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San Andreas rated AO, Take-Two suspends production

[UPDATE 4] ESRB slaps dreaded rating on controversial best seller; Take-Two lowers guidance; Wal-Mart, Best Buy, and Target pull game from shelves.


After percolating for weeks, the Hot Coffee controversy has finally boiled over. Today, Take-Two Interactive announced that as the result of an investigation by the Entertainment Software Ratings Board (ESRB), all versions of Grand Theft Auto: San Andreas will now bear an AO for Adults Only rating for "Blood and Gore, Intense Violence, Strong Language, Strong Sexual Content, [and] Use of Drugs." Previously, the game was rated M for Mature.

The rerating comes nearly a month after the first reports surfaced of the so-called "Hot Coffee" mod for the PC version of San Andreas. After being installed, the widely available mod lets users play a bonus sex minigame as a reward for completing the numerous "girlfriend" missions in San Andreas.

After video of the mod was widely circulated, such figures as ardent anti-game activist Jack Thompson and US Senator Hillary Clinton (D-NY) blasted the game. Clinton went as far as to publicly equate violent games with cigarettes and alcohol as a hazard to America's youth. In short order, the ESRB launched the aforementioned investigation, which looked into whether the mod was included in the original game or was made by a third party.

In response to the PC mod surfacing and gaining wide notice, Rockstar Games, the Take-Two subsidiary that develops and publishes San Andreas, issued a carefully worded statement in reference to the mod. "So far we have learned that the 'Hot Coffee' modification is the work of a determined group of hackers who have gone to significant trouble to alter scenes in the official version of the game," it read.

However, Rockstar's statement did little to extinguish the fires of controversy. Soon, reports began to surface that console versions of San Andreas contained code for the sex minigame. Late last week, GameSpot editors unlocked the code from a PlayStation 2 copy of San Andreas bought in October 2004, using an Action Replay Max device and a series of cheat codes. Since console games are written on unalterable DVDs and cheat codes cannot introduce new content, the fact the minigame was playable at all means it was included in the original PS2 San Andreas, albeit hidden.

The AO for Adults Only rating means that, according to the ESRB's official definition, the current version of the game now "should only be played by persons 18 years and older" and "may include prolonged scenes of intense violence and/or graphic sexual content and nudity." This doesn't sound too far off from the ESRB definition for the M for Mature rating, which says games bearing it "have content that may be suitable for persons ages 17 and older. Titles in this category may contain intense violence, blood and gore, sexual content, and/or strong language."

But while they sound similar on paper, the AO and M ratings have one very big difference in real life. Namely, most major chain stores, including the all-important retail behemoth Wal-Mart, will not carry AO-rated games. By contrast, M-rated games aren't even separated from games bearing the T for Teen, E10+ for Everyone 10 and older, and E for Everyone ratings. (Games rated EC for Early Childhood are usually educational in scope and are found in different sections.)

[UPDATE 2 and 3] It didn't take long for the effects of the rating to be felt. Late Wednesday, Target, and Best Buy issued press releases they were pulling all versions of San Andreas from shelves. Unconfirmed reports had GameStop following suit, and Wal-Mart told CNN/Money that it had issued orders to all stores to stop selling the game. "We do not sell games that are rated AO," Wal-Mart spokesperson Karen Burk told the site.

In its statement, Take-Two outlined its response to the commerce-limiting AO rating. "[Take-Two subsidiary] Rockstar Games has ceased manufacturing of the current version of the title and will begin working on a version of the game with enhanced security to prevent the 'hot coffee' modifications," it read. "This version will retain the original ESRB M-rating and is expected to be available during the Company's fourth fiscal quarter." The quarter in question runs from August to October 2005. The company will also release a patch for the currently available PC version of the game, which will lock out the sex minigames.

[UPDATE 4] Wednesday evening, the Interactive Entertainment Merchants Association (IEMA), the main game-retailer lobby, issued a statement in the middle of its annual convention. "Our members intend to immediately cease all sales of the game until existing inventory can either be re-stickered with an AO (Adults Only) rating, or exchanged for new versions of the game that has the hidden content removed and the original M (Mature 17+) rating intact," read the statement. "Though not a policy, IEMA members generally do not carry AO-rated games any differently than we do not carry X-rated videos or DVDs, thus it is likely that our members will be removing all copies of the current version and re-stocking with the updated version."

Take-Two braced Wall Street for the financial fallout of the ESRB and IEMA decisions. Its statement, which was released after markets closed, said the company was lowering guidance for its third fiscal quarter (which ends July 31, 2005) to $160-$170 million in net sales and a net loss per share of $0.40-$0.45. Take-Two also lowered its guidance for the fiscal year (which ends October 31) to $1.26-$1.31 billion in net sales and $1.05-$1.12 in diluted earnings per share. The news hammered Take-Two's stock, which was down $1.82 (6.72 percent) in after-hours trading as of press time.

While not good, today's news was not as bad as it could have been. Most industry watchers had expected a hefty fine from either the ESRB or possibly even the government. Some even speculated that the company would be forced to recall all copies of the game, at a catastrophic expense.

For its part, Take-Two stuck by its contention that the rerating was "due to unauthorized third party 'Hot Coffee' modification." The publisher reminded the public that "the scenes depicted in the 'Hot Coffee' modification are not playable in the retail version of the game unless the user downloads and/or installs unauthorized software that alters the content of the original retail version of the title, representing a violation of Take-Two and Rockstar's end user license agreement (EULA) and intellectual property rights."

Paul Eibeler, Take-Two's president and chief executive officer, also gave his personal thoughts on the matter in the statement. "We are deeply concerned that the publicity surrounding these unauthorized modifications has caused the game to be misrepresented to the public and has detracted from the creative merits of this award winning product," he said.

"The ESRB's decision to re-rate a game based on an unauthorized third party modification presents a new challenge for parents, the interactive entertainment industry and anyone who distributes or consumes digital content," Eibler continued. "Rockstar Games is pleased that the investigation is now settled and they look forward to returning their focus to making innovative and groundbreaking video games for a mature audience."

[UPDATE 1] A Los Angeles Times story on the rating quoted Take-Two spokesman Jim Ankner as admitting that "there is sex content in the [San Andreas] disc. ... The editing and finalization of any game is a complicated task and it's not uncommon for unused and unfinished content to remain on the disc." However, a Rockstar Games spokesperson flatly told GameSpot that Ankner "was misquoted."

There was no misquoting Patricia Vance, president of the ESRB. In a sternly worded statement on the ESRB site, she said "we have concluded that sexually explicit material exists in a fully rendered, unmodified form on the final discs of all three platform versions of the game (i.e., PC CD-ROM, Xbox, and PS2)." She also had harsh words for Take-Two. "Considering the existence of the undisclosed and highly pertinent content on the final discs, compounded by the broad distribution of the third party modification, the credibility and utility of the initial ESRB rating has been seriously undermined," she said. "Going forward, the ESRB will now require all game publishers to submit any pertinent content shipped in final product even if is not intended to ever be accessed during game play, or remove it from the final disc."

Vance did concur with Rockstar's assertion that the sex minigames were "programmed by Rockstar to be inaccessible to the player and they have stated that it was never intended to be made accessible. The material can only be accessed by downloading a software patch, created by an independent third party without Rockstar's permission, which is now freely available on the Internet and through console accessories." A Rockstar spokesperson said the company was considering legal action against Action Replay, GameShark, and other makers of console cheat devices that allow access to the sex minigames.

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