Revenue from interactive products and services increased to $9.5 million from $0.7 million in the prior-year period, primarily reflecting the successful July 2012 launch of Jackpot Party® Social Casino on Facebook®, which currently ranks among the five most popular social casinos on Facebook based on the number of daily active users, coupled with organic growth in our UK-based B2C online website and the addition of Phantom EFX retail sales and Jadestone game server integration revenues.
Other gaming operations revenue increased $0.1 million on a year-over-year basis to $4.6 million, primarily reflecting growth in networked gaming products and services.
Total gross profit, excluding depreciation, amortization and distribution expense as used herein, increased 4% to $102.6 million from $98.5 million in the year-ago period. Total gross margin improved to 64.5% compared to 63.3% a year ago. Product sales gross margin rose 220 basis points to 53.1% in the September 2012 quarter compared to 50.9% in the prior-year quarter. The year-over-year increase reflects the benefits from our mix of business, ongoing continuous improvement initiatives, strategic sourcing actions, and a year-over-year improvement in gross margin on other product revenues due to higher margin on used gaming machine sales and high-margin VLT software game set revenues. Gaming operations gross margin was 78.6% in the September 2012 quarter compared with 79.1% in the prior year, reflecting the impact of higher jackpot expense on wide-area progressive games, partially offset by the benefit of increased revenues from high-margin interactive products and services, and compares favorably to 77.4% in the June 2012 quarter.
The following table summarizes key components of operating expenses and operating income for the three months ended September 30, 2012, and 2011 ($ in millions):
|Three Months Ended|
|Research and development||$||27.6||$||24.4||$||3.2||13.1|
|As a percentage of revenues||17.4||%||15.7||%||170bp||10.8|
|Selling and administrative||34.4||38.3||(3.9||)||(10.2||)|
|As a percentage of revenues||21.6||%||24.6||%||(300)bp||(12.2||)|
|Depreciation and amortization||28.0||22.6||5.4||23.9|
|As a percentage of revenues||17.6||%||14.5||%||310bp||21.4|
|Impairment and restructuring charges||—||9.7||(9.7||)||nm|
|As a percentage of revenues||—||6.2||%||(620)bp||nm|
|Total operating expenses||$||90.0||$||95.0||$||(5.0||)||(5.3||)|
|Operating expenses as a percentage of revenues||56.6||%||61.0||%||(440)bp||(7.2||)|