“Creating and leveraging great games continues to be the core of our strategy and our success,” asserted Barry Cottle, President and Chief Executive Officer of Light & Wonder, on a second quarter earnings call.
Elaborating on what is labelled as a “pivotal year” for the company, Cottle further emphasises that “no one else can match our wealth of great franchises or our ability to deliver great games to players anywhere they want to play”.
Cottle also noted the “significant progress” being made on transforming the company, in addition to seeing successes on its 2022 roadmap that led to a “strong operating performance” through Q2.
“When you look at what we’ve accomplished, you see clear evidence of our ability to deliver on the promise of transforming our company and to drive significant value for our shareholders,” it was said.
This, said Light & Wonder, is due to April’s $5.8bn lottery divestment to Brookfield Business Partners, as well as a $400m reduction in the sale price on OpenBet that will see Endeavor Group pay a total of $800m upon closure by the end of Q3.
“Together, these two dispositions will generate approximately $5.6bn in net after-tax cash proceeds, and it represents the final step in the process of streamlining our organisation,” Cottle said.
Adding: “This momentum is the result of the fundamental changes we have made throughout the company.”
“…current GGR levels remain strong, just as they have during past economic cycles.”
Before delving into the performance of each core business unit through the second three month period of the year, Cottle detailed confidence “about our industry and our path forward” despite the current economic climate.
“We have built a leading and unique position in a market that’s not only huge and converging but has also been historically resilient to the dynamic economic environment. In fact, current GGR levels remain strong, just as they have during past economic cycles.
“However, we continue to closely monitor trends and remain proactive, taking steps that have positioned us well to successfully navigate this evolving environment, including proactively implementing measures to offset inflationary pressures, creating a global supply chain and driving operational efficiencies throughout our organisation.”
During Q2, Light & Wonder recorded a five per cent Q2 revenue rise to $610m (2021: $581m), with the group’s gaming division tracking a six per cent increase to $390m (2021: $367m).
This, said Cottle, is due to the company’s overarching strategy and roadmap “already delivering robust underlying growth,” as well as achieving “tangible success” across its three largest TAMs.
“When it comes to gaming, our ‘North Star’ remains building the best games and enabling platforms,” Cottle said.
“That’s why we’ve ramped our game road map and focused on leveraging our proven evergreen franchises created by some of the best game design talent in the industry. Our strategy is working.”
Despite igaming remaining consistent year-on-year with revenue of $60m, Light & Wonder is buoyed by a 47 per cent US uptick driven by GGR scaling as well as continued market share gains.
“We believe that there’s no better time to be in this industry”
“Our original games underpinned our market share growth in the US. If you look at the top 20 games on our igaming platform, our original content fuelled more than 70 per cent of GGR, a testament to the affinity players have for our land-based franchises and digital native games.
“We also saw strong performance from our Lightning Box acquisition, which remains the number one digital native studio on our igaming platform in the US. Creating and leveraging great games continues to be the core of our strategy and our success.”
SciPlay is also praised as producing a “solid” second quarter as revenue rose four percent to $160m, with the segment reported as outperforming the social casino market both YoY and sequentially making “good progress” towards a targeted expansion into casual.
“This has been a pivotal year for our company, and we had tremendous success this quarter,” Cottle concluded.
“We believe that there’s no better time to be in this industry, and nobody is better positioned to take advantage of the $70bn TAM games market opportunity.
“We are uniquely positioned to capitalise on the opportunities ahead with unmatched assets and market leadership, a clear vision and road map and unparalleled competitive advantages to take market share, drive cash flow and ultimately generate significant long-term value.
“We couldn’t be more excited about the future and the path we are on to generate significant returns for our shareholders.”