Games Workshop: real profits from fantasy games

Games Workshop, a long-established maker of wargames, has enormous potential for further growth.

People with Warhammer figures
In-person events help turn customers into loyal enthusiasts
(Image credit: © Games Workshop)

Games Workshop (LSE: GAW) is a £3.8bn FTSE 250 company with a fine record of growth and profitability (see below). The firm’s business model is simple, at least in theory. It aims to “make the best fantasy miniatures in the world, to engage and inspire our customers, and to sell our products globally at a profit”, says the investor relations website. “We intend to do this forever. Our decisions are focused on long-term success, not short-term gains.”

More specifically, Games Workshop sells fantasy games such as Warhammer to a large number of devoted customers, both online via its own website and through more than 523 of its own shops and a further 5,400 independent outlets in 73 countries. The shops are not solely for buying: they play a key role in showing customers how to engage with the hobby of collecting, painting and playing with the miniatures, landscapes and wargames so they join the wargaming community. This activity helps recruit new customers to be long-term collectors and fantasy gamers. Special events at its Nottingham headquarters also help strengthen customer loyalty.

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Dr Mike Tubbs

Highly qualified (BSc PhD CPhys FInstP MIoD) expert in R&D management, business improvement and investment analysis, Dr Mike Tubbs worked for decades on the 'inside' of corporate giants such as Xerox, Battelle and Lucas. Working in the research and development departments, he learnt what became the key to his investing; knowledge which gave him a unique perspective on the stock markets.

Dr Tubbs went on to create the R&D Scorecard which was presented annually to the Department of Trade & Industry and the European Commission. It was a guide for European businesses on how to improve prospects using correctly applied research and development. He has been a contributor to MoneyWeek for many years, with a particular focus on R&D-driven growth companies.