Dragon Train designer leaves Light & Wonder

Wednesday, October 2, 2024 11:41 AM
Photo:  CDC Gaming
  • United States
  • David McKee, CDC Gaming

According to an October 2 investor note from Truist Securities analyst Barry Jonas, the designer of the embattled Dragon Train game has quit manufacturer Light & Wonder. The move follows a Nevada judge’s injunction against deployment of Dragon Train, on which Light & Wonder had placed considerable hope.

Jonas wrote that he believed Light & Wonder will withdraw all installed Dragon Train machines by October 24. That would be 30 days after Judge Gloria Navarro enjoined further sales of the controversial game, which Aristocrat Technologies claimed used purloined intellectual property.

Following the unnamed designer’s departure, Jonas opined that investors were dealing with a limited issue. He said the ramifications are confined to the designer in question and Dragon Train itself.

The analyst wrote that Light & Wonder “has now separated from the designer and the question is to what extent is [Aristocrat’s] IP responsible for the success of the game. We believe there could be alternative math model replacements for ALL’s IP and Dragon Train holds some unique features not in question.”

Light & Wonder has reiterated its 2025 cash-flow projections, which confine the impact of Dragon Train to five percent of EBITDA. Jonas added that the company would attempt to mitigate the situation by offering casino operators other, non-Dragon Train games from an extensive portfolio, in lieu of the banned slot.

Jonas described a 22 percent fall in Light & Wonder share prices following Judge Navarro’s injunction as “overdone.” He restated a Buy rating on the stock, while advising investors to take a wait-and-see attitude until Light & Wonder presents at Global Gaming Expo in Las Vegas next week.

Jonas held to a $120 per share price target on Light & Wonder, which was trading at $87.91 a share at the time of his report. He concluded on an upbeat note, writing, “We continue to believe [Light & Wonder] has a very diverse offering extending well beyond one game and features multiple growth drivers.”