Our Business Model

We have a simple strategy at Games Workshop. We make the best fantasy miniatures in the world, to engage and inspire our customers, and to sell our products globally at a profit. We intend to do this forever. Our decisions are focused on long-term success, not short term gains.

Simple, but every part of this statement is important. We make things. We are a manufacturer. Not a retailer. We do have outlets in retail locations and these stores  show customers how to engage with our hobby of collecting, painting and playing with our miniatures and games. They are the front end of our manufacturing business. If our stores do a great job, we will recruit lots of customers into our Hobby and they will enjoy spending their money on the products we make. The products we make for our customers are the best in the wargaming world. This is because everyone at Games Workshop is passionate about our Hobby.

Every year we seek new and better ways of making our products and improving the quality. This is not simply a personal obsession; it also makes good  business sense. We know that, for a niche like ours, people who are interested in collecting fantasy miniatures will choose the best quality and be prepared  to pay what they are worth. The games are a key part of both our Hobby and our business model. Our games are played between people present in a room (a Games Workshop store, a club, a school), not with a screen. They are truly social and build a real sense of community and comradeship. This again makes good business sense.

The more fun and enjoyable we make our games, the more customers we attract and retain, and the more miniatures our customers want to buy. This in turn allows us to reinvest in making more and more exciting miniatures and games, which creates a virtuous circle for all. We are also clear that we will only make fantasy miniatures, not historical ones. Fantasy miniatures from our own Warhammer and Warhammer 40,000 worlds allow us unlimited scope for product innovation.

In addition, we can, and do, defend our intellectual property rigorously against imitators, thus ensuring that our worlds are synonymous with quality. Our customers are global. People with our particular Hobby gene, that is collecting, painting and playing with fantasy soldiers, exist all over the world. Our job is to find them.

In developed markets we like to do this ourselves through our own Games Workshop stores. Here we employ wonderful people who are recruited for their enthusiasm and willingness to help others. Our store managers are quite literally that: the centre for the Hobby in their local community and it is their behaviour and attitude that determine our success in that location. Because it takes time and care to find the right person to run a Games Workshop store, it will take us many years to get the global penetration we  want to achieve. So, in order to improve our coverage today, we seek out other businesses which can help us get to the places where our hobbyists may be found.

The best businesses at helping us are independent shops, run by owners who know their customers and offer them a good personal service. We call these Stockists and we supply them with an easy to manage range of our fastest selling products, which we resupply every month. For emerging markets in Eastern Europe and South America we work through experienced local distributors to ensure our product is available through their local networks of retailers. And, of course, in all these locations, we also have the Games Workshop Webstore, which gives customers a huge amount of information on the Hobby and access to our entire range of products with a fast and efficient delivery service to wherever they live in the world.

Finally, we know that if we want Games Workshop to be around for a long time, we have to deliver all this profitably. This is why we are cost conscious. We don’t spend money on things we don’t need, like expensive offices or prime rent shopping locations or advertising that speaks to the mass market and not our small band of loyal followers. We only invest where it makes a positive improvement to our business model, such as in tooling to make better plastic miniatures, in opening more Games Workshop stores to improve our customer service and in fit-for-purpose systems to make our processes more efficient and reliable.

And when we make an investment, we measure its impact to ensure that it delivers an improved return on capital for our owners. Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 400 or so Games Workshop stores which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. Even though we have been in the UK for over 35 years, we still see opportunities for growth here with smaller one man stores in market towns and suburbs of large cities. Compared to the UK, most of the rest of the world is for us still “green field” territory. This means we believe we can keep on growing steadily, using the same tried and tested approach of recruiting and retaining customers by opening Games Workshop stores, supported by the  Games Workshop Webstore and independent Stockist accounts across the globe. With this growth we should be able to put more volume through our dedicated manufacturing and warehouse facilities ensuring that our gross margin continues to improve.