Casino gaming, entertainment and systems technology provider
International Game Technology
) and High 5 Games recently announced an extended partnership. As
per the terms of the deal, High 5 Games will continue to develop
new games, which will be published by IGT over the next several
As per the extended agreement, High 5 Games will develop
exclusive titles for all IGT markets that include land-based,
online and mobile games. The companies plan to release 16 new games
Big Dragon Lounge
That's A Hit
over the next few months.
IGT and High 5 Games relationship dates back to 2004. Since then
High 5 Games has developed more than 100 games for IGT, which
includes popular titles such as
Golden Goddess, Cats, Da Vinci Diamonds, Shadow of the
IGT continues to bear the brunt of a sluggish domestic market
due to lower play levels, higher unemployment rate and weak
replacement sales. To combat this scenario, the company is looking
for growth opportunities in the fast growing social and mobile
games market over the long term.
According to market research firm BI Intelligence, the U.S.
social gaming market (including mobile games) is expected to more
than double from approximately $2.0 billion in 2011 to
approximately $5.5 billion by 2015.
IGT is banking heavily on partnerships to solidify its position
in these fast growing markets. We believe that the newly extended
partnership with High 5 Games will further boost International Game
Technology's casino-based gaming portfolio, which will drive its
market share going forward.
IGT is also seeking expansion opportunities in international
territories to boost profitability. Over the past few months, the
company has entered into a number of partnerships with overseas
players including EspaceJeux.com. We believe that the company will
continue to focus on expanding its presence in international
markets and will further sign licensing agreements with leading
local providers over the long term.
However, we believe that the increasing investment in product
development will drive operating costs, which will remain an
overhang on the stock in the near term. Moreover, fewer new
openings and increased competition from
Bally Technologies Inc.
WMS Industries Inc.
) 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 carries a Zacks #4 Rank, which
implies a Sell rating in the short term.
BALLY TECH INC (BYI): Free Stock Analysis
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