In May 2022, Scientific Games underwent a transformation that reverberated throughout the gaming industry.
The company changed its name to Light & Wonder, shed its lottery and sports betting businesses, and began to concentrate on its gaming assets.
During an Oct. 10 interview with Nevada Independent reporter Howard Stutz (formerly with CDC Gaming Reports), Light & Wonder CEO Matt Wilson said the company’s “Frankenstein collection of assets” under the Scientific Games banner needed to be pared.
“We were trying to be a huge amount of things to a lot of different end markets,” Wilson said during the Global Gaming Expo education session “Gaming’s Quest for Innovation: It’s Time to Level Up”. “We’d been put through a huge amount of leverage and debts, and we had some discussion to make about how we pivoted the company and focus it around some really streamlined core competencies.”
Light & Wonder now focuses on content and what Wilson referred to as its unique but complementary businesses: land-based gaming, social casino, and igaming products.
Wilson said the company particularly loved its former lottery business, but it didn’t really mesh with its gaming assets and belonged in a different portfolio. He also noted the lottery business was stable, but that it attracted a different subset of investors.
“For us, (divesting the lottery business) was really successful and unlocked a huge amount of value,” Wilson said. “Shares prices traded up since we made those decision, so it’s been a great thing for our shareholders.”
Stutz noted the divestitures enabled Light & Wonder to reduce its debt from slightly over $9 billion to about $4 billion.
Wilson said the name change to Light & Wonder didn’t cause much consternation among three important groups. Investors, he said, are mostly concerned about whether share prices are going up or down. Customers are interested in the name, but their focus is mostly on “the quality of your products, and quality of your games.” And then there were the company’s employees to consider. It was especially important to try to come up with a name that appealed to prospective employees who are likely to be younger.
“We’re trying to call out to the next generation of potential employees,” Wilson said. “These are young animators, engineers, and mathematicians. We make games for a living, it’s an exciting place to be, so we’re trying to promote a brand that says come work for us. … That where (the name change) was targeted.”
Stutz remarked that Wilson began his tenure as Light & Wonder’s CEO in March of 2020, just as the COVID-19 pandemic was shutting down American businesses. The gaming industry saw most, if not all, of its casinos forced to close.
While admitting it was a horrible time across the world, Wilson admitted there was a silver lining.
“It gave us time to re-think the business,” he told Stutz. “To make dramatic change, in a business that was kind of in a steady state would have been hard trying to find the right balance.
“But within two weeks of me starting, 100 percent of the employee base had left the building. … It really forced a lot of dramatic change, and it probably catalyzed the change to Light & Wonder. Without COVID, I think we’d probably still be Scientific Games with the same collection of assets. I don’t think we would have thought as big as we did.”
Wilson said he’s grown to accept the 24/7 nature of his role, even if what he has to deal recently has been disheartening. Light & Wonder has 300 employees located in Tel Aviv working on its social casino business. To wake up on Oct. 7 and learn that “a huge part of our business was going through that level of devastation” due to the attacks in Israel,” it just consumes you,” Wilson said.
“All weekend I’m trying to get myself around what’s happening in that part of the world. We had 10 percent of our workforce in Israel being called up for action. We’re going to G2E and saying we’re going to war against the competition, and we have team members who are literally going to war. It’s devastating. It’s the 24/7, 365 nature of our business.”