Interactive revenues boost IGT
Third-quarter revenue rise driven by online, although social business Double Down sees drop-off in users.
Interactive revenues contributed significantly to a strong third quarter for US-facing manufacturer International Game Technology (IGT), with the channel contributing the bulk of the company’s 9% year-on-year revenue growth.
Revenues from gaming operations climbed 13% in the quarter to US$301m, with IGT noting that “Excluding the interactive businesses, revenues were flat.”
However the company’s social business Double Down Interactive, acquired for $500m in January this year and described in the Q2 results as having contributed “accelerated growth”, saw the number of monthly users drop 7% quarter-on-quarter to 5.2m.
Operating income dropped by close to one third year-on-year, coming in at $95.5m, although much of this was down to $26m in acquisition-related costs.
CEO Patti Hart explained in an analyst call following the results: “Our interactive business, inclusive of Double Down, is performing out ahead of really where we would expect it to be at this point.
“We have a couple of new products launching in August and our assumptions around our ability to drive daily average users is still not as predictable for us, being new owners of that business, as maybe we’d like for it to be,” she added.
IGT has already launched a number of social casino titles on Double Down, notably the Da Vinci Diamonds slot and the freeplay Texas Hold’em Poker offering, and Hart said: “To really move it, it’s all about mobile, mobile, mobile for us in the Double Down area.”
Meanwhile the company’s real-money poker business, IGT Poker – renamed from Entraction earlier this year – is not broken down into detailed numbers. This month has seen the network block players from several more countries including Belgium and Australia, according to Pokerfuse.
Hart explained in the analyst call: “Poker has been a significant contributor to IGT since our inception. We were founded as a video poker company, so it’s a part of our heart and soul. But it’s going through its own level of changes.” However much of her discussion of poker centred around video poker rather than the online variant.
An eGR source revealed that IGT’s former VP of corporate development and strategy was relieved of his duties after less than a year in the role, a consequence of “lamentable due diligence” with regards to the Entraction acquisition.
Other executives have also departed this year, with executive VP of interactive Gideon Bierer now working on a number of start-up projects after what he has described as an “amicable” exit, and former VP interactive sales of business development Alex Kelly also leaving the company.
Chief financial officer John Vandemore said: “We think that our interactive business as a whole, including the real money wagering products in Europe, continue to require operating cost investments,” adding that “We will continue to invest in those businesses as long as we have faith that ultimately, the revenue is going to continue to grow at the rate it’s growing at.”