International Game Technology
's (
IGT
) popular slot game 'Cleopatra' is being made available on mobile
devices by DoubleDown Interactive. The mobile-based Cleopatra is
compatible with
Apple
's (
AAPL
) iOS devices as well as with
Google
's (
GOOG
) Android based devices, enabling the game to reach out to a
large number of gamers.
This is DoubleDown Casino's second game in the mobile format,
after Da Vinci Diamonds. IGT's DoubleDown Casino has been
offering online versions of IGT's traditional casino-style games.
Now, the company's expansion into the mobile gaming segment has
diversified its revenue base. IGT is expected to release mobile
editions of its popular titles such as ELVIS A Little More
Action, Kitty Glitter and Wolf Run.
In the last reported quarter, IGT's top line had expanded 17%
year over year, aided by strong performance from the interactive
business and higher product sales. Interactive revenue was $53.9
million compared with $13.4 million in the year-ago quarter.
Social gaming revenue was $35.8 million while IGTi revenue was
$18.1 million in the reported quarter.
We believe that IGT's diversification in the mobile segment is
a long-term positive strategy. 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.
Though IGT is a comparatively new entrant in the online social
and mobile gaming market, we believe that DoubleDown's strong
product portfolio and customer base will provide it a competitive
edge over other established players.
We believe that IGT will be benefited by new contract wins
along with an improving domestic gaming environment,
international expansion opportunities, an impressive product
portfolio, reduced dependence on the domestic machine replacement
cycle and strong growth from the interactive business going
forward.
Additionally, the company is keeping pace with technology
demands and has made headway with its IGT Cloud offering. We
expect the IGT Cloud services to gain traction in the casino
gaming industry, as it is expected to be well received by new
casino properties, thereby improving the company's top line.
However, increasing competition from
Bally Technologies Inc.
(
BYI
) and
WMS Industries Inc.
(
WMS
), and increase in operating costs due to investment in product
development are the headwinds going forward.
Currently, IGT carries a Zacks #2 Rank, which implies a Buy
rating in the short term.
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