Last week I blogged on Britain banning Rockstar's Manhunt 2, owned by Take-Two Interactive (NASDAQ: TTWO) for the game's "unremitting bleakness and callousness of tone." I said that banning games stifles creative freedom and has the ability to destroy an industry -- from game makers to retailers, and, most importantly, consumers.

Well that's exactly what has happened folks.

Following bans in Britain and Ireland, as well as an "Adults Only" rating in the United States, GamesIndustry.biz has told us that Take-Two temporarily shelved Manhunt 2.

Manhunt 2 was scheduled for release on July 10 on the Sony Corp. (NYSE: SNE) PlayStation 2, PSP, and Nintendo's (OTC: NTDOY) Wii consoles. However, both Sony and Nintendo carry an Adults Only policy, which leaves little room for compromise. Even if the game were to ship with the AO rating, many retailers -- including Wal-Mart Stores (NYSE: WMT) -- will not put Manhunt 2 on the shelves.

Take-Two could still appeal the rating of a more toned-down version that fits the "Mature" rating for players 17 and older. However, the AP's Matt Slagle reports that the decision to suspend distribution of Manhunt 2 could actually boost demand, according to industry analysts. Colin Sebastian, an analyst at Lazard Capital Markets, tells Slagle that he doesn't believe the game will hurt Take-Two's bottom line in the long term, and he considers the recent controversy over the game to be great exposure. "It's free publicity," Sebastian said. "Consumer backlash is a risk, but at the end of the day if it's rated 'M' the retailers will take it."

Investor's didn't seem phased on the news. Shares of Take-Two Interactive were up for the week and closed +1.02% on Friday, to $20.82.

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