Walter Bugno, CEO, IGT International chats to Jack Bulavsky
We last spoke six months ago. How would you now describe the company and the coming together of IGT and GTECH?
What really stands out to me is the complementarity of the two legacy organizations and how well the new IGT has come together. When we exhibited at G2E Asia and AGE, it truly felt like we were one unified team that had worked together for much longer than just the few months since the completion of the merger agreement. I’m very pleased to see how our customers have embraced the new IGT. The expanded depth and breadth of our product offerings enables us to address customer needs across games, systems and solutions, on a global level, like never before.
If there are two or three things that have changed in how the company does business, what have they been?
I believe the new IGT has really taken on a more international approach. This is a natural result of bringing the two legacy organizations together, where individual strengths in particular markets now combine to create a greatly enhanced global presence. We now operate in more than 100 countries worldwide. This level of scale enables another evolution in our business, in that we can leverage our size to offer our customers a broader portfolio of solutions to help increase their revenues and profitability.
And how is business? How are your traditional markets doing and how is business in your emerging markets? Please name those emerging markets?
We have accomplished a lot since the completion of our merger agreement in April. In our second quarter results we reported a 17 percent increase in IGT’s international business on a pro forma constant currency basis. I’m pleased by our progress and the momentum we have in securing new and replacement business internationally. We see projected growth in economic activity for Europe in 2016. In APAC, despite slowing growth in the region overall, we are well-positioned there. Cambodia, Laos, Vietnam, Nepal, India and Sri Lanka represent emerging markets with opportunities for us. In Latin America, we’re experiencing good performance overall and expect that to continue with measured growth moving forward.
How do you stay ahead of the digital world with its constant changes?
The digital world provides a great channel for content distribution through our interactive and social gaming businesses, so we embrace it as a method for further leadership and innovation. Interactive is a viable method for expanding the scope of the player base to include a larger demographic, while creating affinity for games in casinos. In order to understand players, we have to provide gaming experiences where and how players want them. Greater technology and the concept of connecting players to casinos through online and social play appeals to players and can help foster industry growth.
The new IGT is such a large company. Is there still room to grow?
There is definitely still room to grow. The size and scope of the new IGT position us well for new growth. The depth and breadth of our products and solutions, combined with the strength of our relationships throughout the world give us unique competitive capabilities. We can leverage our range of product offerings to capitalize upon opportunities with market-specific solutions from ourportfolio of lottery, machine sales, systems and interactive.
What’s going to be the company’s message at G2E 2015?
We will have a large presence at the show that exemplifies IGT’s Winning Combination of games, systems and solutions. Our Customer First focus of helping our customers drive player engagement and profitability will be the driving force.
What new games or products will be showcased at G2E 2015?
At G2E we will demonstrate our portfolio of gaming products and services across all channels, including premium content, core titles, hardware innovations, systems technologies and interactive solutions. Among the highlights is our pairing of the most successful slot theme of all time, Wheel of Fortune, with the award-winning TRUE 3D technology in our debut of Wheel of Fortune Double Diamond 3D. We will also continue IGT’s tradition of bringing pop culture’s most touted licensed brands to the G2E trade show floor, with a number of new game introductions based upon some of today’s hottest TV and Internet shows. We’re also building upon the worldwide success of our S3000 cabinet by introducing a complementary tournament solution, Spin-Ferno, which is fueled by our Tournament Manager 5.0 system and empowers multi-site slot tournaments on banks of S3000 cabinets.
There’s an active conversation in Nevada about variable-payback percentages in slot machines, meaning skill-based gaming with arcade-game elements. Is this an international conversation? Your thoughts?
The skill-based gaming concept is interesting and right now Nevada is leading the conversation. In order to participate, like any other aspect of our business, we would consider the associated regulatory requirements and our customers’ needs before developing skill-based games. I think what is refreshing about the conversation is that the gaming industry acknowledges that we all need to continually innovate. That sentiment certainly resonates on an international level.
Gaming operators are showing more profit from non-gaming areas such as food and nightclubs. Are you concerned about this?
Today there are so many forms of entertainment in a casino, and everything works together to create a compelling destination. To keep gaming relevant we have to strike the balance between the pace of change and the investment required to keep pace. Understanding the player is of fundamental importance as we work together to address the different needs and interests among changing demographics. IGT can help operators understand players by providing them with sophisticated diagnostics tools, such as those that we offer from our systems solutions. Our systems solutions increase the quality and relevance of interactions with players, while helping operators optimize their floors so that they cater to different types of players.
