Media Watch

Electronic Gaming Business, August 27, 2003

BusinessWeek Online (July 31) reports that the SEC investigation into game company accounting practices could have more serious implications than some anticipate. Various financial analysts weighed in to say that the involvement of the SEC's enforcement division indicates that there may have been accounting violations. Also, the money mavens say that adjusting the ways in which game companies book revenue off of retail shipments could make their financial situation much more volatile.

Wall Street Journal's StartUpJournal (www.startupjournal.com) reports that venture capitalists are shying away from investing in games startups. Not only is the field too hit or miss, but the market is so dominated by the major publishers that there is little chance for a new company to find space on shelves. VC investing in game companies in 2002 was down to $37 million, from $66.9 million. Wireless game makers seem to be the only lukewarm spot for VCs.

The high-profile release of Madden 2004 brought mass media attention to EA's studio system. The San Francisco Chronicle (Aug. 18) carts out the usual stats about its blockbuster sales mentality and ability to follow mass market trends, but the article also points out that EA seems to enjoy a general lack of controversy (i.e. we're not making Vice City here) by producing relatively bloodless "Boy Scout" games.

[Copyright 2003 PBI Media, LLC. All rights reserved.]