PRESS RELEASE

Gütersloh, 21. October 2005. ASCARON Entertainment GmbH announces a fantastic lineup as part of an expansion plan for the internationally booming games market. The No. 1 German PC games developer is able to look back on first-class results and growth in the last 2 years. Currently, ASCARON is expanding into new business segments and is opening a new studio. Managing Director Holger Flöttmann describes the success of the past two years as an "extremely positive development". Important key factors for this success were the consumer acceptance of in-house titles, and the growth of a successful international sales activity around the world from the sales and marketing office opened in Birmingham (UK) 3 years ago.

ASCARON's recent move into a new headquarters building in Gütersloh is another indication of the ongoing expansion.

A prime example of ASCARON's domestic and international success so far is the title "Sacred". In 2004, the role-playing game was the top-selling title in Germany, Italy, Spain, France, Poland and Russia, and a top 5 hit in many other countries. The world-wide sales figures of Sacred have reached 1.6 million so far. Sacred has become one of the most successful German games ever published in the USA where it was awarded "Best Role Playing Game of the Year" by PC Gamer magazine. Sacred has sold more than 200,000 units in the USA - a figure that has never before been achieved by a game developed within Germany. Since setting up an International sales office ASCARON titles have been published in sixteen languages to more than forty countries to date. These figures denote a significant growth in the international sales of ASCARON, which are targeted to reach seventy percent of overall revenues by the end of the next financial year (31st March 2007)

Currently, the international game market boasts double-digit growth rates and an overall turnover of approx. twenty billion Euro. Therefore, ASCARON considers its international development as an essential strategy for future expansion. This includes distributing both own IP and third party IP internationally, focusing on game content that corresponds with world-wide gaming trends and aiming at a quality level that exceeds international standards. Furthermore, ASCARON is rapidly progressing with their planned entry into the development of console titles, co-operating with an established third party and creating the platform from which to successfully realize this objective.

New Development Studio and Quality Assurance Center in Potsdam

Establishing new production capacities is a further part of the expansion strategy. Therefore, ASCARON Entertainment GmbH is launching a new development studio in Potsdam. Within the next three years, up to eighty new jobs will be created there. Most of the employees will be directly involved with developing computer and video games. The preparations for the opening of the new studio began in 2004; business will commence before the end of 2005. ASCARON's investment into this business within the next two years will amount to a two million Euro sum. The federal state of Brandenburg supports these activities with economic subsidies, which places an additional emphasis on ASCARON's high technological potential and its market appraisal. The location of Potsdam offers additional important strategic advantages for Holger Flöttmann regarding the future coalescence of digital entertainment media. "We will be able to co-operate with other companies in the entertainment business in order to break new grounds in terms of technology and marketing, delivering advancements and producing results which will ultimately benefit not just the end user, but the industry as a whole."

In addition to the development studio, ASCARON will launch a company for quality assurance in Potsdam. The subsidiary company "Quality Four GmbH" will work on behalf of ASCARON and it will act as a service provider for other developers and publishers. Its goal is to elevate the quality of computer and video games to the standards that are required in order to be internationally successful. The services range from consultation regarding content and technology during the development process, to acceptance tests and the controlling of compatibility and correctness. The Managing Director of the new company will be one of the business veterans, Bernhard Ewers, who was previously owner and director of the Software and Project Company Instance Four. Business will commence before the end of 2005.

Holger Flöttmann regards the new proposal of providing quality assurance for other companies as a basis for more co-operation and mutual developments. "ASCARON has proven that a well-equipped David is able to stand his ground against the Goliaths of the business. Small and medium-sized competitors will be stronger if they work together in order to cut a significant chunk out of the games market cake."

About ASCARON Entertainment GmbH

ASCARON Entertainment GmbH is one of the pioneers in the development of computer games. It is also the leading developer of computer games in Germany and it has been prominent in the sales charts for more than a decade with titles such as Sacred, Port Royale, Anstoss, Vermeer and Patrician. ASCARON is headquartered in Gütersloh and it maintains a development studio in Aachen (Germany) as well as an international department in Birmingham (UK). Additionally, ASCARON is about to establish a development studio as well as a company for quality assurance in Potsdam throughout the course of this year. Currently, ASCARON markets its products in more than 40 countries.

For further information about ASCARON Entertainment GmbH, please visit

www.ASCARON.com