Midway Announces 2007 Q1 Results

CHICAGO - May 3, 2007 - Midway Games Inc. (NYSE: MWY) today announced results of operations for the three month period ended March 31, 2007. The Company also confirmed its prior full year guidance and provided revenue and earnings guidance for the second quarter ending June 30, 2007.

FIRST QUARTER RESULTS

Net revenues for the 2007 first quarter were $11.1 million, compared to the 2006 first quarter net revenues of $15.4 million and ahead of prior guidance of approximately $7 million. The 2007 first quarter net loss was $19.8 million, or a loss of $0.22 per basic and diluted share, compared with a 2006 first quarter net loss of $22.6 million, or a loss of $0.25 per basic and diluted share.

On a non-GAAP basis, excluding the impact of stock-option expenses and other non-cash items, the 2007 first quarter loss was $18.2 million or $0.20 per basic and diluted share, compared to the Company's previous non-GAAP guidance of a loss of approximately $0.23 per basic and diluted share. For the 2006 first quarter, on a non-GAAP basis, the Company reported a loss of $21.5 million, or a loss of $0.24 per basic and diluted share. A reconciliation of non-GAAP results to GAAP results is provided at the end of this press release.

Other recent operating highlights include:

David F. Zucker, president and chief executive officer, commented, "We exceeded our expectations during the first quarter primarily due to the continuing sales of our holiday 2006 releases and other catalog titles. The second quarter is off to an excellent start with the launch of The Lord of The Rings Online, and our resources are focused on successfully launching several more titles later in the quarter."

OUTLOOK

During the second quarter, the Company has already released The Lord of the Rings Online: Shadows of Angmar for PC in North America, and expects to release Mortal Kombat: Armageddon for the Wii, Hour of Victory for the Xbox 360, Hot Brain for the PSP, and Touchmaster for the Nintendo DS worldwide. For the second quarter ending June 30, 2007, Midway expects the following:

o $0.01 of stock option expense and deferred income tax expense related to goodwill, and

o $0.03 of non-cash convertible debt interest expense.

For the year ending December 31, 2007, Midway's full year outlook remains unchanged:

o $0.02 of stock option expense,

o $0.13 of non-cash convertible debt interest expense, and

o $0.02 of deferred income tax expense related to goodwill.

Mr. Zucker concluded, "We are very excited by the strong response of gamers and the press alike to the launch of The Lord of the Rings Online, and we are encouraged by the early excitement we are seeing for such front-line titles as Mortal Kombat: Armageddon for the Wii, Stranglehold, BlackSite: Area 51, The Wheelman, Unreal Tournament III and Hour of Victory. As the next generation systems build momentum through this year, we believe we are well positioned to take advantage of the growing base of gamers looking for the highest quality content."

NON-GAAP FINANCIAL MEASURES

Midway has included non-GAAP financial measures in its quarterly results and 2007 outlook. Midway does not intend for the presentation of the non-GAAP financial measures to be isolated from, a substitute for, or superior to the information that has been presented in accordance with GAAP. In addition, information used in the non-GAAP financial measures may be presented differently from non-GAAP financial measures used by other companies. The non-GAAP financial measures used by Midway include non-GAAP basic and diluted loss per share.

Midway considers the non-GAAP financial measures used herein, when used together with the corresponding GAAP measures, to be helpful in providing meaningful additional information regarding its performance by excluding specific items t hat may not be indicative of Midway's core business or projected operating results. These non-GAAP financial measures exclude the following items:

Stock Option Expense. Midway adopted SFAS No. 123R, "Share-Based Payment" beginning January 1, 2006 in which it began to recognize as an expense the fair value of its stock options. A non-GAAP measurement that excludes stock option expense identifies this component of compensation expense that does not require cash outlay.

Non-cash convertible debt interest expense. In accordance with GAAP, Midway is required to record discounts on its convertible senior notes as a result of decreases in the conversion prices of these notes. These amounts are amortized as interest expense through the first date on which the holders may redeem the notes. There is no cash outlay associated with this interest expense. A non-GAAP measurement that excludes the convertible debt non-cash interest expense allows for an easier comparison to prior periods, and also distinguishes this interest expense from the remainder of the interest expense, which requires (or required) a cash outlay by Midway.

Deferred tax expense related to goodwill. Midway recognizes deferred tax expense related to increases in the difference between the book basis and tax basis of goodwill. Goodwill is not amortized for book purposes but is amortized for tax purposes. This increase in the book to tax basis difference causes an increase in the related deferred tax liability balance that cannot be offset against deferred tax assets. Given the nature of this deferred tax expense, a non-GAAP measurement that excludes this expense is deemed relevant.

In the future, Midway may consider whether other significant items should be excluded when arriving at non-GAAP measures of financial performance.

CONFERENCE CALL

Midway Games Inc. is hosting a conference call and simultaneous webcast open to the general public at 4:30 P.M. EDT today, Thursday, May 3, 2007. The conference call number is (800) 291-9234 or (617) 614-3923 (international callers). The passcode for the call is 92181909. Please call ten minutes in advance to ensure that you are connected prior to the presentation. Interested parties may also access the live call on the Internet at www.investor.midway.com or at www.earnings.com. Please log-on fifteen minutes in advance to ensure that you are connected prior to the call's initiation. Following its completion, a replay of the call can be accessed until May 10th by dialing (888) 286-8010 or (617) 801-6888 (international callers). The passcode for the replay is 49959332. Additionally, a replay of the call will be available for twelve months on the Internet www.investor.midway.com.

ABOUT MIDWAY

Midway Games Inc. (NYSE:MWY), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major video game systems and personal computers. More information about Midway and its products can be found at www.midway.com.

For More Information

Geoffrey Mogilner

Midway Games Inc.

(773) 961-2222

gmogilner@midway.com

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning future business conditions and the outlook for Midway Games Inc. (the "Company") based on currently available information that involves risks and uncertainties. The Company's actual results could differ materially from those anticipated in the forward-looking statements as a result of these risks and uncertainties, including, without limitation, the financial strength of the interactive entertainment industry, dependence on new product introductions and the ability to maintain the scheduling of such introductions, the current console platform transition and other technological changes, dependence on major platform manufacturers and other risks more fully described under "Item 1. Business - Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2006, and in any more recent filings made by the Company with the Securities and Exchange Commission. Each forward-looking statement, including, without limitation, financial guidance, speaks only as of the date on which it is made, and Midway undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, except as required by law.