Infogrames Entertainment Announces 1999/2000 Full-Year Results; a Year of Investment in a Time of Transition.

Business Editors

LYON, France--(BUSINESS WIRE)--Oct. 10, 2000

Infogrames Entertainment (Paris Bourse: SICOVAM 5257) today announced its financial results for the year ended June 30, 2000.

Over the past year, which experienced a substantial market transition, Infogrames' dedicated growth strategy has enabled it to strengthen its position as a market leader through:

-- In December 1999, Infogrames took a controlling interest in GT Interactive
Software (GTIS), publisher and distributor of Driver, Unreal Tournament, Deer
Hunter, and the leading publisher of entertainment software for the Macintosh
in the US. Over the past six months GTIS has undergone a major restructuring
initiative, which culminated in the merger of GTIS and Infogrames North America
under the new name Infogrames, Inc (Nasdaq: IFGM) on October 2. The US
organization has also added a number of industry veterans to its management
team, including: Alyssa Padia (formerly with Sony CE); Jason Bell (formerly
with Electronic Arts); David Fremed (formerly with Marvel Enterprises); Sarah
Buxton (formerly with Virgin); Cathy Tische (formerly with Mattel); Nancy
Griffin (formerly with Time Warner); and Andy Hieke (formerly with Nintendo).

-- Infogrames, Inc. brings a number of high-profile titles to Infogrames
Entertainment's portfolio such as Munch's Odyssee, Driver 2 and Unreal
Tournament. With this strong line-up of key franchises the Company expects to
return to profitability in the coming financial year.

-- Following this major restructuring initiative the Company is now able to
reach consumers through a distribution network of approximately 20,000 retail
outlets in the US.

Consolidated net revenues for the financial year ended June 30, 2000 increased approximately $205.9 million, or 70.4 per cent, to $498.4 million, compared with $292.5 million for the twelve months ended June 30, 1999. Excluding the acquisition of GTIS, this growth would have been 16 percent.

The integration activities of the US operations and the establishment of Infogrames.com have negatively impacted the Company's net income by $30.1 million and $5.1 million respectively. The European operations have had a positive contribution of $9.3 million to the Company's net income.

           Consolidated statements of operations - overview

($ In millions)        June 30,    Results as of June 30, 2000
                         1999   Europe(a)  USA   Inf.com   Total

Net revenues            $292.5   $312.4  $183.1    $2.9   $498.4

Gross margin             130.0    136.5    79.8     1.7    218.0

Operating income
   after tax              22.6     14.9  (25.0)   (4.9)   (15.0)

Net income                19.7      8.9  (30.2)   (5.1)   (26.4)

Net income - Group share  19.4      9.3  (30.1)   (5.1)   (25.9)

    Europe(a): European numbers consist of the Company's European and
        Australian operations, as well as US activities prior to the
        majority acquisition of GTIS.

INVESTMENTS:

United States 

-- In December 1999, Infogrames took a controlling interest in GT Interactive
Software (GTIS), publisher and distributor of Driver, Unreal Tournament, Deer
Hunter, and the leading publisher of entertainment software for the Macintosh
in the US. Over the past six months GTIS has undergone a major restructuring
initiative, which culminated in the merger of GTIS and Infogrames North America
under the new name Infogrames, Inc (Nasdaq: IFGM) on October 2. The US
organization has also added a number of industry veterans to its management
team, including: Alyssa Padia (formerly with Sony CE); Jason Bell (formerly
with Electronic Arts); David Fremed (formerly with Marvel Enterprises); Sarah
Buxton (formerly with Virgin); Cathy Tische (formerly with Mattel); Nancy
Griffin (formerly with Time Warner); and Andy Hieke (formerly with Nintendo).

-- Infogrames, Inc. brings a number of high-profile titles to Infogrames
Entertainment's portfolio such as Munch's Odyssee, Driver 2 and Unreal
Tournament. With this strong line-up of key franchises the Company expects to
return to profitability in the coming financial year.

-- Following this major restructuring initiative the Company is now able to
reach consumers through a distribution network of approximately 20,000 retail
outlets in the US.

Through a total investment of $267 million in the US, the Company now controls approximately 88 percent of the shares of its North American affiliate and expects to achieve approximately $0.5 billion in revenue in 2001.

Research and Development:

-- During the past financial year, Infogrames invested heavily in

research and development for next-generation consoles, most

notably Sony's PlayStation2 computer entertainment system

(with eight titles planned in financial year 2000/01, and more

than 20 in 2001/02). The Company has also invested heavily in

the development of content for the launch of Nintendo's Game

Cube and Game Boy Advance, as well as Microsoft's Xbox

(approximately 10 titles surrounding the launch of the

system).

-- This has been achieved through:

- The acquisition of Paradigm, known for its experience on

Nintendo's platforms

- New development partnerships in Vietnam and Korea

- Doubled efforts in R&D, excluding those resulting from the

acquisitions of GTIS

These investments in the creation of products are critical to Infogrames global strategy of capitalizing on advances in revolutionary technology and are expensed as they occur.

Infogrames.com:

-- Includes investment in three areas of new media that will

allow for the distribution of interactive game content and

significant revenue growth in the future:

- High-speed Internet access

- Digital television via satellite or cable

- Next generation cellular telephones

Infogrames has invested in the acquisition of technologies and development of tools that allow its titles to take advantage of these new online media, allowing the consumer to enjoy a new perspective on the gaming experience. An example of this includes Infogrames' investment in Canada's Den-O-Tech, a leader in In-flight entertainment.

Through a $6.7 million investment in this field, Infogrames has begun to position itself to take advantage of the growth opportunities provided by broadband technology.

TRANSITION:

During the fourth quarter of financial 1999/2000, the market underwent a major transition:

-- Consumers adopted a `wait-and-see' approach in anticipation of

the arrival of next-generation consoles

-- Retailers lowered their inventory levels, thus accelerating a

decrease in average retail prices

-- The `Pokemon' phenomenon captured a significant part of the

worldwide Game Boy market

-- Hard-core gamers steadily moved from a single player off-line

experience to a multiplayer on-line experience through the

Internet.

While management maintained a proactive approach to the market transition through decreased pricing, focused marketing, and inventory control, the group's fourth quarter was still sharply affected by the market changes. Although the Company felt the negative effects of the market changes during the year, it was able to prepare for an anticipated growth in 2000/01 when the next-generation consoles arrive on the market.

PERSPECTIVES:

The market will begin a new era upon the arrival of the next-generation consoles and high-speed network access.

Thanks to the important investments in Europe and the US over the past year, Infogrames now has a worldwide publishing and distribution network which is poised to take advantage of the growth sectors in the interactive entertainment market.

Financial 2000/01 will be defined by:

-- The acquisition and strengthening of key licences and

franchises on existing mature game platforms (Game Boy,

PlayStation, PC).

-- The increased business opportunities surrounding the launch of

PlayStation2, Game Cube, Game Boy Advance, and XBox.

-- The beginning of the broadband revolution with the first

partnerships between content providers and access providers.

Due to its large catalogue of licences and franchises, Infogrames plans to satisfy the needs and expectations of the market through:

-- Continued strengthening of leading franchises on the existing

large installed base of mature platforms with such titles as

Alone in the Dark IV and Driver 2 for the PlayStation.

-- Releasing eight new titles on PlayStation2 (including the hit

title Unreal Tournament, which will be available at launch).

-- Taking advantage of new online technologies with its PC titles

such as Desperados and Independence War.

-- Developing mass-market games for broadband networks.

Infogrames' strategy of anticipating market and technology changes, as well as producing mass market content for multiple platforms, will ensure its position as the global leader in the digital interactive entertainment market.

About Infogrames

Infogrames Entertainment SA (Paris Bourse: SICOVAM 5257) is a worldwide leader in the interactive entertainment software industry. Headquartered in France, the company develops and publishes award-winning computer and video games for the PlayStation(R) game console, PlayStation(R) 2 computer entertainment system, Nintendo(R) 64, Nintendo(R) Game Boy(R) Color, Sega(R) Dreamcast(tm), Macintosh(R), and personal computer platforms. Founded in 1983 by chairman and CEO Bruno Bonnell, Infogrames has published many award-winning franchises in its 17-year history, such as Alone In The Dark(tm), Test Drive(R), Driver(tm), Deer Hunter(tm), Oddworld(tm), Unreal, Independence War(tm), and V-Rally(tm). The company is also known for its best-selling and award-winning line of children's entertainment software from Humongous Entertainment starring Putt-Putt(R), Freddi Fish(tm), Pajama Sam(R) and SPY Fox(tm), as well as its successful Macintosh publishing label, Macsoft, the number one publisher of Macintosh entertainment software. In addition, Infogrames has a number of key strategic licenses including Warner Bros. Looney Tunes(tm), Nickelodeon's Blue's Clues(tm), Le Mans 24 Hours(R), AM General Hummer(R), Harley-Davidson(R), and Dodge(R) Viper.

Based in New York, Infogrames, Inc. (NASDAQ: IFGM) is a majority owned subsidiary of Infogrames Entertainment and serves as the headquarters for the company's operations in North America. For more information, visit Infogrames' web site at www.infogrames.com.

SAFE HARBOR STATEMENT

Certain statements contained in this release are forward-looking statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described. With respect to such forward-looking statements, the company seeks the protection afforded by the Private Securities Litigation Reform Act of 1995 and other enabling legislation. Statements contained herein with regard to the company's business outlook and prospective operating and financial results are based upon management's expectations regarding various factors, which may be beyond the company's control. This statement is not intended to identify each and every risk and uncertainty inherent in the company's business, and should be read in conjunction with the company's cautionary statements contained in its most recent filings with U.S. and foreign regulatory authorities.