Multimedia Games in deal with Sigma

Thursday, Jan. 27, 2005 | 10:58 a.m.

Multimedia Games Inc. has acquired certain assets of Sigma Game Inc. in Las Vegas in a deal designed to broaden distribution of Sigma slot machines and give Multimedia, which makes slots for tribal casinos, a foothold in the nontribal casino market.

Sigma Game, which has more recently scaled back to about 30 employees from a staff of 80 and fought to compete against much bigger slot makers, isn't dissolving in the deal.

Multimedia Games President and Chief Executive Clifton Lind said the purchase will give his company a roster of new games, including video poker machines, that will appeal to tribal customers.

The companies declined to disclose the purchase price for the assets in the all-cash deal.

Multimedia Games, based in Austin, Texas, also has obtained rights to acquire shares in privately held Sigma Game. Multimedia shares fell 14 percent in midday trading today after the reported a 31 percent profit decline in its first fiscal quarter. The company said other indicators were up as it sold more slots to tribes. It also was recently selected by the Israeli National Lottery to provide that country's first electronic instant lottery and is developing other lottery products.

Sigma Game suspended operations in October while Chief Executive Jim Jackson considered selling the company or finding a new equity partner.

Jackson said at the time that Sigma's slot machines were performing well but that the company couldn't grow and compete with giant slot machine competitors without a cash infusion from a buyer or partner.

The company, known for making a slot machine based on the "Life" board game, has a license to sell and distribute slots in most major gaming markets nationwide.

"The company is still up and operating," Jackson said today. "We're going to see how our relationship with Multimedia grows and evolves over time."

The company intends to develop new machines with Multimedia and may hire more workers for the effort, he said.