Scientific Games Corp’s development of a common software and operating system for the various casino gaming machine brands it has acquired since 2013 is likely to be welcomed by investors, said Telsey Advisory Group in a note on Tuesday. It followed a meeting on Monday with senior management from the gaming equipment and lottery management firm.
Telsey analysts David Katz and Brian Davis also highlighted that Scientific Games’ new software and operating system – known as Argos – would be what they referred to as “backward compatible”, meaning it could be applied to legacy products as well as new ones.
Gavin Isaacs, president and chief executive of Scientific Games, had mentioned in an interview with GGRAsia earlier this year that the firm would move to a single operating system for its large catalogue of casino games and electronic equipment.
Mr Katz and Mr Davis noted that the use of a single set of technical protocols was “intended to save considerable time and resources in the [product] development and approval process, as well as providing greater flexibility to service customer needs”.
The analysts added that more information about Argos would be available at Scientific Games’ stand at the Global Gaming Expo 2015 trade show in Las Vegas next month.
The duo said the new platform “should alleviate concerns about obsolescence among the brands”.
“Overall, we believe the strategy is prudent and should be effective in the long term, which is critical, given that it comprises 68 percent of total segment EBITDA [earnings before interest, taxation, depreciation and amortisation] according to our 2015 estimates,” they stated.
On August 3, U.S.-based Scientific Games posted a 66-percent year-on-year jump in second quarter revenue to US$691.5 million. Its net loss for the period however widened to US$102.2 million from US$72.4 million a year earlier, affected by costs and charges related to the acquisition and integration of gaming equipment makers Bally Technologies Inc and WMS Industries Inc, the company said. The acquisition of Bally Technologies was completed in November in a deal valued at US$5.1 billion.
Bally Technologies had previously acquired Nevada-based table games equipment and slot machine supplier SHFL entertainment Inc in a US$1.3-billion transaction.
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