Q: What was your decision to scale back the Australian operations?

A: It was basically due to the operating results of the company and the need for change.
IGT Australia's performance since its acquisition of Olympic Video Gaming a year ago has been very disappointing. It's been very inconsistent with the operations and financial success of IGT we've achieved in other parts of the world.
Essentially we did not bring together the two brands effectively to capitalise on what should have been a strengthened position in the marketplace, and the company was not managed effectively.
We've since written down US$92 million in good will from the acquisition, and restructured the company.

Q: Do you believe this will affect the perception of your position in Australia?

A: We're not in any way leaving the market place.
Even though we've had staff cuts, our 350-strong employee operation is still larger than many of our competitors. We've looked at our product line and have a stronger focus than before and are definitely moving forward. IGT is also concentrating on games development through our two facilities in Sydney and Melbourne.
So in effect, we're strengthening our position in Australia by being able to draw on our development houses in the UK, Europe and the USA to supply the best product lines.

Q: How many games do you expect to release over an eight-week period?

A: We would prefer not to disclose that information in such a competitive market place.

Q: Will IGT Australia only supply the Australian market, or do you hope to supply export markets?

A: We certainly won't ignore our customers in markets such as Singapore and Malaysia.
Australia has supplied some of the gaming machine jurisdictions in Asia as well as the Far East. We've also supplied some of these markets from Reno, and will continue to work together.
Unfortunately there's not a tremendous amount of business in Asia at the moment, but there's enough for us to continue.

Q: Do you believe that the other gaming machine manufacturers in Australia will all survive?

A: I don't know the answer to that question, but we'll certainly survive. We've been in Australia for over 13 years

Q: If Aristocrat is licensed in Nevada are they likely to erode IGT market share? Is Williams eroding IGT's market share?

A: Aristocrat is a strong competitor and we compete with them in other markets. In terms of eroding our market share, we won't let them if we can help it.
In terms of Williams, they've done a good job with the video product they have developed over the past few years. Although video has not been as successful in the US as it is in Australia, they sell over 10,000 machines a year and have taken a good share of the spinning reel video segment. Nevertheless, the most popular video game in the US is IGT's Triple Play Poker game.

Q: Do you see continuing growth in the global gaming machine industry, and where do you see the most growth and current trends that will carry us into the next few years?

A: Yes, I see growth but believe it will come from new technology and new features we can offer with our products to provide more entertaining games.
Technology enhancements within the games will allow IGT's business to grow.
In particular, I believe that there will be a continued movement towards cashless gaming and multi-denominational games. Perhaps down the track we will see an assimilation of gaming machines as we know them with ATM's to offer debit card gaming.

Q: Is participation in an operator's earning the future and a fair way to go? Or, do you believe that's it's fair for a manufacturer to participate in a location's earnings?

A: We believe that pricing to date has been fair. Value for the product is related to its popularity. Unlike Australia where machines are purchased outright, the US model has traditionally revolved around investment in a game. It's now moving toward a rental fee, which offers operators an open-playing field and more "bang-for-the-buck".