$20 million for cyber-sex

Wow! $20 million for putting a sex scene in a video game that rewards players for beating up hookers?  Only in America!

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Take-Two Interactive Software said today that it reached an agreement to settle a securities class-action lawsuit that stemmed from its infamous “hot coffee” incident involving hidden sex scenes in a Grand Theft Auto video game four years ago.

In that incident, developers at Rockstar Games included a hidden sex scene in their hot-selling Grand Theft Auto: San Andreas video game. The scene (right) wasn’t playable in the game until a hacker released a tool that unlocked it. When word got out about the “hot coffee mod,” it caused a flurry of controversy.

The company first claimed the scene was the work of hackers, and then it discovered the scenes were inadvertantly left on the game disks by the Rockstar Games developers. Parents were not pleased that the scene let the hero of the game accept an invitation for hot coffee from a bikini clad woman and  then engage in sex in her apartment. It led to a product recall and the tanking of the company’s stock price. About a billion dollars in market capitalization evaporated, but investors sued when they discovered that company officials had made questionable statements during the price collapse. The incident was one of the factors that led to a complete overhaul of the management team.