More On SEC Probe Into Game Publishers

Thanks to Reuters for a follow-up article discussing the SEC investigation into videogame publishers, in which Acclaim, Activision and THQ are already a part. Analysts elaborated on the probe: "..the investigation was probably considering two key questions: at what point in a game's release did the publisher recognize revenue from its sale, and whether reserves taken as insurance against weak sales were being used to smooth out revenues." This may mean the rush to get product out at the end of the financial year, as recently occurred with Tomb Raider, may be changed somewhat: "For example, some video game publishers book software revenue on the day the product is shipped. A more conservative approach could be to book revenue the day a retailer takes possession of the goods." Update: 07/21 22:14 GMT by S : There's also a good CNN Money article discussing the implications of this probe.

Comments

IYAAL, please explain..

[Creepy Crawler]

I dont understand exactly what Acclaim did illegal (other than make a bunch of shitty games). And it's not like they have a "We are the only game publishers" Patent.

So, why is the SEC doing this?

Re:Is this really that important?

[Anonymous Coward]

Simple, the Enron and Global Crossing execs are friends with our President.

If the SEC bothers itself with other scandals that don't really matter (Such as the well publicized but not very signifigant Martha Stewart scandal), then maybe people will forget about Enron, Global Crossing, Florida Elections, the California Energy Scandal, etc.

Maybe a rethink?

[spumoni_fettuccini]

I think their revenue models are screwy anyway. Take into consideration the people that reserve [deposit] or preorder the games [full price], doesn't that count? Would they also benefit from introducing the title a little cheaper? I wait for a PC or console [PS2] game to drop from $50-$60 USD range down in the ballpark of $20. Many of my friends just rent their console game, about $5, finish it and never wind up buying the title.