One can only imagine who is still trading shares of video game maker Acclaim Entertainment (Pink Sheets: AKLMQ), considering it filed for bankruptcy earlier this month. Yet there it is; shares are trading at $0.02, up 12.5%.
This is not a company that will be coming back from the brink. It's not a Kmart
It's already fired 600 employees and closed offices in New York, Austin, Texas, and the U.K.
Acclaim is one of the oldest video game makers around, having lasted more than 17 years. Yet during a time that saw the rise of competitors Electronic Arts
Fool contributor Jeff Hwang has chronicled Acclaim's stumbles throughout the year, pinning its hopes for rejuvenation on games tied to Disney's
Acclaim isn't the only game manufacturer facing financial trouble. Eidos
When David Gardner first picked Electronic Arts as a Motley Fool Stock Advisor pick back in 2002, he noted the $9 billion industry was estimated to grow to $22 billion worldwide by 2005. So with such growth anticipated, why is it hard for companies to stay in business? Games are expensive to make, and there has been a certain amount of oversupply. The winnowing process of game makers is only natural. But it will be only the strong that survive as new consoles replacing Sony's PlayStation 2 and Microsoft's
It's the reason why you see so many games focused on movie or TV show tie-ins, or on established franchises: Developers know there is a built-in market. Yet it wasn't enough for Acclaim to stave off bankruptcy or its asset sale.
While EA, Take-Two, or Atari
Fool contributor Rich Duprey is eagerly awaiting the debut of Halo 2. He does not own any of the stocks mentioned in this article.