After a favorable ruling for Aristocrat Technologies in a U.S. district court regarding intellectual property disputes, Light & Wonder is developing a revised version of its popular game Dragon Train. The court's injunction prohibits Light & Wonder from manufacturing and selling the current version of Dragon Train, due to alleged infringement of Aristocrat's intellectual property, particularly related to the game's mathematical components.
At the end of September, a judge in Nevada issued a preliminary injunction against Light & Wonder, preventing the company from distributing its Dragon Train gaming machines. Aristocrat Technologies, a major player in the gaming industry, filed the lawsuit, claiming that certain elements of Dragon Train copied proprietary features of its own Dragon Link game series. This ruling prompted Light & Wonder to act swiftly to comply with the court's order.
Light & Wonder CEO Matt Wilson discussed the situation in a video statement, confirming that the company is replacing Dragon Train machines installed at various locations. Most of these 2,200 machines are located in North America, and Light & Wonder is working closely with customers to provide alternative games while ensuring a smooth transition. Wilson emphasized that these changes will not significantly impact the company's broader profit goals, with adjusted EBITDA still set at $1.4 billion by 2025.
Development of the New Version of Dragon Train
According to Capital Brief, despite the court order, Wilson remains optimistic about the future of the Dragon Train series and announced plans to develop a new version of the game. He explained that the court's ruling mainly affects specific mathematical aspects of Dragon Train, while the core gameplay and features remain unaffected. "We are working on creating a compliant version of Dragon Train," Wilson said, noting that this project is the company's top priority.
The new version will comply with the court's order, expected to address the intellectual property issues raised by Aristocrat while maintaining the game's appeal. The release schedule for the updated version is still unclear, but Wilson expressed confidence that Dragon Train will continue to be a successful franchise in Light & Wonder's portfolio in the coming years.
Global Market Reaction and Stock Performance
Following the legal dispute, Light & Wonder's stock initially fell after the injunction was issued, but rebounded after the release of the new version of Dragon Train, rising 5.7% on the Australian Securities Exchange. Industry analysts noted that the legal issues surrounding the game only represent a small part of Light & Wonder's overall business. Truist Securities analyst Barry Jonas stated in an investor report that the impact of the lawsuit is mainly limited to Dragon Train and its designers, who have since left the company.
Although the court's ruling affected the company's ability to sell Dragon Train in the U.S. and Australia, where the game was previously very popular, Light & Wonder remains committed to supporting its customers through its rich library of other games. Games such as Ultimate Fire Link and Huff and Puff are being offered as alternatives to ensure that the company's customers continue to receive high-quality gaming experiences.
Looking Ahead: Light & Wonder's Future Plans
While dealing with the legal complexities of the Dragon Train dispute, Light & Wonder continues to focus on broader growth plans. Despite the challenges posed by the injunction, Wilson reiterated the company's commitment to maintaining its profit target for 2025. A strong alternative game portfolio and a planned $1 billion stock buyback program bolster this confidence.
Meanwhile, Light & Wonder is preparing for the upcoming Global Gaming Expo (G2E) in Las Vegas, where it plans to showcase its latest games. The company is also expanding its distribution network through new partnerships, including a recent collaboration with Peter & Sons, aimed at enhancing its impact in globally regulated markets.
