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Analysts: Konami Gaining on Competitors

Reports from stock analysts show that Konami Gaming, the U.S. subsidiary of Japanese video game conglomerate Konami Corporation, has gained on its competitors in market share over the past year.

“Several years ago, Konami was virtually non-existent in the North American market,” Roth Capital Partners analyst Todd Eilers told the Yogonet news service. “They’ve been one of the few companies to penetrate the oligopoly of the large gaming suppliers.

“The real story is that a lot of investors don’t even know about Konami, and that it is a meaningful player in the slot market.” Roth projects that Konami’s 2010 slot sales will top 71,000 units for revenues of around $1.1 billion.

Much of the manufacturer’s recent success has been attributed to increasing collaboration between the engineers of the Japanese parent company, which produces such famous home video games as the Metal Gear series, and the slot designers based in Las Vegas.

The company has had much success with its latest series of slots, called “K2V,” and the new “Podium” cabinet. Another closely watched product has been “Advantage Revolution,” a novel hybrid game cabinet that has a revolving main display that shifts between reels, video and a bonus mechanism.

“They’ve been able to leverage their engineering talent from Japan really well to incorporate unique aspects in their games that the other suppliers don’t have,” Eilers said.

Added Goldman Sachs analyst Steven Kent in an investor note, “We have heard Konami described by its competitors as a ‘niche’ player but, given the multi-year improving trends, this seems less and less likely. We fear that the major slot players are not paying enough respect to this smaller player and that the big four—IGT, WMS, Bally, and Aristocrat—may soon become the big five.”

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