Interactive Magic Announces Expansion Packs for Microsoft Flight Simulator 98; RAF Collection and Concorde SST to Debut this Christmas.

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Dec. 10, 1998--Interactive Magic (NASDAQ: IMGK), developer and publisher of award-winning games, announces two new titles designed to help desktop pilots get even more enjoyment from the world's premier flight simulation program.

In December, Interactive Magic will ship RAF Collection and Concorde SST -- expansion packs for Microsoft's Flight Simulator 98, which, according to PC Data, is the best-selling computer game series in history.

RAF Collection features 32 of Britain's top military planes and variations, gathering classic Royal Air Force aircraft from the post-WWI era through the present day. The collection allows you to fly the planes that won a World War and redefined aviation: WWII's famed Spitfire, the ferocious Tornado (used in the Gulf War), and the Harrier Jump Jet (the Falklands War). The collection also contains terrain and scenery for over 200 airfields in England and Wales, authentic engine sounds for each aircraft, a fully functional Flight Simulator 98 instrument panel for 14 classic planes, 4 historically accurate WWII-period airfields and a stirring history of the RAF.

Concorde SST connects desktop pilots with complex supersonic technology, and was designed in accordance with actual flight dynamics (as verified by a Concorde pilot). The Concorde expansion software brings totally new features to Flight Simulator 98: exterior visuals are highly detailed, as are the transparent nose visor glass, the realistic instrument panel, and the fully-animated cockpit visor. Thanks to incredibly smooth animations, you can now see the under-carriage lower and retract, as well as the Concorde's distinctive drooping nose cone and visor. Concorde SST users will also enjoy authentic sound effects sourced from an actual Concorde. (Crank up the volume and feel the incredible thrust of the afterburners!)

RAF Collection and Concorde SST were developed by FlightSim Developers and are being published across Europe by The Associates, a UK publishing group known for producing first-rate Microsoft Flight Simulator expansion packs. FlightSim Developers is a highly respected design group widely acknowledged for creating some of the most visually attractive and aerodynamically accurate aircraft for Microsoft's Flight Simulator 98.

Interactive Magic, Inc. (Nasdaq: IMGK) is based in the Research Triangle Park area of North Carolina and is dedicated to developing and producing high quality Internet, online and PC CD-ROM games. Interactive Magic owns iMagic Online(SM), a pay-for-play online service with customers from more than 70 countries, and iMagic Labs, a development house for games and technology. Interactive Magic's PC CD-ROM titles are marketed and distributed through more than 15,000 foreign and domestic software outlets. Interactive Magic has strategic or OEM/bundling arrangements with numerous companies including Microsoft (Nasdaq: MSFT), GTE (NYSE: GTE), America Online (NYSE: AOL), Columbia House, Software-Of-The-Month Club, Diamond Multimedia (Nasdaq: DIMD), Thrustmaster (Nasdaq: TMSR), Logitech (Nasdaq: LOGIY), Enlight Software and Topware Interactive.

Interactive Magic has established sales and marketing operations in the UK and Germany. For more information, contact Christine Heneghan at [e-mail] or call [phone] ext. 3131. For OEM/bundling information, contact Jerry Heneghan at [e-mail] or call [phone] ext. 3104. For sales opportunities, contact Lee Bishop at [e-mail] or call [phone] ext. 3126. For Interactive Magic Investor Relations information please contact David Pasquale of Dewe Rogerson at [phone].

Founded in 1975, Microsoft (NASDAQ "MSFT") is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use; each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day. Microsoft and Microsoft Flight Simulator 98 are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries .

Forward-Looking Statements: This news release contains forward-looking statements, which are based upon current expectations and involve a number of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by the company. These factors include, but are not limited to, risks of delays in development and introduction of new products, dependence on new product introductions which achieve significant market acceptance and the uncertainties of consumer preferences, the rate and degree of market acceptance of online gaming, the ability to negotiate profitable terms for online gaming products and services, dependence on third party software developers for a significant portion of new products, risks of rapid technological change and platform changes, intense competition, seasonality, dependence upon third party distribution and risks associated with international business. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the company with the Securities and Exchange Commission including, without limitation under "Risk Factors" set forth in the company's registration statement on Form SB-2. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

RAF Collection and Concorde SST are trademarks and Interactive Magic is a registered trademark of Interactive Magic, Inc. All other trademarks are property of their respective owners. Copyright 1998 Interactive Magic, Inc. All rights reserved.

For Screenshots/Releases go to: www.imagicgames.com/mediaroom