International Game Technology (IGT - Snapshot Report) will provide its online and mobile games to Loto Quebec, an online casino gaming company. Loto Quebec will have access to IGT’s wide array of online and mobile casino style games through IGT’s remote gaming server (IGT rgs).
IGT will offer popular game titles like Cleopatra, Da Vinci Diamonds, Cats and Coyote Moon to Loto Quebec. These mobile-based games are compatible with Apple’s (AAPL - Analyst Report) iOS devices as well as with Google’s Android-based devices, enabling the game to reach out to a large number of gamers.
Recently, IGT has entered into a similar partnership to provide online games with Mr. Green and Betsson. We believe that IGT’s diversification in the mobile segment is a long-term positive strategy.
According to the market research firm, BI Intelligence, the U.S. social gaming market (including mobile games) is expected to increase more than two-folds from approximately $2.0 billion in 2011 to approximately $5.5 billion by 2015.
Though IGT is a comparatively new player in the online social and mobile gaming market, we believe that the company’s strong product portfolio and its customer base will provide it with a competitive edge over other established players.
We believe that IGT will benefit from new contract wins along with an improving domestic gaming environment, international expansion opportunities, an impressive product portfolio, reduced dependence on the domestic machine replacement cycle and strong growth from the interactive business, going forward.
Additionally, the company is keeping pace with technology demands and has evolved with its IGT Cloud offering. We expect the IGT Cloud services to gain traction in the casino gaming industry, as it is expected to be well received by new casino properties, thereby improving the company’s top line.
However, increasing competition from Bally Technologies Inc. and higher operating costs due to investment in product development are headwinds, going forward.
Currently, IGT has a Zacks Rank #2 (Buy).