Paul Eibeler, President and Chief Executive Officer, stated, "We are extremely pleased that the FTC has concluded its very thorough investigation, and that the matter has been resolved. We recognize the importance of maintaining public confidence in the Entertainment Software Rating Board (ESRB) rating system and helping the ESRB educate parents and consumers about the rating system. We look forward to putting this behind us and focusing on what we do best - creating video games."

Wedbush Morgan stock analyst Michael Pachter predicts in a report that the jury investigation could last several months and while it is difficult at this point to determine just what the grand jury hopes to find, it is possible a few Take-Two employees will face potential criminal indictment and conviction over their involvement with Hot Coffee. Take-Two employees and directors both current and former will likely be asked to testify in court in the future.

"The subpoenas leave us baffled," continues [Pachter's report], "and raise the specter of quite serious consequences. The potential outcomes range from indictments and convictions of key employees to no indictments issued at all. Should one or more key strategic, operating or creative employee be charged with criminal activity, we believe that at a minimum, the employee charged would be distracted from performing his or her duties for the company, and at a maximum, the employee charged would be convicted and would likely leave the company."

Take-Two and Rockstar's legal woes don't end there, unfortunately. Actor Roger Hill has sued the companies over use of his likeness in the recent video game adaptation of the 1979 motion picture, The Warriors. Hill explains he had previously declined to work with the companies during development of the game, but Take-Two maintains it had secured "valid third-party license for the rights to use Roger Hill's likeness and the character of Cyrus in The Warriors video game and related marketing materials."

The agreement, outlined in a 10-Q filing yesterday, is for a three-year term, and provides for the payment of $25 million in restricted stock, plus unspecified internal royalties.

The 10-Q explores the value of Rockstar's creative heads, and the risk to the company of any failure to offer a decent package to GTA's bosses. It states, "We rely on our management and other key personnel for the successful operation of our business. In particular, we are highly dependent on the expertise, skills and knowledge of certain of our Rockstar employees responsible for content creation and development of Grand Theft Auto and other titles."

In spite of all the Hot Coffee headaches the GTA franchise caused for Take-Two and Rockstar, the publisher certainly has no plans to reliquish their hold on the series anytime soon.

Xbox GTA fans can expect to see "Grand Theft Auto: The Trilogy", a compilation package that includes the GTA III, Vice City and San Andreas games. PS2 gamers meanwhile can choose to pick up the GTA: San Andreas Special Edition, which bundles San Andreas as well as "The Introduction" game movie CG and "Sunday Rider" documentary DVDs.

These special edition GTA releases should hit retail this October 18th. Naturally, both will bundle the M-Rated version of San Andreas that removes the hidden, incriminating Hot Coffee evidence from its game code. You will recall that current versions of San Andreas have been re-rated to "Adults Only", seeing as how they feature the Hot Coffee content.

Rockstar has promised to release a "new" version of the game that will conform to the ESRB guidelines for an "M" rating, and ship "AO" rating stickers to retailers that still plan on selling the game as it is. That said, the publisher still stands to lose a bit of revenue, as many retailers like Best Buy and Circuit City are expected to pull the game from shelves until that new "M" version launches.

Many retailers sell "M" rated games, which "may be suitable for persons ages 17 and older," according to the rating board, but won't sell "AO"-labeled games at all.

Take-Two also said Wednesday that it expects to suffer financially. It lowered its expectations for its current quarter and fiscal year to set aside funds for returns of the games, and figured that net sales could decrease by more than $50 million during the quarter ending July 31.

Senator Hillary Rodham Clinton of the District of New York today has called upon the Federal Trade Commission (FTC) itself to investigate the allegations as to where this questionable content is really coming from. Clinton has also expressed her dissatisfaction with the current Entertainment Software Ratings Board (ESRB) rating system, urging the FTC to examine the rating policies of the ESRB and retailers. Further drawing upon the momentum spurred by this one case, she is committed to proposing a bill to the Senate that would make it a federal offense in the U.S. to sell mature/adult-rated games to customers outside of their the target age group.

'No wonder these games are falling into the hands of our children and no wonder so many parents feel everyday like they are fighting this battle with their hands tied behind their backs,' Clinton said. 'We need to do better. We need to do everything we can to make sure that parents have a line of defense against violent and graphic video games and other content that go against the values they are trying to instill in their children.'

This investigation was prompted when a recent unofficial mod, made available for download for the PC version of the game, claims to utilize "unused code" for certain (after-)dating events inside the main game to create some saucy mini-games for the player to at last see and ultimately control to a certain extent. The ESRB's goal is to find out just how much, if any, of this content was indeed hidden in the game by the developers:

ESRB president Patricia Vance said her organization has "opened an investigation into the circumstances surrounding the 'Hot Coffee' modification." "Hot Coffee" refers to the mod which, when installed on a PC with San Andreas on it, unlocks several minigames which prompts players to have the game's hero in X-rated acts.

The ESRB's investigation will examine whether or not the mod unlocks pre-existing code, as appears to be the case, or is actually a purely third-party creation. Its ultimate purpose will be to determine if Take-Two violated ESRB regulations requiring "full disclosure of pertinent content."

To tell you the truth, I would be somewhat impressed if Rockstar really did go to all the trouble of cooking something up for the "coffee" sequences, only to shove it to the nether regions of the game and away from prying eyes in the end. :P I wouldn't be surprised if it was just the work of the mod itself though, but we'll have to wait and see where this goes. It could just be a bit of senstionalist reporting, in the very end.