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Opinion: Time For A 'Hot Coffee' Postmortem

Opinion: Time For A 'Hot Coffee' Postmortem Exclusive

September 8, 2009 | By Leigh Alexander

September 8, 2009 | By Leigh Alexander
More: Console/PC, Exclusive

With Take-Two's $20 million settlement with its investors late last week, the long-wrought 'Hot Coffee' episode finally comes to a close. The settlement comes after the $2.75 million the publisher had previously set aside for payments and costs to incensed consumers -- and that's not all.

Once a user mod revealed a hidden sex minigame, the recall, re-rating and re-release of Grand Theft Auto: San Andreas the publisher had to undertake was surely expensive, concussing revenues -- where major GTA releases usually bring windfalls, the company's third quarter in 2005 showed a $28.8 million loss.

An estimate based on legal costs and lost sales is ultimately just a ball-park guess, of course -- that $20 million also compensates investors for Take-Two's stock option backdating scandal, and the company's insurance paid much of it. It's also impossible to create a precise lost-sales figure.

But the financial cost of "Hot Coffee" to Take-Two is clearly in the tens of millions, at least -- a huge price tag for a small share of game content consumers were never even supposed to see.

How'd It Happen?

Or were they? We'll never know, really -- on one hand, there was no way to access the scandalous content through normal gameplay. On the other hand, the developers had to be aware of the thriving mod community around GTA games; it's hard to believe Rockstar didn't foresee that someone out there would find a way to unveil the hidden content.

That someone turned out to be now-legendary Dutch GTA modder Patrick 'PatrickW' Wildenborg, who claims it wasn't even a particularly difficult mod. "The only thing I had to do to enable the mini-games was toggling a single bit in the main.scm file," he explains on his site -- finding the bit to edit was harder than the toggling itself, he says.

"All this material is completely inaccessible in an unmodded version of the game," says Wildenborg. "It can therefore not be considered a cheat, easter-egg or hidden feature, but is most probably just leftover material from a gameplay idea that didn't make the final release."

Theories abound, certainly -- an experiment with adults-only content that got kiboshed? A developer in-joke no one ever thought consumers would find? An internal prank? But neither Rockstar nor Take-Two has ever explained exactly how or why the mini-game got into San Andreas, and as the episode's shadow has hung over the publisher for quite some time as it is, it's unlikely they'll ever address it.

On The Mend

Under the nurturance of chairman Strauss Zelnick, Take-Two has made a steady, successful turn-around from its checkered past, colored not only by "Hot Coffee," but by the corruption of its past execs. With the company finally in the clean-and-clear, none can blame Take-Two for aiming to move on and forget it.

But the how and why of 'Hot Coffee' is important. The content might have cost Take-Two millions and caused it inestimable headaches, but the entire industry paid for that episode, too.

The scandal impacted the reputation of grown-up video games in the eyes of new consumers taking their first look. 'Hot Coffee' ammunized the old-fashioned protests against games, complicated the battle for mature content and mature consumers, and disarmed game developers hoping to earn respect among "the rest of the world" for the work they were doing.

Take-Two might have finally moved on, but 'Hot Coffee' still hangs over the Entertainment Software Ratings Board, whose fight to build consumer trust in a self-governing ratings system is still weighted by this one high-profile episode where developers ducked outside that system. That the whole of GTA: SA was never intended for the young or easily scandalized becomes a moot point.

The Bad Get Cooler

All this while, time and distance have effectively turned 'Hot Coffee' into something of a positive for developer Rockstar -- safely under the umbrella of its publisher, Take-Two's golden calf can benefit, in consumers' eyes, from its rebel reputation.

Provocative wit, dark humor and continual boundary-pushing is part of the studio's aesthetic, and gamers love a rogue. 'Hot Coffee' has since gone from a costly and serious scandal to the sort of legendary prank that just makes the class bad-boy cooler.

An episode like 'Hot Coffee' would likely have been the end of a less-gifted developer, but far from penalizing its hip talent, Take-Two has bent over backward to retain and reward it in unprecedented ways.

The Collateral Damage

Rockstar brass emerge unscathed as the 'Hot Coffee' chapter closes at last. But the significant damage to the rest of the industry is impossible to count in dollars.

In fact, of the $2.75 million Take-Two set aside to compensate consumer claimants, it ultimately only paid out $300,000. Consumers were angry, but few actually bothered to claim their cash -- proving the "damages" were to things larger and less quantifiable than people's wallets.

Take-Two's prior leadership was ousted and replaced for its numerous failings. A court ruled that consumers who claimed GTA: SA's M-rating was "deceptive" were entitled to money. Shareholders who claimed the value of their investments were damaged by the episode were compensated by law.

Now that legal issues are no longer an excuse for the publisher to be tongue-tied, here's calling for a 'Hot Coffee' postmortem: Why was that content there? What was its original function? Who, exactly, was responsible, and how was it dealt with? What did management and lead design learn from the incident, from both a technical and an HR standpoint?

Restitution has now been made to all the affected parties -- but how will the rest of the industry be compensated for what it's lost to 'Hot Coffee'? The least it can ask for is the facts at last.

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