BACKGROUND OF BDE

CORPORATE OVERVIEW

Bandai Digital Entertainment (BDE) is a new media company dedicated to producing interactive family▄oriented edutainment and entertainment digital media products. Since its inception in 1995, the company has become widely known for its Windows and Macintosh games and entertainment products, online products and one of the world`s first Internet appliances.

In October 1995, Bandai Digital Entertainment (BDE) was established by Bandai Co. Ltd., one of the world`s largest manufacturers of toys and children`s entertainment, as an American subsidiary. Headquartered in Cypress, Calif., BDE and its affiliated Bandai companies are involved in a broad range of activities including character licensing, multimedia and children`s entertainment.

In May 1997, Bandai Digital Entertainment reorganized and divided its business operations into two business units: the Software division and the Pippin @World division. Each unit is staffed independently, yet share business resources and many opportunities with other Bandai units.

SOFTWARE PUBLISHING BUSINESS UNIT

In May 1997, Bandai Digital Entertainment expanded its internal operations through the formation of a new software publishing unit. The software publishing unit develops and markets Windows, Macintosh and online games and entertainment digital media products. The unit is able to capitalize on the Bandai brand and its accessibility to character licenses through Bandai America.

Bandai Digital Entertainment`s CD▄ROM products include:

Tamagotchi
BDE has partnered with 7th Level to develop a computer▄based version of the sensational Tamagotchi. The CD▄ROM version of Tamagotchi offers more game options, greater interaction and much richer graphics. The Tamagotchi CD▄ROM is available for Windows 95.

Surf Monkey
BDE is working together with Microsoft and MediaLive to deliver an integrated children`s online product, including a Web browser, e▄mail and chat, all with parental protection. The Web browser is based on Internet Explorer 4.0, featuring a children`s interface and hosted by an animated monkey created through Microsoft`s agent technology. Surf Monkey will be available for Windows 95 in March of 1998.

Esoteria
BDE will be releasing this 3D shooting action adventure game in the second quarter of 1998. The Windows game will feature completely non▄linear exploration of a three▄mile wide city. The city can be viewed from various vantage points in sniper mode, and then explored at will. Esoteria is expected to redefine the genre of non▄linear action▄adventure games.

Movioke
Superstar personality Dennis Miller hosts this great Hollywood family and party game that lets users play roles in a wide variety of movie scenes by replacing the original dialogue with their own voice. The title is available as a Windows/Mac hybrid.

Digimon
BDE plans to incorporate online gaming into the follow▄up to the Tamagotchi CD▄ROMâDigimon. Using its own servers, BDE will let Digimon owners take the digital monsters they have raised and put them into battle with friends and strangers alike. The Digimon online presence will feature tournaments, chat and more. Available for Windows in April 98.

Gundam 0079 ▄▄ the War for Earth
Gundam is a futuristic adventure game based on the Gundam fighting robot character. The game features strong graphics and ongoing interactivity. The Win/Mac disc is now available.

Pegasus Prime
Pegasus Prime is a remake of the original Journeyman Project time travel adventure. Rich graphics and extensive game play are combined in this four▄disc adventure game from Presto Studios.

Racing Days
This auto▄racing simulation targets race enthusiasts and fans of the classic line of Nissan Z cars. The title features an in▄depth garage experience, as players customize their car`s handling, brakes, gear ratios and more, and then test the results on a choice of tracks.

PIPPIN @WORLD BUSINESS UNIT

BDE is strongly committed to the Pippin @World Internet platform with active technology enhancement programs and pending marketing agreements that extend the @World`s versatility as a computing and network device. Pippin @World`s viability was evident in BDE`s May 1997 announcement of Ethernet connectivity for a wide range of vertical markets that include corporate Intranets. BDE`s vertical market focus will be on hospitality, education and other markets.

The Pippin @World is uniquely positioned to meet customers` needs in vertical markets because it is a low▄cost, more robust platform than competitive offerings. Strengths of the Pippin @World include its ability to work with NTSC and PAL TV systems; a browser optimized for TV that can be customized for each customer; rich browser features, such as HTML 3.2 compatibility and QuickTime, RealAudio, Shockwave and Internet Relay Chat built▄in; and a hardware design that can easily be modified. Also, BDE offers extensive technical support to customers.

The Pippin @World is available through the Computer Town, Cyberian Outpost, DayStar, MacZone and Mac Warehouse. A line of family▄oriented, "trusted" brands of interactive multimedia software is also available for the Pippin @World. The line offers something for everyone in the broad array of CD▄ROM genres such as reference, how▄to and productivity; leisure ▄ home entertainment; learning ▄ educational; and multimedia games.

MANAGEMENT

Yuji Hirano is president of Bandai Digital Entertainment in the U.S. Hirano joined the company in 1976. While at Bandai, Hirano has managed market launches of consumer electronic products, such as game software, gaming devices and PDAs for children. Hirano was appointed general manager of Bandai`s Consumer Electronics Division in April 1992. His work for the company also included managing overseas business, particularly in Europe. He was appointed president of Bandai France in April, 1994.

Toyo Okada is senior vice president of the Pippin business unit overseeing sales, marketing and development. He has 29 years in the computer industry, with specific expertise in launching new technologies including mobile computer technologies, such as hand▄written character recognition; computer graphics technologies; and operating systems for mobile computers and mainframe computers. From April 1992 to March 1996, Okada served as president and chief engineer for mobile computers at J&A Portable Systems, Inc. Prior to that, Okada served as president of Citizen Systems, Inc. and primarily worked for developing the world`s first mobile computer with hand written character recognition. Previously, Okada worked for Nippon Unisys Corp., a Japan subsidiary of Unisys, in various areas.

John McGanty is director of BDE`s software business unit and is responsible for the development, marketing and sales of BDE`s Win/Mac CD▄ROMs and online products. Prior to BDE, McGanty was a partner at MediaQuest Marketing, a marketing consulting firm specializing in multimedia clients. Previously, he served as vice president of Grey Advertising, supervising the U.S. West account. Before that, he was director of Cambridge Advertising servicing a consumer electronics distributor. McGanty began his career with the management consulting firm of McKinsey and Co. He earned his degree in management at the Wharton School of the University of Pennsylvania.

Scott Zafran is national sales manager responsible for the sales and marketing of the Pippin @World. Zafran also served BDE as marketing manager. Prior to BDE, Zafran worked for Philips Media, where he directed promotions campaigns for software titles running on a variety of platforms. Previously, he was a regional marketing specialist for Philips Consumer Electronics Company (PCEC). There, he was one of the first regional sales specialists responsible for introducing Compact Disc▄Interactive (CD▄i) in the United States. Zafran holds degrees in Communications and Psychology from the University of California, San Diego.