(By Mani) The Global Gaming Expo (G2E) will take place in Las Vegas from Oct. 1 to Oct. 4 at the Sands Expo & Convention Center. A number of gaming companies such as Bally Technologies Inc. (NYSE: BYI), International Game Technology (NYSE: IGT), WMS Industries Inc. (NYSE: WMS) and Shuffle Master Inc. (NASDAQ: SHFL) will participate in the event showcasing new game content, new software technologies and server-based game applications.
In the event, themes such as limited visibility, a largely stagnant replacement cycle with little optimism for accelerating operator capital spend in 2013, and increased competition from smaller manufacturers will also continue to resonate.
"As such, we believe content and innovation will again be the key to identifying the winner from this year's show as we no longer believe the show serves as a positive catalyst for the group in general," Deutsche Bank analyst Carlo Santarelli said in a client note.
In addition, the breadth and depth of product offerings from smaller, non-core equipment manufacturers will continue to heighten competition in 2013. Other concerns are iterations in the types of product and how recent casino openings are impacting replacement demand, if at all.
Now let's see what the gaming companies could potentially showcase at the event.
After a strong G2E in 2011, where Bally Technologies unveiled its Michael Jackson and Grease games, it has a tough act to follow and investor attention will gravitate to its WAP follow-on titles.
"We think much of the sentiment towards BYI coming out of the show will relate to the strength of these titles and slot floor manager commentary around their level of excitement for them. We also expect BYI will continue to expand its content library for its Alpha II platform," Santarelli said.
Though, Bally may not launch any games as exciting as last year, it will showcase a broad range of titles that further solidify the Alpha II platform. Additionally, Bally intends to roll out incremental bonusing applications for its Elite Bonusing Suite, a product that has been well-received by most operators to date.
In addition, International Game Technology will showcase its strong suite of licensed brand content with follow-on titles to existing game themes. Additionally, it plans to build upon its existing video poker games with new game introductions, a clear response to potential competitive pressures.
"Once again, we believe IGT will exhibit a larger portfolio of localized content for international markets," the analyst wrote.
Meanwhile, WMS may exhibit a multitude of new titles for inclusion in both its for-sale and gaming operations segments. Furthermore, WMS intends to further extend product offerings on its existing stable of game themes, namely "Monopoly" and "The Wizard of Oz."
On the hardware front, WMS is likely to introduce two new cabinets this year, with one being a gaming operations specific cabinet and the other an update to the Bluebird line.
With respect to "My Poker," which debuted last year at the show, WMS will expand its new poker game with enhanced customization capabilities and additional game features.
"Given exclusive arrangements with Caesars and Station Casinos, we believe WMS's My Poker has the potential to gain traction, though many have tried to compete in this field and have been unable to do so in scale. We expect this to be a topical issue coming out of the show," Santarelli noted.
In addition, after introducing the new MD3 shuffler at G2E in 2011, Shuffle Master is expected to introduce the next generation of the Deck Mate shuffler. With approximately 7,000 Deck Mate shufflers in markets today, a substantial portion of future earnings hinge on the success of the new Deck Mate.
"On the proprietary game front, we believe SHFL will continue to extend its current suite of titles with enhancements and tweaks to its existing portfolio. Additionally, we believe SHFL will showcase new content for its progressive and side bet offerings," the analyst added.