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SEGA PARTNERS WITH DEEP FRIED ENTERTAINMENT TO DEVELOP FOR THE PSP SYSTEM

SAN FRANCISCO & LONDON (September 18, 2006) -- SEGA® of America, Inc., SEGA® Europe, Ltd., and Deep Fried Entertainment® today announced a partnership to create game content for the PSP® (PlayStation®Portable) system. Based in Vancouver, Canada, Deep Fried Entertainment is an independent development studio launched in June 2005 by five industry veterans who have been key team members on such titles as Need for Speed: Underground 1 & 2, NFL Gameday, and Baldur's Gate.

"SEGA understands the handheld market like few other publishers," said Deep Fried Entertainment Chief Operating Officer Brenda Bailey. "This understanding of the market, coupled with SEGA's deep respect for creativity and innovation, makes the company an ideal partner for our team."

"Deep Fried Entertainment brings a unique blend of talent and expertise to the table," said Simon Jeffery, President and Chief Operating Officer, SEGA of America, Inc. "This agreement reinforces our commitment to establish strategic partnerships with top development talent in North America."

The deal is the latest in a string of similar announcements from SEGA that underscore the company's increased emphasis on Western content development. Previously, SEGA announced partnerships with developers Silicon Knights, Bizarre Creations, Obsidian Entertainment, Monolith Productions (Condemned: Criminal Origins), Planet Moon Studios and Pseudo Interactive (Full Auto). SEGA has also acquired development studios The Creative Assembly (Total War series), Secret Level and Sports Interactive (Worldwide Soccer Manager series).

About SEGA® of America, Inc.

SEGA® of America, Inc. is the American Publishing arm of Tokyo, Japan-based SEGA® Corporation, a worldwide leader in interactive entertainment both inside and outside the home. The company develops, publishes and distributes interactive entertainment software products for a variety of hardware platforms including PC, wireless devices, and those manufactured by Nintendo, Microsoft and Sony Computer Entertainment Inc. The SEGA® of America Web Site is located at www.SEGA.com.

About SEGA® Europe Ltd.

SEGA® Europe Ltd. is the European Publishing arm of Tokyo, Japan-based SEGA® Corporation, and a worldwide leader in interactive entertainment both inside and outside the home. The company develops, publishes and distributes interactive entertainment software products for a variety of hardware platforms including PC, wireless devices, and those manufactured by Nintendo, Microsoft and Sony Computer Entertainment Europe. The SEGA® Europe Web Site is located at www.sega-europe.com.

About Deep Fried Entertainment®

Deep Fried Entertainment Inc (DFE) is an independent videogame developer in Vancouver, British Columbia, Canada. Founded in June 2005, by one sharp business person and five industry veterans who were senior members of teams that delivered some of the most successful and memorable games in history, including games such as Need For Speed: Underground 1 & 2, NFL Gameday, Baldur's Gate, MDK2 and many others. Further information can be found at: www.deepfriedentertainment.com.

CONTACTS:

Chris Norris

Access Communications

(for SEGA of America)

415-844-6285

cnorris@accesspr.com

Steve Groll

SEGA of America

(415) 701-4124

steve.groll@segaamerica.com

Lynn Daniel

SEGA Europe Ltd.

+44 (0) 20 8995 3399

DanielL@soe.sega.co.uk

Brenda Bailey

Deep Fried Entertainment Inc.

604-633-0399

bbailey@deepfriedentertainment.com

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