NEWS - Wednesday, July 20, 2005

Grand Theft Auto Gets An Adults Only Rating

Take-Two lowered its forecast for its third quarter ending on July 31 to $160 from $170 million in net sales and a net loss of 45 cents a share from 40 cents a share. For the fiscal year ending Oct. 31, 2005 Take-Two lowered its forecast to $1.26 billion to $1.31 billion in net sales and $1.05 to $1.12 in diluted earnings per share. The company is establishing a reserve fund to cover the value of the existing North American inventory, Take-Two spokesperson Jim Ankner said. Shares of the New York-based video game publisher sank more than 6% to $25.40 in late trading. "Grand Theft Auto" is one of the most popular video game franchises. It features graphic violence and mature themes. Take-Two said in a release Wednesday that the Entertainment Software Rating Board -- a video game industry regulatory body -- had changed its rating of the "Grand Theft Auto: San Andreas game," to "Adults Only 18+" from "Mature 17+." Grand Theft Auto game-play has traditionally included elements that allow players to engage in scenes that imply sex between characters. But a downloadable modification for the game -- dubbed the "Hot Coffee" modification -- allows players to unlock scenes which characters are depicted as actually have sex. Take-Two maintains that the "Hot Coffee" modification is an unauthorized, third-party product and violates the game's end-user license agreement and the company's intellectual property rights. Ankner said it is a standard industry practice to create content that never makes it into the final version of a game. Although the sex scenes are included in the software, they "were never intended to be found," he said. In addition to ceasing manufacturing of the game for all platforms, the company will also offer a downloadable patch for the PC version of the game in the coming weeks to block the scenes. Take-Two will also begin working on a new version which will retain the original "Mature 17+" rating and is expected to be available during Take-Two's fiscal fourth quarter. For versions currently in inventory, Take-Two will be providing "Adult Only" labels for retailers who wish to continue to sell the current version of the title. Late Wednesday Best Buy Co. issued a press release saying it is pulling Grand Theft Auto from its stores and online site.


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