Light & Wonder is working on a revamped version of its popular Dragon Train game after a U.S. District Court ruled in favor of Aristocrat Technologies in an intellectual property dispute. The court’s injunction prevents Light & Wonder from manufacturing and selling the current version of Dragon Train due to alleged violations of Aristocrat’s intellectual property, specifically relating to the game’s mathematical components.

In late September, a Nevada judge issued a preliminary injunction against Light & Wonder, barring the company from distributing its Dragon Train machines. Aristocrat Technologies, a major player in the gaming industry, had filed the lawsuit, claiming that certain elements of Dragon Train copied proprietary features from its own Dragon Link game series. This ruling has led Light & Wonder to work swiftly in complying with the court’s directives.

Matt Wilson, CEO of Light & Wonder, addressed the situation in a video statement, confirming that the company is in the process of replacing Dragon Train machines installed in various locations. The majority of these 2,200 units are located in North America, and Light & Wonder is working closely with customers to offer alternative games while ensuring a smooth transition. Wilson emphasized that the changes would not significantly impact the company’s broader earnings targets, which remain set at US$1.4 billion in adjusted EBITDA by 2025.

Development of a New Dragon Train Version

Despite the court order, Wilson was optimistic about the future of the Dragon Train franchise, announcing plans to develop a new version of the game, according to Capital Brief. He explained that the court ruling primarily affects specific mathematical components of Dragon Train, while the core gameplay and features remain unaffected. “We’re working diligently to build a compliant version of Dragon Train,” Wilson said, noting that this project is a top priority for the company.

This new version, which will adhere to the court’s orders, is expected to maintain the game’s appeal while addressing the intellectual property concerns raised by Aristocrat. The timeline for the release of this updated version remains unclear, but Wilson expressed confidence that Dragon Train would continue to be a successful franchise in Light & Wonder’s portfolio for years to come.

Global Market Response and Share Performance

In the wake of the legal dispute, Light & Wonder shares initially dropped following the injunction but rebounded with a 5.7% gain in ASX trading after the announcement of the new version of Dragon Train. Industry analysts have pointed out that the legal issues surrounding the game represent only a small fraction of Light & Wonder’s overall business. In an investor note, Truist Securities analyst Barry Jonas stated that the ramifications of the lawsuit are largely confined to Dragon Train and its designer, who has since left the company.

While the court’s decision affected the company’s ability to sell Dragon Train in the U.S. and Australia, where it had previously been popular, Light & Wonder has remained committed to supporting its customers through its extensive library of other gaming options. Titles like Ultimate Fire Link and Huff and Puff are being offered as replacements, ensuring that the company’s customers continue to have access to high-quality gaming experiences.

Looking Forward: Light & Wonder’s Future Plans

As Light & Wonder navigates the legal complexities of the Dragon Train dispute, the company continues to focus on broader growth initiatives. Wilson reiterated the company’s commitment to maintaining its 2025 earnings target, despite the challenges posed by the injunction. This confidence is bolstered by a robust portfolio of alternative games, as well as a planned US$1 billion share buyback program.

In the meantime, Light & Wonder is gearing up for the upcoming Global Gaming Expo (G2E) in Las Vegas, where it plans to showcase its latest game titles. The company is also expanding its distribution network through new partnerships, including a recent collaboration with Peter & Sons aimed at increasing its presence in regulated markets globally.