By Stuart Condie
SYDNEY--Slot-machine maker Aristocrat Leisure plans to maintain spending on developing new games even if revenue growth slows under the weight of weak consumer sentiment, including in the U.S., the Australian company's chief executive officer said.
Aristocrat's experience through the Covid-19 pandemic--when casino visits dried up and slots stopped spinning due to restrictions designed to slow the spread of the disease--showed the importance of continuing to invest through even the toughest economic conditions, CEO Trevor Croker said Wednesday.
"Almost half of the business was shut down because casinos were shut, but we invested in the games portfolio because, when things do improve, you have to have games for people to play," Croker said.
"Some of our bigger market share gains really came off the back of Covid because we were then first to market with new content."
Aristocrat said Wednesday it had 46% of the global premium slots market by units and 48% by revenue. It wants to keep growing share across all its divisions, it added.
The company, which also provides the technology platform for lotteries in U.S. states including Michigan and Massachusetts, generated US$2.1 billion in revenue in the first half of its current fiscal year, which runs through September.
For now, Croker said Aristocrat isn't seeing any revenue impact from the inflationary effects of the Middle East conflict, which recently helped push U.S. consumer sentiment to a record low.
Gross gambling revenue from casino floors is tracking above broader retail consumer spending, he added.
Croker said the company's resilience stemmed from the 2024 strategic pivot in which Aristocrat divested its casual mobile gaming assets.
Now focused on being a slots content and technology provider, it sells machines but also generates recurring revenues from leasing units and taking a share of their winnings.
"We are focused on 'how do we generate more and more recurring revenue as part of our business?', which gives us flexibility to invest organically over the longer term," Croker said.
Design and development investments are optimized by deploying the same proprietary brand or game software across traditional slot machines and other channels such as online gaming.
Croker said the use of artificial intelligence was also making game development more efficient, allowing for speedier testing and iteration.
"We actually go from concept to a playable prototype a lot quicker," Croker said.
Write to Stuart Condie at stuart.condie@wsj.com