GAMEWORKS FINDS FUNDS FOR NEW SITES; $76 MILLION BROUGHT IN.

Byline: Dave McNary / Daily News Staff Writer

Sega GameWorks, the fledgling chain of high-tech arcade nightclubs, announced Monday it has raised $76 million as it prepares to open 100 outlets in five years.

``This is an affirmation of the blueprint we've established,'' said Michael Montgomery, president of the joint venture between DreamWorks SKG, Universal Studios and Sega. ``We're getting a very broad demographic of customers beyond young men, with about half being repeat customers.''

The funds came from unnamed institutions and private investors through a placement organized by Donaldson Lufkin & Jenrette. GameWorks, based at Universal in North Hollywood and overseen by industry superstar Steven Spielberg, also announced it has drawn nearly 2 million customers to sites in Seattle, Las Vegas and Ontario, Canada, in five months.

The sites offer custom-designed attractions, hundreds of video games, bars and restaurants with the goal of attracting free-spending upscale adults rather than teen-age loiterers. They are part of the trend of bringing the feel of theme parks into major American cities, highlighted by Walt Disney Co.'s recent decision to launch a DisneyQuest chain of interactive sites.

Montgomery said the investors were impressed with not just the initial response but also the long-term potential of the concept. ``They like GameWorks as an alternative to going out to dinner and the movies,'' he said.

GameWorks launched its first site in Seattle in March and plans to open locations in Phoenix and Dallas by the end of the year. It will roll out eight facilities next year, including Miami, Long Island, N.Y., and Brazil, according to Montgomery, and will eventually raise more funds through a public offering.

Kevin Skislock, an analyst with L.H. Friend, Weinress, Frankson & Presson, said the GameWorks sites he has visited need fine-tuning. ``GameWorks has potential, but they need to attract more of a cross section,'' he said.