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SEGA Partners With Secret Level To Create Xbox 360, PlayStation 3 Content

Blend of SEGA IP, Western Content Prime Publisher for Growth

FOR IMMEDIATE RELEASE

SAN FRANCISCO & LONDON (July 6, 2005) - SEGA® of America, Inc. and SEGA® Europe Ltd. today announced a partnership with Secret Level, a San Francisco-based development studio, to recreate a classic SEGA franchise for PlayStation®3 (PS3) computer entertainment system and the Xbox 360TM video game and entertainment system from Microsoft. The deal signifies an expanding SEGA network of development partners creating Western content for current and next-generation hardware platforms.

Under the terms of the worldwide exclusive deal, SEGA will manage all sales, marketing and distribution activities and work with Secret Level to supervise ongoing game development. Secret Level is best known for creating Americas Army: Rise of a Soldier (PlayStation 2 & Xbox), Magic: The Gathering Battlegrounds (Xbox & PC), Star Wars Jedi Starfighter (Xbox), and the Unreal Engine for the PlayStation®2 computer entertainment system and GameCube.

"SEGA will become a leading publisher on the next generation of console hardware by marketing great Western-developed content that includes properties from a rich portfolio of SEGA games," said Simon Jeffery, President and COO, SEGA of America. "The talented design team at Secret Level has demonstrated innovation in game development and has a history of technical achievements that will help SEGA reinvigorate a vintage and highly commercial franchise."

"We are excited to be working with SEGA and honored to bring one of their classic franchises to the PlayStation 3 and Xbox 360," said Jeremy Gordon, President, Secret Level. "SEGA's strength as a publisher and their history of great iconic franchises make them a perfect partner for a growing independent developer like Secret Level."

This agreement, along with recent partnerships with developer Silicon Knights; Monolith Productions (project: Condemned: Criminal Origins); Sports Interactive (project: Football Manager 2006); SUMO (Project: Virtua Tennis: World Tour); Pseudo Interactive (project: Full Auto); and the acquisition of esteemed developer, The Creative Assembly (project: Spartan: Total Warrior) continues to highlight SEGA's emphasis on Western development.

Both companies have decided not to announce product, platform, or release details at this time.

About Secret Level:

Secret Level creates original game titles, tools, and technologies for the console entertainment industry. Founded in late 1999, Secret Level is located near SBC Park in San Francisco, and has steadily grown to accommodate several talented teams. Secret Level develops for both current and future generation platforms, including Sony PlayStation®2, Microsoft XboxTM, PlayStation®3, Xbox 360TM, and the PSPTM (PlayStation®Portable) system. Secret Level also holds "Tools & Middleware" licenses from both Sony and Microsoft. For more information about Secret Level or any Secret Level product, please visit the company's Web site at www.secretlevel.com.

About SEGA® Europe:

SEGA Europe Ltd. is the European Publishing arm of Tokyo, Japan-based SEGA Corporation, and a worldwide leader in interactive entertainment both inside and outside the home. The company develops, publishes and distributes interactive entertainment software products for a variety of hardware platforms including PC, wireless devices, and those manufactured by Nintendo, Microsoft and Sony Computer Entertainment Europe. SEGA Europe's Web site is located at www.sega-europe.com.

About SEGA® of America:

SEGA of America is the American Publishing arm of Tokyo, Japan-based SEGA Corporation, a worldwide leader in interactive entertainment both inside and outside the home. The company develops, publishes and distributes interactive entertainment software products for a variety of hardware platforms including PC, wireless devices, and those manufactured by Nintendo, Microsoft and Sony Computer Entertainment Inc. SEGA of America's Web site is located at www.sega.com .

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