Russian Publisher And Distributor To Become Largest In Eastern Europe

Los Angeles, USA, May 16, 2005 - 1C, the largest developer, publisher and distributor of software and interactive products in Russia, CIS and the Baltic states, officially announced today that it has acquired 100 percent of Cenega Distribution Group and Cenega Publishing.

Cenega Distribution Group is the leading Central European distributor with offices in Czech Republic, Slovakia and Poland. Cenega's average market share exceeds 30 percent in the above mentioned countries reaching a dominating figure of 45 percent in selected territories.

"We are very pleased with the fact that we will be able to use Cenega's experience, potential and its developed distribution network in the implementation of our business plan. This deal allows us to become the largest distributor and publisher in Eastern Europe," said Nikolay Baryshnikov, International Sales Director of 1C. "The agreement allows our company to provide a unique solution for distributing titles in Eastern and Central Europe, which includes 18 countries and hundreds of cities. For the first time ever publishers will have an opportunity to distribute their titles through a single network that covers a vast territory and provides high-quality service."

This takeover is in line with 1C's strategy of building a powerful multi-office distribution network which will cover all major Eastern and Central European markets and stretch over 11000 kilometers and 13 time zones. The combined population of ex-USSR countries, Czech Republic, Slovakia and Poland exceeds 330 million people, making the 1C distribution territory one of the largest markets in Europe with an overall value of over 250 million euros.

Cenega Publishing is an established publisher with a focus towards Central European developers. Cenega's main releases include UFO: Aftermath, Korea: Forgotten Conflict, Shade: Wrath of Angels. Currently in development are such titles as UFO: Aftershock, El Matador and others. The combined portfolio of 1C and Cenega will reach an impressive amount of over 60 titles in development for the PC and for consoles to be released in 2005-2006.

Yuri Miroshnikov, Head of Interactive and Education Products Division of 1C, said: "The deal will allow 1C to work with highly professional and talented teams from Central European countries. The developers in that region have created world famous hits such as Operation Flashpoint and Mafia."

"We are very happy to work together with 1C to provide a full range of products, support and service for our partners and customers. Together we will be able to reach a completely new quality level of distributing and publishing games," noted Martin Valkovic, Managing Director of Cenega.

About 1C Company

1C Company specializes in distribution, publishing and development of interactive entertainment products and business software. Founded in 1991 1C has become the leading Russian company publishing and distributing computer games in the former USSR. 1C Company is widely acknowledged as a game developer and has several internal studios. Internal developments of 1C include IL-2 Sturmovik, IL-2 Sturmovik: Forgotten Battles, Aces Expansion Pack and Pacific Fighters. 1C Company works as a publisher and producer with over 20 leading Russian independent development studios and has produced over 50 projects for PC and consoles.

More information about the company is available at http://int.games.1c.ru.

The statements contained in this release that are not historical facts are "forward-looking statements." The Company cautions readers of this press release that a number of important factors could cause the 1C Company's actual future results to differ materially from those expressed in any such forward-looking statements. 1C Company and 1C logo are registered trademarks of the 1C Company. All other company names mentioned herein may be trademarks of their respective owners. Copyright ? 2005 1C Company, All Rights Reserved.