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Epic Games Acquires Majority Stake In People Can Fly

Warsaw, Poland 20-Aug-2007. Epic Games today announced that it has acquired a majority interest in Warsaw, Poland-based game developer People Can Fly. People Can Fly ("PCF") is best known for creating the hit PC game, Painkiller, but most recently has been collaborating with Epic on the PC version of Gears of War®. In addition the two companies are collaborating on a new intellectual property which Epic will be previewing privately to publishers at Games Convention in Leipzig, Germany this week.

The relationship began last year when People Can Fly was evaluating Unreal® Engine 3 to use for a new multi-platform game project. "PCF showed us their early prototypes within only a few weeks and we were totally blown away," said Mark Rein, Vice President, Epic Games, Inc. "The quality of their work was extremely high, and knew we had to find a way to work more closely with them in the future." Epic hired PCF to work on the PC version of Gears of War, and collaborated with them on design of a new IP.

"Working with this team of guys who love making over-the-top shooters was a blast, and we didn't want it to end," said Dr. Michael Capps, President of Epic Games. "And their work was outstanding. The multiplayer levels they created for Gears PC look as good or better than the original. How could we not jump at the opportunity to work together on a long-term basis?".

"We are very excited to be working with Epic Games" said Adrian Chmielarz, Creative Director and Co-Owner of People Can Fly. "To be able to work with the best technology company in the business and collaborate on making amazing fantastic games is an offer you just can't refuse. Making games is hard work but it is also great fun. Working with Epic reduces the stress of being an independent developer and lets us focus even more on fun side of the business."

About People Can Fly

People Can Fly is a 50-person game development studio founded in February 2002 and located in Warsaw, Poland. PCF's team is composed of industry veterans, with experience dating back to 1993.

PCF's first game - Painkiller - turned out to be a great success. The game was awarded numerous industry awards (e.g. Single-Player Shooter of the Year by Computer Gaming World; E3 - Best Shooter Award, E3 - Biggest Surprise Award) and received enthusiastic reviews from the gaming press. The game's average rating is 82% based on 250+ reviews (source: GameRankings.com). It was chosen as the official tournament game for the CPL World Tour, which offered the largest cash prize ever for a computer game tournament.

After releasing Painkiller in April 2004, the team worked on online community support, then started the work on PK's Expansion Pack called Painkiller: Battle out of Hell, which was finished in only five months and released end of November 2004. After the expansion pack had gone gold, PCF started working on their first console project - Painkiller: Hell Wars (Xbox). The game was released in July 2006.

About Epic Games

Epic Games, Inc., based in Cary, NC and established in 1991, develops cutting-edge games and game engine technology for PC and console. The company has created multiple million-selling, award-winning titles in their Unreal series and their latest game, Gears of War®, broke sales records on Xbox 360 selling more than 3 million copies worldwide in the first ten weeks and awarded overall Game of the Year for 2006 by the Academy of Interactive Arts & Sciences, Game Developers Choice Awards, GameSpot, GamePro and many others. Epic is also responsible for the Unreal Engine, which is the underlying technology for a wide range of games including, Console Game of the Year winner, "Tom Clancy's Splinter Cell TM" by Ubi Soft; PC Gamer's Game of the Year, "Deus Ex" from Ion Storm/Eidos; "America's Army: Special Forces," by the United States Army, and "Harry Potter and the Sorcerer's Stone" (PC) by Electronic Arts. Epic's Unreal Engine 3 is the current holder, and three-time consecutive winner, of Game Developer magazine's Front Line award for Best Game Engine. Epic Games was also awarded Studio of the Year at the 2006 Spike TV Video Game Awards and Developer of the Year by Official Xbox Magazine. Additional information about Epic can be obtained through Epic's Web site at www.epicgames.com

Gears of War and Unreal are trademarks, or registered trademarks, of Epic Games, Inc. in the United States and other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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