Despite some of the worst returns in years for casino operators, some slot manufacturers are actually showing better-than-expected results.

Take, for example, Bally Technologies. Despite a recession-driven chokehold on casinos’ capital expenditure budgets, Bally was able to achieve earnings per share growth of 20 percent.

The company actually delivered fiscal year 2009 earnings within its original guidance range from a year ago. Bill Lerner of Union Gaming Group noted that the company achieved its results partly through a combination of dynamics in game sales and gaming operations that drove higher margins. The company coupled this with smart debt pay down and accretive share repurchases.

Lerner had previously cited positive signs for slot manufacturers.

He noted that both WMS and IGT had reported June results “that leave us encouraged about what earnings could look like during the next replacement cycle.”

“We continue to continue to believe that domestic replacement will coincide with gaming expansion globally as governments look to plug budgetary gaps with greater predisposition than in the past,” Lerner noted.

Gaming manufacturers could see a replacement cycle start to ramp up next year, along with their earnings per share, he noted. Growth also is likely to come in the form of gaming expansion in Ohio and other jurisdictions that are seeking to plug budget gaps with slot revenue.

In the meantime, one segment apparently hampered by the recession has been server-based gaming. With capital budgets crunched, only a handful of projects appear to be gaining much momentum, and most are on a smaller scale (save for MGM Mirage’s floorwide project at CityCenter’s Aria hotel-casino opening the end of this year).

Cleo the App

It was only a matter of time before one of the major slot manufacturers made the move to morph one of their games into an iPhone app.

Million-2-1 and IGT announced the Cleopatra app in August. The 5-reel, 20-line game authentically replicates the original slot game, “making Cleopatra the definitive slot experience on the iPhone and iTouch platform.”

“After enjoying so many years of success with the Cleo slots in real casinos, we’re thrilled to allow players to enjoy Cleo now on the iPhone and iPod Touch,” said Chris Sheffield, director and general manager of remote gaming for Million-2-1, an IGT company.

It’s by no means the only slot game out there, but its developers contend its graphics and unique features set it apart. The ‘Tournament’ mode lets players challenge themselves and others around the world to achieve the best scores and earn a place on the global leader board. Competitive gamers can apply a winning strategy by changing the number of lines and credit stake on each spin.

Players spin the reels by shaking the iPhone or iPod Touch, or by tapping the play button. Three or more Sphinx symbols start the Cleopatra Bonus. The amusement-only game sells for $1.99 and does not replicate the odds of winning or the payouts of similar IGT casino games.

One reviewer called the app a “fun diversion” right up the alley of a typical slot player who plays a slot machine for an extended period of time.

Another noted that the product has far less glamour than the casino version, said, “for those gamers that already have played the real Cleopatra this version surely have a great appeal. It is always nice to have a mobile version of the real thing.”

While not earth-shattering, the move does show manufacturers are at least exploring this space, and that's a good sign if they hope to click with a younger generation of gamers.