First off: I'm back, sort-of. Work's been insanely crunched and I've been dealing with some health issues (tore something in my arm playing bass at a show; nothing says "Rock'n'roll" like your arm going numb in the middle of a song).
That said: There's been some interesting developments in the wargaming world since my last post, the juicest of which have come from Games Workshop. Here's a quick summary:
- Games Workshop asks online retailers in the EU to stop shipping to non-EU customers.
- Games Workshop announces their transition from metal to resin (and a subsequent price increase).
- Games Workshop announces annual price increase.
- Games Workshop allegedly is only going to announcements of new models one weel in advance (not clear if this is one-week in advance of pre-orders or product release).
(all rumors from Dakkadakka.com)
It'd be really easy to go a rant about how terrible GW is etc etc etc. As someone who's only marginally invested in their games, its hard to get emotional to the point of irrationality. For me, looking at these new prices and the price trends, the "fun-to-dollar" ratio is such that I'm going to stop buying new models. That said, this isn't an article about that.
The first bit of information is what really interests me, because I think its quickly going to become a "teachable moment" to other waragaming companies with regard to globalization/non-local markets.
Like a lot of companie, GW is still learning how to do business in a "globalized" world. They've certainly taken advantage of many of globalization's perks: easy access to low wage labor (they print products in China), low tariffs, and access to a wide number of markets. Suffice to say: the above have all been "pluses" to GW.
Woo Hoo!
However, much like many other companies, GW is getting stung by globalization as well. GW-the-manufacturer has to contend with other companies copying their designs and recasting using lower cost (i.e. - lower Asian) labor sans R&D overhead. Largely, this hasn't been a big issue. GW-the-retailer has to contend competition via the internet, where consumers have access to markets where prices are lower than they are locally (due to taxes, quicker access to exchange-rate differences, lack of store front overhead, or a combination of the above). This, clearly, is hurting GWs retail operations in some locales (Australia/New Zealand notably).
D'oh
Which brings us to Monday's announcement. Unsurprisingly, the reaction from many AU GW consumers has been negative (they're being asked to absorb a ~60% increase in price due to GWs price structure). To me, this was a poor PR decision for a myriad of reasons:
- Consumers don't generally like price increases on the magnitude of >50%. Add to this the state of the global economy and GWs good being luxury items; not a great place to be.
- GW feels very comfortable adjusting prices every 6 months to offset their own costs. They've been very resistent to readjusting exchange rates, particularly when it doesn't favor them (e.g. - in this instance). That's a morally bankrupt position to take and consumers are going to have a strong negative reaction to their brand.
- Compounding the above is intellectually bankrupt position that GW should be allowed to reap all the benefits of globalization but its consumers shouldn't.
I don't the above is going to cause the downfall of GW (it most certainly won't). However, I do think its going to be a boon to GW's competitors in the Australian market and cause GW to reevaluate their price structure in the region (I can imagine the resulting sales drop coupled with their data on consumption pre-"embargo" will let them know where to place prices).
I also think its going to signal more frequent price "reallignments" in non-US/non-EU countries by a number of manufacturers. Its clear consumers are savvy enough to naviagate large exchange-rate discrepencies; why give them a reason to take the extra effort to?
It'll be interesting to see where this issue is at (and where the AU community is at) in 6 months to a 1 year.
