Here are the BYI notes from our meetings in Las Vegas last week
Replacement demand:
- Casino budgets were set by corporate in October/November- so calendar 2009 will remain lackluster
- They are not expecting big improvements in 2H09
- They think normal replacement is 7-10 years. So 70-100k is "normal"
- Ohio, IL and Italy are all centrally determined markets and BYI claims that WMS can't really participate in those markets
New casinos/markets:
- BYI attained 20% market share at City Center, IGT got 50%, WMS got 22%
- Illinois - They are meeting with a distributor in Chicago. Video poker pays back 98% so you need a multi-pack offering. They don’t think that IGT gets more than a third. Systems is another big opportunity. With respect to timing, they will have a better idea on timing Thursday
- PA - doesn't think VLTs will happen
Participation:
- They only have a few products in the WAP category. They have 700 digital towers in the queue - lap or fixed fee
- BYI differentiates their participation games by performance solely
- They have 14 test banks to see what works. Licenses are tough to get and expensive. They are launching new games in the WAP business, which is a very tough segment to penetrate
- WMS is doing a great job in WAPs and community gaming. WMS is being very aggressive
Mix:
- Steppers: strongest space
- Video: think that this will be their strongest G2E
- V32 video is performing very well for them. They don't have great video for cinevision. They will do a bunch of wheel games too
International:
- The international market is a huge opportunity for them - 16% of revenues and 22% shipped
- Europe is 70% Novamatic
- Australia - ALL owns that market 60-70% but is 3rd in terms of ship share. BYI is about 20% there
- BYI has very good relationships in some European markets/Australia
- They are re-launching in Australia this month. A monopoly expires in Victoria in 2012 - so that's a big opportunity consisting almost entirely of video machines
- They are working on South America/Europe. They are getting bombed by distributor type deals
General commentary:
- They don't think the economy is recovering - just bouncing along the bottom
- No question that new units will be way down next year
Products:
- They have 40k S6000k’s in the field
- They have 46 titles on the big spinning reel games. Digital towers. V32 (tower like - similar to “Deal or No Deal”). Have 7 new titles vs just one
- Dual vision is like a wheel of fortune game - 2 people can play together. The performance has been very strong - couples play it. Daily fee or participation
- Fireball - it’s their hottest title. Digital tower series
- Power strike - very strong - cinevision
- Reel money - V32 really cool. Cash meteors - can spin - touch screen
- Cash wheel - spinner on cinevision