Take-Two's Steamy Scenes: a Wash?

A sex-scene controversy has tarnished Take-Two Interactive's (TTWO Quote) reputation and threatens to sully current-quarter earnings, but investors differ on the longer-term meaning for the company -- and its stock price.

An assortment of major retailers on Wednesday and Thursday said they would pull the game from shelves in reaction to a change in the rating of Grand Theft Auto: San Andreas from "mature" to "adults only." While this crimping of distribution could hit sales, the company might actually benefit from the publicity, ameliorating some of the effect.

With Take-Two shares already trading at a discount to those of the company's peers (the stock was recently at $25.53), the downside may be limited. But the news certainly didn't help, and the upside for the stock might be limited as well, thanks to broader issues. ...