A leading designer, developer and manufacturer of gaming machines and systems products, including online and mobile gaming solutions, International Game Technology (IGT) will showcase its latest upcoming games and systems at the Indian Gaming 2011 Tradeshow and Convention from April 3 to 6 in Phoenix, Arizona.
IGT will exhibit a number of games from the MegaJackpot and Core game product lines in the show. This includes the second edition of IGT’s popular slot machine game Sex and the City.
Based on the hit television series from HBO, the newest edition is known as Sex and the City Big Diamonds and features IGT’s top performing MultiPLAY game interface. In the latest version of the game, players have the option of playing the game up to four times, simultaneously, with different outcomes on the same machine. The latest edition also features five progressive bonus levels and four character-specific bonuses.
The original version of the game gained huge popularity and was ranked #1 among all stand-alone progressive MegaJackpot games on casino floors in 2010. We believe the new version will also achieve strong growth going forward.
IGT is expected to launch a Ghostbusters slot at the Indian gaming show 2011. The newest member of the MegaJackpot family features high-frequency bonuses, which gamers can achieve by putting low denomination bets.
IGT will showcase a new game known as Wheel of Fortune Triple Extreme Spin at the event. A first of its kind, the game features three physical spinning wheels in the top box. The game also features a three-game MultiPLAY interface with IGT’s Rapid Reload feature, which locks in symbols and re-spins the reels for bigger wins.
IGT is also expected to release a Pinball MultiPLAY game, with special features targeted at mid and high denomination players.
The other important products include Megabucks Wild Sapphires, a latest addition to the Megabuck family of games. Also joining the family is Bill Cash, a popular slot from the Top Dollar Reel MultiPLAY Slots. The jackpot, ranging from $1.0 million to $10.0 million depending on jurisdiction, is expected to drive significant customer base due to its high prize amount.
From its core game product line, IGT will display the new skill-based Reel Edge series at the show. For the first time, gamers will be able to stop the spinning reels in an attempt to win and can also use a joystick to control the outcome of the 100% skill-based bonuses in the top box. Being a skill-based game; Reel Edge is expected to be popular with the younger generation (age group 21 to 44).
IGT is scheduled to introduce the new Multi-Color Multipliers, which integrates colourful reel lighting, entertaining music and LCD interaction into one platform and is available for four games, including Hells Bells, White Pearl, Hawaiian Diamond and Tiki Beach. During each spin of the game, the Multi-Color Multipliers light up the reels in red, green, blue or white, and multiply wins up to 4 times depending on which color is lit.
The company is also expected to display a new technology for casino management by combining sbX Experience Management system with IGT Advantage.
sbX is the first server-based gaming solution that allows its operators to run their own choice of games any time and facilitates better management of the casino floor at a lower operational cost. sbX also provides the same amount of comfort to players, allowing them to select their own choice of games instantly and experience a more real-life feel of casino management.
sbX has multiple tools, which spices up the entire gaming experience. sbX Service Window provides unique player interaction experience at the slot machine. The window provides a menu of information and services that the player and operator can optimize. sbX Floor Manager allows access to the IGT game library, enabling operators to efficiently mange their casino floor with the mere touch of a button.
We believe sbX will drive growth for IGT, as the company continues to install the system both domestically and internationally. We believe that the broadening customer base will boost IGT’s top-line growth over the long term.
IGT is also expected to display innovative online and mobile gaming products at the Indian gaming show 2011. IGT recently formed a new interactive division by merging WagerWorks and Million-2-1 groups in order to maintain its dominant position in the online and mobile industry over the long term.
Recommendation
We maintain our Neutral rating over the long term (6-12 months). We believe IGT is focused on reducing its dependence on the domestic machine replacement cycle.
We consider this a prudent strategy as it brings consistency in top-line growth and increases earnings visibility going forward. The current product pipeline reflects strong growth expectations from non-machine revenues in systems; intellectual property and new games/software.
However, top-line growth remains elusive and we believe that lack of visibility on replacement sales, very few new openings and increasing competition, especially from Scientific Games Corp. (SGMS) will remain primary growth headwinds for 2011.
Currently, International Game Technology has a Zacks #4 Rank, which implies a Sell rating on a short-term basis.
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