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Games Workshop strikes deal with Amazon to make Warhammer 40,000 films and TV shows

By Louis Goss

Games Workshop on Monday said it has struck an exclusive agreement with Amazon to make films and TV shows set in its Warhammer 40,000 universe in a major deal that could further boost the FTSE 250 company's meteoric share price performance.

Under the terms of the agreement, Amazon (AMZN) will be given exclusive rights to produce films and TV series based on the Warhammer 40k wargame, which sees players act out battles using miniature models which cost up to GBP100 each on tabletops made to look like battlefields.

Shares in London listed Games Workshop (UK:GAW) rose 1.1% on Monday, having risen 17% over the previous 12 months and 250% over the past five years.

Analysts at Peel Hunt, led by Charles Hall, said they believe the deal with Amazon will be a "game changer" for Games Workshop in bringing its Warhammer 40k universe to a "wider global audience."

Games Workshop, which was first founded in 1975, has seen its share price surge by 7,800% since its initial public offering (IPO) in September 1994 due to the successes of Warhammer 40,000, which is now the most popular miniature wargame in the world.

The Nottingham-headquartered company's successful efforts to capitalize on the growth of geek culture has seen its revenues more than triple under current CEO Kevin Rountree, to GBP445.4 million ($564 million) in 2023.

First launched in 1987 following the successes of medieval wargame Warhammer Fantasy, Warhammer 40k is set in a distant future in which a stagnant human civilization is under attack from hostile aliens.

Games Workshop said its full-year forecasts remain unchanged, in what Peel Hunt's analysts described as a sign that any upfront payment made by Amazon in return for the rights to develop Warhammer 40k are "modest."

Peel Hunt's analysts instead said the value of the deal lies in expanding Games Workshop's audience as they noted Amazon Lord of the Rings series had more than 100 million viewers worldwide.

The deal will see Games Workshop and Amazon work together over a 12- month period to agree creative guidelines on which any films or TV series will be based, in what was described by a team of analysts at Goodbody led by Patrick O'Donnell as "an indicator of the importance placed on its key IP [intellectual property]."

Analysts at AJ Bell led by Russ Mould noted that "Games Workshop risks long-lasting reputational damage if Amazon makes a mockery of its IP on the screen."

Amazon will also gain merchandising rights associated with any Warhammer 40k films or TV shows it produces as well as the option to develop Games Workshop's medieval themed Warhammer Fantasy universe into similar productions.

-Louis Goss

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12-18-23 0648ET

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