Executives of Light & Wonder announced late on April 2 that they were unilaterally pulling all of their Jewel of the Dragon slot machines from casino floors. The news was delivered in an afternoon conference call with Wall Street analysts.
The move was prompted by Aristocrat Leisure’s March 14 amendment of ongoing litigation. Aristocrat amended its existing court complaint against Light & Wonder, which previously addressed the latter’s Dragon Train game, to encompass Jewel of the Dragon as well.
According to Inside Asian Gaming, Jewel of the Dragon “shared similarities with Aristocrat’s Autumn Moon game, including similarities between the Hold and Spin features, the jackpot displays, and the logos.” Light & Wonder has offered customers replacements for Jewel of the Dragon from its game library.
CEO Matt Wilson reported that, since only 150 Jewel of the Dragon machines were in deployment, it represented less than one percent of Light & Wonder’s installed slot base. “It’s a small game in relation to the universe of games we’ve created.”
By contrast, Wilson said Dragon Train’s North American installed base entailed 2,200 devices. He added that removal of Jewel of the Dragon would have no material impact on revenues or growth. “It just limits the noise. The game has some similarities to [Aristocrat’s] Dragon Link, but it’s not the same game. What was pertinent to us was to not drag our customers through this again.”
CFO Oliver Chow pointed out to analysts that Jewel of the Dragon revenues were well under $10 million, calling the effect of its withdrawal “immaterial.” Wilson noted that he would reintroduce Jewel of the Dragon in the event of a favorable verdict.
Since the decision to pull Jewel of the Dragon had been made “late last week,” Wilson said, it was too early to say what games would replace it. But “There’s a bit of a smorgasbord of games that we’re making available.”
Wilson revealed that Light & Wonder had commissioned an independent review of all its post-2021 games and “found no evidence of contagion” from competing products. A review of 2015-21 games was, he said, not expected to raise new issues.
Part of the intellectual-property issue involved par sheets, which specify hold percentages, jackpot frequency, and other technical issues. Wilson said these were widely shared and could have fallen into competing hands. He added that he was “steadfast” behind new research and development at Light & Wonder.
Chow was queried as to how the Jewel of the Dragon controversy, which had depressed Light & Wonder’s stock price, would affect the company’s stock repurchases. The CFO responded that the shares were now trading “at very attractive levels … we’ll be taking advantage of any significant dislocations.”
Added Wilson, “It’s largely a non-event for [our] customers. They’re frustrated this is playing out so publicly and impacting them. They want less noise between the two companies. We believe we’re going to see them be supportive in the future.”
Asked how Light & Wonder’s game-development process would change, Wilson said he was dealing with “a legacy issue,” rather than an ongoing one. “The team deeply understands where the bright line is,” he said.
When it was pointed out that Aristocrat’s legal filing alluded to yet another unspecified Aristocrat game, Wilson said that, yes, it had been one that was in development. But that game had been withdrawn and destroyed “out of an abundance of caution.”
The issue of caution was also raised in terms of what sort of game-making talent Wilson might bring on board in the future. He denied any inhibition, saying, “We’re always looking for free-agent signings.” But he continued, “We have the right amount of talent on the roster at the moment.”
Wilson also asserted that no other Light & Wonder games have been challenged in court by any other competitor. “We’re committed,” he concluded, “to competing fiercely, but fairly.”
