Tabletop Gaming News got wind of the following note from Games Workshop that’s making the rounds to their various trade partners:

Dear Valued Customers,

There is an old curse you might know: “May you live in interesting times “

I would be very surprised if anyone could look around our tiny world today and not ponder the truism of such a simple remark. There is very little doubt that these current days would certainly qualify as interesting.

Among many other concerns the world has been struggling with the rising cost of energy, transport, and materials. These rising costs have ultimately affected not only the price of gasoline that we put into our tanks, but the price we pay for milk, eggs and cereal. It has also, not surprisingly perhaps, greatly affected the costs for producing miniatures.

Today we are contacting all of our Trade customers globally to announce that due to these rising costs, we too will be raising some of our prices.

We do not do this lightly. We fully understand that the timing of the price rise directly conflicts with our annual July price review and for that we deeply apologize. I hope that you understand that this price rise is not something Games Workshop Global desires to do, it is something we have to do.

That being said, we wish to approach this change with the same dedication to customer service that we do for every endeavor. So for clarity and fairness I offer the following points:

We are contacting our Trade customers this week to prepare them for any questions they may have.

On Monday August 25th a message informing end hobbyists will be placed on all of our websites.

Prices will change September 29th.

A message will appear in our October White Dwarf.

The price increase will affect part of our paint and hobby ranges, as well as a large portion of our metal models and printed materials.

Even with the pressure of rising costs we are adamant that we will not at this time raise prices on any plastic model kits. Providing high quality, great value kits is fundamental to our corporate strategy and will continue to produce and distribute them at the current prices for as long as we are able.


Games Workshop

Rumors from sources generally trustworthy on these things put the price increase at 25% on supplies and most metal miniatures.  The interesting part of the announcement is that plastics have been saved from the price increase.  This price increase follows an announcement by Privateer Press that saw a 10-20% increase in their own miniatures (most of which are metal as well).

Both companies pointed to the increased cost of oil as a driver for their decision to raise prices, but oil is a very minor component in the production of metal miniatures (the biggest contribution is to the cost of transportation).  Privateer also pointed to the rising cost of tin and other non-ferrous minerals, which seems more reasonable (tin prices in particular have increased by over 50% over the past year and a half).  Another possibility is the increasing cost of labor although the average salary in the US and UK hasn’t risen substantially in the past two years.  Unfortunately, it may just boil down to a crappy world economy.

So what does all this mean for Games Workshop?  Much has been made of GW’s first quarter earnings (which showed the first increase in revenue in three years), but what most people failed to notice is that GW still had a loss in 2008:

2008 2007
Revenue £110.3m £109.5m
Loss per Share (2.4)p (11.2)p
Games Workshop stock chart from Google

Games Workshop stock chart from Google

Two years of losses isn’t great for a company, especially one that thrives on the disposable income of its customers.  Even worse, their stock has been taking a beating like you wouldn’t believe, losing over 80% of its value in the past four years.  Given the major scaling back that occurred in the Black Library division (which resulted in those products being licensed to Fantasy Flight Games), GW isn’t looking very strong at all.

So what does this mean to the average gamer?  Only time will tell, but Games Workshop has definitely been scaling back its operations over the past five years, shutting down retail outlets and allowing many properties to languish.  That said, they have also been taking many pro-retailer and pro-consumer positions, imporving terms for retailers, delivering some serious fan service for 40K and Fantasy Battle fans and stepping up support for miniature gaming as a hobby in general.  My guess is that we’ll see a further slow down in the number of regular releases, more bundle deals (not unlike the revamp of the 40K batallion boxes) and an increased focus on supporting fan-sponsored events (Apocalypse seems to have been a huge success in getting fans to organize thier own large gatherings).  Got a theory?  Share it in the comments!