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Best of Liz Benston

Gaming Guru

Liz Benston

Sigma Suspends Operations

7 October 2004

LAS VEGAS -- Sigma Game Inc. of Las Vegas has suspended its operations this week while it considers selling the company or finding a new equity partner.

The small company, known for making a slot machine based on the "Life" board game, also pulled out of the Global Gaming Expo this week -- the premier trade show for the slot and casino industries -- to focus on evaluating the company's future, Sigma Chief Executive Jim Jackson said.

While competition is stiffening in the slot industry, Jackson said the decision to consider a new partner doesn't indicate that Sigma and its games are performing poorly.

The company's slots are "doing fine," but the company has reached a point where it needs to grow to remain competitive, he said.

"The reality for Sigma in the future is going to be working with a partner or acquirer -- someone who can help us grow and compete on a bigger scale," he said. "It's difficult to be the little guy competing with the major manufacturers out there."

The company may release a few new slots each year compared with the more than 200 games per year that a major slot maker like International Game Technology or Alliance Gaming Corp. may show off to casino buyers at the Global Gaming Expo.

"We've never been able to compete with that," Jackson said. For the past several years Sigma has created niche products by striking alliances with other slot manufacturers, he said.

The company is the only privately held slot maker trying to compete on a global basis relative to its publicly traded peers, Jackson said.

Sigma is controlled by Japanese investor Katsuki Manabe and has a license to sell and distribute slots in most major gaming markets nationwide. It has employed as many as 80 people at its Las Vegas headquarters but has laid off several people to reach a point where its staff count is in line with current demand for Sigma slots, Jackson said. The company hasn't laid off any of its remaining employees this week, he said.

Jackson said he expects the company to be in full operation next week after it evaluates several proposals that may include selling the company. He declined to elaborate on proposals the company is considering or whether any particular companies are interested in buying or partnering with Sigma.

Mikohn Gaming Corp., a publicly traded slot maker in Las Vegas, had struck a deal with Sigma a few years ago to apply its slot software to Mikohn game titles.

Mikohn spokeswoman Sharon Walters said Sigma has since developed game titles based on its own software platform and is instead striking deals to offer those titles on games made by bigger slot manufacturers.

IGT and Alliance Gaming representatives declined to comment on Sigma's business plan or whether the companies would be interested in buying any Sigma assets.