With the settlement, New York-based Take-Two Interactive Software Inc. and Rockstar Games Inc. face fines of up to $11,000 per violation if they violate the order, once it becomes final. The companies also must recall existing "Grand Theft Auto: San Andreas" games and offer a software patch.
The deal with regulators comes just one day after Congress gave overwhelming approval to legislation that will make broadcasters pay exponentially more for airing racy material that the Federal Communications Commission considers indecent. The measure, which awaits President Bush’s signature, would fine broadcasters $325,000 per incident, a tenfold increase.
Word of the settlement grew quickly during the first day of the two-day Sex in Video Games Conference in San Francisco, which was attended by nearly 150 adult and game industry representatives on Thursday.
Many of the attendees weren’t surprised about the settlement.
“The whole controversy was stupid; it was really bad porn, so God bless them for getting to that stage,” Dave Taylor, a game programmer at DDT, told XBIZ.
Brian Shuster, CEO of Utherverse, which offers the just-launched RedLight Center, a 3D “red-light district”-themed game, said all of the publicity surrounding the controversy worked economically well for the two companies.
“It was the greatest marketing move in the game industry,” Shuster told XBIZ. “Geez, how many times were they mentioned in the press?”
Take-Two’s best-selling "Grand Theft Auto: San Andreas" game included the sex scene known as "Hot Coffee," which could only be unlocked and viewed with a computer download and implementing “cheat codes” on PlayStation 2 and Xbox equipment.
Retailers that do not carry adult-rated games pulled the title from shelves, costing Take-Two millions of dollars and putting a chill on an industry accustomed to self-censorship. Later, the gaming industry’s ratings board slapped an "Adults Only 18+" label on “Grand Theft Auto: San Andreas.”
Take-Two claimed it incurred $24.5 million in costs associated with returns of the game, which generated $100 million in sales within its first month of release in October 2004.
With the FTC deal, company officials must properly notify consumers of racy content on future games. The companies also have released a patch that, if downloaded and installed on the game, disables the “Hot Coffee” program; the patch is available for download at www.nomorehotcoffee.com.
The companies also will be subject to compliance reporting requirements to ensure that they meet the terms of the order.
“Parents have the right to rely on the accuracy of the entertainment rating system,” said Lydia Parnes, director of the FTC’s Bureau of Consumer Protection. “We allege that Take-Two and Rockstar’s actions undermined the industry’s own rating system and deceived consumers. This is a matter of serious concern to the commission, and if they violate this order, they can be heavily fined.”