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SEC Probe Investigates Activision, Acclaim
Thanks to Yahoo! for passing on a brief press release from Activision and a similar release from Acclaim indicating they are "..part of a formal probe by the U.S. Securities and Exchange Commission into video game industry accounting practices." According to a separate Forbes article, Acclaim "..said the formal, non-public inquiry is entitled 'In the Matter of Certain Video Game Manufacturers'", meaning that other games publishers may also be under investigation - we'll update if any other publishers make similar announcements. Update: 07/18 23:59 GMT by S : According to this Reuters article, THQ is also involved in the inquiry, and analysts suggest an "..industrywide investigation would represent an unusually wide scope for a regulatory probe."
Could this include the fact that all video games seem to come out for exactly the same price?
(Please don't flame, I don't know if this is SEC jurisdiction. That's why I'm asking).
"as plurdled gabbleblotchits on a lurgid bee" - Prostetnic Vogon Jeltz. (One man's humorous is another mans flamebait)
Seems like the Cube might not be the only game system Acclaim stops developing games for...
Seriously, BMX and titties, of course they're under a formal probe by the U.S. Securities and Exchange Commission !
Who needs a
Is it asking too much to hope that this investigation was spurred by the rapidly growing trend of releasing buggy, barely playble software and some underhanded agreements with many retail chains to not accept returns on unopened software? I know I'm not the only one with a dozen or so $50 drink coasters for games that just plain didn't work*cough*Enter the Matrix*cough*
But seeing as its just the SEC, it probably has to do with some funny bean counting in the Accounting Department and we can continue to expect boxed fecal matter we have become acustomed to.
I think its funny that they are apparently starting with Activision and Acclaim. I always get the confused anyway... :) Hell, a lot of the video game industry seems crooked. Maybe they are just going in alphabetical order. =P
PaleHour
I would think that Activision would be under inquiry by the FDA because of the trace amounts of nicotine that they put into SoF2, but hey, what do I know.
it would be Acclaim and then Activision.
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That would be someone else's jurisdiction. I think what they're specifically looking at here is accounting, and nothing else...making sure the video game corporations aren't cooking their books.
I think they're starting alphabetically, because Acclaim is trading for less than a dollar, and at under $13, Activision isn't exacly shooting through the roof.
Netjak.com independent reviews of domestic & import video ga
I guess this is what happens when you do your accounting on Tombstones!
If I have been able to see further than others, it is because I bought a pair of binoculars.
The only weird accounting issue that I can think of for game companies has to do with their reserves of unsold product. The retail outlets are allowed to send back unsold products after a certain period of time, and becuse of these agreements, the video game makers are supposed to estimate how much product they expect to have returned, and then reduce their revenue by that amount. Anytime you let managment estimate something, it opens the door for games, managment can under reserve and raise current earnings (at the cost of future earnings) or they can over reserve to lower current earnings, and raise those in a future period. Can anyone else think of some other accounting games that these types of companies can play?
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Having a relative of mine doing some of their accounting back in the mid-90s. Lets just say that their practices would raise some eyebrows in the SEC.