Games Workshop Tries to Crack Down on Internet Sales

heirodule writes "In this messageboard posting internet retailer The warstore says he was contacted by Games Workshop, maker of miniature wargames such as Warhammer 40,000 and the Lord of the Rings Battle Game. GW will be refusing to distribute their product to retailers who sell over the internet after July 1. That's bad enough, but they cited the problem of IP violations (like people posting pictures of their products?) as part of the rationale. The claim is that for GW, this has nothing to do with internet sales offering discounts (yeah, right) but with the 'experience' that GW wants customers to have (of coming into their own stores and getting a hard sell)." The nearest Game Workshop store to me is a 1 hour, 10 minute drive, according to their store locator. The Usenet thread may be of interest.

Comments

That's Capitalism.

[RatBastard]

GW will find out the hard way that people will not buy what they can not access. There are no GW shops where I live and probably never will be. The only options I have is to either buy on-line or have a friend shop for me, provided I have a friend near a GW shop.

Re:That's Capitalism.

[TopShelf]

This is an incredibly short-sighted decision that will ultimately cut GW off from a large number of customers. Every manufacturer has the right to do something like this, but they don't, for obvious reasons. Instead of merely saying "that's Capitalism," I'd say it's more of a short-term vs. long-term mistake...

gw

[Satai]

GW used to be a much different organization. As they became bigger and bigger, it seems like they really lost touch with the gamers, and they kept targetting a younger and younger crowd. I mean, if you can, get your hands on a copy of "Rogue Trader" -- and then compare the feel of the rules to the ones from the latest edition of WH40k. They've added more models, and yeah, they're better models, but it feels like they've surrounded them in a web of dense, arbitrary rules.

I suppose that's necessary, for the climate of gaming nowadays. It's much more important to win than to play, which it didn't feel like when I first got into WH/WH40k oh-so-long ago.

Well, anyway, this doesn't surprise me. TSR went through a phase like this, before WotC bought them out. Remember when all the online D&D supplements were curiously void of any actual references to D&D? I think GW is making that same transition -- from a company made of gamers to a company selling to gamers.

how channels work

[boskone]

What GW is probably trying to do is protect their resellers' profit margins.

For instance, what a lot of people do is talk to the local guy, use up all his time and ideas, and then buy online from someone who is cheaper because they don't spend all day helping customers and providing a value-add. Therefore, you see the people who were providing all the quality customer service go out of business because they can't spend all that time helping people and compete with the low price guys. The same thing is in retail computer space, that's why the level of customer service is so abysmal IMHO. People would go pick the brains of the people who would spend time with them, and then go and order online or from some cheap guy that doesn't help them.

So, this makes it so that the stores which ostensibly put in the effort to educate customers and generate sales get crushed and the stores that add no value do well... BUT once the stores that provided the value go away, then you tend to get the whole manufacturer's sales go down because no one is helping the customers. You'll get some guys that will keep buying, but you'll not get many new customers.

THere are exceptions to this, and it sounds like they do need more resellers if their nearest one is over an hour away for someone, but they probably do have channel management reasons for wanting to make all their people compete evenly.

Re:how channels work

[ArmorFiend]

Heh,
I don't buy this "value add" thing. Even before the internet all the GW stores I went to had surly, greedy propriators. And why is that? I think its because GW intentionally breeds an "its all about the money" attitude. I once got to read the magazine they produce only for retailers, and it had a few telltale sentaces like: "soon your profits will be ballooning faster than your customer's belt sizes!"

I think warhampster is clearly a money collector just like Pokemon. If you really like miniatures wargaming there are several systems out there that do not require $500 + 100 hours to get into. Pernsonally I like Ogre

Re:GW Strong Arm Tactics

[b1t r0t]

That's not all. I had this explained to me last month. If you don't do things "their way", as in stocking their entire range of stuff, and display it prominently, you'll get demoted to a "C" class retailer. For which you don't get much more of a discount than the average Joe who orders bulk direct from GW.

Basically, GW considers themselves to be an entire hobby, rather than being a part of the hobby of minatures gaming. They'd prefer it if people didn't even have a chance to use them as a "gateway drug" for minatures games from other companies.

Think of Microsoft times ten. Imagine if it wasn't just file formats in Office and site licensing that requires paying for Windows based on the number of PCs and Macs at a site. Imagine if they required stores to stock mostly Microsoft stuff, and to stock the entire Microsoft "hobby" line.

Worst Price-to-Product Ratio of any commodity

[ashitaka]

Seriously.

Little plastic or metal figurines. Once the original has been designed, you just churn them out by the millions. Most are just derivations of older designs anyway.

So why do these things cost C$30-C$50 each??!!

Unpainted.

It's called Price fixing.... Re:That's Capitalism.

[TedTschopp]

In the United States if you demand that a retailer sell something at a certain price, or you try to force the issue, you can go to jail.

That's why it called the manufactureres Suggested Retail Price or MSRP. GW is the manufacturer, they sell to distributers who sell to retailers, who sell to the public.

The problem is that GW doesn't like the fact that the mini's they make for $.25 and are sold to the distributer for $2.00 are being sold by internet retailers for $2.25 +S/H. Becuase at a GW owned store and at most Brick and Mortor stores, they go for $6.00.

Ted Tschopp

Not really...

[WebCowboy]

GW wants to ban ALL 3rd party internet vendors and do it themselves--they want the WHOLE pie to themselves. Perhaps they are trying to become "vertically integrated" (ie. greedy bastards). Theoretically, making, distributing, marketing and selling a product through one big company is supposed to reduce risk of IP theft, possibility of other entities that you depend on going under and so on.

However in todays economy (fast moving, information based, global) "vertical integration" is ineffective and obsolete except in the case of VERY big corporations like GM--and even they outsource (if there is a problem with the outsource, they have enough pull to affect their management or pull out, or even take them over). The "razor blade" theory is also becoming so much bunk too (giving away whe razor and ripping us off on the blades).

In the computer industry I can think of examples where the tactics GW used completely backfired. MITS created the PC industry with the Altair--they were the only player in the game, but success very quickly brough competitors (Proc Tech, IMSAI, Cromemco, Apple, Commodore, Tandy...). MITS tried to aggessivley protect their IP (namely the bus which became known as the S100 bus--competitors started making peripheral cards for it and soon make S100 PCs of their own). Not only was MITS uncooperative with 3rd party vendors--they went as far as to threaten lawsuit. On the sales and marketing side, MITS attempted to make all their dealers exclusive MITS dealers--but soon most broke off that deal as IMSAI (and later Apple) gave them sweeter deals and didn't demand exclusivity.

GW is doing this now. They are vigourously defending their "IP" to the point of crippling their marketing (they don't even want people to put up pictures on their websites---turning their nose up at free advertising!). Furthermore, hey are trying to control everything--they want to have the only website and a bunch of stores with nothing but their own product. Like MITS, GW isn't exactly a high profile company. Also like MITS, their product could be duplicated relatively easily (not cloned mind you, but if GW alientates customers work-alike products will fill the void). GW could be like MITS in a third way in 2 or 3 years--completely gone.

This vertical strategy only stands a good chance of working if you have BIG resources and can take BIG risks. Even Texas Instruments failed with the TI99/4a. From the start they employed a vertical strategy (along with the "razorblade" strategy when sales were slow). Before TI discontinued the machine, they controled manufacturing (the thing was loaded wil all TI chips---CPU, VDP, memory, logic), distribution and sales (making it a bit more difficult to find than say a Commodore, Atari or Apple) and software/peripheral/accessories (they figured they could sell the computer for much less than it cost to make and hose customers on software and hardware accessories--the 3rd party TI market was basically non-existent). TI couldn't pull it off and lost millions. Ironically, in the couple of years AFTER TI pulled out of the market, a small 3rd party industry blossomed around the TI.

If a giant like TI couldn't pull it off, how can a specialty shop like GW handle the whole pie?