Games Workshop PLC profits while testing the loyalty of its biggest

Games Workshop Group PLC (LSE:GAW) has a hardcore devoted following that nevertheless gets very angry with the company periodically.

Consistently cheesing off the fanbase has not stopped the company evolving from one that initially served a niche market in the UK into a FTSE 250 company that serves a niche market across the world.

The most recent controversy exercising the Games Workshop community flared up about five months ago when the company changed its intellectual property (IP) guidelines.

Rather than aiming being aimed at warning off commercial enterprises the new guidelines seemed to take aim squarely at fans who were creating their own content inspired by the Games Workshop game systems (essentially Warhammer, a set of war game rules based in a Tolkienesque world; Lord of the Rings, a set of war game rules featuring characters, races and places from JRR Tolkien’s books; and Warhammer 40k, a science fiction game containing 24 different factions, including one called “Orks” – I can’t begin to think where they got the idea for that faction from).

The stipulations imposed by Games Workshop (GW) sought to prevent the use of artwork or imagery copied from any official Games Workshop material; prevent the content creators from making any money from their efforts; prevent the use of any GW logos – i.e. make it clear that the content is unofficial; ensure that none of the content providers said anything disparaging about GW.

Some popular GW fanboyz and fangurlz took the hint and ended their GW-related content creation activities, which upset the fans of the fanboys/fangurlz.

Pretty soon, there was a post on Reddit calling for a boycott of Games Workshop.

Boycott may have hit the shares more than the bottom line

Interim results announced today by Games Workshop suggest that any boycott is not going to bring the company to its knees. Profit before tax in the six months to the end of November 2021 was down at £88.2mln from £91.6mln the year before but revenue on a constant currency basis rose to £191.5mln from £186.8mln.

Peel Hunt said the results were excellent given the tough comparatives from a year ago and the impact of currency, freight and supply chain disruption.

“Headwinds are now abating, with currency flattening off, capacity increasing, and freight and supply chain issues stabilising. With an improving outlook, we are increasing our forecasts by c.3%. There is a lot to look forward to in our view, with increased capacity to meet demand, a full slate of video games releases and plenty of activity on new projects,” the broker said.

Gemma Boothroyd, an analyst at Freetrade, said Games Workshop’s vertically integrated business model confers certain advantages.

“Soaring freight costs to transport its figurines and table-top games may…