Games Workshop has confirmed an agreement with Amazon granting exclusive rights to develop films and television series based on the popular Warhammer 40,000 universe. The deal establishes creative guidelines and includes merchandising rights for any future productions.
Although Games Workshop shares were flat on Tuesday, the agreement validates this year’s rally, which helped the stock earn promotion to the FTSE 100. In addition to providing Games Workshop with a fresh and potentially lucrative revenue stream, the deal will take the Warhammer brand and characters into the mainstream and is likely to help boost sales of its tabletop gaming figurines.
The comprehensive agreement also gives Amazon the option to expand into the Warhammer Fantasy universe, though this can only be exercised after the initial Warhammer 40,000 content is released.
While this marks a major development for both companies, Games Workshop has noted that the development of films and television series typically requires several years of production time, suggesting fans may need to be patient for the first releases.
Investors will look forward to the additional licensing revenues when they are eventually recognised. Of the company’s £260m estimated revenue for the first half, just £30m was from licensing – a near 100% increase on the prior year – representing a huge opportunity to bolster the top line by leveraging its IP.
Games Workshop shares are up 40% so far this year. The company is one of the best FTSE 350 performers of the last decade.