ASP’s have been stable despite historically weak demand.
Over the last 5 years, average selling prices (ASP’s) for slots have increased at a healthy clip. Since 2007, ASP’s for the 4 public suppliers increased 22%. Over the last year though, we’ve seen ASP growth decelerate to about 3%.
The industry also experienced some dramatic shifts in wallet share since 2007 among the ‘Public 4’. WMS’s wallet share jumped 15% from 19% in 2007 to 34% in 2010 at the expense of BYI, IGT and to a smaller extent, ALL. During the first half of 2011 we saw some reversal of this trend as WMS was the biggest wallet share donor – losing 3% YoY mostly to BYI and IGT, who each garnered 2% more of operator wallet share.
Despite the big moves down in their stocks following calendar Q2 earnings releases, both WMS and BYI increased their wallet shares this past quarter. Consistent with our replacement demand analysis, the pricing picture does not seem as dire as the recent stock price performance suggests.