UPDATE 1-Wachovia cuts International Games to market perform

(Recasts; adds details) July 29 (Reuters) - Wachovia downgraded computerized gaming equipment maker, International Games Technology (IGT.N) to "market perform" from "outperform," citing concerns over the company's future earnings per share growth, saying operators are taking participation games off the floor.

The brokerage said its recent channel checks showed various operators, including Harrah's Entertainment Inc, trimming participation games due to the soft operating conditions in the market.

"For International Games Technology, it will need to drive a server based replacement cycle to grow EPS meaningfully, beginning in 2010," the brokerage said.

Before the advent of a server based gaming, Wachovia also expects delays and cancellations of IGT's future casino projects which were to help its earnings.

Shares of the Reno, Nevada-based company closed at $21.85 Monday on the New York Stock Exchange. (Reporting by Mary Meyase in Bangalore; Editing by Bernard Orr)