Gaming device maker and social gaming operator International Game Technology (IGT) saw revenue and profits tumble in its fiscal Q1, but social gaming continued to shine. Total revenue fell 17% to $451m while net income fell 56% to $35m in the quarter ending Dec. 31. It could have been even worse, but fiscal Q1 2015 had one more week than the same period the previous year, which boosted revenue by $22m and operating income by $2m.
IGT CEO Patti Hart acknowledged that “market challenges remain in the land-based casino business” but tried to play up the performance of the interactive division, which includes the lucrative DoubleDown Casino social gaming operation.
The interactive division saw revenue rise 23% to $91.5m, of which social gaming accounted for $79.4m (also up 23%). DoubleDown’s daily average users (DAU) rose 11% to 1.9m, while average daily bookings (the sale of virtual goods and credits) per DAU rose 2% to $0.43. Average monthly users fell 16% to 5.2m, which the company credited to marketing targeting “higher-quality players.” Mobile users accounted for 39% of DoubleDown revenue, an improvement of 68% year-on-year. Meanwhile, revenue from the real-money IGTi operations rose 23% to $12.1m.
IGT’s gaming operations division saw revenue fall 5% to $211.1m, which the company attributed to a 16% decrease in the installed base of machines. Product sales revenue tumbled 39% to $148m due to lower machine unit volumes and the fact that the previous Q1 enjoyed a 2,800 video poker unit sale a further 825 VLT units in Illinois.
On the bright side, costs fell 7% despite the extra week in Q1, which the company credited to the March 2014 ‘business realignment’ aka laying off 7% of its global workforce. IGT declined to offer any guidance as to how it expected to fare in 2015 as a whole.
Last July, Italian lottery and gaming technology firm GTECH announced it would pay $6.4b to acquire IGT. A Feb. 10 date has been set for IGT shareholders to vote on the proposed merger of IGT and GTECH. Assuming the vote is favorable, the parties hope to conclude the merger by April.
