A leader in designing, manufacturing and marketing games, International Game Technology (IGT) recently announced its plan to install its sbX system at the Foxwoods Resort Casino in Mashantucket, Connecticut.
Foxwood Resort Casino selected the sbX system because of its ability to work in conjunction with other gaming manufacturers' systems.
sbX is the first server-based gaming solution that allows its operators to run their own choice of games at any time and also facilitates better casino floor management at lower operational costs. sbX also provides complete freedom to players in terms of game selection and experience (offers a more real-life feel of a casino).
sbX has multiple tools, which spice up the entire gaming experience. sbX Service Window provides a unique player interaction experience at the slot machine. The window provides options regarding information and services that the players and operators can optimize.
sbX Floor Manager allows access to the IGT game library, enabling operators to efficiently manage their casino floor with the mere touch of a button. Moreover, the IGT Floor Manager integrates seamlessly with IGT's AVP machine models.
Year to date, IGT has installed the sbX system at a number of casinos including High Winds Casino, Miami; Carson City, Nevada-based Casino Fandango and at the Enjoy Group’s Casino Rinconada de Los Andes in Chile.
IGT plans to expand sbX domestically and internationally, thereby driving growth. More than 40 casinos in 10 countries have already partnered with IGT for this server-based technology.
We anticipate that the broadening customer base will boost IGT’s top-line growth over the long term. Moreover, we expect the demand for sbX to remain high both domestically and overseas due to its cost effectiveness.
Our Take
IGT continues to increase its focus on core slot machine and associated technology businesses, as well as its online opportunities as reflected by the Entraction acquisition. IGT will showcase a number of new innovative mobile and online games at the Global Gaming Expo (G2E) from October 4-6, 2011 at the Sands Expo and Convention Center in Las Vegas.
IGT is also expected to launch a bunch of mobile and online games including MONOPOLY and Star Trek, along with other most popular games such as Cleopatra, Da Vinci Diamonds and Cats. We believe IGT’s focus on online and mobile games will drive revenues going forward.
Additionally, international expansion, an innovative product pipeline, focus on reducing dependency on the domestic machine replacement cycle and strong growth from the interactive business will drive significant upside over the long term.
However, sluggish macroeconomic conditions, lack of visibility on replacement sales, very few new openings and increasing competition from WMS Industries (WMS), Bally Technologies Inc. (BYI) and privately held Aristocrat Leisure Limited, will keep the stock range bound in the near term.
We have a Neutral recommendation on the stock over the long term (6-12 months). Currently, IGT has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.
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