submission re gwoz n97404 damian coburn · 29#august#2014# # # drrichardchadwick# generalmanager#...

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29 August 2014 Dr Richard Chadwick General Manager Adjudication Branch Australian Competition and Consumer Commission GPO Box 3131 Canberra City ACT 2601 Attention: Mr Luke Griffin Dear Mr Griffin Exclusive dealing notification N97404 lodged by Games Workshop Oz Pty Ltd: your reference 54573 I am writing to make a submission in response to the subject exclusive dealing notification (notification) by Games Workshop Oz Pty Ltd (GWOP). Summary of submission The notification confuses hobbies and markets. Miniatures gaming might be regarded as one hobby. Other hobbies referred to such as scale modeling are not the same hobby. Miniatures gaming is divided up into different parts. Different markets support these different parts of the hobby. GW products form a relevantly (in terms of the market in which lessening of competition and detriments or benefits to the public occur) distinct market and nonGW products are generally not substitutable for GW products. Therefore the availability of nonGW products does not obviate the detriment of lessening competition and higher prices that would result from the proposed conduct set out in the notification. The putative benefit of shopfronts supporting the hobby is overstated and may be more about GW’s practice of turning over young players with brief involvement in the hobby than benefiting the hobby at large. Therefore the ACCC should not allow the proposed conduct as there are no benefits to the public, or insufficient benefits to the public, to outweigh the lessening of competition that would result from the conduct.

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Page 1: submission re GWOZ N97404 Damian Coburn · 29#August#2014# # # DrRichardChadwick# GeneralManager# Adjudication#Branch# Australian#Competition#and#Consumer#Commission# GPOBox3131#

29  August  2014      Dr  Richard  Chadwick  General  Manager  Adjudication  Branch  Australian  Competition  and  Consumer  Commission  GPO  Box  3131  Canberra  City  ACT  2601      

Attention:  Mr  Luke  Griffin      Dear  Mr  Griffin    Exclusive  dealing  notification  N97404  lodged  by  Games  Workshop  Oz  Pty  Ltd:  your  reference  54573      I  am  writing  to  make  a  submission  in  response  to  the  subject  exclusive  dealing  notification  (notification)  by  Games  Workshop  Oz  Pty  Ltd  (GWOP).        Summary  of  submission    

• The  notification  confuses  hobbies  and  markets.    

• Miniatures  gaming  might  be  regarded  as  one  hobby.    Other  hobbies  referred  to  such  as  scale  modeling  are  not  the  same  hobby.  

 • Miniatures  gaming  is  divided  up  into  different  parts.    Different  markets  

support  these  different  parts  of  the  hobby.    GW  products  form  a  relevantly  (in  terms  of  the  market  in  which  lessening  of  competition  and  detriments  or  benefits  to  the  public  occur)  distinct  market  and  non-­‐GW  products  are  generally  not  substitutable  for  GW  products.  

 • Therefore  the  availability  of  non-­‐GW  products  does  not  obviate  the  

detriment  of  lessening  competition  and  higher  prices  that  would  result  from  the  proposed  conduct  set  out  in  the  notification.  

 • The  putative  benefit  of  shopfronts  supporting  the  hobby  is  overstated  and  

may  be  more  about  GW’s  practice  of  turning  over  young  players  with  brief  involvement  in  the  hobby  than  benefiting  the  hobby  at  large.  

 • Therefore  the  ACCC  should  not  allow  the  proposed  conduct  as  there  are  

no  benefits  to  the  public,  or  insufficient  benefits  to  the  public,  to  outweigh  the  lessening  of  competition  that  would  result  from  the  conduct.  

 

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     The  miniatures  gaming  hobby    The  notification  conflates  different  hobbies,  and  hobbies  with  markets.    An  explanation  of  the  hobby  of  miniatures  gaming  will  assist  in  understanding  the  markets  involved  in  miniatures  gaming.    Starting  with  my  personal  experience:  I  am  now  49.    I  have  been  wargaming,  or  more  acceptably  “miniatures  gaming”,  or  more  accurately  playing  rules-­‐based  games  with  toy  soldiers,  on  and  off  since  I  was  about  13.    The  members  of  the  various  circles  in  which  I  play  tend  to  be  about  the  same  age,  give  or  take  a  decade.    Our  interests  span  both  GW  and  other  games  systems.    We  are  generally  typical  of  a  broad  section  of  the  miniatures  gaming  community  –  which  is,  I  will  note  now,  is  in  frank  contradiction  to  GWOP’s  contentions  about  benefits  to  the  public  to  the  extent  they  are  predicated  on  the  gaming  community  being  made  up  of  teens  that  give  up  gaming  after  a  “certain  age”.    I  also,  pertinently  to  GWOP’s  claims  about  substitutability  and  the  following  discussion  of  the  hobby  markets,  also  build  scale  models,  play  eurogames,  had  a  brief  interest  in  model  trains,  and  tried  but  failed  to  become  interested  in  collectible  card  games  such  as  Magic:  the  Gathering.    The  miniatures  gaming  hobby  as  it  is  now  dates  from  the  mid  1950s  to  the  early  1960s.    In  essence,  miniatures  gaming  involves  fighting  battles  with  scale  model  soldiers  and  vehicles,  usually  on  a  tabletop  with  representations  of  real  world  objects  like  trees,  buildings  and  roads,  using  rules  that  govern  how  models  are  moved,  interact  with  each  other  and  terrain,  and  fight.    Subsidiary  to  these  games  are  activities  such  as  collecting  and  painting  miniatures  and  making  the  terrain  over  which  the  toy  soldiers  ‘fight’.    Picture  1,  below,  shows  an  example  of  part  of    game  in  play.    Miniatures  gaming  is  divided  up  in  various  ways  depending  on  different  kinds  of  games  and  the  differing  interests  of  its  participants.    A  primary  division  relevant  to  the  present  matter  is  between  games  that  aim  to  represent  different  historical  periods  (for  example,  medieval  warfare,  or  the  wars  of  Napoleon,  or  World  War  II),  and  those  that  represent  fictional  situations  in  fantasy  (of  the  magic  and  wizards  and  goblins  kind)  or  science  fiction  universes.        As  well  as  different  historical  periods  and  fictional  universes,  there  is  a  plethora  of  rules  and  miniatures  suppliers  for  each.      Consider  games  based  on  the  French  revolutionary  and  Napoleonic  wars  of  1792  to  1815.    These  were  actual  events  that  occurred  in  our  world.    There  are  many  competing  sets  of  rules  and  miniatures  for  gaming  this  period,  but  they  are  generally  attempting  to  represent  the  same  things  and  events.              

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   picture  1:  ‘Soviets’  from  my  collection  representing  soldiers  from  1944    advance  up  a  ‘hill’  on  the  other  side  of  which  are  some  ‘German  paratroopers’.    In  the  background  is  a  Soviet  ‘SU-­‐76  armoured  vehicle’,  a  small  ‘wood’  is  further  in  the  background.    The  dice  and  tape  measure  –  as  it  happens,  from  GW  -­‐    are  paraphernalia  used  to  give  effect  to  the  rules  governing  the  game.    I  lost.      Games  set  in  fictional  universes  –  that  is,  the  part  of  the  hobby  into  which  GW  sells    -­‐  are  not  like  this.    Apart  from  licensing  of  intellectual  property,  each  fantasy  or  science  fiction  ruleset,  and  most  ranges  of  fantasy  and  science  fiction  miniatures,  relates  to  their  own  distinct  fictional  universe.    This  will  become  important  later  in  relation  to  substitutability  of  products.    All  that  said,  from  the  perspective  of  ‘what  is  the  hobby’,  miniatures  gaming  can  reasonably  construed  as  one  broad  hobby.    It  contains  a  variety  of  interests  and  emphases:  different  players  like  different  historical  periods  or  may  have  a  preference  for  historical  over  fictional  universes  or  vice  versa;  may  be  focused  on  competitions  with  strangers  or  games  within  a  small  circle  of  friends;  rigid  attention  to  historical  accuracy  or  not  caring  about  the  same;  or  spending  more  time  painting  miniatures  (or  reading  history)  than  playing,  or  not  painting  them  at  all.    Nonetheless  the  essential  elements  of  miniatures  gaming  set  out  above  tie  these  activities  together.    Finally,  I  should  for  completeness  address  the  notification’s  further  assertions  that  activities  such  as  collectible  card  games,  scale  modeling,  certain  kinds  of  board  games,  model  trains,  etc  are  part  of  the  same  hobby  as  miniatures  gaming.    There  are  some  overlaps  and  similarities,  and  for  reasons  that  probably  don’t  need  explication  (unkind  people  may  link  the  hobbies  via  the  word  “nerd”),  

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people  interested  in  one  will  often  be  interested  in  others.    However,  for  example:    

• the  game  element  of  miniatures  gaming  does  not  mean  that  all  games  and  miniatures  gaming  are  the  same  hobby,  grey  areas  like  Zombicide  mentioned  in  the  notification  notwithstanding.    Bridge  and  Monopoly  are  not  miniatures  gaming,  and  neither  is  collectible  card  gaming  even  if  the  cards  have  pictures  of  monsters  or  wizards  on  them.  

 • miniatures  gaming,  scale  modeling  and  model  trains  have  shared  aspects  

and  techniques  of  modeling,  but  the  objects  are  separate.    In  scale  modeling  (which  may  include  using  miniatures  gaming  products)  the  process  and  the  model  is  the  object  of  the  hobby.    Most  miniatures  gaming  players  do  some  modeling,  but  with  the  goal  of  playing;  miniatures  painting  services  exist  for  those  players  who  don’t  want  to  do  it  themselves.  

 These  do  compete  for  individuals’  time  and  money,  but  so  do  motor  vehicles  and  holidays.    In  any  case,  whether  or  not  these  activities  are  the  same  hobby  as  miniatures  gaming  is  not  necessary  to  establish  to  discuss  the  relevant  market  in  which  GW  products  are  sold.    Games  workshop    As  already  noted,  GW  produces  products  for  miniatures  gaming  in  fictional  universes.    They  have  fantasy  and  science  fiction  universes  of  their  own  creation,  for  which  the  primary  game  systems  are  Warhammer  Fantasy  Battles  (WHFB)  and  Warhammer  40,000  (WH40K)  respectively,  and  make  products  under  licence  for  the  Peter  Jackson  versions  of  the  worlds  of  J.R.R.  Tolkien’s  The  Hobbit  and  Lord  of  the  Rings.    GW  was  established  in  the  1970s  but  first  produced  WHFB  and  WH40K  in  the  1980s.    In  the  first  instance  the  universes  were  somewhat  derivative.    The  WHFB  world  was  populated  by  medieval  French  and  16th  Century  Germans  (both  with  added  wizards)  with  a  conventional  fantasy-­‐archetype  menagerie  of  dwarves,  elves,  orcs  etc.    The  WH40K  universe  was  (and  is  populated)  with  space-­‐elves  and  space-­‐orcs,  and  “space  marines”,  now  trademarked  and  fiercely  protected  by  GW1  but  a  long  pre-­‐existing  trope  in  science  fiction  with  an  added  touch  of  R.A.  Heinlein.    In  the  thirty  years  between  then  and  now  GW  grew  to  be,  arguably,  the  most  significant  company  in  miniatures  gaming  to  the  benefit  of  the  entire  hobby.    

                                                                                                               1  Perhaps  tangentially  relevant  to  the  present  matter,  GWOP’s  claims  in  the  notification  about  their  concern  for  the  gaming  community  might  be  weighed  up  against,  for  example,  their  approach  to  online  communities  of  people  that  play  their  games  and  that  talk  about  and  display  their  products,  even  positively.    Instances  are  too  many  to  list  but  one  might  google  the  terms  [games  workshop  cease  desist].  

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Others  have  narrowed  GW’s  lead  but  it  is  still  an  organization  against  which  others  are  compared  in  terms  of  quality  of  product.    Strengths  of  GW,  and  ways  in  which  GW  has  benefited  the  hobby  include:    

• notwithstanding  their  derivative  beginnings,  the  GW  fictional  universes  now  have  considerable  depth  and  richness,  with  characters  and  histories,  alliances  and  enmities,  adding  significantly  to  the  gaming  experience.    Of  the  532  pages  of  the  the  current  WHFB  rulebook,  for  example,  about  110  pages  are  devoted  to  background  to  the  Warhammer  Fantasy  world  (noting  that  part  of  the  balance  relates  to  broader  aspects  of  gaming  using  GW  products  –  there  are  not  400+  pages  of  rules!)  

 • while  what  constitutes  a  good  miniature  is  a  matter  of  preference,  a  good  

case  can  be  made  that  GW’s  miniatures  have  consistently  been  at  least  the  equal  of  any  other,  and  frequently  superior,  which  has  also  provided  benchmarks  for  other  manufacturers  to  aspire  to.    A  number  of  important  miniatures  sculptors  have  worked  in  GW  

 • similarly,  GW  publications  are  of  consistently  high  production  standards  

and  have  led  the  industry;  and  similarly,  a  number  of  prominent  games  designers  or  business  people  have  previous  experience  in  GW  

   Miniatures  gaming  markets      Miniatures  gaming  involves,  aside  from  having  a  large  enough  flat  surface  to  play  on,  acquiring  a  range  of  products,  most  importantly:    

• rulebooks,  to  govern  games;  frequently  also  supplemental  books  to  provide  advanced  or  variant  rules,  or  to  assist    (or  prescribe)  how  one  organizes  one’s  miniatures  for  play  

 • miniatures,  ie  the  toy  soldiers,  including  individual  soldiers  or  vehicles,  or  

aircraft  or  ships,  depending  on  the  game    

• ‘terrain’,  such  as  buildings,  hills,  trees,  roads,  etc,  and/or  materials  to  make  these  on  a  DIY  basis  

 • paint,  glue,  modeling  tools  

 • gaming  aids  such  as  dice  to  govern  outcomes  of  actions  in  games,  and  tape  

measures  for  movement  of  miniatures,  as  prescribed  by  rules.    (GW  are  the  only  company  which  attempts  to  meet  all  of  these  needs.    An  increasing  number  of  companies  provide  both  rules  and  miniatures.)    An  important  matter  for  the  decision  maker  in  the  current  matter  is  to  form  a  view  on  what  is  or  are  the  relevant  market(s)  in  which  competition  is  being  

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lessened  with  respect  to  s.  47(13)(c)  of  the  Act  and  in  relation  to  which  the  notification  is  made.    Some  possible  perspectives  on  this  are  that:    

• there  is  a  single  broad  hobby  market  including  computer  games  and  scale  models;  this  is  the  view  put  and  relied  upon  by  the  notification  

 • there  is  a  single  market  for  miniatures  gaming  products  

 • there  is  a  market  for  each  of  the  kinds  of  miniatures  gaming  products  

listed  above    

• there  is  a  market  for  each  of  the  kinds  of  miniatures  gaming  products  listed  above,  and  furthermore  some  of  these  products  fall  into  further  markets.  

   The  last  point  is  the  nearest  to  correct.    I  argue  that  the  relevant  view  for  the  present  matter  is  that  there  is  a  market  just  for  GW  products,  at  least  insofar  as  the  key  products  of  rules  and  miniatures  are  concerned.      Establishing  what  is  the  market  relevant  to  the  decision  rests  in  part  on  substitutability  of  products,  noting  s.  4E  of  the  Act.    That  section  refers  to  products  that  are  “substitutable,  or  otherwise  competitive  with”  each  other.    The  notification  links  the  two  elements  in  the  phrase  by  defining  substitutability  in  terms  of  products  with  which  GW  products  compete,  but  with  a  very  broad  idea  of  competition  of  products  for  players’  time  and  money.    This  is  an  incorrect  view.        As  I  have  already  noted,  the  ‘competing  for  time  and  money’  test  does  not  hold  up;  if  it  did,  then  all  goods  in  the  world  would  be  in  one  market.    The  notification,  however,  attempts  (albeit  perhaps  not  stating  it  as  explicitly  as  this)  to  point  at  a  commonality  of  interests  draw  a  circle  around  the  miniatures  gaming  and  other  hobbies  to  say  something  to  the  effect  of  ‘it’s  one  hobby,  they’re  model  soldiers  and  rules,  one  buys  them  from  the  same  places  and  players  buy  from  across  brands,  therefore  they  are  one  market’.    This  is  also  an  incorrect  view.    Substitutability  defines  what  products  compete  in  the  same  markets.    What  “substitutability”  means  in  a  plain  language  sense  is  not  necessarily  complex  but  I  will  go  do  some  pains  to  support  the  possibly  counterintuitive  idea  that  one  toy  soldier  is  not  necessarily  the  same  as  just  any  other  toy  soldier.      Products  might  be  considered  substitutable  is  they  meet  at  least  these  criteria:    

• they  meet  the  same  practical  need  or  purpose    

• they  provide  roughly  equivalent  satisfaction  of  those  needs  or  purpose,  subject  to  trading  off  price,  and  quality  and  utility.  

 In  a  simple  case,  two  cars  may  be  substitutable  in  this  sense  if  they  both  provide  transport  out  of  the  rain  and  on  roads;  one  may  be  more  comfortable,  but  the  other  may  be  cheaper  and  so  be  more  attractive  to  some  consumers  on  that  

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score.    To  the  extent  one’s  criteria  are  transport  on  roads  and  while  doing  so  staying  out  of  the  rain,  cars  that  meet  those  needs  are  substitutable  and  could  be  considered  one  market.    Consider  also  cycling.  Cycling  is,  aside  from  a  form  of  transport,  in  a  sense  one  hobby.    Road  cycling  and  downhill  mountain-­‐biking  ,  however,  require  different  kinds  of  bicycles.    It  is,  strictly,  possible  to  downhill  mountain-­‐bike  on  a  road  bike,  so  long  as  one  doesn’t  care  about  enjoyment,  discomfort,  or  an  increased  likelihood  of  breaking  one’s  bike  or  oneself.    All  other  things  being  equal,  road  bikes  are  not  substitutable  for  mountain  bikes  for  the  downhill  mountain-­‐biking  part  of  cycling.    In  that  sense,  mountain  bikes  form  a  market,  notwithstanding  that  there  exist  shops  that  sell  both  kinds  of  bikes  and  that  there  are  consumers  who  buy  both  kinds  of  bikes.    Applying  this  to  miniatures  games:  consider  picture  2,  which  shows  a  range  of  miniatures  from  GW  and  other  sources  from  my  own  collections.          

   Picture  2:  from  top  left,  anticlockwise:  GW  Lizardman  for  WHFB;  GW  ‘Legolas’  for  Lord  of  the  Rings  games;  GW  Space  Marine  for  WH40K;  Bolt  Action  Soviet  infantryman  c.  1941;  Gripping  Beast  Viking  warrior;  North  Star  Miniatures  ‘desperado’;  Battlefront  Miniatures/Flames  of  War  British  infantry  c.  1941  (note  that  these  are  a  different  scale  to  the  other  figures);  Perry  Miniatures  Russian  Infantryman  c.1812.    This  picture  illustrates  an  intuitively  obvious  point:  miniatures  for  different  historical  periods  or  nations,  or  from  different  fictional  universes,  are  different.    The  relevant  point  being  led  to  is  also  on  reflection  an  obvious  one:  generally  speaking,  players  will  want  figures  appropriate  to  the  forces  and  to  the  historical  

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periods  or  universes  in  which  their  games  are  set.    To  put  it  simply,  if  one  is  collecting  miniatures  to  represent  a  Russian  force  in  1812,  one  is  not  going  to  want  or  be  satisfied  with  the  Viking  or  ‘cowboy’  figures  for  inclusion  in  that  collection.    They  are  not  substitutable.    Because  of  this,  there  is  a  market  for  Russian  infantry  of  the  Napoleonic  wars,  sitting  within  a  broader  market  for  figures  from  the  Napoleonic  wars.    Within  those  markets  there  are  different  brands  which  are  substitutable  and  choice  of  which  depends  on  preferences  over  metal  versus  plastic,  detail,  style  and  so  forth.    As  noted  above,  however,  each  fictional  universe  is  unique  and  in  practical  terms  fictional  universes  are  brand-­‐specific;  consequently,  miniatures  of  different  brands  are  not  on  the  whole  substitutable.    This  is  not  absolute:  sometimes  there  are  similarities  which  may  enable  this  or  that  particular  kind  of  miniatures  to  be  substituted  (for  example,  more  than  one  company  makes  ‘skeleton  warriors’),  but  on  the  whole  substitutability  is  not  feasible  unless  one  is  willing  to  put  up  with  the  equivalent  of  Miss  Marple  joining  Law  and  Order:  SVU  or,  again,  riding  a  road  bike  down  a  rough  mountain  track.    Looking  more  specifically  at  examples  in  the  notification,  it  is  suggested  that  Privateer  Press  Warmachine  and  Flames  of  War  (FoW)  miniatures  are  substitutable  with  GW  products.    As  noted  above,  WH40K  is  based  on  an  elves-­‐and-­‐goblins-­‐in-­‐space  plus  pulp-­‐sci-­‐fi  humans  aesthetic.    Warmachine  is  based  around  steam-­‐powered,  magically-­‐directed  robots.    Picture  2  includes  an  example  of  FoW  miniatures  which,  like  all  FoW  miniatures,  are  in  a  different  scale  to  GW  products  and  are  located  in  20th  Century  warfare.    Simple  inspection  of  the  picture  shows  that  the  suggestion  that  these  FoW  products  are  substitutable  with  GW  in  the  sense  relevant  to  the  decision  for  the  ACCC  is  nonsense,  leaning  towards  risible.    Account  also  needs  to  be  taken  of  the  place  of  GW  in  the  hobby.    As  also  noted  above,  the  GW  universes  are  rich  and  detailed  having  been  constructed  over  three  decades.    They  produce  rules  around  their  miniatures,  and  miniatures  around  their  rules,  and  both  around  worlds.    This  is  highly  attractive  to  miniatures  gamers.  There  are  significant  numbers  of  players  who  play  only  GW  games,  and  plenty  of  gamers  for  whom  GW  provides  their  only  excursion  from  historical  games  (I  would  be  one  of  the  latter).    Notwithstanding  their  ‘we  are  just  one  of  many  equally  good  products’  approach  to  the  notification,  GW  themselves  recognise  and  proudly  state  that  they  provide  a  holistic  gaming  experience:  “(w)arhammer  is  a  game  unlike  any  other  because  it  is  so  much  more  than  a  game.    It  is  an  engaging  and  engrossing  pastime  –  a  full-­‐blown  hobby  with  a  lot  of  different  aspects.    There  are  armies  of  Citadel  miniatures  to  collect  and  paint,  fantastical  battlefields  to  model,  a  rich  history  to  explore,  and  an  unending  list  of  gaming  challenges”  (WHFB  rulebook  page  viii,  my  emphasis;    “Citadel”  is  the  main  brand  for  GW  miniatures).        

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In  simple  summary:  GW  gaming  is  a  distinct,  popular  and  enjoyable  part  of  the  miniature  gaming  hobby.    GW  games  are  not  simply  interchangeable  with  other  games.  If  one  wants  to  play  GW  games,  on  the  whole  one  will  want  GW  products.    Therefore  GW  products  are  not  substitutable,  and  therefore  the  presently  relevant  market  is  GW  products.      Lessening  of  competition  and  benefits/detriments  for  the  public    Lessening  of  competition    Preventing  online-­‐only  businesses  sales  will  reduce  competition  and  increase  prices.    There  is  significant  variation  in  prices  with  retailers,  both  ‘bricks  and  mortar’  and  online,  offering  discounts  of  ten  to  twenty  per  cent  on  GW  retail  prices.    Eliminating  online-­‐only  businesses,  which  would  remove  retailers  on  the  face  of  it  able  to  provide  the  largest  discounts,  will  reduce  downwards  pressure  on  prices.    It  should  be  noted  that  online  sales  are  an  important  part  of  the  market  for  GW  products  in  that  retailers  without  an  online  presence  are  unlikely  to  have  a  comprehensive  range  of  GW  products  due  to  their  number  and  diversity.    In  this  regard  GW  themselves  ceased  some  years  ago  to  stock  all  of  their  products  in  the  their  own  shopfronts.    According  to  their  website,  about  850  items  are  ‘web  store  exclusives’.    Some  of  these  are  bundles  the  components  of  which  are  ordinarily  available  through  the  GW  shopfronts  or  other  retailers,  but  many  of  them  are  not.    Consideration  may  be  given  to  the  costs  of  inventory  for  physical  compared  to  purely  online  shopfronts,  and  the  extent  to  which  removing  online-­‐only  retailers  will  on  average  narrow  the  range  of  products  available  from  non-­‐GW,  and  therefore  cheaper,  retailers.    It  will  be  noted  that  the  notification  proposes  that  retailers  not  be  allowed  to  break  down  products.    In  case  the  import  of  this  is  not  clear,  some  online  retailers  specialise  in  breaking  down  sets  of  miniatures  and  selling  the  components.    This  is  major  benefit  to  players.    If  I  want  to  buy  just  one  ‘tactical’  space  marine,  or  perhaps  just  one  arm  or  gun  etc,  I  can  do  so.    Under  GW’s  model  I  have  to  spend  $65  (at  their  prices)  for  a  set  of  ten  miniatures  to  get  one  or  a  part  of  one.    It  will  be  noted  that  the  notification  is  consistent  with  GW’s  past  efforts  to  maintain  high  prices  in  Australia,  and  to  protect  their  regular  retail  prices  in  other  parts  of  the  world.    GW  standard  retail  prices  are  significantly  higher  than  world  prices.    The  WHFB  rules  book  is  AU$124,  US$74.25  and  GBP45,  putting  the  RRP  margin  at  about  50-­‐60  per  cent  for  the  same  product  in  Australia.    Other  non-­‐GW  brands  have  much  smaller  margins  in  Australia,  of  up  to  ten  or  twelve  per  cent,  but  sometimes  less  than  that  and  sometimes  nothing,  over  UK  standard  retail  prices.            

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Until  2011,  many  Australians  sourced  GW  products  from  the  UK  thereby  obtaining  substantially  reduced  prices,  anecdotally  landed  in  Australia  at  about  the  same  wholesale  cost  to  local  retailers  from  GWOP.    In  2011  GW  restricted  sales  to  retailers  in  the  EU  and  US  markets  to  selling  in  those  markets.    It  will  be  noted  that  the  notification  proposes  to  apply  this  to  the  Australia  and  NZ  markets.    It  will  also  be  noted  that  in  2013  GW  introduced  arrangements  in  the  UK  that  align  with  the  conduct  proposed  in  the  notification.    One  might  suspect  that  the  purpose  of  the  proposed  conduct  is  to  support  these  previous  efforts  to  maintain  high  Australian  prices;  that  would  certainly  be  the  effect.    Benefit  and  detriment  to  the  public    The  notification  asserts  that  there  will  be  no  detriment  to  the  public  due  to  availability  of  alternative  products.    Why  this  is  incorrect  has  been  explained  sufficiently  above.    The  notification  also  rests  benefits  to  the  public  by  the  existence  of  physical  shopfronts.    The  benefits  set  out  in  the  notification  do  exist,  but  are  much  overstated  and  irrelevant  to  many  people  in  the  miniature  gaming  community.    There  are  relatively  few  shopfronts  as  described  in  the  notification,  providing  gaming  spaces  etc.    It  is  not  clear  that  a  significant  number  of  players  make  regular  use  of  these  facilities;  as  I  have  already  described,  players  are  a  very  diverse  group  and  can’t  be  categorized  as  wanting  to  hang  out  at  the  game  shop.    GW’s  business  model  of  turning  over  young  players  may  suit  its  cashflow  purposes,  but  it  is  obscure  how  this  benefits  the  broader,  mature  (in  interest  in  gaming,  not  always  in  years)  gaming  community.    Summary    The  conduct  set  out  in  the  notification  will  reduce  competition,  raise  prices,  and  provide  no  discernable  benefits  to  the  public,  notwithstanding  benefits  to  GWOP.    Therefore  there  are  no  benefits  to  the  public,  or  insufficient  benefits  to  the  public,  to  outweigh  the  lessening  of  competition  in  the  market  that  would  result  from  the  proposed  conduct.    Therefore  the  ACCC  should  not  allow  the  proposed  conduct.              Damian  Coburn