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Take-Two Finalizes Hot Coffee Settlement
Take-Two Finalizes Hot Coffee Settlement
September 1, 2009 | By Christian Nutt

September 1, 2009 | By Christian Nutt
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    19 comments
More: Console/PC



A $20 million dollar settlement brings a close to a class action lawsuit brought against Take-Two by its investors. The company will pay $4.9 million itself, and insurance will cover the rest.

Investors had alleged their investments in the publisher were damaged by the scandal around the infamous hidden 'Hot Coffee' modification in Grand Theft Auto: San Andreas, over which Take-Two settled with consumers in 2007.

This new class action suit also relates to Take-Two's stock option grant investigation, which has already resulted in settlements to government agencies.

Take-Two says it's made changes to its management procedures and will continue to do so, to ensure problems like these do not crop up again. It also says that it has fully accrued the costs of the settlement over several financial quarters, ending April 30, 2009.

In an investor call today, Take-Two chairman Strauss Zelnick stated simply: "We're pleased to have reached this settlement and put this historical matter behind us."


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Comments


[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Bob Stevens
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Game companies shouldn't be held responsible for what can only be exposed via game-genie type devices and third party PC hacks. The ESRB opened this can of worms and now the rest of the industry is paying the price.

steve roger
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It is an interesting issue. What would have the ESRB rated the game if they had been informed that the pornographic scenes were hidden in the game and could be unlocked? Do you think it would have given them the Mature Only or Adult Only? Sure hindsight is 20-20, but I think that Take -Two's attorney's said that it was the right thing to do was settle, because I think that the ERSB would have slapped the game with an Adult's only. The whole issue is over the disclosure. If disclosed the rating would have been higher. The failure to disclose made the financial forecast a lie. Because the truth was that Take-Two wasn't selling a Mature title it was selling an Adult title.



Did I get this correct?

steve roger
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I agree with your argument but not your conclusion. The fact that the content can be accessed with gameshark means that it is just like a cheat. Cheats are enabled in games by developers when they are hacked or when the code is released. Or it could be done via the developer console. Doesn't matter how it is accessed, just that it can be. This is just locked content. Once unlocked the game is a Adult title. I am willing to bet, and this is what matters, that the ESRB, had been told what you said and I just said and they would have slapped a Adult Only rating on it.



Do you think that if it was disclosed as "locked content" they would have gotten a mature rating?



Well, it doesn't matter, because a good lawyer would tell them and they were told don't risk this and they settled.



It really doesn't matter who one feels about it. It is what the likely outcome would be if the case went trial.



Also, where is the innocent mistake? The developer knew. And when they found out they withheld it.

John McMahon
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I have to agree with Steve Roger. As a programmer, I know what content is on the game disc and anything on the disc can be accessed. The primary point is that the developer provided content on the disc and never told anyone.



I also think about it another way, if that content (and other similar content) were removed because they decided not to use the content, then it would have given them additional storage space on the disc which could be used to help improve audio, lessen compression requirements to get the content to fit on the disc, etc.

Megan Swaine
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I agree. They shot themselves in the foot- the content should not have been there in the first place, if they didn't want people to access it. It's as simple as that.

raigan burns
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I don't think it's so simple: you have to patch the game -- modifying the game's code! At that point, it's no longer the same game. What if, rather than modifying the game's code, the patch modified the textures so that everyone appeared naked in-game. Would that have been Rockstar's fault as well?! How is changing the code any different than changing the assets? They're both just a bunch of bytes stuffed in memory somewhere.



It seems beyond stupid to consider anyone responsible for the application of external code to an existing game. I guess this is what happens when the jury and/or judge is clueless concerning technology.



I could write a patch which would re-process the in-game music, making an all-Beatles radio station. (Note that I wouldn't simply be injecting my own music into the game, I would be using something like http://monolith.sourceforge.net/ so that the actual in-game assets are re-interpreted to become the Beatles songs). Would Rockstar then need to pay royalties?



I don't know.. this just seems pretty stupid.

steve roger
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Raigan, in law school that is what we called the slippery slope argument. It didn't work in law school tort classes just like it fails in the courtroom and on appeal. As such, it just isn't persuasive.



A nice definition: http://en.wikipedia.org/wiki/Slippery_slope

Aaron Casillas
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Why was the content on the disc in the first place? The same thing occured on the production of Sin if you guys remember that game. Porn kept showing up in the texture packages, it would get caught by QA and then resurface again. It was a waste of money and time.

Doug Poston
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"It's a chilling reminder of the fact that the ESRB is not the ally of the game industry."



The ESRB is not perfect, but it is our best defense against government regulation.

Bob Stevens
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I'm not sure how the ESRB is a defense against government regulation when they caved at the first sign of government displeasure in the wake of hot coffee. They've set a precedent now that the game developer is now responsible for what happens to their game when random bits of memory are modified via gameshark. The content was on the disc and I agree that this was shoddy, but it was also well-protected in as much as it could not be accessed without gameshark hackery. It could only be turned into an "adult" game (which is also debatable) by using methods outside of Rockstar's control.



As I suggested above (Al Nonymous is me, fwiw), the best solution for handling hot coffee and moving forward would be to add a "3rd party modifications to this game are not rated by the ESRB" banner, similar to the online warning. This should have been obvious, but there was a great deal of pressure on the ESRB at the time and a lot of misinformation flying around about the specific hot coffee content and how it was accessed. They made a bad decision, and companies like Rockstar and Bethesda have already had to pay for it.

Tyler Peters
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All this discussion, stemming from the fact that we are such a repressed society that our ratings boards have no problem with beating and killing hookers after having implied sex with them, but we'll sue (to protect our children!!) over being able to have simulated consensual sex with our clothes on.

Yes, that it this forum's longest sentence.

The ESRB needs to be disbanded and we need a general ratings system.

steve roger
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@Bob, but the hot coffee fiasco is not the result of a third party modication, any different than using cheats with gameshark. Your label would not protect Take-Two from penalties with that warning label. Because the code wasn't modified at all by third parties. The porn sequences were already there. All you are doing is saying that if some third party put that content "into" GTVSA then they aren't responsible. Which means that your warning label is entirely unnecessary because they aren't responsiible for such modifications by third parties now. You have a fundamental misunderstanding of cause and effect. You need to accept that the Hot Coffee content is not some independent content that was added in unbeknownst to Take-Two by third parties. (Such as the case with online conduct that is beyond the ability of Take-Two to control.)



All you are describing is that game developers and publishers aren't responsible by the tortuous intermeddling of third parties. However, they are already protected from that by civil and criminal law.



Think of it this way, using a gameshark to unlock content in a video game is not illegal, especiallly when you realize that Take-Two set this ability to up to unlock the content all by themselves.



The point is that the offending content was put in the game and was accessible legally. This is not a case of tampering.

Doug Poston
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@Bob: I use to agree with you 100% that anything that requires a 3rd party tool to unlock shouldn't have to be rated, and I still think that leaving the content in was an honest mistake by the developers, but the fact remains that 3rd party tools like Game Shark exist. By allowing RockStar to get away with leaving unrated content on the disc, what would stop other companies from doing the same on purpose?



I still think it is unfortunate that RockStar got fined for this, IMHO the ESRB should of issued a warning and new rules that make it clear that this will not be tolerated going forward, but they had to do something. And, yes, they do appear to cave in quickly to government outcry but...



@Tyler Peters: "The ESRB needs to be disbanded and we need a general ratings system."



A general rating system run by who?



Congress made it clear that without an organization like the ESRB, the government would have to be directly involved. Without the protection of the ESRB (or something like them), based on laws that have been introduced in the past there would be no realist gore, no simulated violence against law enforcement, no 'look alike' weapons, etc. Games with adult content would not be allowed to advertise anywhere minors could see them, and must be sold under the counter.

steve roger
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I guess Bob and I are talking about two different things. Bob is saying how it should be, and I am just relating what the state of the regulations and applicable law are right now. I shouldn't be arguing against change. There is a problem with trying to use a rule that says "third party modifications that result in revealing unrated content" are not covered by the ESRB rating. Because as long as method used to access that unrated content is legal you have rule that undermines the intent of Congress in allowing the ERSB be to regulate the industry and once you do that Congress would be able step right back in as described by Doug.



I suppose that you would have to effectively ban third party unlocking devices and describe it as tampering. However, you would run into a real difficult legal battle preventing it. Essentially, you would have to make devices products like gameshark illegal. I just don't see that happening.



The trouble I see is that there is a much simpler answer to the Hot Coffee issue. That is disclosure. Which would have resulted in two rated products. One mature version that didn't have the content and another version that could be unlocked and would be rated Adult. Because this is how such a disclosure would have been handled, Take-Two really doesn't have much of a defense.



Sorry, Bob if I got too preachy.

Evan Combs
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The game was rated M for Mature, meaning it was rated for adults people who are 17 or older. So what is the big fucking fuss about. You see the same kind of stuff in PG-13 movies, and Ma rated TV shows. I don't care if it was disclosed or not, if it was rated M it covered any sexual content, especially when the sexual content is just some dude humping a girl. You saw no naked body. Maybe the ESRB didn't know about it when they rated it, but the rating they gave it covered that material anyways.



Also I agree the ESRB has no balls, but that doesn't mean they should be disbanded. They just need new management.





"Congress made it clear that without an organization like the ESRB, the government would have to be directly involved."



You could make an argument that if the government stepped in, and enforced a rating system of their own that it would be unconstitutional.



"Without the protection of the ESRB (or something like them), based on laws that have been introduced in the past there would be no realist gore, no simulated violence against law enforcement, no 'look alike' weapons, etc. Games with adult content would not be allowed to advertise anywhere minors could see them, and must be sold under the counter."



Actually all of that would be illegal even without the ESRB.

Doug Poston
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@Evan: I would hope that the US government would find all those restrictions unconstitutional as well, but I'm not so certain. A lot of powerful people in the current government do not agree that video game's are protected free speech.

Bob Stevens
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Steve, Take-Two didn't do anything to specifically enable a gameshark code. As far as I understand gameshark and similar programs work by editing bits of memory while the game is running. Someone basically took the PC patch, found the right bits of memory to stomp in the console games, and turned that into the appropriate gameshark code. If I'm wrong on this then my whole argument is invalid and I'd appreciate being corrected by someone more knowledgeable about gameshark.



The issue of publishers putting stuff into games on purpose for people with gameshark to find is an odd one. As far as I understand it, creating gameshark codes is *hard*. It's probably much easier if you know something is there to unlock, but it's still a tough job. I've done some of this with hexediting old dos games to enable new features and it was weeks of work just to find the right spots to twiddle.



So you may be right, my solution isn't a perfect one, but I don't think game publishers intentionally putting porn on discs for people with gameshark to unlock is likely in 2009.



Just for fun, one game I worked on ps2 to psp network play that we had to drop at the last minute. But due to the way we disabled it, someone could enable that with gameshark, if they were clever enough and knew the name of the title. There are thousands of little things like that in shipped games, and the developers can't possibly track them all. That's why I'm not a fan of basing ratings on what can or can't be accomplished with gameshark.

steve roger
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I did it myself. I did not mean to say that they intended to enable a gameshark, however, it would really easy to prove beyond a reasonable doubt that it was a foreesable consequence for putting the Hot Coffee code in the game in the first place. All that has to be asked at trial is "well, if that content wasn't intended to be accessed why is it in there in the first place." Similar questions can be applied to content and commands accessed via developer's consoles. Certainly, you can say that developer content and commands aren't intended for customers but if they access it and it was pornographic you wouldn't be able to argue with a straight face that "it wasn't intended to be accessible so it shouldn't be considered subject to ESRB guidelines." In any event, it is just too easy to conclude that it was foreseeable that the Hot Coffee content would be accessible.



Anyway, Take-Two didn't do itself any favors during the Hot Coffee fiasco by the side stepping statements they made:



"According to its creators, the Hot Coffee mod merely unlocks hidden, preexisting code inside San Andreas. The game's publisher, Rockstar Games, appeared to vehemently--but carefully--deny that charge in a statement earlier this week. "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," the company said. "In violation of the software user agreement, hackers created the 'Hot Coffee' modification by disassembling and then combining, recompiling and altering the game's source code."





Rockstar's statement also claimed that the mod was the product of complex technical tampering. "Since the 'Hot Coffee' scenes cannot be created without intentional and significant technical modifications and reverse-engineering of the game's source code, we are currently investigating ways that we can increase the security protection of the source code and prevent the game from being altered by the 'Hot Coffee' modification," read the statement.





However, Rockstar Games' argument has been undermined by an increasing number of reports that claimed the sex minigame is in the PlayStation 2 version of San Andreas. Since the PS2 version comes on an unmoddable DVD, it cannot have any content added to it, although cheat codes--created either by the publisher or third parties--can unlock preexisting code on the disc. While devices such as GameShark and Action Replay Max can tweak preexisting variables in system memory with cheats, they cannot inject new models, animations, and/or code into a game."



Source: http://www.playstationalley.com/ps2/GrandTheftASAHC.php



This includes the codes, the basic Hot Coffee fiasco facts, stupid statements by Take-Two, and what you get when you access Hot Coffee.



___________________

Sure I understand what you mean about discarded content being revived. But the trouble is that the scenario you describe just doesn't quite fit the Hot Coffee fact pattern. It would if you said that a little or a lot of gamesharking resulted in an online strip tease or blood lust slaughter killings not available in the rated version then there is something to worry about. I just don't buy into the "we didn't know that the content was X-rated!" The most common question is the enabling of blood in a game. If a game is rated Teen without blood enabled but it is Mature with it enable what should the rating be if the blood is only accessible through a technique like gamesharking. The answer is actually pretty simple, just like I said before: disclosure. Tell the ESRB and find out what the rating will be by allowing that code to be accessible and make a business decision about it's being there and potential accessibility. Perhaps 2 versions of the game will need to be released, or only one. Of course, it is more expensive, but that is the cost of doing business in a society.


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