Sweet Release

Lancers Reactor was the first to receive this press release, regarding the situation at Digital Anvil...

MICROSOFT TO ACQUIRE DIGITAL ANVIL

Addition of Austin-Based Development Studio Continues Microsoft Games Division Growth

REDMOND, Wash. - Dec. 5, 2000 - Microsoft Corp. today announced it has reached a preliminary agreement to acquire Digital Anvil Inc., a premier games developer based in Austin, Texas. Under the terms of the pending acquisition, Microsoft would gain the rights to select Digital Anvil titles, including "FreeLancer," the highly anticipated space-combat simulation game, as well as a yet-to-be-announced title currently in development for the Xbox(tm) video game system, scheduled for release by Microsoft in fall 2001.

Microsoft and Digital Anvil have worked closely since 1997 to develop ground-breaking games for the PC platform. The addition of Digital Anvil comes on the heels of other successful game acquisitions by Microsoft, including FASA Interactive Technologies Inc., creators of the best-selling "MechWarrior(tm)" franchise; Access Software Inc., creators of "Links(tm)" golf simulation titles, the most popular PC golf franchise; and Bungie Software Products Corp., creators of the upcoming "Halo," recognized as one of the best original games coming to market. Following the planned acquisition, Digital Anvil will continue to create titles from its Austin headquarters as part of Microsoft's growing pool of in-house development talent.

"The acquisition of Digital Anvil will strengthen our commitment to producing top-quality PC and Xbox titles," said Ed Fries, vice president of games publishing at Microsoft. "'FreeLancer' is a true expression of Digital Anvil's innovative spirit. By combining our internal resources with the Digital Anvil team's development talent, we will ensure the realization of their creative visions."

In a related announcement, Chris Roberts, founder and CEO of Digital Anvil, said he would be departing the company to pursue other creative endeavors. Roberts will, however, continue to work with Digital Anvil through the completion of "FreeLancer." Serving as creative consultant, he will continue to craft the game's intricate storyline and serve as an adviser to the development team.

"This acquisition is a positive growth opportunity for Digital Anvil," Roberts said. "Under the Microsoft umbrella, 'FreeLancer' and other games will be supported by a strong infrastructure and realized in the spirit in which they were conceived."

Slated for release for the PC in late 2001, "FreeLancer" was honored with four of the coveted "Game Critics" awards at the 1999 Electronic Entertainment Expo (E3), including Best of Show; Best Game, PC; Best Simulation; and Outstanding Achievement in Graphics. "FreeLancer" features a detailed 3-D sci-fi universe and innovative gameplay intertwined with an intriguing storyline.

About Microsoft Games Division

The Microsoft Games Division is a leading worldwide games company with three core businesses: games development and publishing, Xbox, and Zone.com. The company's award-winning PC game titles excite the imaginations of casual gamers and appeal to the passions of hardcore players. Xbox, the video game system, is a future-generation platform that inspires developers to create better games, faster. Zone.com (http://www.zone.com) is the Internet's largest game site.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software - any time, any place and on any device.

#########

Microsoft, Xbox, MechWarrior and Links are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.