This entire discussion is based on a whole bunch of people being very ignorant of production costs for products, from raw materials to the finished sellable product.
Also, this really has nothing to do with Legion. It's supporting that weirdos anti-GW rant. Again.
GW does have large markups.
But its not the largest markups by any industry, by far...
On the Model sets themselves , GW has previously stated that their percentage of markup is second only to the Diamond and Pearl Trade .... However , the Diamond industry doesn't invest in the horrific loss-making precedents of Branded Storefronts that GW does. So if anything, Profit is made, profit is reinvested into attempting (and generally failing) to make more profit, but at the very least, maintaining a market share.
GW would increase their overall
profits
by switching to an online market only, and they know this. They don't, because the one thing they have maintaining their full and unadulterated massive market slice, is
direct presence
. Even if its not in your specific area, its
out there
.
Honestly, I don't think these gaming companies make as much as we'd like to believe.
Say, $100 is MSRP. We know that online retailers at one point have given 25-30% discounts... so let's say the store is paying somewhere between 40-60% for the product.
So now we are at $50.
From marketing in school, we were told that these costs are roughly half of the product, we are down to $25 to account for manufacture, sculpting, etc...
I think in the books and music business... the author/developer needs to sell a certain amount before they start making money (e.g., like 10k copies). While we may believe that FFG limits supply (e.g., Nintendo) to cause supply/demand... I think they project what they can sell and only reprint when they think they can sell more.
Perhaps, I'm completely wrong, but we've seen game companies rise and fall. It's a brutal business.
Yeah I’m not aware of any billionaire game makers.
3 hours ago, kmanweiss said:You know nothing about humanity do you. lol
In our society, basically everyone assumes everyone is playing fair. People generally assume that no one is ripping them off because if they were, they'd get in trouble. People assume that companies are only making a reasonable margin. People tend to be VERY wrong. Enron, housing crisis, Wells Fargo, etc. People fall for scams every day because they trust that everyone is good and everyone is looking out for their best interest.
I personally believe FFG and companies like GW likely make pretty darn good margins (which is necessary for a relatively low volume business model), but I don't believe they are predatory. But that's an assumption with no basis in fact. We have no way to estimate if we are getting a good deal. Once profit margin is a known factor, the consumer is more knowledgeable and is able to make better informed decisions.
Without margin info, you make your purchase decision based on how bad you want it, and can you afford it. Once you introduce 'is it a good deal' into the equation, things change.
Sure, I don't think FFG pulls a 80% margin. That's crazy. But if they did, would you still buy? If that $100 box of minis and cardboard cost them all of $10-$15 to produce all things considered. Would you not start to hesitate at that purchase, where as now when you assume it's only a 10% margin and have no issue purchasing multiple copies.
Ultimately, this lawsuit looks more like a discovery exercise. He wants to pull enough info so that everyone can actually see the costs. Such information could ultimately support the fans or the critics, but it would be very enlightening.
Again, to clarify, I have no problem with FFG. I think this lawsuit is bunk. But I think the lawyer isn't trying to win, I think he's just fishing for information to back up his complaints.
Sorry, but are you seriously comparing the margins of a niche, luxury, small volume hobby business with those of companies providing housing, energy and banking? Comparing the business practices of FFG or GW with Enron or Wells Fargo is crazy. If you're required to buy something, like housing, energy, public transport, insurance, healthcare banking, etc it's assumed that those companies make more modest profits as that's something that consumers are obliged to buy from *someone*. It's also potentially being sold to a huge market (i.e. Everyone) so the volume is massive. If those companies are taking advantage of that necessity then they should be rightly pilloried. If you're looking at the margins on entirely voluntary, luxury, niche products, then that goes out the window. Will information on the profit margins of a gaming company make a difference on whether I buy their products? No. I spend my disposable income on what gives me the greatest enjoyment. If they're selling a fantastic (as in it suits my tastes) product, at a price I'm willing to pay for it, then all power to them. Would I get shirty if they priced me out of something I was previously enjoying? Absolutely. But unless they price themselves out of the market completely then it's not objectively too high a profit margin. That's market economics, and coincidentally why markets in basic necessities should be regulated, but that's another topic entirely...
1 hour ago, Hawktel said:Yeah I’m not aware of any billionaire game makers.
Bill Gates. He started with games on the Apple II.
That aside I have been gaming for 40 years and not one of the companies I started with exists as it did from the time. Avalon Hill, SPI, SSG, FASA and more have come and gone in that time.
While I know nothing about manufacturing, I would be rather concerned about a game company that sell games for $10 with componentry like FFGs and then bring models out for a few cents. I like my FFG games and would like to be playing their games many years from now.
6 hours ago, kmanweiss said:You know nothing about humanity do you. lol
In our society, basically everyone assumes everyone is playing fair. People generally assume that no one is ripping them off because if they were, they'd get in trouble. People assume that companies are only making a reasonable margin. People tend to be VERY wrong. Enron, housing crisis, Wells Fargo, etc. People fall for scams every day because they trust that everyone is good and everyone is looking out for their best interest.
I personally believe FFG and companies like GW likely make pretty darn good margins (which is necessary for a relatively low volume business model), but I don't believe they are predatory. But that's an assumption with no basis in fact. We have no way to estimate if we are getting a good deal. Once profit margin is a known factor, the consumer is more knowledgeable and is able to make better informed decisions.
Without margin info, you make your purchase decision based on how bad you want it, and can you afford it. Once you introduce 'is it a good deal' into the equation, things change.
Sure, I don't think FFG pulls a 80% margin. That's crazy. But if they did, would you still buy? If that $100 box of minis and cardboard cost them all of $10-$15 to produce all things considered. Would you not start to hesitate at that purchase, where as now when you assume it's only a 10% margin and have no issue purchasing multiple copies.
Ultimately, this lawsuit looks more like a discovery exercise. He wants to pull enough info so that everyone can actually see the costs. Such information could ultimately support the fans or the critics, but it would be very enlightening.
Again, to clarify, I have no problem with FFG. I think this lawsuit is bunk. But I think the lawyer isn't trying to win, I think he's just fishing for information to back up his complaints.
I assume everyone is ripping me off... As but they should be.
You need to balance what something is worth to you, if they charge $50 and you think that sounds good for what you get then who cares what profit was made. They should charge the most they can and still sell.
2 hours ago, Icelom said:They should charge the most they can and still sell.
Supply and Demand would contradict that statement.
21 minutes ago, Amanal said:Supply and Demand would contradict that statement.
That is the basic principle of supply and demand. Where were you in econ?
Ok so I work in the manufacturing industry, and while the industry I work in is different all manufacturing is roughly the same. I can tell you that the number one cost in manufacturing is labour costs by a very large margin in western countries.
I'm of the general view that I shouldn't be paying more for a plastic figure than I'd pay for a metal one. Case in point, I can get Perry Miniatures metals for about $1.85 a piece for some quite lovely figs (you know they're good sculpts because they're made by the Perry bros). I'm used to paying FFG prices for such things and I will continue to do so, but paying at the point still stands.
On 9/7/2017 at 11:30 AM, kmanweiss said:This guy's lawsuit may be total bunk and he may be expecting to lose. But he may be able to make GW produce evidence to actual costs (material, production, promotion, staffing, shipping, etc) so that one could definitively see what the profit margin is. That alone could have a HUGE impact. If word starts getting around that FFG is ripping off customers with huge margins, Disney's name gets dragged through the mud, they renegotiate their IP contracts to have price limits to protect their own interests. Large groups of GW fans may quit all together if they start to learn they've been robbed blind for decades. Companies licensing IPs may ask for a bigger slice of the pie, or find other companies to work with.
This all would be absolutely horrible for actual fans of the games.
On 9/7/2017 at 0:56 PM, kmanweiss said:Sure, I don't think FFG pulls a 80% margin. That's crazy. But if they did, would you still buy? If that $100 box of minis and cardboard cost them all of $10-$15 to produce all things considered. Would you not start to hesitate at that purchase, where as now when you assume it's only a 10% margin and have no issue purchasing multiple copies.
No? There's only one price available to me. Whether or not I think the contents are worth the price tag has absolutely nothing to do with how much it costs the company to produce. I could organize or join a boycott, but then I don't get to buy the stuff I wanted in the first place at all anymore.
If FFG had a smaller profit margin, would Legion or Armada have even been made? The development of those games - the design and playtesting, the molds for the miniatures, the salaries for skilled designers, so on and so forth - was funded off the profit margin of X-wing and other games.
On 7.09.2017 at 6:56 PM, kmanweiss said:But that's an assumption with no basis in fact. We have no way to estimate if we are getting a good deal. Once profit margin is a known factor, the consumer is more knowledgeable and is able to make better informed decisions.
Without margin info, you make your purchase decision based on how bad you want it, and can you afford it. Once you introduce 'is it a good deal' into the equation, things change.
Sure, I don't think FFG pulls a 80% margin. That's crazy. But if they did, would you still buy? If that $100 box of minis and cardboard cost them all of $10-$15 to produce all things considered. Would you not start to hesitate at that purchase, where as now when you assume it's only a 10% margin and have no issue purchasing multiple copies.
But we already have all the relevant information. This is the 21st century, you have the accumulated knowledge of the entire human race at your fingertips for the price of bringing your laptop to a cafe and ordering a latte. You can very easily (albeit it would take you a fair bit of time I imagine) research the logistics of the model-making industry and get fairly precise figures about production line setup cost, mould costs, labour costs, packaging, shipment, marketing and distribution costs etc. You can even use specific financial data provided by Games Workshop themselves to figure out their profit margins with decent accuracy when supported with all your other research.
You could also go and chat up the guy at your local store. If you're on friendly terms and he's knowledgable in the industry and not just a counter drone, he can provide you a lot of the relevant figures. I know, I used to be one.
Or you can just count up the raw materials cost separate from everything else like the clown with the lawsuit and hope that no one notices your argument has no grounds in reality.
There is no Illuminati 'the company doesn't want you to know the truth' bull going on here. The only kind of bull going on here is people being incredibly ignorant, but history shows there's no cure for that, hence conspiracies.
Bottom line is, if someone's up in arms over how little money in plastic price goes into producing Geedub's product, I can't figure out why they're not FURIOUS and chaining themselves up to the door at FFG HQ right this second, given how little paper and cardboard costs.
Edited by player1750031The argument of "if we knew the real production costs we could make a more informed decisioN" confuses me.
Knowing the costs wouldn't change anything. The price would still be the price, and you could either buy it or not. Exactly as now. it's not about "getting a good deal"....no company (ok, very few at least) are interested in giving "good deals". They are interested in pricing their products at a level to balance sales and profit per unit, thereby maximising overall profit.
The customer has the power to buy or not, and thats it/ And that's all there SHOULD be. No manufacturer in any industry should need to reveal anything about their production costs....the customer already has every bit of info they need to decide whether to buy or not (short of deliberate misselling or obfuscation of actual product flaws/drawbacks etc....Volkswagen for example).
13 hours ago, player1750031 said:
Bottom line is, if someone's up in arms over how little money in plastic price goes into producing Geedub's product, I can't figure out why they're not FURIOUS and chaining themselves up to the door at FFG HQ right this second, given how little paper and cardboard costs.
You're kidding, right? Here in Australia i tried to get all of hotac including the booklet professionally printed. And on cardstock a fair bit thinner than ffg uses.
It was going to cost me a fair bit more than the average game/campaign box, let me tell you!!!
Now i get low volume and other variables to big production, but it was crazy expensive...
Edited by Ralgon3 hours ago, Ralgon said:You're kidding, right? Here in Australia i tried to get all of hotac including the booklet professionally printed. And on cardstock a fair bit thinner than ffg uses.
It was going to cost me a fair bit more than the average game/campaign box, let me tell you!!!
Now i get low volume and other variables to big production, but it was crazy expensive...
Yes, that's exactly my point. I'm sorry it went over your head.
By the logic of the lawsuit, it should've cost you pennies to do that. The fact that it did not shows that the logic is flawed, to put it mildly.
Edited by player1750031And even with all of the costs against the MSRP, that does'nt necessarily equal a sale. With a lot a stock sitting in a warehouse, the profit becomes quite negative until it is sold, so looking at actual material costs and sale price is not very useful. Besides, without a healthy profit, how long do you think the game will be around?
7 hours ago, Amraam01 said:And even with all of the costs against the MSRP, that does'nt necessarily equal a sale. With a lot a stock sitting in a warehouse, the profit becomes quite negative until it is sold
With injection molded miniatures specifically, tooling and making just the mold to cast them bears an up-front cost that can go into hundreds of thousands of dollars. The profit for a set of miniature is in the negative not until you sell a unit, but until you sell several hundred, if not thousands of units.
Even if FFG were to announce their models cost 0.00001 cent to produce, I'd still buy them because A they are the only one producing them, and B I think the price is acceptable for what you get even if the raw material is super cheap.
And if you were to produce the exact same models through shapeways it would be a fair bit more expensive. Should that ever change, I think model producing companies will have a problem. But since they can produce in mass they will probably always be able to stay cheaper.
Like I'm paying for a solid rules system, game/tournament support. game balancing errata, and an awesome looking IP that will draw enough players to make investing in the game an enjoyable prospect.
Yes I know a lump of plastic is not worth much, and neither is the paper/card stock everything is printed on.
When I buy a book I'm not weighing up the cost of parts, otherwise id pick up all the junk in the discount section.
3 minutes ago, Lord Tareq said:Even if FFG were to announce their models cost 0.00001 cent to produce, I'd still buy them because A they are the only one producing them, and B I think the price is acceptable for what you get even if the raw material is super cheap.
And if you were to produce the exact same models through shapeways it would be a fair bit more expensive. Should that ever change, I think model producing companies will have a problem. But since they can produce in mass they will probably always be able to stay cheaper.
If a service like Shapeways ever becomes truly cheaper than current mass production techniques, the mass producers will simply change to the new cheaper model.
I'm going to paraphrase an episode of West Wing:
The second pill costs then ten cents to make, the first one cost them $25 million.
Putting that to the topic at hand, you have designers (of both the game and graphic varieties), writers, proofreaders and editors (let's not kvetch about their abilities, FFG employs and ostensibly pays these people so it's part of the cost), you have licensing fees, you have "opportunity expense" in that not only are these people's salaries tied up in design of a product that will not generate revenue for quite some time, but they are not directed towards a higher margin product like Destiny or an LCG. You have modelers and molds. You have utility bills, leasing office space, and other physical plant costs that are spread across the entire company. You have costs I haven't listed and you have costs I don't even know about.
Long story short, Star Wars: Legion has easily cost hundreds of thousands of dollars to produce without even considering physical production, which you base off random inflations of figures spouted off in a bull legal action that lack a reliable evidentiary basis.
THEN you have the fact that unless you buy this game directly from FFG, they sell it to distributors for lower (sometimes MUCH lower) than the MSRP.
TL;DR: there are far more costs that go into a game like this than just plastic, cardboard and ink.
On 9/7/2017 at 4:25 PM, Hawktel said:Yeah I’m not aware of any billionaire game makers.
Notch was worth over a billion as of 2 years ago...
On 9/7/2017 at 7:06 AM, Jut said:Sure its been a few years, maybe its $.10 cents a figure now, maybe the base box is only running them $10, but dang, that is just crazy to think of actually cost and what we end up paying.
Thoughts?
My thoughts are that if you actually think this is even remotely accurate you lack the ability to think critically. Could be you are just trolling and fully understand how ludicrous this concept is.
You have not allotted for any of the following:
This list is in no way exhaustive either. This was just off the top of my head.
11 hours ago, FatherTurin said:Notch was worth over a billion as of 2 years ago...
Boardgames are a diferent beast there, sadly. The Catan guy probably does well for himself, maybe the designer of Dominion, too, but I haven't heard anything exceptional.