MGA Entertainment Revolutionizes Family Entertainment by Bringing the Power of New Technology to the World of Fun.

Business Editors &Entertainment Writers

LOS ANGELES--(BUSINESS WIRE)--Feb. 9, 2000

Company Aims to Leap Into Industry's Top Rank,

Alongside Hasbro and Mattel

MGA Entertainment is on a mission to revolutionize the family entertainment industry. For more than a decade, the company has been quietly implementing a long-term strategy to position itself and its products in consumers' minds as synonymous with fun and innovation.

Coming off a year of record-breaking sales and the development of an unparalleled distribution network, MGA Entertainment has both the infrastructure and product plan in place to allow the fun to begin.

&uot;MGA Entertainment is revolutionizing family entertainment by using technologies from other industries to develop products that challenge the minds of children, and send their imaginations into hyper-drive,&uot; said Isaac Larian, chief executive officer of MGA Entertainment. &uot;We are leading the industry in applying cutting-edge technologies, such as voice recognition, sensors, progressive growing and artificial intelligence, to interactive entertainment, with an end result that is both fun and inspiring, limited only by a child's imagination and creativity.&uot;

Prior to entering the family entertainment industry, MGA Entertainment was a leader in identifying top-quality products and licensing opportunities that the company marketed and/or distributed in the United States. MGA Entertainment is now applying its understanding of what it takes to meet and exceed both consumer and retail demand by developing and marketing its own lineup of both proprietary and licensed entertainment products.

In 1999, the company reached more than $75 million in sales, a 65 percent revenue increase from 1998. Its product portfolio, which includes smart toys, interactive dolls, youth electronics, handhelds, music and licensed products, incorporates the hottest trends with the latest technology, pushing the envelope on realism, and taking interactive entertainment to new levels.

Unparalleled Distribution Network

An integral part of MGA Entertainment's record-breaking success stems from the company's non-traditional approach to retail distribution. Unlike other companies in the toy or family entertainment industries, MGA Entertainment has leveraged its consumer electronics heritage by establishing relationships with a broad range of retailers, including mass merchandise, specialty, drug, grocery, music and video outlets. Trusted consumer retail brands, such as Radio Shack, Walgreen's and Blockbuster, among others, complement MGA Entertainment's partnerships with Wal-Mart, Toys R Us and Target. In fact, at the end of 1999, MGA Entertainment products were available in more than 33,000 storefronts -- more than any other company in the industry.

&uot;Developing smart and innovative products is only part of the equation. Putting the right products in the right places for consumers to see at the right time is essential to succeed in the world of family entertainment,&uot; said Larian. &uot;With more than 95 percent sell-through of our products in 1999, our philosophy and approach is right on track.&uot;

Original Ideas For Today's Kids

MGA Entertainment is leading the industry in developing original products that speak directly to today's youth. Last year, MGA Entertainment brought the dormant toy robot category into the 21st century with the introduction of CommandoBot. This 20-inch droid uses advanced speech-recognition technology through an accompanying headset to allow users to carry out 12 commands. CommandoBot responds to his master in ways no other robot can.

On the softer side of the family entertainment industry, MGA Entertainment has quickly become a leader in the special-feature doll category. Although the company has been in the doll business for only three years, MGA Entertainment has the third largest market share. According to the industry source TRSTS, MGA Entertainment's GiddyUp Girl interactive doll was the leading large doll in 1999. The company's first doll, Bouncing Baby, was a best seller, receiving the Family Fun Toy of the Year award in 1997.

&uot;MGA Entertainment will continue to develop products that are of interest to both boys and girls of all ages, with a heavy emphasis on harnessing the power of technology to literally bring our products to life,&uot; explained Larian. &uot;The word `limitation' isn't part of our vocabulary -- and it will never be a part of our products.&uot;

Smart Licenses

An emphasis on brands with staying power define MGA Entertainment's licensing philosophy. The company develops the product first, making sure it is inherently fun on its own, and then attaches the right license. In addition, the company uses primary and secondary research to track the hottest trends with today's youth, allowing it to stay one step ahead of its competitors. Dragonball Z, the hottest licensed property this year, joins MGA Entertainment's existing licensing partnership line-up, including WWF, Power Rangers, Monster Rancher and Sailor Moon.

About MGA Entertainment

MGA Entertainment is revolutionizing family entertainment by bringing the power of new technology to the world of fun. Headquartered in Los Angeles, the company offers a balanced portfolio of proprietary and licensed products for boys and girls of all ages, ranging from traditional to high-tech. The company designs, manufactures and markets smart toys and other technology-based entertainment products. With distribution in more storefronts than any other toy company, MGA Entertainment products are within a child's reach in virtually every town and city in the nation. Additional information can be found on the company's Web site at www.mgae.com.