International Game Technology
(
IGT
) recently launched a free-to-play version of its popular online
slot reel game
Da Vinci Diamonds
through the Double Down virtual Casino on the social networking
site
Facebook
(
FB
). IGT acquired Double Down Interactive, the operator of the
virtual casino in January this year.
Double Down Casino is the most popular casino-style social
gaming application on Facebook, with more than 5.2 million monthly
active users, according to AppData. There are currently 20 games
that players can enjoy at the Double Down Interactive online casino
on Facebook. Double Down is the exclusive license holder of the
social version of
Da Vinci Diamonds
, originally developed by High 5 games.
Da Vinci Diamonds
is a 3x5, 20 payline game, with a jackpot of 5000 coins. The most
interesting features of this slot game are the Tumbling reel and
free spin bonus which significantly increases the chances of a big
win. Under the Tumbling reel feature symbols which made the winning
combination disappear and new symbols drop in sequence to fill in
the empty positions.
IGT launched the game way back in 2007 and the online version
was exclusively available from its Wagerworks subsidiary. However,
due to the legal prohibitions regarding Internet gambling in the
U.S., the game was available only in Alderney, Gibraltar, United
Kingdom and Malta, where online gambling is legalized. Despite this
constraint
Da Vinci Diamonds
turned out to be the most successful online slot reel game for
IGT.
Da Vinci Diamonds
is IGT's only slot game that is now available on multiple platforms
including social, online and land based casino. IGT expects to
launch a mobile version of the game going forward. We believe that
the platform expansion will further boost the game's popularity and
user base over the long term.
We believe that this will also boost IGT's top-line growth going
forward. Although the game is free to play in Facebook, the company
is expected to generate significant revenue from advertisement and
through the in-game sale of virtual goods in exchange for virtual
currency, which is known as micro-transactions.
Meanwhile, IGT recently announced that the Nevada Gaming
Commission (NGC) has granted the company license for online gaming.
Upon getting the nod, IGT will be able to bring its online
portfolio of interactive games to the Nevada casinos. We believe
that this will further boost IGT's revenue generation capability
through its interactive gaming portfolio going forward.
We believe that IGT stands to benefit significantly from the
massive growth opportunity of social and mobile games 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 more than
$5.5 billion by 2015. As per data from eMarketer, the majority of
online gamers in the U.S. will soon be mobile gamers, reaching 174
million by 2016 from 80.8 million in 2011.
We believe that IGT has a strong product pipeline based on the
acquisitions of Double Down and Entraction, which will help it to
further penetrate the social and mobile gaming market. This will
offset a sluggish domestic market due to lower play levels, a
higher unemployment rate and weak replacement sales.
IGT is also seeking expansion opportunities in international
territories to boost profitability. We believe that IGT will
continue to focus on expanding its presence in international
markets and will benefit from its licensing agreements over the
long term.
We have a Neutral recommendation on the stock over the long term
(6-12 months). Currently, IGT has a Zacks #2 Rank, which implies a
Buy rating on a short-term basis.
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