Games Workshop's FOMO Problem: Real or Not?
There has been a lot of talk about Games Workshops FOMO strategy for new product releases. Not only have they been doing this strategy for several years, but it seems to be accelerating: more products coming faster--and disappearing faster. Hence the fear of missing out.
Why does Games Workshop's FOMO strategy work? The answer is really simple, but please stay with me as I explain. The answer, at least for now, is that Games Workshop's products are just really good, and the company isn't unethical.
Now, I know that might be unpopular to say. It seems like it's much more popular to hate on Games Workshop and say that they're scamming people with this marketing scheme and that they're tricking people into buying garbage. These people say that we need to "vote with our hobby dollars" to teach Games Workshop a lesson--we need to walk away, choose a different company, a different game, a different rule set.
I'm not being Pollyanna here and saying that everything is sunshine and rainbows with Games Workshop, but I think it's fair to say that Games Workshop has a good track record of turning out the highest quality models in the industry, with games that are highly enjoyable, with peripheral content (books, videos, animations, community posts, etc.) more often than not. And that they do it all using regular old ethical business tactics.
Because if we take this "vote with your hobby dollars" approach to Games Workshop attitude, then we need to not only look at the future but look at the past and the present. And the fact is that people ARE voting with their hobby dollars. They're voting consistently and overwhelmingly in favor of Games Workshop.
This is a basic tenet of the free market: that the cream rises to the top, that the best products sell the most because people like them so much.
Here's the truth: Indomitus, Sisters of Battle, Dominion--and yes, even Cursed City--are just really good products at fair prices. The models are stellar. The deals are significant.
Let's look at two scenarios: "Games Workshop's FOMO is a scam," and "Games Workshop's FOMO is justified."
"Games Workshop's FOMO is a Scam"
Let's look at the evidence that Games Workshop is using black-hat tactics when they're trying to sell us stuff.
For starters, there's the problem of artificial scarcity. They have the power to make more than enough of the products that they're selling that there's no good reason to have limited runs, or to sell out so early. By creating artificial scarcity, they are able to make us beg for the products, snapping them up in minutes and then they're gone forever.
There's also the Cursed City problem: they get everyone excited about a product, release it, sell out, and then fail to support it--essentially a bait and switch.
Games Workshop is also able to limit the allocation to FLGSs so that Games Workshop can sell the product in their own stores and on their own website for much more money than you could get the same product. More profit for Games Workshop, more profit for scalpers, and the regular consumer gets screwed.
And really, at best, Games Workshop is incompetent in the way they are able to forecast product demand. They have no idea how many copies of an item to produce because they have no idea how many will sell.
Phew. Glad we got that out of our system. Games Workshop is the worst.
Now, let's look at it from the other side:
"Games Workshop's FOMO is Justified"
Artificial scarcity isn't a black-hat tactic by any stretch of the imagination: it's marketing 101. If you think that Games Workshop is doing anything devious when they sell out of a product and don't reprint more, just think about every grocery store, every website, every car dealership, and--everywhere else. "Limited Time Only!" "Buy Now!" "Only Available In Stores!" "Fourth of July Sale!" "24 Hours to Buy!"
With very few exceptions--none that I can think of--every company uses some type of artificial scarcity to sell their products faster and for more money. You may not like it, but if we're going to hang Games Workshop for it, then we need to string up every 2-for-1 sale on Cheerios, too.
Look, we all know that Games Workshop is trying to make money. All companies are trying to make money. Games Workshop is a publicly-traded company that has an obligation to its shareholders to try to increase the shareholder value. That's a fact of free market capitalism. (We may not love free market capitalism, but this is the world we live in.)
So when we say that Games Workshop is somehow trying to scam us by wanting to earn a lot of money, that's a criticism of the free market and needs to be applied to all free market companies. And yes, that includes other game companies like Warlord Games or Wargames Atlantic or Mantic or Creature Caster or Anvil Industries. None of them are charities, and they all have profit targets they want to hit.
Now, is there an argument to be made that there's a difference between "cutthroat take-no-prisoners capitalism" and "a good product at a fair price capitalism"? Of course that's true. But are we really believing that's what's going on here? I'm not so sure.
Look at these boxes. Look at the breakdown we did of all the Start Collecting boxes showing how the boxes are all better deals than buying the individual parts separately. Let's pretend that we're all 100% free market capitalists: the selling price of Indomitus on Amazon, at the time of writing, is $265. If economic theory is to be believed, then that means that $265 is a justified price of the box (because "everything is worth what the consumer is willing to pay").
If it's true that Indomitus is currently "worth" $265, then Games Workshop releasing it at $200 was a really good deal. The fact that individual pieces of Indomitus's "Space Marines: Honored of the Chapter"--which is only nine models out of the Indomitus box--is selling for $140 alone means that Indomitus was a really good deal.
So if Indomitus was a really good deal then why are we getting upset that it was only a really good deal for a limited time? Clearly, Games Workshop sees that they can make more money on the individual models. They very likely could have launched Indomitus at $225 or $250 and people still would have bought it. We don't know the exact price elasticity, but we know that what it's currently valued at.
Okay, let's take a step back.
The question we're all asking is: what about Cursed City? That's an example of Games Workshop FOMO run wild.
For starters, we don't have any idea what Cursed City was, but in the opinion of this writer, who has his MBA in marketing, Cursed City was clearly a big mistake. There is no theory of the free market or economics or black-hat marketing to explain Cursed City. It was simply bungled. Someone, somewhere, screwed up.
If that's the case--whether the person who screwed up was the marketer who did the forecasting or the lawyer who wrote the contracts or the business person who did the trade negotiations or the captain who was piloting the boat or the politician who made the tariffs--then, again, are we going to lynch the company over a stupid (really stupid) mistake? It wasn't a strategy, it was a botched job.
Yes, we can justifiably say "I don't want to do my business with a company who makes such stupid mistakes." And we can "vote with our hobby dollars" and walk over to Mantic and buy Kings of War instead of Age of Sigmar.
But the question is: does Games Workshop have a *pattern* of mistakes? Because, yes, if you bought Cursed City expecting to play it and all of its promised expansions for years, then you have a right to be pissed off. But are there other instances of Games Workshop churning out a AAA product, selling a box for $200, and then immediately cutting off support? There's simply not.
But what about the allocation issues with Dominion?
There were rumors when Dominion was released that it was going to sell out immediately, and therefore FLGSs got their allocations stripped so that Games Workshop could sell the box in their own stores and on their own website for full price.
But those rumors...turned out to be false. There's plenty of Dominion to go around. It's still for sale everywhere.
The main complaint about Dominion now seems to be "well, see? Games Workshop has all of these leftover boxes of Dominion which proves they can't forecast." No. Maybe it means they learned from the release of Indomitus.
Look. If you want to paint Games Workshop as greedy, conniving robber barons, then that's fine. It's an opinion, and you're entitled to opinions. But the facts don't bear it out.
Yes, Games Workshop wants to make money.
Yes, Games Workshop sells products with limited releases.
Yes, Games Workshop has made mistakes.
But doesn't Games Workshop continue to have the best miniatures on the market?
Doesn't Games Workshop sell these limited releases at a good price, considering the price of the individual models later?
I'm not trying to be a Games Workshop apologist. I'm not married to Warhammer. I own ten times the amount of historicals as I do of Warhammer. I prefer Vallejo to Citadel paint. I never bought Indomitus, when it was released, when it was made-to-order, or when it's currently on sale.
I'm just a wargamer who also happens to be a business guy and a marketer, and I get tired of seeing mud being flung at a company that isn't doing anything unethical. I like 40k. I like Age of Sigmar. I will continue to play them.
Maybe one day I'll see a pattern of mistakes and abuses and I will choose to walk away, but right now, if I'm going to "vote with my hobby dollars" then some of those votes will stil go to Games Workshop.