Updated from 6:04 p.m. EDT
Take-Two Interactive (TTWO - Get Report) is ceasing production of the latest version of its popular Grand Theft Auto game following public outcry about a software hack that allows players to see racy sex scenes.
The video-game software publisher is setting up a reserve fund to cover the value of copies of the game still in its inventory. As a result, Take-Two is slashing its outlook for its fiscal third quarter and its full fiscal year.
Investors frowned on the news, sending the company's stock down nearly 7% in after-hours trading.The move is in response to and follows the completion of an investigation by the Entertainment Software Rating Board, a regulatory body set up by the gaming industry. New York Sen. Hillary Rodham Clinton and other public officials have called for separate inquiries. The ESRB has advised retailers to stop selling GTA until the "corrective actions" have been taken. According to the ESRB, Take-Two agreed as part of the settlement to either re-label for retailers the current version of GTA with an Adults Only rating or to exchange all unsold copies the retailers are holding for copies of the updated game Take-Two "is pleased that the