We have a chance to go and take back share but we also will see this whole ship share issue abate because there won’t be the pressure on existing floors to downsize our video reels by basically maintaining the existing population through conversion.
They really will have an obligation to revisit repopulating their floor with new hardware platforms from IGT because effective October 1st we will only be supporting AVP with game development.
We will still continue this for 8960 technically for a period of time and there will be some discreet developments for 8960s but effective October 1st our product is AVP for video reel and if you take a look at the products that were introduced, wide screen versions and normal versions both for the upright and the slant top we have a bar top product, in a bar top segment for instance, that’s 100% IGT business.
Steve Wieczynski (Stifel Nicolaus & Company, Inc.): On the lower guidance, have the markets deteriorated that much or are you just being conservative as a possible?
Thomas J. Matthews: Maybe a little bit of both. Hopefully it is conservative and that we will see improved play levels. But what had happened in the first calendar quarter of the year, March quarter was somewhat unprecedented in that you had gaming play levels down and you had gaming play levels down for a whole host of different reasons in different markets.
Some of it was competitive pressure, some of it was smoking bans, some of it was the economy. You did not have a whole lot of public acknowledgement of it yet because you did not have necessarily very good visibility as to how, if and at what degree it would continue.
We have to anticipate for our business that the economic conditions are likely going to continue like this for the remainder of the calendar year and maybe even going into next year in the early portion of the year.
Steve Wieczynski (Stifel Nicolaus & Company, Inc.): Can you give me a quick shipment second run down on the Japanese market right now, what you are seeing there?
Thomas J. Matthews: We will have a product introduced in this quarter and feel reasonably comfortable that we will have modest sales success with that product in the fourth quarter.
The demand that we anticipate for the overall market in 2009 is something like 600,000 units of which our goal is still to capture upwards of 10% of that but really have been running at closer to the 6% level in terms of capture.
William Lerner (Deutsche Bank Securities): How do you not use your balance sheet which is underleveraged for all this time to address the video side of the business?
Thomas J. Matthews: We have probably done a little bit more there than is visible. The biggest effort that we have had at IGT over the last few years is probably more so than people realize as it relates to SB is collaboration with other development groups.
For instance, this last quarter the activity we have with PGIC to extend our reach into a couple of markets and to have the opportunity to introduce SB functionality to their casino link install base. It has been important that some of their development efforts now are oriented toward supporting application development in that space as well.
There is a finite number of games that we can introduce in our system and that is where we have struggled with some internal debate of how many games do we need to publish on an annual basis for us to be able to realize appropriate share.
We are constrained by the fact that almost all the game development goes through our development queue which means that however many dollars that we can put in there will define the number of games that we can produce.
We are working more with third party game developers than ever before and trying to give them the tools necessary for them to be able to take some of that development work away from us and as a result have the opportunity to publish more title. More titles that have varied looks, different kinds of development styles so we have a much broader library in that space than we have had in times past.
Rachael Rothman (Merrill Lynch): Can you talk a little bit about the ASP in margin profile of the new AVP boxes you are going to start selling?
Thomas J. Matthews: One thing we have done very well is continue to grow margins and we had very good margins in game ops this quarter and that’s in a pretty tough interest rate environment for us. We had something like 325 basis points of interest rate movements over the last six months or so.
It reflects some of the non-machine mix, it reflects not being in some of the lower margin businesses but also it just reflects in us being able to sell higher margin products to our customers. AVP lowers the margin percentage slightly as it compares to its predecessors but grows absolute margin dollars fairly handily and I think that the decline in the margin percentages are short term.
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