In the corporate history of International Game Technology, there has arisen, at crucial points, savvy executives who have moved the company forward. Starting from the beginning in 1975, when it was founded as Sircoma Company by gaming pioneer William S. (Si) Redd, himself a castoff from another slot manufacturer, IGT has produced leaders that have been innovative, creative and non-traditional.
Redd’s hiring of Chuck Mathewson as chairman in 1986 was another turning point for the company. Under Mathewson’s leadership, the R&D dollars that IGT typically invests paid off handsomely with the debut of Megabucks, the first linked progressive slot system. IGT soon had the lion’s share of the casino market and other slot manufacturers were reduced to also-rans. Mathewson gathered a powerful team of executives that continued to encourage the innovation and sales that the powerful organization needed to drive its growth.
But the technology explosion in the early 2000s transformed those also-rans into fierce competitors, and IGT began to see market share slip away. Changes in the boardroom and executive suites throughout the industry allowed those competitors to continue to gain ground.
A decision to bring in board member Patti Hart, a former executive with Pinnacle Systems, Inc., Excite@Home, Sprint and other companies, as CEO may be sparking the kind of reinvigoration IGT already has experienced multiple times. Hart has built a team made up mainly of managers and executives with vast technology and management knowledge but little gaming experience. As she moves to transform IGT into a technology company, the new executives are also maintaining their focus on IGT’s current customers.
Technology-Driven
Some say it was IGT’s single-minded devotion to server-based gaming that caused the initial erosion in market share, but IGT Chief Operating Officer Eric Tom says that’s not the case now. He says IGT has a more balanced view, with games still being front-and-center as the most important aspect of the company.
“We spend well over $200 million a year in R&D,” says Tom, who came to IGT in July 2009 with an extensive background in technology companies like Qwest, Force10 Networks, Sprint and others. “That is almost double our nearest competitor. One of the things that we’ve really had a lot of energy and focus around is how we make that $200 million actually feel like a lot more. So while $200 million has been a constant number for IGT over the past several years, we’re getting a lot more out of that, because of some of the things we are doing.”
Tom says the company is building fewer games but spending more time and money on each game it rolls out. He says some of that R&D money is spent on market research.
“We think about game characteristics that resonate with players,” he says. “We perform market segmentation to understand different types of players, and the types of game characteristics, when combined together, that resonate with that type of player. We are very disciplined about building games by segment, most importantly in the volumes necessary to serve that segment, so that we don’t get too focused on one piece of the market. IGT prides itself in the ability to serve a very broad marketplace, so to us, these are not niches. These are important segments of the market we serve.”
So by using this research in combination with the design studios that have recently been refined, Tom says games are the key.
“Our business is making great games,” he says. “We may think about how to distribute the games through different mediums, but it always starts with the creativity that exists within the company. The development process that we’ve built at IGT over the last couple of years, whether it’s market research, market segmentation or other initiatives, are for the single purpose of putting our studios in the best position to create those games. We give them the guidelines, but it still requires just a li
