CryptoLogic Realizes Profit On Sale Of Internet Magazine.

TORONTO--(BUSINESS WIRE)--Dec. 13, 1999--

(TSE:CRY.)

CryptoLogic Inc., a leading Toronto-based Internet software development company, today announced the sale of Gamesmania, a wholly owned subsidiary, to Hip Interactive Corp. for $1.7 million in cash and stock. The transaction enables CryptoLogic to realize a profit on its January 1999 purchase of Gamesmania, a leading electronic magazine and operator of one of the most popular video game sites on the Internet.

"Today's announcement fulfills CryptoLogic's original goals in purchasing Gamesmania," said Andrew Rivkin, CryptoLogic's president and CEO. "Not only has CryptoLogic realized a sizeable profit for its shareholders, but we have also maintained valuable equity in the fast-growing Internet entertainment market by taking back shares in Hip Interactive Corp."

Hip Interactive Corp. was formed in 1999 to create a fully integrated name brand E-commerce business, selling video games and consumer PC software. On Thursday, December 9th, 1999 Hip completed the acquisition of six companies, being Gamesmania Inc., an award winning and popular Internet electronic magazine (e-zine) which offers reviews of video games to its visitors, Software Online Inc., a consumer software and computer peripherals E-tailer; Operational Excellence Inc., an E-commerce solutions provider; Microplay Entertainment & Video Centers Inc., a franchiser of video game and PC software retail stores, Softek International Inc., a of consumer software and video games and Gameworld Inc., an operator of coin-operated video arcades. To reflect those transactions, Hip raised $16,094,000 by way of a private placement.

Hip Interactive Corp. has submitted an application for visible quotation of its common shares on the Canadian Dealing Network under the trading symbol "HIPI"; however, as of the date of this press release, CDN has not completed its review of such application.

Gamesmania will benefit greatly from the move to Hip Interactive Corp. in that, they will be able to expand their product offering from solely PC gaming into console gaming as well. This means that their coverage will include Sony Playstation, Sega Dreamcast, Nintendo 64 and many other popular platforms. Under the Hip Interactive Corp. umbrella, Gamesmania should be in a better position to compete in their Internet space.

In addition to this strategic move for Gamesmania, CryptoLogic may have the opportunity to provide its E-commerce facilities to this new entity and is currently in discussions with the management of Hip Interactive Corp. to this end.

On January 6th 1999, CryptoLogic announced that it had purchased the assets of Gamesmania from Internet Frontier Inc. (iFront), a wholly owned subsidiary of Microforum Inc. (TSE:MCF). For competitive reasons, the material terms of the transaction were not publicly disclosed.

CryptoLogic Inc. (TSE:CRY) is the leading software development company serving the fast-growing Internet gaming market. The company's proprietary technologies enable secure, high-speed financial transactions over the Internet. CryptoLogic continues to innovate and develop state of the art Internet software applications for both the electronic commerce and Internet gaming industries.

CRYPTOLOGIC FORWARD-LOOKING STATEMENT DISCLAIMER:

Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including without limitation risks associated with the Company's financial condition and prospects, legal risks associated with Internet gaming and risks of governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on licensees and key licensees, risks associated with competition and other risks detailed in the Company's filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking statements.