'Grand Theft Auto' Maker Settles With FTC

The settlement calls for the video game maker to prominently display content relevant to a game's rating on all future packaging.
The maker of the best-selling "Grand Theft Auto" videogame series settled with the Federal Trade Commission (FTC) Thursday over a complaint that the company hid sexual explicit content in its "San Andreas" title last year.

The FTC and Take-Two Interactive both announced the agreement Thursday, which requires the videogame maker to prominently display content relevant to a game's rating on all future packaging, and to create a system for reviewing game content when submitting it to any rating organization.

No fines were levied as part of the deal, but Take-Two will be subject to penalties of up to $11,000 per violation for any future problems, the FTC said. Take-Two will also have to file compliance reports with the federal agency.

The FTC's charges came out of last year's brouhaha over "Grand Theft Auto: San Andreas," which was released with an "M" rating (Mature 17+). However, the game actually included secret character nudity and graphic sex scenes that could be unlocked by installing a small modification, or "mod," file. The FTC said that Take-Two violated the law when it obtained the more lenient rating -- rather than an AO (Adults Only) -- even though it knew of the hidden content.

Take-Two was lambasted by Congress and parent groups, and responded in August 2005 by releasing a patch that removed the "mod" file, and pulling the game from store shelves until it could re-release a version stripped of the cloaked sexual content.

Also on Thursday, Take-Two posted a second-quarter loss of $50.4 million (71 cents a share), compared to a Q2 2005 loss of $8.2 million (12 cents a share) even as revenue climbed to $265.1 million from $222.1 million. The company also wrote off $24.3 million related to the ditching of several games in development and the closing of two studios.

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