We followed up with Wedbush Morgan analyst Michael Pachter to help explain the "discontinued operations" situation. The analyst told Joystiq, "I am sure that the purchase price of $175 million is in there -- it would have been carried on Viacom's balance sheet as goodwill. The rest could be other operations (non-gaming), some portion of the earn out that they paid a couple of years ago, which should have been expensed, but you never know, or some portion of the development costs for games not yet released."
Update: Added quote from EEDAR analyst Jesse Divnich after the break.
[Thanks, Andrew B.]
Regarding discontinued operations, Divnich explains, "It is just a way for them to classify future losses so the impact of losses do not psychologically impact the sentiment towards the company. If Viacom said, we lost 'X million,' investors would be concerned about their long-term health. However, by saying we lost 'X million' from discontinued operations, it would convey to investors that the losses are attributed to an area of their business they no longer plan to be a part of."