - which is fair enough. GW will have made their money from the franchise and the shareholders will have profited from it. Then the dividends will dry up, the major shareholders will go elsewhere and the share price will correct itself back to pre LotR levels.