love the video game industry...

What's most shocking about the controversial-and top-selling-Grand Theft Auto isn't embedded sex scenes. It's the financial chicanery of the game's maker. Why don't investors care?

But the dirty little secret about the games business isn't just those unsavory embedded sex scenes but unsavory business practices—and Take Two is Exhibit A. The videogame industry has mushroomed into a $10-billion-a-year behemoth in the U.S., according to the NPD Group, which tracks retail sales—hauling in more cash than the movie box office. With that success has come questions about industry accounting practices, and in 2003 the SEC began investigating a number of gamemakers. But Take Two is the industry's wild child. A not-so-small publicly traded company—its market capitalization today is almost $2 billion—it has a history of financial improprieties, hefty stock sales in the midst of scandal, and revolving-door management. In June, just before the hot-coffee controversy erupted, Take Two settled SEC charges that it had engaged in fraudulent accounting practices designed to inflate revenue, meet earnings targets, and trigger bonuses to executives.