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Games Workshop Group (GAW)

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Thursday 06 April, 2000

Games Workshop Group

Trading Statement

Games Workshop Group PLC
6 April 2000



GAMES WORKSHOP GROUP PLC ('GAMES WORKSHOP' OR THE 'COMPANY')

TRADING UPDATE

There  are  three  parts to this announcement : an update on current  trading;
progress on New Media initiatives; and progress in the restructuring strategy.

Update on Trading

In  our interim statement, released on 25th January, we reported profit before
tax (pre exceptional items) up 9 per cent on the previous interim period.   At
the  same  time we stated that we were confident that the growth in the  first
half would be maintained in the full year.  In the post Christmas period there
has been a deterioration in the performance of our UK retail operations, as  a
consequence  of  which we now expect the results for the current  year  to  be
below market expectations.

We  believe this deterioration in UK retail is primarily due to the launch and
success of the Pokemon trading card game.  This has drained an element of  the
discretionary  'pocket money' spend which, we believe,  would  otherwise  have
been spent on Games Workshop products.  In spite of this, the ongoing strength
of  the Games Workshop Hobby limited the decline in like-for-like sales in the
UK  retail chain to 15% in the post Christmas period and to below 5%  for  the
year  to  date.  The retail chain remains profitable.  However, this  together
with a continuation of sluggish sales to the independent sector - most notably
in Germany - has resulted in a shortfall in expected revenue.

Significantly our North American operation continues to show strong sales  and
profit  growth  and  our Internet sales grew by 85% in the third  quarter.  We
currently  have  over  300,000 unique monthly visitors to  our  sites  (games-
workshop.com).  Since the start of the second half we have added  UK,  German,
French,  and  Australian  Internet sales sites.  These  sales  activities  are
supported by a huge Internet community boasting over 12,000 pages of Warhammer
and 40k material.

Extending the Reach of Games Workshop into New Media

In  line with our declared policy we are actively pursuing various initiatives
to  exploit further the powerful intellectual property of Games Workshop  into
the Internet and other media.

Consequently  we  are ready to sign an agreement for an Internet  based  Multi
User  Dungeon (or 'MUD') set within the Warhammer world which will be in  beta
testing  this  summer, ready for launch before Christmas 2000.  This  will  be
operated  by The Online Games Company ('Online') under a partnership agreement
with  Games  Workshop.  Players will access the game through a  dedicated  web
site  on  the  Internet by paying a monthly subscription.   The  world's  most
successful MUDs run on AOL and were created and maintained by Online.

We  have  also agreed an option with Seattle based computer animators -  Exile
Films  - to produce a feature length animated movie for TV set within the  40k
universe.  Games Workshop has retained all the associated merchandising rights
and we are building a series of arrangements to create maximum value from this
project.  The founders of Exile Films are experienced animators whose  credits
include Lost In Space, Star Trek and the Starship Troopers TV series.

These  are  the  first  of  a  number of strategic partnerships  that  we  are
currently  exploring as part of our ongoing commitment to expanding the  Games
Workshop  imagery  into  new media.  We believe that  this  can  significantly
enhance  shareholder value.  We expect to announce further developments,  both
specific and structural, in the coming months.

Progress on structural changes

We have made significant progress in the restructuring changes we announced in
the  half year statement. Our new logistics function is up and running and has
taken responsibility for stock replenishment to our sales organisations.   The
plans are now in place to obtain full multi-lingual packaging by June 2000 - a
key  part  of  the  changes  which  will greatly  simplify  our  supply  chain
processes.  Order fill rates are greatly improved from the first half.  We are
close  to finalising the contractual arrangements for the outsourcing  of  our
North  American  warehousing and distribution.  This will be a staged  process
commencing with distribution to the West Coast.

The  loss  making Hong Kong head office is scheduled to close at  the  end  of
April  with  the  distribution consolidated into a single  location  for  Asia
Pacific.

The other changes outlined in the half year statement remain on track.

Contacts:

Chris                     Chief       Games Workshop           0115
Prentice              Executive                             9168100

Michael                 Finance       Games Workshop           0115
Sherwin                Director                             9168100

Shaun Dobson                         Credit Lyonnais       020 7588
                                          Securities           4000

John Rawlings                            Rawlings PR          01756
                                    (Press contacts)         770376

6 April 2000



                                                                                                                       

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