GT Interactive Strengthens Global Presence With Acquisition of U.K. Software Developer, Reflections Interactive Ltd.

NEW YORK--(BUSINESS WIRE)--December 22, 1998--

GT to Publish New Driving Game This Spring by

Creators of Hit `Destruction Derby' PlayStation Series

Reflections Becomes Sixth Internal GT Interactive Studio

GT Interactive Software Corp. (Nasdaq: GTIS) further expanded its international presence and augmented its stable of quality internal software developers today by agreeing to acquire U.K.-based Reflections Interactive Ltd., executive partner in the premier software development studio, for 2.28 million shares of common stock. GT Interactive plans to release its first Reflections title, Driver, for both the PlayStation and PC in the Spring of 1999. There may be additional consideration payable based upon future results of the studio. The acquisition is expected to be non-dilutive to GT Interactive's fiscal 1999 earnings.

"With nearly 15 years experience creating hit games on several platforms, Reflections is one of the most formidable developers in the industry," said Ron Chaimowitz, chairman and chief executive officer of GT Interactive. "They have an unquestionable ability to create global brands with successful sequels, as demonstrated by their multimillion-unit selling Destruction Derby franchise. Reflections joins GT Interactive's growing stable of internal software studios which includes Bootprint Entertainment, Cavedog Entertainment, Humongous Entertainment, SingleTrac and Oddworld Inhabitants."

"As we continue to grow our international market share, developers like Reflections -- which can design products specifically for Europe as well as those with broader global appeal -- become vital to our success," said Harry Rubin, president of International for GT Interactive. "With their proprietary technology and track record of producing hits, we are pleased to have Reflections as the flagship GT Interactive studio in the U.K."

With the addition of Reflections, GT Interactive builds upon its strategy to establish internal development capabilities for further control over intellectual properties, development time and margins.

Based in Newcastle, England, the studio was founded in 1984 and has produced several best-selling games across PC and console formats. Reflections' Destruction Derby and Destruction Derby 2 games for PlayStation each achieved more than one million units in global sales. The company's Shadow of the Beast series for the Amiga computer was also an industry best seller. Its first title for GT Interactive, Driver, is a car chase game (PlayStation and PC) set in the U.S. and it features a newly designed game engine.

"We are very pleased to be working with GT," said Martin Edmondson, of Reflections. "We like the company and have the greatest respect for their achievements in the industry. We are hoping to deliver some great titles and establish strong franchises for them. The backing of GT will give us the benefit of their expertise in marketing and distribution."

Headquartered in New York, with 1997 revenues of $531 million, GT Interactive Software Corp. (www.gtinteractive.com) is a leading global cross-media entertainment company which develops, markets, merchandises and distributes game software; creates e-commerce, electronic storefront leasing, advertising and content licensing opportunities on the Internet; and produces television programs. Via its OneZero Media subsidiary, GT operates a specialized entertainment portal, www.getwild.com, which acts as the Entertainment Zone on AltaVista; and produces the nationally syndicated television program, The Wild Wild Web. The company's software labels include GT Interactive, Humongous Entertainment, Cavedog Entertainment, SingleTrac, WizardWorks, CompuWorks, MacSoft and Slash. -0-

Certain statements contained in this press release may be deemed forward-looking statements that involve a number of risks and uncertainties. The company's actual results may differ materially from the expectations expressed in such forward-looking statements. Among the factors that could cause actual results to differ materially are worldwide business and industry conditions, including consumer buying and retailer ordering patterns, product delays, changes in research and development spending, company customer relations, in particular, levels of sales to Wal-Mart and other mass merchants, retail acceptance of the company's published and third-party titles, competitive conditions and other risks detailed, from time to time, in the company's SEC filings, including, but not limited to, the company's form 10-K for the period ended March 31, 1998.