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GW hikes Warhammer prices despite growing profit margins

GW has announced a price hike of 3-5%, despite its most recent financial report showing a healthy profit margin for the manufacturer.

The Stonks meme, edited so that the businessman in a black suit is wearing a Warhammer 40k Primaris Space Marine helmet

Warhammer prices are going to rise in the region of 3-5% on June 10, according to an announcement made by Games Workshop on Tuesday. The announcement comes despite the fact Games Workshop’s most recent financial report indicates the firm’s gross and operating profit margins for the core business are rising.

The firm doesn’t specify which models in which Warhammer 40k factions and Age of Sigmar armies will see price rises, just that “some prices in our Warhammer stores and on Warhammer.com” will increase. It adds that Games Worskhop’s paints for miniatures, White Dwarf magazine, and Black Library books (including digital publications) won’t be affected.

“The price changes for individual products will vary”, according to the Warhammer Community post, with a 3-5% rise what customers should expect on average. The article gives the example of a squad of Necron Warriors, which will go from $50 to $52, £30 to £31.50, or €40 to €41 depending on territory. Pour one out for Warhammer players in Sweden and Norway, where prices will go up “between 8% and 14%” instead.

Warhammer 40k illustration, Salamanders Space Marines in heavy green Aggressor power armor, equipped with hand-mounted flamers

Games Workshop’s most recent interim financial report provides some basic information about the costs of doing business that the firm faces. Published on January 9, it covers the business’ finances in the six months up to 26 November 2023.

GW’s ‘core gross margin’ measures the percentage of revenue that is left after the firm covers all the costs associated with making miniatures and getting them to customers, but before paying for the rest of the business operations or taxes. Increases to the price of materials, higher factory costs, higher fuel costs, or greater warehousing fees, would result in this margin shrinking.

The report lists the firm’s core gross margin as 69.4%, an improvement on the last financial year and on the same period in financial year 2021-22. The improvements are “mainly due to a reduction of inventory provision charges and a reduction in carriage costs”, as well as savings on materials and design. The only area where margins are identified as being worse is in ‘production’, and only by 0.1%.

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GW also has to pay for business operations that don’t directly make miniatures, things like marketing, customer services, IT support, legal counsel, and so on. The percentage of its revenue left after paying all these further pre-tax costs of business is called the ‘operating profit margin’. According to the January 9 report, this margin sat at 35.4% in the six months up to November 26.

A gross margin of 69.4% and an operating profit margin of 35.4% are better than Games Workshop’s performance in the preceding two years’ financial reports:

Financial year Core gross margin Core operating profit margin
2022-23 66.5% 33%
2021-22 67.1% 34%

More data is available, but prior to 2021 GW did not fully separate licensing income from core income, so the measurements aren’t directly comparable – the core gross margin appears to be better in 2020-21, but licensing has very low cost of sales, and this may be affecting the data.

The Warhammer Community post announcing the price rises states that “no one likes a price rise and we’ve done our best to keep prices down”.

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Wargamer has asked Games Workshop to comment on why it is increasing prices despite apparently growing gross margins and operating profit margins, and whether its full financial report for the year 2023-24 will reveal that it is facing increasing costs that it has yet to announce. We’ll update you if we get an answer.

To get a better idea for some of the costs associated with designing and manufacturing miniatures, check out Wargamer’s deep dive behind the scenes at Mantic Games.