Squidmar's latest video is horrifically misleading

Not trying to stir any drama here, but there is a lot of misinformation and lack of understanding around the costs associated with keeping our favourite hobby alive. Squidmar's latest video seems to be an attempt to combat that, but they made some pretty serious omissions and I wanted to challenge those in a space that isn't the hellhole that is YouTube comments.

The conclusion the video reaches is that it costs $30,000 for a basic ten model kit, and $60,000 for a large special kit. They used a tactical squad and angron as the example images for each.

I think the numbers they used to reach these totals are probably about right, there's a lot of estimation but overall probably within 10-15%. However they completely left out at least three major sources of cost that all contribute to the cost of the models: facilities, the moulds, and the costs for running the company.

They do mention that there are other jobs at GW that aren't directly involved in making models, such as HR, legal, insurance etc. But they just brush this off as if it doesn't matter and make no attempt to include this in their conclusion. Salaries are a huge expenditure for any company, GW is a global scale company, those salaries will be many millions in total. Not to mention they deliberately keep jobs in the UK which means higher salaries and a lot of associated costs because the UK has pretty decent employment laws. Obviously you can't add those salaries onto the cost of one kit, but model sales are GWs biggest revenue source by far so the price does have to pay for those salaries.

GWs facilities costs are also astronomical. Just on retail space they operate over 500 stores worldwide. The rent alone is going to be many millions again. You also have to have at least one staff member per store, you need to pay for inventory at that store, and shipping to and from the store. On top of this there are things like warehousing, distribution and their three (soon to be four) factories. Again that's another load of many millions of cost. You also need specialised equipment at the factories, the injection moulding machines will cost millions.

The mould making is not touched on in the video, they mention sprue layout but stop there. Now this is where I got annoyed with the squidmar team. They pinned a comment that mentions they estimate $12,000 for one mould. So they say it would be $12k for the tactical squad and $36k for angron. Now the reason they have these numbers is because they have had moulds commissioned. There is no excuse for them to have left this information out of the video, and it massively changes the final numbers.

They are also likely wrong. Multiple people in the comments point out that an injection mould can cost 10s of thousands of dollars, but it can also go up into the 100s of thousands. GW are very well known for the high quality and high level of detail of their models. They have been at the cutting edge of injection mould making in some regards for quite a while. Things like the thickness of the parts are actually surprisingly challenging to pull off. If you compare an airfix, revell or bandai kit to GW you will basically always find that GWs parts are a lot thicker and chunkier than others. They do that so the models can handle regular gaming, but it has an engineering cost.

Don't forget that GW also does all of this in-house. The vast majority of injection moulded models come from Asia, probably China. This likely includes the $12k that squidmar are talking about, they will have gone for the cheapest option that worked for them. Not criticising them for this, they don't have the funds to do what GW does, it would be the right choice for them.

If you're still reading, thank you for getting this far, sadly I have a bit more to say.

GW are making record profits, they have been for quite some time. It seems obvious to say that they could lower their prices and still make money. But what effect would doing that actually have on our hobby? GW doesn't just take all that profit and put it in the CEO or shareholders bank accounts. A very large portion of it goes back into the business as investment and capital. Those three factories will have been funded by those record profits, as well as the new one. GW pays all of its staff members an annual bonus based on profits, everyone from the CEO to the janitors gets the same amount. This varies by year but has been as high as £5000. Per employee.

The important part for us though is the sheer number of kits that GW make. Every single one takes a ton of financial investment which won't break even untill a lot of kits are sold. Each one is a risk. Space marines are safe, those will always sell like hotcakes. But if they make a new box of Tau pathfinders that will take a lot longer to break even. The safest plan would be to invest in just a few kits at a time and only start making more once the last lot are seen to be selling well. GW doesn't do that though. The number of plastic kits they release per year is honestly staggering. There were about 30 kits released for 40k last year. They also made kits for kill team, heresy, AoS, underworlds, warcry, LotR, necromunda, legions imperialis, blood bowl and the old world (that ones costs are different though, there is cost involved with bringing old kits back but I have no clue what they would be).

All of that is only possible if GW takes on big investment risks. Risks are usually bad in business, but GW can afford to take these risks because of the record profits. If they have a bad year it would suck, but the company would survive. If GW dropped their prices (or stoped increasing them) then we would see a big cut in the number of kits released per year, and the number of supported factions and games.

My last point is on those price increases. No one likes them, I hate to see that number go up. But in general (there are some notable exceptions) the cost of a box of models in real terms money has not changed much. For example a tactical squad was $35 in 2005, now it is $60. $35 dollars with inflation would be $56.93 so only $3.07 increase over 20 years. The empire flagellants have actually gone down by a few dollars.

TLDR: GWs prices are high, but there is reason for that and lowering them would have an impact on our hobby. Squidmar failed to communicate this properly in their recent video and I think they have a duty to do better considering the size of their audience.