Inside Move: Game biz in corner amid SEC probe

SEC investigates how publishers book revenue

This should be money time for the vidgame industry, the fat part of the five-year hardware cycle between new game consoles when publishers reap billions.

But the gravy isn’t flowing these days, and the SEC is investigating how at least four publishers book revenue on titles that are later returned unsold.

The probe is a headache for publishers, but could have wider impact:

  • It may hamstring companies just when they should be banking cash for the expensive 2005-2006 transition to new vidgame consoles.

    “If you’re not squirreling away your nuts now, you’re not going to make it through the long, cold winter that’s coming in about two years,” says one insider. “This could hurt everybody.”

  • It could complicate the Universal sale. VU Games is a big publisher, and on the block, but an already messy auction of U assets needs no more uncertainty.

  • Weakened companies are prime takeover targets, and consolidation seems likely over the next two years.

“If you called our top shareholders and their top shareholders, they’d probably split down the middle about whether it’s a buy opportunity or a sell opportunity,” says John Riccitiello, prexy and chief operating officer for the industry’s bluest chip, Electronic Arts.

With $1.6 billion in cash, EA may go shopping. So could Xbox owner Microsoft, with $49 billion in cash and not nearly enough good gamemakers in its fold. Both reportedly have been kicking tires on takeover targets in recent months.

More Digital

  • Barstool Sports logo

    Barstool Sports Gets Another $15 Million From Chernin Group

    This should be money time for the vidgame industry, the fat part of the five-year hardware cycle between new game consoles when publishers reap billions. But the gravy isn’t flowing these days, and the SEC is investigating how at least four publishers book revenue on titles that are later returned unsold. The probe is a […]

  • Slate Staffers Unionize With Writers Guild

    Slate Staffers Unionize With Writers Guild of America East

    This should be money time for the vidgame industry, the fat part of the five-year hardware cycle between new game consoles when publishers reap billions. But the gravy isn’t flowing these days, and the SEC is investigating how at least four publishers book revenue on titles that are later returned unsold. The probe is a […]

  • Netflix phone

    Netflix Takes Another Stab at Shorter-Form Videos With 15-Minute Comedy Specials

    This should be money time for the vidgame industry, the fat part of the five-year hardware cycle between new game consoles when publishers reap billions. But the gravy isn’t flowing these days, and the SEC is investigating how at least four publishers book revenue on titles that are later returned unsold. The probe is a […]

  • Funny or Die Logo

    Funny Or Die Lays Off Employees Amid Digital Sector Crunch

    This should be money time for the vidgame industry, the fat part of the five-year hardware cycle between new game consoles when publishers reap billions. But the gravy isn’t flowing these days, and the SEC is investigating how at least four publishers book revenue on titles that are later returned unsold. The probe is a […]

  • Google audiobooks

    Google Takes on Audible With New Audiobook Offering

    This should be money time for the vidgame industry, the fat part of the five-year hardware cycle between new game consoles when publishers reap billions. But the gravy isn’t flowing these days, and the SEC is investigating how at least four publishers book revenue on titles that are later returned unsold. The probe is a […]

  • homepod-white-shelf

    Apple Starts Selling HomePod on Feb. 9

    This should be money time for the vidgame industry, the fat part of the five-year hardware cycle between new game consoles when publishers reap billions. But the gravy isn’t flowing these days, and the SEC is investigating how at least four publishers book revenue on titles that are later returned unsold. The probe is a […]

More From Our Brands

Access exclusive content