Officially spanning more than two years, the latest economic recovery cycle seems to follow the path of a carousel at times. During this same period, the proliferation of gaming has continued to explode, yet the stock prices of global gaming suppliers are treated like minor beneficiaries.
Coupled with stagnant job growth and protests on Wall Street, investors took notice of waning confidence levels by sending most sectors south, including global gaming manufacturers.
During the month of September, the markets pushed the AGEM Index back six months, causing it to take its largest one month fall in more than a year. Declining by 8.18 points or 7.2%, the index of 17 global gaming suppliers ended the month at 105.80. Only four companies – Aristocrat Technologies, INTRALOT SA, Lottomatica and Wells Gardner Electronics - reported monthly gains in their stock price, three of which are located in markets outside the United States.
Notably, global gaming suppliers are probably better positioned to take advantage of an expanding market than they have ever been. Focusing on core competencies and trimming fat while pushing forward with innovation has been the focal point for many during the latest downturn.
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That said, prior quarter earnings from a few larger gaming manufacturers continue to shed light on their uphill battle of convincing gaming operators to reinstate normalized machine replacement cycles.
On a positive note, WMS and IGT have increased new units sold in international markets over the last year. It’s likely overseas markets are going to continue to be a bright spot as gaming demand throughout Asia and Europe grows. This is evident in global gaming suppliers’ opening of new international offices and anecdotal evidence from G2E earlier this month, where
MGM Chairman and Chief Executive Officer Jim Murren said he expects “two or three” additional gaming markets to open in Asia. (E-10.12.11)
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