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“Why are Arcadia Products so Expensive?” by Mr. K

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We’ve all thought about it, some of us more vocally than others, and on Thursday last week, the mysterious Mr. K from Arcadia — previously Yamato — took some time to publish a long blog post on the topic of why Arcadia’s products are so highly priced.

The really high quality transforming Macross toys have never been cheap. No, not even the Takatoku 1/55. But Arcadia’s recent offerings have finally broken the 30,000 yen barrier. Some of us in the forums felt that Arcadia had gone insane. Well, this here is a unique opportunity to peek at what actually goes into producing a Valkyrie toy and give a bit more context to the figures.

Original article:
http://ameblo.jp/arcadiaac/entry-12066413053.html

Feel free to discuss this in the MW forums!

 

Why are Arcadia toys so expensive? By Mr. K (Translated by Renato)

Why are Arcadia toys so expensive?

Our Macross items are currently on a Macross Zero boom (according to myself).
We’re putting out several UN Spacy birds in turn, but I (personally) want to do Anti-UN ones as well.

However, there is a growing difference between the way things are today and years ago, so the truth is that we cannot do things like in the old days.

“How can we make these products a reality…?” I’m constantly struggling with that thought.

Of course, the same goes for other projects, too, but it is a constant, everyday struggle.

Hello. My name is Mr. K, the struggling project developer of this company.

For years now the Chinese factories have been raising their fees and we have seen that influence the price of our products.

This is not just a hit on our company, but also on the manufacturing industry as a whole. So yeah, of course it’s a struggle!!

So I thought I would take some time to think about the reason for that struggle, which is the issue of high price point products, and how that relates to profit margins.

That said, it’s not like I can actually talk about the profit bottom line or anything, so let’s just think about it in the following way…

I will call it: “Why do people say our products are expensive…?” (And yes, as I write this my heart can’t help but feel heavy).

OK, well, so there are obviously going to be differences in standards depending on the users, but it’s true that many are saying that comparatively speaking, they are expensive and huge.
Right, so, since I don’t really know much about marketing and sales, I am going to look at the issue of “Why are our products said to be oh, so expensive?” from the perspective of the project planner.

The price is decided based on profit for the company. That much is obvious. But then if so, the higher the costs, the higher the price, right? OK, so what costs are we talking about?

The costs needed to manage our company… Like salaries. Those are important. Other costs factor in development and production. Design, prototyping, steel mold plates, manufacturing, etc. etc.

OK, that’s all normal.

However, production costs at Chinese factories are increasing. Domestic costs have not really increased (neither have salaries… *cries*). As a result, the retail price goes up.

……So that’s why they’re expensive!! Or rather, that’s why we have to make them expensive!! (In order to live!)

(And I can hear you going, “Well, then, just find some other factory in another country!”, but of course proper training is needed. Even before that, we need to consider the idiosyncrasies of that country’s people and culture. Some other larger makers are actually moving that way, but for a small-mid-size company like us, we cannot easily afford such an up-front investment. So we are staying put with the current factory.)

…It seems I just rushed to the conclusion, doesn’t it…
Ah, well, as the project planner, let me change the focus to, “how to make a product that people would buy even at this price?”

If we approach the issue with the understanding that because of global issues the price is going to go up, and that just cannot be helped, so we need to think in terms of how to develop and produce a product that is going to feel worth that price. Well, this is all just my view, so… you know… just use it as reference… please be kind…

OK, so the Chinese factories raising their fees is not only an issue for this company, so we’ll leave that out from this analysis.

Regarding production numbers, too, they vary from item to item, and the scale of our company is different to that of our competitors’, so we’ll leave that out also. (The reason I bring it up is because the more we produce, the cheaper the cost, [economies of scale].)

OK, so let’s begin.

As the planner, I believe the following points are factors in the high pricing of the products. (Maybe in you should read these with a “Considering the small scale of our company…” at the start of each one of these).

①:Firstly, mecha have lots of parts.
②:Thus, there are numerous molds.
③:For every project, my working hours are long. In other words, personnel expenses. Oh, by the way, don’t think I get a particularly high salary.
④:The more parts you have, the more paintwork that needs to be done.
⑤:The more parts you have , the more building work that needs to be done.
⑥:Our quality standards for building work are high.

Is that it? Can’t think of any more…

OK so, with regards to ①, we have many “real mecha” which incorporate a transformation gimmick, so part counts are just going to end up being high. The easiest way to put it is that even for products of the same size, whether or not the thing transforms ends up completely changing the parts count.

With increased parts count, comes increased complexity and tolerances. So I ask the sculptor to take great care and eventually we reach a stage where we are both satisfied.

Having said that, we are not trying to raise the parts count wastefully. Our motto has been to not have something transform just for the sake of having it transform. We (meaning, the sculptor) stick carefully to the official transformation settings while keeping the sculpt as free from complexities as possible. So, if you’ve ever handled any of our products you know that you can quite easily transform them, right? (Actually, there may be a problem in how detailed the instructions are…)

In general, our users tend to say that once that first transformation is out of the way, then it’s all hand candy!

Ah, I seem to have gone off on a tangent.

The point is that while we are trying to keep parts count to a minimum, the necessities of mecha and transformation require that they increase.

Next.

Regarding ②, that’s simply it. More parts means more mold sheets. Though it depends on the mold size, with one sheet you can buy a car (a new car on the more affordable side). [n.b. Buying a car in Japan is more expensive than in America. -Renato]
I’ve hardly built any plastic models, so I don’t really know, but it’s not like when you see all these parts so close together on the runner [sprue] of a plamodel. It’s mostly because of the materials, but “completed items” are harder/tougher than plamodel plastic, right? At least, ours are. I mean, they have to be, you want to play with them roughly, so they have to be built robustly…

So this relates to the efficiency in the factory. They try to minimize the number of “gates” (the bits that connect the pieces to the runner). Probably. (I imagine so, I haven’t checked.)
The idea is that to cut the work done at the factory.

Off-topic again…

The point is the difference between having parts the size of a 10 yen coin and lining them up so that the area taken totals 100 yen as opposed to 1000 yen (What a reckless example). Of course, in our case, we have them lined up to total 1000 yen.

That said, we do try to lower mold costs by re-using the same parts in a single product when we can, so we can get the most out of a single mold.

③. This is simply personnel expenses. Mine.

I often hear that in terms of the proportion of company costs, “staff costs are expensive”, and that made me a little concerned so I put this down.

Well, this topic is sort of a small break within this article. However, I want to write a little about it. (Looking back, it was more than “a little”)

When development begins for a project, I really dig deep and try to shape it thoroughly.

First of all, what kind of product is it going to be. “For this mecha, I want to reproduce this feature”; “I want to add this option”, etc.

Regarding the gimmicks, I say I’m thinking I want this or that, and consult with the sculptor.
Most of the details regarding the sculpt I leave to the sculptor. Thank you always.

While the sculptor sculpts, I am busy with other things. I use this time to think of other projects. After the sculpt is done, we send it over for checks and comments. Then we go back and make corrections and put out a prototype. We send that over for more checks, then do more corrections. At the same time, we start to think about colouring and similarly get that checked and corrected as well.

At the same time, I prepare materials for the production at the factory (part guides, building manuals, colouring instructions).
At this point we start to make the molds at the factory. Once the mold layouts are done I check them.

We start marketing at that point. Mostly photographing, going over to the different media outlets and getting them to produce articles, etc.

Next, designing packaging and instructions….

By that time the molds are done. Then we put out a test-shot. Once I receive that, I check every inch of it and send my comments over to the factory. The comments number over 200 every time.

Incidentally, the first test-shot is called T-1. We then we move through T-2, T-3, until T-END. At the END stage, all problems with the mold have been cleared.

At around the T-3 point, I use the test-shot to check for parts-fitting and colouring.

Basically, this is all to test the tolerances of the mold itself, really. It just so happens that it also allows me to check parts-fit and colouring. It’s a very important process. (It also means this is the point where I start to get home late at night.) Also, I start writing the blog around this point.

After that, the factory goes into production. We ask them to check the products during the production run. I get some of them sent over so that I, too can check them myself.

So once the run is finished, that’s when the final check is done. I take out several dozen random ones from a crate of completed products (including the packaging and instructions) and check them.

I’m basically inspecting if they are finalized as products. I used to go over to the factory to do this.

Once they pass this inspection, they finally are shipped over to Japan.

So for my own project-planned items, I struggle with all of the above for a year to a year and a half. It sounds long, but there are even more really detailed Parts to the work, so I don’t goof off often (according to myself).

* Of course, this is all within the context of transforming mecha, so with other projects the project time is shorter, or the processes would be different, etc..

So, in order to do all that, my salary is one of the costs. I’m sorry…

Well, this was supposed to be my break, but it’s the most tiring thing… (laughs)

On to ④.

The more parts there are, the more paint work there is.
For example, if we have one part which does not move, it only takes one pass to apply colour. In order to make the same part move, it needs to be split into two parts, and each part would need to be painted individually, thus you need to make two passes at the paint application.
Simply put, if you increase the number of paint application passes, your production costs go up.

⑤.
This is the same as the paint apps.
For example, a product that has 20 pieces in one arm has twice the building process as one with 10 pieces. As the amount of building work changes, so does the cost. By the way, as for our products, they have 20.
Everything thus far are reasons for all the labour costs.

So let’s talk about ⑥ — this is about high quality standards.

Actually I don’t know about the quality standards of other companies, so I can’t say anything about them. In fact, in my opinion, this is all just normal, so here I will just directly ask the people at the factory for their pure opinions!

Mister K: “Our products are said to be expensive, what do you in the manufacturing process at the factory think are the main factors in this (barring the global issues)?”

Head of the Factory:  “Expensive? That’s unthinkable! We are sincerely and strictly following the orders of Arcadia!!”

Mister K “Yeah, no, I mean… OK, I’m sorry. Um… That’s not what I..” (I then try to explain the main topic.)

“From the perspective of the factory processes, are there specific steps which take a lot of effort or are time-consuming, etc.? If so, what are they? Please explain.”

Head of Factory   ”Firstly, considering the production numbers, your orders concerning quality are detailed and numerous! That’s a lot of pressure on the factory. There’s also many parts involved, so the actual building work itself is tough and the proportion of scrap is very high, so the cost ends up going up.”

Mister K ”I’m sorry.”

Head of Factory:  ”It’s problematic to even try to explain everything in detail so I will just give some examples.”
(Below are some comments from the different divisions).

Injection specialist: ”The thing we are most careful about is the cutting of the gates (in other words, trimming off the connectors to the sprues). Normally, all of the gate cuts leave a whitish mark. However, your company has added an extra step in the process to remove the white mark, so we take care in that.”

Mister K ”Oh, thank you very much. That really helps us out.”

Injection  ”Also, there are high standards regarding mold deformities (shrinkage, warping, etc.). Especially in the wing parts.”

Mister K  ”Yes, because in fighter jets, the width and curvature of the wings are important.”

Injection ”Also the checks regarding mold colours are so strict!! We have to make sure that all of the parts are molded in the exact same shade of colour. In particular, white is the most difficult.”

Mister K  “That’s absolutely necessary. The form and colour are what shape the image of the character, so please understand the importance of this.”

Spray and Pad (paint apps) Specialists ”There are no allowances for colour bleeding, not even a little bit…”

Mister K  ”Of course not..!”

Paint  ”All of the positions of the pads (colour masks) have to be perfect. Then on top of that, there are many colour patterns, so if you are off by just a little bit, that’s it, it’s unusable. It’s such a waste!”

Mister K  “Yes, it’s a waste, but we want to make good products, so please yoroshiku ne…!”

Builders:  ”The building is the toughest process in a transformable item! You know what your standards are like, right?” (Gaps, roughness, etc..)

Mister K  “Wow… I’m sorry to hear it’s so tough.”
Die-cast specialist: ”Even a tiny bubble is unforgivable. When you paint, it’s normal to have bubbles…”

Mister K:  “………..”

Die-cast specialist: ”Also, the parts trimming. And making the surfaces clean. We use a special file for the finish… We only use it on your products.”

Mister K  ”Yes, it’s a special process.”

Die-cast specialist ”By the way, for every type of product, the scrap proportion of die-cast is around 36%.”

Mister K  “So you can’t use a third of it…. *cries*”

Injection and paint apps:  ”If we’re talking about scrap, when you factor in plastic molding and the painting processes, it’s around 65-78%.”

Mister K  “So more than half of the entire production are parts we can’t use!!!”

As you can see, when you make products with such high standards, you end up with mostly parts that you cannot use. In fact, even I was shocked.

That said, let me put it another way – we check each individual part in great detail and make sure there is no unevenness in the building and painting processes, thanks to the love between me and the factory! (Not that that’s down in writing anywhere…)

This all comes from a feeling of wanting to make good products for you to play with! (Sure, sounds really cheesy, but it’s genuinely heartfelt.)

Thanks to this, we get few calls to the customer center (I think), so I believe this is the correct way to look at things (as far as the company is concerned).

So what it comes down to is, my work and the processes in it, and the procedures at the factory and waste output. We talked about a lot of things, but I feel that my qualms have been put to rest.

I should note, however, that I don’t know about the production processes of other companies, so please just look at this as Arcadia, and in particular, Mr. K’s case.

Conclusion.
I think you all have your own ideas, so there’re people who think “Mr. K’s standards are too high so that’s why releases are delayed and the price is high”, or “I never knew about those hardships… no wonder they cost so much”. I leave it all up to you.

Even so, I hope that you can feel that “Yes, Mr. K’s products are expensive, but they’re good!!” (Though writing that myself is embarrassing…)

The rising costs will probably keep on rising, but even with that, I aim to continue to do this, so “yoroshiku“!

Thank you so much for reading this long piece!

Kind regards,

-Mister K