International Game Technology is recognized as a world leader in the design, development,
manufacturing, distribution and sales of computerized gaming machines and systems
products in all jurisdictions where gaming is legal. Currently, we operate in
two lines of business: product sales and proprietary gaming.
International Game Technology principally served the United States (US) gaming
industry when founded in 1980, expanding into jurisdictions outside of the US
in 1986. In addition to our US production facility in Reno, Nevada, we also
manufacture our products in the United Kingdom (UK) and through third party
manufacturers in Japan and Canada. We currently maintain sales offices in various
locations across the US, Australia, Europe, Japan, Latin America, New Zealand,
South Africa and the UK.
International Game Technology was incorporated in Nevada in December 1980 to
acquire the gaming licensee and operating entity, IGT, and to facilitate our
initial public offering. In addition to our 100% ownership of IGT, International
Game Technology has the following directly or indirectly wholly-owned subsidiaries:
I.G.T.-Argentina S.A. (IGT-Argentina); I.G.T. Australia Pty. Limited (IGT-Australia);
International Game Technology (NZ) Ltd. (IGT-NZ); IGT do Brazil Ltda. (IGT-Brazil);
IGT-Europe B.V. (IGT-Europe); IGT-Iceland Ltd. (IGT-Iceland); IGT-Japan K.K.
(IGT-Japan); IGT-UK Limited (Barcrest); International Game Technology-Africa
Pty. Limited (IGT-Africa); International Game Technology S.R. Ltda. (IGT-Peru);
Sodak Gaming, Inc. (Sodak), and Silicon Gaming, Inc. (Silicon); VLC, Inc. (VLC);
IGT OnLine Entertainment Systems, Inc. (OES) sold in November 2003
IGT operates principally in two lines of business: Product Sales and Proprietary
Gaming
IGT's standing as a leader in the global gaming market is built largely on
our ability to develop and design platforms and related games that people want
to play combined with our innovative systems to improve casino operations and
profitability. Our emphasis and investment in research and development (R&D)
has allowed us to maintain our leadership position in the industry. We have
five design centers located worldwide, in addition to our primary development
team located in Nevada. These strategically located centers provide us with
a local presence and access to our customers, allowing us to respond to market
needs and preferences in a timely manner.
We are a prominent designer and provider of games, platforms and systems to
the gaming industry.
We combine the development of creative designs and technological advancements
with our entertainment license library and patented intellectual property to
provide gaming machines with a high degree of player appeal.
Platforms
Our Intel based 80960 platform development includes: the Game King' video platform,
which offers a single or multi-game format with a touchscreen monitor utilizing
the iGame-Plus' interactive video games with animated graphics and secondary
bonusing features; the Vision Series', a spinning reel slot combined with a
full color liquid crystal display; and the S2000' spinning reel platform which
combines one of the broadest game libraries with upgraded processor boards and
an enhanced sound package. Multi-line, multi-coin video based games are currently
among the most popular games on the casino floor. In response to this trend,
our products employ advanced technology to enhance entertainment and communication
features while retaining many of the familiar and popular features of older
games.
During fiscal 2003, we introduced a new line of spinning reel games that include
a 4-reel series with a bonus round or a 5-reel series. This diversification
in the spinning reel segment, coupled with our themes provided our customers
with another set of games for their casino floors. As a result, demand for our
S2000'product line increased.
The VLC 8800' platform continues to hold a significant market share in the
government sponsored public gaming or video lottery markets, as governments
replace their older equipment. The 8800s can connect to all the major domestic
video lottery control systems. This platform offers a multi-game format with
Multi-Denomination' and second screen bonus features. We are working with our
customers as we transition from this 8800 platform to the next generation based
on our 80960 Intel processor board platform. We have service level agreements
for 8800 platform games through 2005 and maintenance through 2010.
In fiscal 2002, we introduced our latest platform, the pc-based Advanced Video
Platform (AVP') that provides improved graphic capabilities such as full screen
live streaming videos and animations with bright vivid colors along with an
enhanced stereo sound system. The AVP' processor greatly expands the storage
capacity allowing space for complex bonusing features. Recently we introduced
our new Reel Touch' Series machine, which offers added features, including an
interactive touchscreen display for bonus games placed above a 5-reel spinning
slot. In conjunction with this machine we also introduced our EZ Touch' touchpad,
which allows players to change the game's denomination at the touch of a button.
We are internally developing central determination games, related systems and
terminals. This technology applies to video lottery markets such as the New
York racinos and the Native American Class II market.
Systems
Our casino management system software supports our comprehensive family of
IGT Gaming Systems' (IGS') products. This system software includes integrated
or stand-alone modules providing casino operators with real-time information
in the areas of slot machine performance, patron management, reporting and analysis
for table games along with credit and banking data.
Our EZ Pay' Ticket-in Ticket-out (TITO) system provides slot machines with
the capability of accepting tickets, enabling players to move from one machine
to another without the inconvenience of handling coins. Casinos have the option
to use both coin hoppers and ticket-in machines connected to the EZ Pay' system.
This technology works with both IGT and competitors' slot systems and integrates
into casinos' existing systems and internal controls, while meeting the regulatory
requirements of each gaming jurisdiction. Our one-wire configuration is referred
to as the Integrated Voucher System' (IVS'). This provides our EZ Pay' software
application with the ability to communicate with IGT's own and other vendors'
slot systems or the casinos' current systems, using the existing casino floor
network. IGT was the first to introduce TITO systems and continues to lead the
industry with over 50% of the TITO systems installed. We have tested and installed
our EZ Pay' system in many of the largest casino properties and have received
regulatory approvals in a majority of domestic gaming jurisdictions.
The growing popularity of the low denomination multi-line, multi-coin gaming
machines has had a significant impact on the evolution of TITO technology. Because
of the volume of coins handled and paid out by these types of games and the
associated casino costs, these games are excellent candidates for the TITO technology,
such as EZ Pay'. All of our new games will be in a Multi-Denomination' format
that can be readily adapted for use with our EZ Pay' system or other TITO systems.
We continue to expand upon the functionality of TITO and EZ Pay' with additional
system updates and enhancements. Wireless validation terminals expand the level
of customer convenience by providing properly equipped floor attendants with
the ability to validate tickets, print receipts and pay customers on the casino
floor. EZ Pay' Ticket Redemption Stations' provide another convenient way for
players to redeem cash-out tickets. Using the automated ticket redemption device's
high security, electronically controlled coin and currency hopper, players can
redeem cash-out tickets right on the casino floor. We anticipate that future
developments will include EZ Pay' promotional tickets that can be loaded with
credits and sent out to attract new customers or reward valued players.
Acres Bonusing' technology enables the design and delivery of bonuses and other
promotions directly to players at the point and time of play. The Acres Advantage''
suite of applications provides operators with a fully integrated casino management
system solution. Built on the Microsoft Windows SQL platform, Acres Advantage''
provides the instantaneous information needed for management decision-making.
COMPETITION
The market for gaming machines and proprietary systems is intensely competitive.
The principal method of competition is product development. A library of strong
performing games and intellectual property can be a competitive advantage. Other
methods of competition include quality and breadth of sales and service organizations,
financial strength of the manufacturer, and pricing.
US and foreign manufacturers that compete with IGT in the domestic casino style
gaming machine market include Aristocrat Leisure Limited (Aristocrat); Bally
Gaming Inc., a subsidiary of Alliance Gaming Corp. (Alliance); Atronic Casino
Technology, Ltd. (Atronics); Mikohn; Konami Co. Ltd. (Konami); Shuffle Master;
Sigma Game, Inc. (Sigma); Sierra Design Group, soon to be purchased by Alliance;
Spielo, recently acquired by GTECH; Universal Distributing, Inc.; and WMS Industries
(WMS). All have developed casino products and are either authorized to sell
products or are in the licensing process in many US gaming jurisdictions.
There are several competitors for the international markets including Aristocrat,
Atronics, Aruze, (formerly known as Universal), Bally, Cirsa Group, Franco Gaming,
Ltd., a division of Recreativos Franco, Konami, Stargames, Ainsworth Gaming
Technology and Novomatic Industries.
In the accounting and player tracking systems product market, our casino data
management system competes with products offered by Bally, Aristocrat, and several
other systems manufacturers.
IGT's competitors in the progressive systems market are Bally, Aristocrat and
Atronics. Our competitors in the stand-alone recurring revenue market are Bally,
WMS, Aristocrat, Mikohn, Shuffle Master, Sigma and Atronics. We provide substantial
marketing and advertising support for our proprietary gaming products and compete
on the basis of our extensive infrastructure, popular brand names, product appeal,
jackpot awards, player loyalty and technical and marketing experience.