Guide to the Games Workshop pricing model
Article updated: 2020.10.29
I often see questions about the Games Workshop pricing model - how does Games Workshop company decide the prices for their Warhammer: Age of Sigmar, Warhammer 40,000 and The Lord of the Rings (Games Workshop v2) miniatures. So I've gathered my ideas about the pricing model that Games Workshop seems to use, based on my knowledge of marketing and what I've seen the company does to maximise their profits. Games Workshop prices might seem expensive, but there are many cost people don't consider in their equations.
Games Workshop pricing model - What kind of costs affect the prices of Games Workshop miniatures?
The cost is made up of multiple parts:
CM) Company maintenance cost: This number is huge, they have to pay a lot of employees all over the world, store employees, website admins, mail order trolls, etc. That’s the base cost, and I consider it quite high, making it a large factor of Games Workshop pricing. An additional thing to consider is that GW allows you to exchange any of your unused GW sets to any other in the same price. Their customer service is also very generous, in my experience they quickly send another package of goods in case they get lost during shipping, or something else was put into the pack instead of what you've ordered.
MD) Miniature development cost: This includes concept art, 3D sculpts, casting mould. I think the cost for similar sized miniatures it’s practically the same, although bigger products require more time spent on sculpting and it requires a larger mould.
Many people overlook this part, but it's costly to create a distinctive model that looks so good that people are willing to pay an excessive amount. As they create miniatures with Heroic scale proportions, they look strange if you mix them with realistic miniatures, and Heroic minis are also easier to cast and paint, so it's an additional advantage.
They craft models that inspires brand loyalty. And that urge of "getting a GW model" is what makes people buy them instead of similar looking, often cheaper models from alternative sources, or buy China-cast models that they know is illegal, instead of buying semi-legal ones from other companies. (I consider them semi-legal, as most of them base their sculpts on models protected by design protection laws.) If you don't need to pay for development, it's easier to go under Games Workshop prices.
SD) System design cost: As you will see later, the fact that these are models used for games, allows them to price the models accordingly. The game designers have to create gaming statistics for the models that makes them desirable by players, and it involves a lot of fiddling and playtesting. I'm not sure how much does the usefulness affect the Games Workshop pricing model, but they need to pay the designers, so it's definitely a cost.
PC) Production cost: The actual cost of the production depends on the size of the miniature, and the bigger it is, the higher chance of creating a miscast, so it’s exponentional. Games Workshop currently only creates injection moulded High-Impact Polystyrene models, so the production costs depends on how many moulds do they have to create, and the production cost of every single sprue they cast. They probably use steel injection moulds, they have a higher creation cost, but they can make a couple thousand good quality casts. When the mould starts to deteriorate, it needs to be replaced. As they need to create at least one mould, their best option to maximise their profit is to use that up, and stop selling the model when it runs out, unless they are sure they can sell another whole run.
The cost of the package also adds to the production cost. Games Workshop used to sell models in flimsy (and cheap) blisters, but now even single models are sold in full colour boxes, with a protective box insert, and even the rules for the model.
SC) Shipping costs: These miniatures are sold all over the world. Getting them all over the world costs a lot, and that affects Games Workshop prices.
Now that we have the costs, we need to come up with a scheme to get that back and make some profit. For this, you give a time limit (let’s say one year), and predict how many sets will be sold (N), and multiply the 3+4 with that (N*(3+4)), and add it to 1+2 , then you divide it with number of sets to get the price to make 0 profit. So, you’ll need to add some extra to the end to get profit (P).
P) Profit: The actual profit still comes in two elements - one is the profit margin to be used with retailers, and the rest is the profit if the set is sold through the GW online store. As I see retailers sell GW sets with a permanent 20% discount, I'm pretty sure they sell them to the retailers for at least a 30% less than the final price. As Games Workshop employees get an 50% discount, I'm almost sure their profit margin is at least 50%.
And here is the "secret formula" for Games Workshop pricing:
Price = ( ( CM+MD+SD ( N*(PC+SC) ) / N ) + P
Explanation of the Games Workshop pricing model
So, for a set that will be sold in tons (Space Marines, specifically tactical marines), you can get a lower price / model, because it will return the costs quickly and predictably. For every other Warhammer and 40K army, the price is higher, because 50% of Warhammer 40K players buy Space Marines, but the rest is collected only by their dedicated players.
For an unnamed commander model, it can be a bit higher, because you’ll only need a few commanders for your army, so it’s less likely that they would return the costs quickly. You might need more than one for your collection, as you might have to paint them with different army colours, or you might require more than one for your army.
For named characters it’s worse, because you’ll only need one for your collection, no matter what. Unless of course you’d like to create different builds, so GW is eager to provide you with options for that. Also, that is why they have to make sure that named characters will be so overpowered that everyone will feel that they’ll need one for their army. Even if they need to add the model as an ally, because it belongs to another army.
For Warhammer models that are produced in large numbers (Chaos cultists), the lowest price per model is about 0.8 EUR / 0.7 GBP / 1 USD in 2020. For larger models (Primaris Space Marines, Stormcast Eternals), the lowest price per model seems to be 1,2 EUR / 1 GBP / 1,5 USD in 2020.
If you'd like to see those Games Workshop prices in actuality, you can check them here:
Buying the products - Games Workshop
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Frequently asked question - Games Workshop prices
Why are Games Workshop models so expensive? / Why is Forge World so expensive? / Why are Warhammer minis so expensive? / Why is Warhammer 40k so expensive?
The models for Warhammer and Warhammer 40K from Games Workshop and Forge World are so expensive because of the reasons I've mentioned above. Forge World is especially expensive, because they use resin casting instead of injection moulded polystyrene, raising the production costs significantly.
Is Warhammer an expensive hobby? / Is Warhammer 40K an expensive hobby?
Due to Games Workshop's pricing model, both Warhammer and Warhammer 40K can become an expensive hobby, depending on your chosen army. If you try to build an army around large Forge World kits, and single pack Games Workshop characters, things can get expensive quickly.
Luckily you can use any kinds of models to play Warhammer, you don't need to buy Games Workshop products, unless you wish to go to official tournaments.
Is Games Workshop too expensive? / Is Warhammer too expensive? / Is Warhammer 40K too expensive?
It really depends on your your choices and your income. Games Workshop products for Warhammer and Warhammer 40K can be expensive, even prohibitively so if you don't earn enough and you'd like to constantly expand your collection. Most of the time the problem comes when the player starts hoarding, and buys a lot of things not because they need them for their army, but because it's available.
Is Warhammer 40k worth the price?
Yes, I think so. You just need to be aware of your real needs, and don't get caught in impulse buys of everything shiny.
How much does Warhammer cost? / How much does Warhammer 40K cost?
Currently (in 2020) a Start Collecting set costs 80 EUR / 60 GBP / 95 USD. For Warhammer 40K that price you get you 200-630 points worth of Ed8-Ed9 units. For Ed9, the minimum army size (Combat Patrol) is 500 points, so for some armies, one box will give you a whole army.
If you get a starter set, things get cheaper. In the Warhammer 40,000 Ed9: Indomitus set, you get two 1,000 point Ed8-Ed9 armies (Necrons and Space Marines) for 155 EUR / 125 GBP / 200 USD.
What is the cheapest army in Warhammer 40k?
The cheapest army has the least models for the most point cost. These are Space Marines, Chaos Space Marines, Adeptus Custodes, and Knights. Getting a Space Marine army from the starter boxes is probably the cheapest option, as they always have Space Marines.
What is the most expensive Warhammer model?
The prize as most expensive Warhammer model goes to Forge World gigantic creatures and titans. A Warlord Titan in 2020 costs 1,550 EUR / 1,250 GBP / 1,930 USD.
Will the prices of Games Workshop drop if we don't buy their expensive Warhammer and 40K products?
I doubt it. If you don't buy the expensive products, they will stop selling them, and continue to sell the more affordable products. Or they will be sold in bundles, to give you more incentive to buy them. For example, if they sell now a squad of 10 for 20 GBP and a character for 20 GBP, the character certainly looks expensive. These prices include the cost of the sprues and the cost of the individual packages. If they use a single package, and put 3 squads and the character in it, instead of 80 GBP, they are able to sell it for 60 GBP.
So, if you refuse to buy the characters individually, this could just lead to models that are only sold in large sets.
I've heard Games Workshop destroy discountinued assets, instead of selling them at a discount, or just giving away for free. How can they be monsters like that?
It is true that Games Workshop tends to destroy products that are discontinued, just like most luxury companies. They can't afford to sell them for cheap, as that would decrease the value of sets that have already sold. Also, this would just make people wait for the discontinuation sale, instead of buying them when they are released. They can't just give it away for free, as there are laws about how to do that, and how much tax they have to pay when doing so. So, to protect those who have already bought the products, and to protect the future interest of the company, destroying them can be the best way.
Resources - Games Workshop pricing model
Uncle Atom (from Tabletop Minions): The Secrets of Games Workshop's Pricing Model: Video about the prices of Warhammer models.Ł
The Outer Circle: The Games Workshop Pricing Structure - In Depth: Video about the pricing of the miniatures.Ł
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Do you have insider experience about the Games Workshop pricing model you'd like to share? Do you feel the Games Workshop prices are expensive? Do you have any questions about my theory? Tell us in the comments!
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