Pachter: Rumored Dead Space Ban “No Big Deal”

When a publicly traded U.S. company experiences what the Securities and Exchange Commission terms an "unscheduled material event" it is required to file a form 8-K in order to alert stockholders and the market at large.

For example, Electronic Arts filed an 8-K just yesterday to inform the market that Harry Potter and the Half-Blood Prince was slipping into 2009, with a resultant loss of significant expected 2008 income.

So, if the rumor that EA’s upcoming Dead Space has been banned in three markets – China, Japan and Germany – is true, might that not trigger an 8-K disclosure as well? None has been forthcoming so far.

For the answer, GamePolitics turned to financial analyst extraordinaire Michale Pachter (left) of Wedbush-Morgan:

GP: If Dead Space was really banned in three major markets (Japan, China, Germany) as the rumor currently goes, wouldn’t that be a material event that EA would need to disclose to the stock market? Also – does EA sell console games in China? I thought no one did because of piracy issues.

PACHTER: Germany will allow the game with modifications.  Japan and China are essentially closed markets.  So really, no big deal. No consoles in China, yet

GP: Can you elaborate on what you mean by "closed market" in terms of Japan?

PACHTER: EA sells very little there, maybe $50 million per year, mostly PC games. I don’t think it is that controversial.  [Dead Space] is a horror game, not the same as Manhunt.  The bans are from the usual suspects, not a big deal

GP: Thanks, Mike.

Although Pachter confirms that there are no console sales in China, Dead Space is scheduled to release on PC, so that’s the version which EA would want to market in China and Japan. If the ban is real (still a pretty big "if" at this point), it likely involves the PC flavor of Dead Space in those markets.

Clearly, Pachter does not see this as a significant issue for EA, at least in the financial sense. Bans are always troubling, however, so we eagerly await EA’s official word on this.

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