The Perils of a Loss Leader Strategy - More Things I Think I Think About Indomitus

It is still radio silence from Games Workshop on the fiasco that was yesterday's Indomitus launch, though the speculation and posturing on social media obviously continues unabated. Comments seem to fall into a few distinct camps, but there is the prevailing concept that Games Workshop made a huge amount of money yesterday with Indomitus selling out in minutes. While no doubt they had a banner sales day, in order for a company like Games Workshop to make money, they have to bring in more revenue than they spend on producing and marketing their product.  Based on their typical pricing model, I find it hard to believe that the new box is a real profit machine on its own. In fact, I firmly believe Indomitus was designed as a "loss leader" to bring new players into the stores, and from this perspective it likely failed miserably.

What I Think I Think About the Indomitus Fiasco

Wargaming can be an expensive hobby. I wrote an article on this a couple of years ago examining the cost of several different gaming systems, and suffice it to say Warhammer products frequently occupy the upper regions of that cost band. While Games Workshop can continue to charge a premium for their products because they own the IP, there are an increasing number of entities trying to create miniatures suitable for 40K and Age of Sigmar. The rise (and slow improvements in quality) of 3D printing is another avenue many seem to be exploring. The problem is that you can't use these at any official Games Workshop event. As a successful company, GW seems to be trying to combat this trend by at least offering entry level sets at a discount - providing substantial value for the dollar and then charging prices with higher margins for the more specialist and advanced units. The new mega-boxed set for 9th Edition was to follow this strategy - a box with the new rulebook, 61 exclusive easy to build miniatures, and a host of other goodies for the (relatively) low price of $199. What could possibly go wrong?

Well, in this case, just about everything...