24 Jun

SEC analyzes video games companies accounting

THE ANGELES, United States (REUTERS). -The United States Securities Commission (SEC for its acronym in English) is reviewing online bookkeeping services practices in the sector of video games in the period from the late 1990s to 2002, a source of the financial regulatory body said yesterday.

The SEC has doubts about the way the companies that develop video games have posted sales during the unprecedented boom that lived its sector, said the source, who asked not to be identified.

Some analysts of the sector and financial experts said that the research could be considering two key questions: at which point of the life cycle of a game are accounted for revenues from their sale, and if stocks taken as insurance against weak sales end up being used to smooth income fluctuations.

A spokesman for the SEC did not comment on the investigation.

Three companies – Acclaim Entertainment Inc. AKLM. Or, Activision Inc. ATVI. Or and THQ Inc. THQI. Or they have said they are part of the research, although this does not imply that they have violated the law.

On the Nasdaq electronic market, the 1644 GMT, shares of THQ, which sells titles for children such as SpongeBob SquarePants, fell 8.08 percent to 16.27 dollars.

Shares of Activision, the company that sells the game Tony Hawk Pro Skater, down 8.5%, 11.4 dollars. THQ and Activision were Monday in the list of actions with greater percentage losses of the entire market.

The values of Acclaim, known for the series of Turok games, lost 5.0 percent to 0.646 dollars.

Another company in the sector recorded casualties was Take-Two Interactive Software Inc. TTWO. Or, with a decline of 2.89 percent to 26.84 dollars. Take-Two is already facing a formal investigation of the SEC relating to its accounting practices.

Analysts said that it expected that investigations by the SEC will do to adopt more conservative policies of accounting for sales.

For example, some companies of video games accounted for revenues of the software the same day that the product is sent.