Tuesday, September 10, 2013

Forge World, Finecast, Plastic, and Games Workshop

There has been a lot of talk recently about the place of Forgeworld products in the current Games Workshop corporate structure.  First someone claims that Forgeworld is not being integrated into the webstore then a few days later we hear that it is and it might even be coming to retail also.  This feeds into a post by Sandwyrm at Back40k about how the new plastic space marine commander is more expensive than a forgeworld terminator captain.  Ofcourse the new plastic commander and librarian is more expensive than every other metal/plastic/finecast characters in the space marine line.  You can get the finecast set of the Masters of the Chapter which are 4 pretty good models for only 5 dollars more.

I think the first thing to note is that the GW plastic kits have become very good provided that the design itself is good.  I was looking at the 2 Dark Angel characters from the Dark Vengeance set that I got as bits and was observing all the fine DA details that need to be removed.  These models have essentially got to the detail level where being in resin or metal is really not going to make a significant improvement.  I was also thinking about how I no longer have a space marine sergeant with 2 lightening claws since I took apart my old metal veteran with that and used the claws on a Shrike model and the model for the Honor Guard banner man.  Now I can get that model in the finecast veteran set or I can build it by combining the new Sternguard and Vanguard models.  The new Sternguard look just a good or better than many of the metal veterans.

So GW has gotten their plastic models up to the level of the metal models and think that is what determines the price.  It is a perfectly valid idea which gets you to 40-50 dollar 5 man units.  Terminators have been 50 dollars forever and the new Sternguard are a better kit with more options.  Ofcourse terminators have been overpriced due to their iconic nature and high in game points cost.  This does not get you to a 30 dollar plastic character though who at most should be at 15-20 dollars since that is the price level of this size characters in resin and metal.

Now the only real difference between metal/resin and plastic is just how many models you are expecting to sell.  Metal/Resin models have low new model costs but high marginal unit costs while the plastic models have high new model cost but essentially negligible marginal unit costs.  What that means in english is that resin models have cheap molds but the resin/mold replacement/labor for producing each model is significant while plastic has high mold/machine cost but actually making the models is literally cents for the next copy.  They spend way more on packing/warehousing/transportation than actually making the sprues.  This was always a decision GW had to make on units for years as they moved into plastic production so I guess they should be pretty good at it now and the new 30 dollar price is a test to see how high they can price such a unit to see if they can really move everything over to plastic since they do have to pay the mold costs back for products that no not sell that many to each player.  With there reduced player base where at most you would ever buy one of those models this might be the level that they think they need for the product to maintain their high margins.  Their choice and I assume it has some logic and numerical data behind it and not just "lets see if these suckers will pay 30 dollars for this".

What does this have to do with Forgeworld?  Well 2 things originally separated forgeworld products from GW. Design and Detail.  Now GW has pretty much got forgeworld detail in their plastic models so that just leaves the unique design.  Couple this to the fact that many of the things forgeworld makes are the same things GW has been significantly pushing the price point up on and things get interesting.  Forgeworld prices have gone up but not at the same rate so what was a 8-10 dollar metal GW mini back when I picked this up again in 2005-2006 is now 30 dollar plastic.  GWs mainstream products have started to catch up on its luxury line in both quality which is actually really cool but also in price which is not so cool.  Now you might ask why Forgeworld is selling more than ever is GW has the same quality, and I think that is design.  Many of Forgeworld models just look awesome but it is not because they are in resin it is because they just have better designs.  They also have more freedom in the designs since they do not need to sell a ton of models to pay for the plastic molds.

Forgeworld in GW is sort of like specialist games was.  You want to use it to capture extra revenue from customers but you do not actually want it competing directly with your plastic kits since plastic kits need volume to maintain their margins.  That is why you see the Heresy Stuff their.  It is a way to get customers to buy a whole additional marine army even if they already have an Apocalypse sized one, but you do not want it to be their first and only marine army.  If GW did it in plastic and placed in its stores it would sell enough to be profitable but it would essentially increase the cost of producing the marine line for every kit but not increase the revenue at the same rate.  GW has been pushing Forgeworld more recently as it is getting write ups in White Dwarf like every month for its new releases (which are generally at high price points as new products) but I am sure they do not want to many new players getting into it until they have filled their closets with plastic.  Moving Forgeworld more into the webstore so you can order it along with other GW kits and get it in no time since it will be locally warehoused might actually be a good move but I would not display the kits in the mainline army parts but in a subcategory area.

One interesting thing to think about Forgeworld is that it is actually an internet discounter that GW complains about not supporting the hobby.   It does not have stores with play tables, it does not introduce new hobbyists, it just sells products pretty much out of webstore to existing GW customers.  I am sure GW would not describe them like that but it is a correct comparison.  This is what makes putting Forgeworld into GW stores tricky since Forgeworld high prices are based on a middleman free sales plan but those GW stores will want the product at 40-50% of the list price since they need that discount level to make money selling the kits.  Ofcourse a 40% price increase would put Forgeworld back into a premimum product price point solving the direct competition problem but would probably also price it such that it really would not sell well at stores where they could actually stock the range.  It is not like GW with their trend of decreasing store sizes have much spare space to add a hundred new products.  So I would guess that maybe just new releases or high sellers are going to show up.  Again sort of like how specialist games used to much valuable sales space then went to the webstore for years before being put out to pasture after significant price increases and total range stagnation in new products. 

So I think that GW should probably bring forgeworld into the online portal but should really not move it into the retail setting in anything other than splash releases that come and go but they appear to be real pushing it forward probably in another short term attempt to boast revenue as they keep sliding.  It would help their stores have reasons to go to compared to FLGS selling at a discount.  Lego sells sets at their stores that are hard to find other places so it always seemed odd to me that GW did not have the direct only products onsite also.  It will be interesting to see how this plays out over the next few years.

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