IGT’s online division continues to grow, but gaming machines are becoming less popular.
After reporting a 2.1% overall increase in revenues during the first quarter of its fiscal 2014, gaming machine manufacturer International Game Technology (IGT) warns that there is potential of “further downside risk.” The company’s revenues reached a total $541 million, with figures for the last three months of 2013 up by 22.3%, but officials say full-year profits might end up lower than predicted.
The number of installed MegaJackpots machines has reduced and this is said to have caused a the biggest loss in gaming revenues. IGT is now taking measures to mitigate this risk and the company announced it would be cutting costs in certain departments. On Thursday, shares have dropped almost 9% in after-hours trading.
Meanwhile, sales revenues went up after an agreement with Caesars Entertainment to supply the casino with 7,000 video poker terminals. Machine sales saw an increase of 21% in the Asia-Pacific region and a painful 53% drop in Latin America.
Online business booming
The company’s interactive division is doing significantly better, reporting an impressive 41% increase. After last year’s changes to American gambling laws brought internet gambling to a few states, IGT now has 8 online casino partners in New Jersey.
Social gaming operator DoubleDown Casino is one of IGT’s most important clients and company CFO John Vandemore claims their mobile casinos “continue to outperform desktop.”