EILERS – FANTINI Quarterly Slot Survey

The EILERS-FANTINI survey is designed to track slot machine and related technology purchasing trends on a quarterly basis and is the gaming industry’s largest slot survey in terms of total casinos and slot machines surveyed.
This quarter’s report represents our 16th proprietary slot survey and includes record-level responses from key purchasing agents at a number of North American commercial and tribal casinos, several racino/VLT operators and six international participants.
In total, the 82 survey participants collectively operate 238 gaming venues with about 280,933 total slot machines or equivalent gaming devices. The 76 North America participants operate 203 casinos and about 261,660 slot machines, representing about 27.3 percent of the total install base of machines in North America.

Key Survey Highlights:
• Purchasing activity for 3Q CY13. The North America survey participants purchased and took delivery of 16,738 slot machines in 3Q CY13, including 6,231 new and expansionary units and 10,507 replacement units while also purchasing 4,499 conversion kits. Our international participants purchased 468 games in the quarter, including 456 replacements and 12 new and expansionary units and 162 conversion kits. Based on this quarter’s survey results, we estimate total North America replacement sales are likely to be about 22,400 games in 3Q CY13 (+14 percent year-over-year) with total unit demand at about 29,000 game sales (+18 percent year-over-year), which includes new and expansionary units.
• IGT leads the pack with large video poker order. Survey participants purchased 54 percent of their games from IGT in the quarter driven by a large video poker order and final Canadian VLTs replacement sales. However, excluding Canada VLTs and video poker, survey participants only purchased 30 percent of games from IGT, which was 5 percentage points below the company’s TTM average. Also, excluding Canada VLTs and video poker, Aristocrat Technologies, WMS, Bally Technologies, Multimedia Games, Aruze Gaming and Ainsworth all gained ship share in the quarter.
• Non-Big five vendors continue to take share. We note Non-Big five vendors continue to take market share in North America with survey participants purchasing 12 percent of games from Non-Big five vendors during the quarter. Excluding Canada VLTs and IGT video poker, participants allocated 14 percent of purchases to Non-Big five vendors versus 9 percent on a trailing basis with Multimedia Games, Ainsworth and Aruze leading the pack.
• Gaming operations are expanding. This quarter our survey participants added 411 (net) recurring-revenue games, which included 109 net additions from new casino openings, 130 net additions from 100 percent leased Class II and VLT casino operators, and another 172 net adds at existing traditional casinos. As for suppliers, Aristocrat, WMS, Bally and Multimedia Games all showed healthy net additions to their lease install base while IGT was the primary share donor in the quarter.
• Top performing premium-leased titles. IGT’s Wheel of Fortune® remained the gaming industry’s top performing premium leased game in this quarter’s survey, although the company’s total share of top-performing games declined again from 37 percent to 34 percent in the quarter. WMS’ Wizard of Oz brand was the second best performing premium-leased title this quarter, and the company’s highly anticipated Willy Wonka & the Chocolate Factory branded game was the third best performing premium leased game in the quarter.
• GTECH Sphinx 3-D was voted most anticipated game. GTECH’s Sphinx 3-D game was the clear winner this quarter, earning 40 percent of the votes. IGT’s AVATAR™ branded game was cited as the second most highly anticipated game with12 percent of the votes. Aristocrat also had a strong showing with two of its new titles being highly anticipated, including The Walking Dead and Batman earning 9 percent and 8 percent of participant votes, respectively.
• Bally had the best G2E showing. According to our survey participants, Bally was the top supplier at G2E this year, receiving the highest ranking, followed by Aristocrat, WMS and then IGT. We note Bally also received the top G2E supplier ranking last year as well, while Aristocrat made the biggest jump over the previous year.
• Slight increase in CY14 replacement demand. Our 76 North American survey participants expect to replace 7.4 percent of the casino-owned games on their floors in CY14, which is slightly ahead of our current CY13 replacement expectations (ex. Canada VLTs) implying low single-digit growth in CY14 vs. CY13.

• Interest in Picture-in-Picture (PiP) and printer-based target couponing technology remains steady. Roughly 30 percent of participants plan to install Picture-in-Picture (PiP) system technology over the next 12 months, and roughly 18 percent of participants plan to install printer-based targeted promotional couponing technology. Both metrics are consistent with prior quarter responses.
• Multimedia Games had the best slot tournament solution. Based on our 3Q13 survey, participants overwhelmingly cite Multimedia Games’ TournEvent® as the best slot tournament solution in the market, followed by Bally’s iView DM Tournaments™ and IGT’s Tournament Manager.

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