The lock-down and ratings revocation came after a lengthy investigation by the ESRB, which was spurred by the discovery of an explicit sex mini-game hidden in the free-roaming, genre-shifting super hit by Rockstar.

Using a mod for the PC version of the game or an Action Replay device for the console version, gamers were able to unlock the Hot Coffee mini-game which allowed them to use a controller or keyboard to have sex with a girlfriend after a date.

In making the decision, ESRB head Patricia Vance said the existence of Hot Coffee can’t help but undermine the credibility of her organization.

After a thorough investigation, we have concluded that sexually explicit material exists in a fully rendered, unmodified form on the final discs of all three platform versions of the game (i.e., PC CD-ROM, Xbox and PS2).

However, the material was programmed by Rockstar to be inaccessible to the player and they have stated that it was never intended to be made accessible.

The material can only be accessed by downloading a software patch, created by an independent third party without Rockstar’s permission, which is now freely available on the internet and through console accessories.

Considering the existence of the undisclosed and highly pertinent content on the final discs, compounded by the broad distribution of the third party modification, the credibility and utility of the initial ESRB rating has been seriously undermined.

The news came about 4 p.m. New York time, within minutes of the closing of the stock market, delaying the immediate financial impact on Rockstar’s parent company, Take-Two.

Rockstar initially denied creating the content on the disc in a carefully worded statement that read in part:

In violation of the software user agreement, hackers created the “hot coffee” modification by disassembling and then combining, recompiling and altering the game’s source code.

Reached for comment Wednesday, Rockstar spokesman Rodney Walker called the decision a new challenge for the industry and digital entertainment in general.

Rockstar has offered retailers the option of either re-stickering existing inventory with an AO (Adults Only 18+) rating, or exchanging all unsold inventory for new versions of the game that has the hidden content removed and the original M rating intact.

The developer will also be making a downloadable patch available to all consumers who have previously purchased the PC version of the game, which will make the modification that unlocks the material inoperable.

The decision could have a sweeping impact on the industry as a whole. The decision forces the ESRB to consider Easter eggs, hidden content and perhaps even the ability to mod a game in rating future games.

It also could lead to a crack-down by the industry on the modding community, forcing game developers to spend more time making their games mod and crack proof lest they be held responsible for some future modification of their game.