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Some Maths? Are we milked?Some Maths? Are we milked?

sailormatlacsailormatlac1 ano atrásMisc
The discussion always pop up as PVC figure prices continue to raise at a somewhat alarming rate. While all that is often base on feeling and guts, I wanted to do some stats about it and see what's happening.

I selected to compile the prices for all 1/8 scale figures produced by Alter since 2006. My reasoning was to pick one single manufacturer to have consistent data. 1/8 scale was selected because it's the most popular and, contrary to bigger scales, prices are rather consistent from one figure to another.

Having established the data, I checked up Japan annual inflation rate and calculated how a 2006 figure price would have evolved according to it. The result can't be used to compare the real rise because figure making is subject to fluctuating currency rates (yen VS yuan because they are made in China), shipping cost and the fact figures are now more complex than 2006. We have also to take in account manufacturing processes and capacities that evolved quite a bit in a decade.

http://i603.photobucket.com/albums/tt111/sailormatlac/Graphic_zpsfvxhenux.jpg

First, it must be noted the price increase is quite linear since 2006, even if some major economic events occured during that period. Something looks fishy... ;-) Isn't? But don't be fooled because you see some interesting things in the next graphic. One thing that is clear, the post-2014 increase correlates to the yen devaluation toward the yuan, a factor often brought forward by manufacturers.

Not shown but calculated, I checked up how CD single prices evolved between 2006 and 2017. They are produced in Japan and didn't experience a real fluctuation. The median price was 1200 yen back then and it is still the case now.

I believe the best way to compare the prices would be to find a similar Japanese product made in China, if possible, anime related. Any suggestion? If you want, I can provide the Excel chart of figure prices.

The big question is Do figure prices follow the market price or if the manufacturers/sellers are taking a bigger profit share on the price? Are we in the middle of game where they are trying to see how much people are going to accept price raises?

To do so, I calculated PVC figure inflation rate and found out it was far more erratic than the previous graphic could tell. At least, it prooves us that Alter prices are related to many complex factors and not just a senseless quest for profit.

http://i603.photobucket.com/albums/tt111/sailormatlac/PVC%20inflation_zpsoz5yxnob.jpg

I have no absolute answer to these questions, but I'm pretty sure MFC users with economic background could provide some insight. This discussion is largely debated but I thought bringing some statistics could provide some fresh data.

It would be interesting to see if the raise is consistent with other major manufacturers (GSC, Koto, Bandai, etc...). Unfortunately, I have very little spare time to compile such data, but think it would give a new perspective. That way, maybe we could see if some companies are really trying to milk the fans by manufacturing cheap goods but using the price rate of higher end manufacturers.

Feel free to share your observations.
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32pt
I think the rise in figure prices coincides more with the following production-cost related events:

-Rise of wages in China www.tradingecon... (i.e. more cost to produce stuff)
-Growth in market due to international customers (i.e. more people ordering from amiami to outside of Japan)
-Increase in complains by international customers about Quality of figures (i.e. we have to spend money on a whole infrastructure (i.e. hire more staff) to take and attend claims from international customers In English!! (i.e. give free stuff to complainers))
-Increase in costs to maintain good quality to avoid complainers (i.e. as if)
-Increase in marketing and advertisement to international customers (i.e. pay booths at events outside Japan)
-Increase in IP values from greedy IP owners

It is important to consider that the future trend of Japanese companies is to pander to international customers since 40% of their own population is dying in less than 30 years from old age.

And... to all of that, you still have to consider a revenue; otherwise is not a business.
1 ano atrás
Recent Comments
0pt
kyoshinhei (1 ano atrás) #18663838I have no background in economics so this is pure speculation on my part.

You bring forward a few very interesting and valid points. I'll never have access to the data, but it would be very interesting to see the rate at which collectors/consumers base grew over the year.

We often hear people complaing about the long delay before very popular items are re-released. Taking into account the production schedule and production capacity issues, it starts to make a lot of sense. Particularly given what's in demand can quickly shift and you could miss the boat while trying to milk a fad that will soon be a thing of the past.

Once again, thanks for taking time to share your thoughts, it's really appreciated.
1 ano atrás
0pt
Kaneel (1 ano atrás) #18662481Here's the interview BloodFlower mentioned: www.excite.co.j...

Thank you for the interview translation. This is really interesting to see how different companies develop strategies to counter the obvious market saturation. At over 60 TV series per month, no wonder the industry can't keep up. As I said in another reply, a Canadian model train maker how have factories in China did a similar interview about two years ago. While he isn't victim of quickly passing fad, he made very similar observations about the shrinkage of customers/product because of diversification. What stuck me was that trying to figure out what people want was sometimes quite difficult because as long as people don't see the price tag they are very vocal about their interest, only to cool down later.

I like your suggestion to do the Koto graphics. It would be interesting and they are an old manufacturer too. I'll try to do something about it and will post the results.
1 ano atrás
2pt
I have no background in economics so this is pure speculation on my part.
Like many I think that the primary reason for prices increases is due to the increase of production costs in China, which in my opinion is a good thing as it means our hobby is starting to distance itself from the slave workers system, GSC's factory in Tottori is a prime example of that.

But aside from workers wages I suspect that there is a secondary reason: more people have been buying figures in recent years (especially with the rise of the Chinese market) and the price increase could be a way for production to keep up.
Let me explain, take a company that has 3 factories. These 3 factories can produce up to 100000 figures a year and in 2015 the maker produced 10000 units of each of the 10 new figures that they announced this year (number are totally random and hypothetical). Then comes 2016, the number of collectors increases by 10% and, as a result, so will the amount of preorders. If the company wants to release 10 new figures, they'll be screwed as they won't be able to produce 110000 units in the year. The company ends up with the following options:
- announce delays but then it's 2017's production that will suffer the consequences.
- release only 9 new figures this year. But if they do that they'll probably have to go down to 8 figures the next year etc. This is not viable in the long run, as it'll look like the company is less active and also because relying on less products is much more risky in case one of them is a commercial flop.
- Build a fourth, bigger factory which boosts their total production capability to 150000. This is a good idea as it'll also allow them to anticipate another production increase in the following years. The downside is that building a new factory is very costly and there's the risk that the construction costs would have been recouped by the time a fifth factory is needed due to the ever rising consumers numbers.
- Last solution and I believe this is what we're seeing: increase the prices to limit the amount of sales. If pricing each figure at 12000 yens instead of 9000 induces a 10% decrease in preorders (again random numbers), then the maker can keep producing 10000 units of 10 new figures in 2016. Besides, this also results in an increase of their profit margins, generating more cash that they'll be able to invest in building new factories along the way.

The actual reality is probably a mix of all these and other factors but, to me at least, it makes sense that way. My belief in these production capacity related issues also comes from my observations of GSC's delay announcements in the last few years. Up to roughly the end of Q1 2016 I was observing a lot of delays, sometimes very long, which I assumed to be due to the unexpected growth in demand. But nowadays these delays seem to be fewer and shorter, leading me to believe that GSC took measures to address the matter. I believe the price increase to be one of them.
1 ano atrás
6pt
Kaneel on Ice
Here's the interview BloodFlower mentioned: www.excite.co.j...

It's with the manager Junichi Inoue of Ginjuujisha who switched over to being a manga artist now and in the light of the popularity of his series and sales going over 1 million he talked a lot about his small one man buisiness.

It's not so much competition he's talking of but that people are more hesitant to buy figures once the price goes above 10.000Yen.
He mentiones that their Naka ITEM #424132 only gained in orders towards the end of the pre-order time frame even though she's considered a popular character.

Amongs other stuff he also comments on the increased change in popularity of a character once a show has ended the next comes around and he finds that people are less likier to drop like 10.000Yen for for every popluar character anymore because they're to many to fast.
But planning and production takes roughly half a year, so by the time they have the figure ready the general interest decreased a lot because no one cares anymore(Hestia would be the most recent prime example)
You could counterattack this like Kotobukiya does, with researching the information on upcoming animes and developing secretly a figure so it's ready when the anime is out.
But this can be a hit or miss to.
If we stay with Koto they've done this with RyuuZu from Clockwork Planet ITEM #464705, Demi-chan's Hikari ITEM #534378 or Re:zero's Emilia ITEM #415032 for example.
This also explains why some series will only get figure merchandise with a second season in the works(or movie, next season, OVA specials)
Companies can be sure that now the first went well enough to have enough interest from us consumers(looking at Kekkai Sensen here or even the multitude of HQ Nendo's)


@ Blog The comparison with singles is kind of like obvious considering how the figure industry os mostly anime/game related but also kind of why-didn't-i-thought-of-it-too ^^

Having such a chart for Koto would be most interesting, seeing how they're like the only major company who can regularly re-release for the same prices and have generally less pricier lines like the bishoujo line or the recent pokemon figures.

Edit: Forget to put a note that everything i wrote regarding the interview should be taken with a grain of salt considering the translation. That's to many Kanji's above my mere beginner level and i stuck to the parts where i was at least sure to read and understand what was written.
1 ano atrás
1pt
I know Kaneel found an interview with one figure company where they stated that the rise in figures are because of the increase in competition. The more different figures we consumers have to choose between the less one figure will sell(since not many will buy them all). I think the Hestia figures are a good example on that; in the beginning everyone bought the Hestias they wanted and some of them actually went up in the aftermarket. But the last Hestias dropped in price almost immediately, because everyone already had a Hestia figure they wanted. Even though some of them were considered good figures.
1 ano atrás
0pt
It's probably a good idea to factor in there's multiple profit margins involved.

The factory needs to profit, the company needs to profit and the retailer needs to profit. Unless one of these parties takes a hit on their profit margin an increase at the factory - i.e the aforementioned wages & improved quality - gets magnified throughout the chain.
1 ano atrás
0pt
rubyserpent_720 (1 ano atrás) #18655050Rise of wages in China is a fig factor. I work in the manufacture/import business and our sister factories in China are demanding more and more salaries per year (on top of us paying for accomodation, food, expenses etc) or else they'll look for work elsewhere. It's no longer "boohoo we're outsourcing business to a third world country so we get them for cheap" prices for everything will be on the rise in the foreseeable future.
Also probably the reason why GSC is opening their own factories in Japan consequently lead to recent QC issues that arise in their figures. The startup process is quite messy and you have to train a lot of workers to paint/assemble


I've heard exactly a similar story from a model train maker in the US.

Yep, I remember when GSC announced the new Japan-based factories, it was clear the business model was evolving. I wasn't aware of their quality control problem, but I must confess I'm not their target public.
1 ano atrás
0pt
naisor (1 ano atrás) #18652846I think the rise in figure prices coincides more with the following production-cost related events:
-Rise of wages in China www.tradingecon... (i.e. more cost to produce stuff)
-Growth in market due to international customers (i.e. more people ordering from amiami to outside of Japan)
-Increase in complains by international customers about Quality of figures (i.e. we have to spend money on a whole infrastructure (i.e. hire more staff) to take and attend claims from international customers In English!! (i.e. give free stuff to complainers))
-Increase in costs to maintain good quality to avoid complainers (i.e. as if)
-Increase in marketing and advertisement to international customers (i.e. pay booths at events outside Japan)
-Increase in IP values from greedy IP owners
It is important to consider that the future trend of Japanese companies is to pander to international customers since 40% of their own population is dying in less than 30 years from old age.
And... to all of that, you still have to consider a revenue; otherwise is not a business.


You are right about the wages. In model railroading, there is actually a trend of business starting to pull out production from China. The increase in wages makes dealing with quality control problem less economical.

They already lost about 1M people since 2010 (almost 1% of the population). It may seems small, but just imagine the impact on government budget it is seriously alarming. Infrastructures don't miraculously vanishes when population shrink.
1 ano atrás
0pt
Shikaree (1 ano atrás) #18652730Given how many different manufacturers there are, I find it hard to believe they are all colluding to artificially drive up prices.

The graphic are quite crude, but I hardly can ready any kind of effort to artificially boost the prices. Anyway, that would require a serious collusion effort and it certainly doesn't seem to be the case.
1 ano atrás
0pt
Shikaree (1 ano atrás) #18652730Given how many different manufacturers there are, I find it hard to believe they are all colluding to artificially drive up prices.

It doesn't seem to be the case indeed. skylinedo (1 ano atrás) #18654739Dude, the quality of figs has also increased since 06. I was turned off by alter back then and my last 3 have blown me away despite being nearly 30-50% more expensive

Yes, I pointed it out, maybe not enough, in my comment. The same trend as been observed in other model scale products were quality improved tremendously during the last decade. That comes with a price since it requires far more human labor. Generally speaking, given the details that comes with Alter figures, the number of steps to finish the actual product is quite impressive. Anyway, back in 2006, PVC were a cheap alternative to GK and since then it evolved into a hobby of its own. It's no longer the same game nor a simple toy anymore, which explain a big deal why the price range exploded in less than a decade. Anyway, when I look at European comics figures, they were already in that price bracket a decade ago.
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