Wednesday, Dec. 9, 1998 | 11:47 a.m.
The Palo Alto, Calif., company produces the "Odyssey" machine, a high-tech video slot featuring state-of-the-art graphics powered by an internal computer.
But after going public in 1996, the company's ambitious growth plan got hit by higher expenses and lower sales than expected, the latter due to the high cost of the Odyssey machine relative to other slot makers' products.
As a result, the company has never made a profit. It posted a $24.6 million loss on sales of $20.2 million in the latest 12 months.
Once trading above $20, Silicon's stock has slumped as low as $1.50. It was up 12.5 cents to $2 in mid-morning trading today, after the layoffs were announced.
The announcement said the company will concentrate on multi-player system and revenue-sharing segments of the slot market, which it expects to yield "much higher margins than our traditional build-and-sell business model."
In September, Silicon said it had agreed to develop new slot products that would be distributed by Anchor Gaming, a larger game designer and manufacturer that has accumulated a strong asset base with successful products such as "Wheel of Fortune."
A Silicon spokesman said the company's Las Vegas office, which is its main service and support facility, will remain open.
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