Acquisition

RNS Number:2517Q
SCI Entertainment Group PLC
29 September 2003



                          SCi Entertainment Group Plc

                          Acquisition of Pivotal Games

SCi Entertainment Group Plc ("SCi" or "the Company"), a leading UK based
computer games publisher, today announces the acquisition of the trade and
assets of Pivotal Games ("Pivotal") from Ernst & Young, the receivers of
Pivotal's parent company, Kaboom Studios, for a cash consideration of #2.36
million, payable upon completion.

Pivotal is a computer games developer which has produced for SCi the best
selling games Conflict: Desert Storm (which to date has sold over 1.5 million
copies), Conflict: Desert Storm 2 and The Great Escape. Conflict Desert Storm 2
went immediately into the number one chart position when it was released on 19
September 2003, and The Great Escape remains in the top ten. In addition,
Pivotal is completing the third game in the Conflict series and has just begun
development of the fourth.

Prior to the transaction, Pivotal Games Ltd, in which SCi owned a 10% stake, was
a subsidiary of computer games developer, Kaboom Studios. In its last audited
accounts, to 31 December 2002, Pivotal Games Ltd had a turnover of #2.4 million,
pre-tax profits of #0.28m and net assets of #0.5m. It currently employs
approximately 70 people. Despite the financial success of Pivotal,
under-performance in the rest of Kaboom Studios caused the Kaboom Group to cease
trading and it was recently put into receivership. SCi has purchased the trade
and assets of Pivotal from the receiver and assumes no liabilities in respect of
either Pivotal Games Ltd or any part of the Kaboom Group.

It is not generally SCi's policy to own in-house development. The Company
operates a successful business model based on outsourcing development to third
parties which has allowed it to keep strict control over its cost base as well
as making the best use of talent within the industry. This model remains at the
core of the SCi's strategy. However the acquisition of Pivotal is an exception
for compelling business reasons:

   *The purchase of Pivotal will both protect and extend the long-term
    arrangements for further products in the Conflict series. The acquisition
    safeguards the future direction of Pivotal and therefore completion of the
    third game and development of the fourth game remains well on track.

   *Just as important, the acquisition will allow SCi to substantially and
    positively alter its royalty arrangements in respect of future products such
    that future earnings will be enhanced.

SCi will continue to work with Pivotal in the same way that it has done for the
last three years. Pivotal will have independent management and payments will
continue to be paid strictly on results. There will be no impact on SCi's
monthly expenditure. It is anticipated that the cash flow effect on SCi of the
purchase consideration will be compensated by the new royalty arrangement within
the next 12 months. Consideration regarding the development of products outside
of the Conflict franchise will continue to be based on choosing the best
developers available from across the industry.

Jane Cavanagh, Chief Executive of SCi said:

"Pivotal is a very successful and talented development house. This acquisition
is a very positive move for SCi, ensuring that we maximise the financial
opportunity of the Conflict series. Our firm commitment to outsourcing remains
as it allows us to continue to deliver the best products and returns on our
investment. For this reason Pivotal will continue to be operated as an
independent studio."

                                    - ENDS -

For further information, please contact:

For media enquiries:

Robin Tozer

Bell Pottinger Financial                  Tel: [phone]


For investor enquiries:

Neville Harris

Bell Pottinger Financial                  Tel: [phone]



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