Q2 AND Q3 MARKET SHARE COULD BE MISLEADING

We’ve found seasonality in slot ship share; something to think about when making judgments about quarter to quarter shifts.

If history holds, IGT should see a sequential market share gain when calendar Q2 unit figures are released.  However, before anyone runs out and calls an end to IGT’s chronic ship share losses, understand that seasonal shifts may explain most of the changes.  In the following chart, we’ve analyzed the seasonal shifts in quarterly ship share.  For IGT, BYI, and WMS, each bar represents the percentage of average annual ship share for each of the four quarters for the period of 2007-2009.

Q2 AND Q3 MARKET SHARE COULD BE MISLEADING - SLOT FINAL

Aside from the aforementioned CY Q2 shift in IGT, the only other notable shift occurs in CY Q3 where WMS typically gives back a lot of share.  Unlike IGT and WMS, BYI's share is usually consistent throughout the year.  Although as we noted in our post last week, Konami is likely to give up a lot of share from CY Q1 to CY Q2 which could benefit all three US suppliers.  Konami's fiscal year end is March 31st and they tend to be very aggressive in that quarter.  IGT apparently captures the lion's share of Konami's sequential decline.  WMS maintains a lot of exposure to the Midwestern markets, which generally experience their strongest quarter in CY Q3.  Thus, customers tend to order a lot of WMS products ahead of the big July 4th weekend, which falls in CY Q2.  WMS's FY 4Q also ends in June which may spur sales as salespeople strive to meet annual quotas.