Gamers lose that Lord of the Rings hobbit

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Gandalf and his hobbit friends have long departed from the big screen, and in their wake, demand for Tolkein-inspired games and models has quickly waned, knocking back Games Workshop, the table top war games company.

The group has been warning of a bubble effect from the epic Lord of The Rings film series for nearly three years and on Friday it admitted that a 17 per cent fall in sales over the five weeks running up to January 1 meant that “sales, and therefore profits, are likely to fall short of current market expectations”.

The recent slip comes on top of a 20 per cent fall in sales in the six months to the end of November to £57.1m and a collapse in interim pre-tax profits from £7.7m to £119,000.

The shares lost 58p or 15 per cent to close at 315p, their lowest for four years, leaving them standing at less than half their 883p value a year ago.

Ian Daly, analyst at house broker Bridgewell Securities, lopped £6m from his full-year forecast, taking it from £10m to £3.9m. “It’s fair to say that that pace of the decline [of sales linked to Lord of the Rings] has happened quicker than anyone expected,” Mr Daly said.

At its peak, Lord of the Rings products accounted for nearly 40 per cent of sales; today that figure is 10-15 per cent.

Mr Daly said the group, which has 330 stores worldwide and is the only specialist war games retailer, had lost its some of its discipline when sales were easy to come by during the Tolkein boom of the past few years.

“The company needs to sort a couple of things out such as re-aligning its new product activity behind core gaming systems like Warhammer 40,000,” he said.

Tom Kirby – the company’s chief executive, who was called out of retirement in 1999 in the wake of a slump in sales – said that prospects remained good, pointing to growth coming from overseas expansion, but he admitted: “It will be a good nine months before we see growth re-established.”

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