Babbages Predicts Record Holiday Sales for Gaming Industry.

GRAPEVINE, Texas--(BUSINESS WIRE)--Sept. 15, 1999--

Interactive Entertainment Retailer Credits New Gaming Hardware

And Software Titles

Plus Pokemon Phenomenon For Explosive Growth

Driven by new gaming hardware, an explosion of hotly anticipated software titles, plus a youth market Pokemon phenomenon, Babbage's Etc., a leader in PC and video games specialty retailing, is forecasting the biggest computer games holiday sales season in industry history.

The 500-store retail chain, bolstered by the launch of Sega's new Dreamcast system on September 9, 1999, is coming off the single best sales day in its history -- more than doubling the chain's previous high-water mark which occurred during the 1998 holiday season. Driving the cash registers was its industry-record of more than 100,000 pre-orders for the new 128-bit Dreamcast systems.

More than 175 Babbage's and Software Etc. stores opened at midnight -- the rest opening by 7 am -- to greet gaming fanatics hungry for the new gaming console. Special in-store promotions in San Jose and Los Angeles co-sponsored by Sega also contributed to the "Hollywood" premiere atmosphere.

The single day September 9 sales record also carried over to the company's new e-commerce site, www.gamestop.com, which delivers hot new product to customers the same day it hits their retail stores.

But Babbage's Etc.'s President Dan DeMatteo predicts Santa's sleigh will be loaded with much more than Dreamcast systems and accessories. According to DeMatteo, today's product mix appeals to a broader range of buyers than ever before. One example of the market's growing diversity is the Pokemon phenomenon. The company predicts another nationwide sales bonanza on October 18 when Pokemon Yellow for the Nintendo Gameboy system is released.

"The Pokemon phenomenon has brought us a whole new group of gamers including girls," DeMatteo said. "It is a huge market, including games, cards and other collectibles."

DeMatteo added that by slashing prices to $99 both Sony and Nintendo 64 have stayed in the game, attracting new buyers in record numbers. The chain's Playstation and Nintendo 64 console sales doubled in September in spite of the Dreamcast launch and DeMatteo expects this sales trend to continue through the holidays. The retailer also sold more than 60,000 copies of Final Fantasy VIII, a popular Playstation title, on September 9, and expects the game to stay atop of best-seller charts.

"We're predicting Playstation and Nintendo 64 sales to continue especially as new software titles are released closer to the holidays. Donkey Kong for Nintendo 64, Resident Evil for Playstation, Nintendo 64 and Dreamcast, and Command & Conquer: Tiberian Sun for PCs all will help to push us to record sales.

"Today's gaming systems now offer the cutting edge in microchip and software technology," DeMatteo added. "With an ever growing number of developers delivering exciting and diverse gaming titles and the widening demographic of our audience base, we have all the elements needed to sustain an exceptionally robust market.

"The gaming industry has never been healthier and we're confident of record sales throughout the fall and this holiday season," said DeMatteo.

Babbage's Etc. is a leading specialty retailer of video games, PC games and gaming accessories. The privately held company opened 70 new stores this year and will finish fiscal `99 with over 525 stores. Babbage's Etc. operates retail outlets under the Babbage's, Software Etc., Gamestop and Planet X names. Babbage's Etc. is headquartered in Grapevine, Texas.