Reheating Hot Coffee: Take-Two Reaches $20M Settlement with Investors

September 2, 2009 -

Take-Two Interactive announced yesterday that it has reached a $20 million settlement in a class-action lawsuit filed over the 2005 Hot Coffee scandal.

Although T2's press release is regrettably light on details, securities are mentioned, indicating that  this case is related to loss of equity value caused by Hot Coffee and its fallout.

Venture Beat has dug up a link to the complaint, Feninger vs. Take-Two. Kotaku offers an explanation of the details:

The nut of the allegations contained in the 34-page suit, is that Take-Two was spending more than it was bringing in and couldn't survive until the next Grand Theft Auto. So, the suit alleges, the company pushed Grand Theft Auto: San Andreas out the door knowing that there was pornographic material in the game because delays would have cost the company too much. If the material was known to be in the, the suit continues, major retailers wouldn't have sold it.

The outcome, according to the suit, was inflated stock prices based on bad or uninformed information from the company and a plunge in stock values when the truth came out.

The suit also alleges that Take-Two lied about the included sex scenes, nicknamed Hot Coffee, when they first came to light, with the company the scenes were "the work of a determined group of hackers who have gone to significant trouble to alter scenes.'"

GP: We should point out that, as the record shows, the notion that Take-Two lied about the origin of the Hot Coffee scenes is a fact, not merely an allegation. In one the sleaziest moves ever seen in the game biz, Take-Two tried to pin the rap for the hidden sex scenes on its biggest fans, the GTA mod community. To be fair, there was a different management team in place back then.


Comments

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

I always thought this so called scandal was hilarious in a way. People made such a big fuss about the hidden sex scene in the game. I mean come on, we are talking about a game where you murder hundreds of people, steal cars, and do all kinds of other horrible things. Does the addition of a sex mini game really make it that much worse? Hell, having sex is one of the only legal activities you do in the game!

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

And how much of this settlement is going to go to the lawyers? Probably at least 80% of it. Class actions are generally a waste of time in this sort of situation. 

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Class actions are an even sweeter gravy train for plaintiffs' counsel than taking cases on a contingency basis. Contingencies are usually capped at 33.3% - 40%. Class actions allow for 100% recoupment of billables and expenses, usually limited by nothing more than the point at which the plaintiffs' counsel believe their claim for billables and expenses will be rejected by the court as excessive. It's not unheard of that the lawyers in a class action walk away with millions of dollars while each individual class member walks away with $179.57. 

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Hot Coffee was in the code but wasn't available to anyone until the mod community found the boolean variable and changed it. As far as I'm concerned modification to the game's code was needed to be able to play Hot Coffee. Although I do remember that Take Two stated that the whole mini-game was created by mods which wasn't true it was just unlocked by them. Yes they lied, they shouldn't have lied, but then again it's not as though they tried to blame it on any one one person, just the "mods" (a faceless entity), I fail to see how the modding community would've been affected by the blame.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Double post!


Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Blaming it on a group of people, their fans no less, only increased the impact felt when they were proven to be liars. How long did it take between the time it was uncovered and blasted on the airwaves and them falsely accusing the modding comunity? Did they atleast try to search the games coding before the accusations began?

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Frankly, the whole thing turned into some hilarious pantomime...

'Oh no we didn't!'

'Oh yes you did!'

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

And now you're rippin, sippin, dippin AND eating puddin!

 

==========================================================

We're all outta PIE! and adult comic books! and i've misplaced my Turbografix!!!

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Wow, talk about gaming the legal system. $20 Million class action suit for something that could not be seen by the general public without a MOD.

How do you attain "class action" status on something you willfully had to go find a MOD for to unlock and see?

Jeez our US legal system is broken.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

On the PC you had to download and install a mod. And I am highly, HIGHLY doubtful that anyone downloadedit and didn't expect anything to happen, and if it did it was likely some parent that didn't understand technology yet their child did.

On the consoles it involved voiding the console warranty by opening it up and altering the chipset. It wasn't a Konami code situation.

In both cases it was a waste of time and effort to see the polygonal equivelent to dry-humping.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

No you don't need to open a console to see the hot coffee mod. Just put the Action Replay Max on the PS2 and enter the code to unlock the hot coffee game.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Ah, ym bad. Still, it was a lot of effort that amounted to something stupid.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Yes, T2 management wrongly tried to pin the blame for Hot Coffee on modders.

However.

The notion that they somehow knew it was in there, intended to scrap it, and deliberately decided to leave it in to save the time it would take to cut it out, is absurd.  It was a bit of dead, unused code, and I find it very doubtful that management was aware of it beforehand.  Why would they be?  Information about the actual coding in the game at that level is probably not bumped up all the way to upper management.  And again, this does not at all excuse their trying to blame it on modders.  All I'm saying is, they didn't make any kind of actual decision to leave it in, they probably didn't even know about it.  They are guilty of mishandling Hot Coffee's aftermath, not of conspiring to leave it in the game.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Considering the sheer volume of things in that game I'm not really surprised they left something in.

----------------------------------------------------

Debates are like merry go rounds. Two people take their positions then they go through the same points over and over and over again. Then when it's over they have the same positions they started in.

---------------------------------------------------- Debates are like merry go rounds. Two people take their positions then they go through the same points over and over and over again. Then when it's over they have the same positions they started in.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

I doubt it was left in on purpose, the likely simply didn't have time to code it out of the game completely.

But ya, laying the blame on the mod comunity was a bad, BAD move, especially since most GTA mods consist of texture or model changes, nothing this complicated.

Of course SOME people had to begin drawing absurd lines that didn't make sense, about some kind of vast conspiracy to distribute porn to children.

Of course thanks to this whole mess I can't trade in my old PS2 copy of San Andreas/

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

I guess Take Two pretty much lost 20 of the 50 Million (excluding attourney fees I assume) Microsoft gave them for making the so called "exclusive" expansion packs. Still I'm glad they lost, it was a low blow to the fans when they were playing dumb and pointing the finger at us even thou the file was there from the get go.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Take Two isn't paying the majority of it. according to Kotaku, TT will pay around 4 million out of pocket, and their insurence (i guess they have insurence against this stuff...smart move on their part) will pay the rest.

 

I'm guessing they'll have to pay more for their insurence though, so indirectly it'll probably still hit them hard.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

You are right about the insurance.

All companies have some sort of liability insurance for cases like this. But still the way this scandal was managed leaves very little to desire and gave a black eye to the game industry in general so a way I am glad they lost but a part of me is saddened cause they are one of my favorite publishers.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Wait, we have to put up with this again?

 

=========================================================

We're all outta PIE! and adult comic books! and i've misplaced my Turbografix!!!

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

You're tired of hearing about it but you took the trouble to click the link and then comment on it?

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

I don't think that's what he meant.  I think he was expressing surprise and dismay that this dead-and-gone issue from years past has been dredged up from the depths, not that he is sick of hearing about it.  After all, who talks about Hot Coffee anymore?  Exactly.  ;)

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Not to surprising though, if the Rapelay articles still come, it shouldn't be to surpirsing that an even deader horse would be beaten.

Personally,  I still think the Hot Coffee thing was blown way out of proportion unfortunly.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

It's not that Hot Coffee was blown way out of proportion, it was that Hot Coffee was handled poorly by everyone involved.

---You are likely to be eaten by a Grue.

---You are likely to be eaten by a Grue.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Okay, blown out of proportion by the politicans, handled poorly by Take-Two.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Ah, okay, that makes much more sense.

Hadn't had my coffee yet...

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Oh, it could be worse. It could be another Rapelay article.

---You are likely to be eaten by a Grue.

---You are likely to be eaten by a Grue.

Re: Reheating Hot Coffee: Take-Two Reaches $20M Settlement ...

Or it could be raining.

 
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