Sunday, May 22, 2011

GW Responds to The Uproar

Ok. As you know, this week Games Workshop has been in the sights of the blogosphere and the forums, including my own editorial, and for good reason.

First, because they formally announced a switch from metal miniatures to the system they are calling Finecast, read resin, ostensibly to reduce cost of materials due to market volatility.

Then immediately after that announcement, the news that they were putting an embargo on trade between regions was released to the internet, where it was learned that countries like Australia would no longer be able to order from such places like Maelstrom, where they could buy their goods at reasonable prices instead of having to suffer their exorbitant, if not extortionate suggested retail price.

GW then followed up with a very long list of price increases, ranging from 3% to 25%. These are not increases across the board, but they are significantly large where they have been implemented, even on models that were JUST released. You would think that they could have priced those models properly when released. Nah, that would have stifled off the block sales. Better to get the huge volume of splash release sales, then raise the prices as soon as that volume returns to the normal flow of goods.

Well, the internet has spoken, and boy are people mad. Madder than I ever remember them being, to the extent they swamped Games Workshop's Facebook page with negative feedback, and took up letter writing campaigns, with petitions and open letters to Games Workshop.

And GW has heard...and even stirred enough to respond.

Here is a copy of their response.

Dear **********,

Thanks for contacting Games Workshop about the change in our trading terms for European accounts. I know this has frustrated you and for that I am truly sorry. As a long standing customer, you deserve to know why we made this decision.

As you know, we introduce people to the Games Workshop hobby of collecting, painting and gaming with Citadel miniatures through our Hobby Centres and local independent trade accounts. Games Workshop Hobby Centres run introductory games and painting sessions, beginner lessons, hobby activities and events. We provide all these services free of charge. We only recover this investment if customers then buy products from us.

Where we don’t have a Games Workshop Hobby Centre, we support local independent trade accounts. These businesses provide a convenient place for customers to buy our products close to where they live. We support these businesses with local customer service teams and warehouses to ensure customers have immediate access to our best selling products and new releases. Many customers discover the hobby this way.

In addition we invest millions of pounds every year in our design studio and factory to ensure that each month we release more new products. This makes the Games Workshop Hobby more exciting for existing customers, helping them stay in the hobby longer. We can only afford to do this because of the volume of customers we have recruited and developed through our local Hobby Centres and trade accounts.

It is for this reason that we have changed our European Trade terms. Over recent years, a number of currencies have moved a long way from their historical relative values, and this has opened the door for some traders to try to take advantage of these currency movements and offer deep discounts to overseas hobbyists. This has been the case with European internet traders selling to some of our customers overseas.

While this may seem great in the short term, the simple fact is that European internet traders will not invest any money in growing the hobby in your country. Their model is to minimise their costs and free-ride on the investment of Games Workshop and local independent shops in creating a customer base.

The inevitable consequence if this was allowed to continue is that Games Workshop would not be able to operate Hobby Centres, nor to support local trade accounts. And if this happened in more territories outside Europe, the loss of volume would leave Games Workshop no choice but to scale back our investment in new product development, further eroding our customer base. Not something that we or our customers would want us to do.

That is why we took the decision to take legitimate action to restrict European trade accounts from selling the goods they purchase from Games Workshop outside Europe.

While I understand that you may still be unhappy with our decision, it was taken to ensure we can continue to support the Games Workshop hobby communities around the world through our Games Workshop Hobby Centres and local trade accounts. And to ensure we continue to invest in developing the best possible new product releases every month. I hope therefore that over time you will see the benefits of this decision for you and your hobby.

Yours sincerely,

Mark Wells
Chief Executive
18 May 2011

Wow. Not only is it steamy BS, it's canned steamy BS. They may have well just addressed this letter "Dear Sucker".

The logic within this letter does not make sense to me at all. I have gone over it time and again and all I see is the exact same canned response they have been feeding us for years.

There is a quote I would like to remind you of. "The definition of insanity is doing the same thing over and over again and expecting a different result. - Albert Einstein"

Well, Gamesworkshop, it's been years. Years. And you keep coming back with the same message. And every year you do the same thing, and come back with the same message. You have not changed your strategy, that I can see, for price structure, retail distribution, etc, yet you seem to expect that continuous and extreme price increases, and monopolistic manipulation of the free market by locking in regional pricing and preventing business from advertising your product and actually trying to compete and sell your goods. But it's not working. You keep having to come back to this point in the infinite circle you are on, and do the exact same thing, starting another lap of your insanity.

I'm not going to even bother trying to tear this apart. There are many others out there who are doing a fine job of it.

But I will take a moment to remind Games Workshop that they made this bed by not going to a universal price list for their goods, and then let exchange rates actually be reflected in the true price. GW, you claim that the cost of goods are higher in other regions due to shipping costs etc., to which I say BULLSHIT. If that were true Games Workshop would not feel they have to impose an embargo and restrict sales by region because those stores in other regions where prices are cheaper would not benefit from the sale to other regions which would require the goods to be shipped. Yet those stores did, and successfully, for years. They shipped goods at discounted prices and succeeded, even after those added costs were factored in. Why? Because Games Workshop has kept regional prices artificially high, allowing for that opportunity.

Games Workshop is not a government. They should stop trying to act like it in this case, and let the free WORLD Market actually work. Switch to a single price structure and let the market adjust and grow.

1 comment:

  1. Two thoughts:

    1. GW is not a hobby unto itself, and their arrogance in claiming to be is mind boggling. Rather minatures wargaming is a hobby and GW happen to be the largest of several companies supplying minatures and game rules for the hobby.

    2. The worst victims of GW's regional pricing seem to be Australia and New Zealand. Interestingly prices there seem to be unusually high for alot of consumer goods, so it's not just GW.