Copyright 2004 www.tombraiderchronicles.com

[ November 25th 2004 ]

During the current financial year (FY05), Eidos [ news ] has launched three key titles. ShellShock: Nam '67 [ news ] , has proved to be a successful new franchise with shipments to date of circa 800,000 units, and with strong sell through, which exceeds our original forecasts. A sequel is already underway. In addition, Backyard Wrestling 2: There Goes The Neighborhood [ news ] and Crash 'n' Burn [ news ] have recently been launched on schedule and initial shipments were in-line with management's expectations.

As previously announced, the PC release of Championship Manager 5 [ news ] was deferred from October 2004 in order to allow for further development and refinement of the game. It will now release, closely followed by the platform and online versions, in the second half of FY05 on a date to be announced in due course. This will add to the already heavily weighted and strong second half release line-up which will see Project: Snowblind and Imperial Glory [ news ] release in Q3 and Just Cause, 25 to Life and Commandos Strike Force, together with the eagerly awaited next in the series of Hitman [ news ] and Tomb Raider [ news ], all currently scheduled for Q4 release.

We believe that the fundamental strengths of Eidos, in terms of its owned intellectual property, creative talent and technical capabilities, continue to make it one of the leading independent companies in the sector. However, given the volatility inherent in the hit-driven computer games industry and the increasing levels of development expenditure required to launch new titles, the outlook for Eidos as a listed company remains challenging.

IO Acquisition: The integration of IO Interactive, the Danish games developer that we acquired in April this year, has been a success. In addition to bringing ownership and control of the highly acclaimed Hitman franchise in-house, IO has provided the Company with significant additional, high quality development capability and technical expertise. Specifically, IO is now leading the Group's in-progress transition programme to the next generation PlayStation and Xbox hardware platforms.

Strategic Review: As shareholders will be aware, the Board announced in June that it intended to undertake a strategic review of both the business and the future direction of the Company. During the review process, we concluded that shareholders' interests would be best served by exploring the sale of the Company. Consequently, in conjunction with our financial advisers, UBS, we prepared a short list of the most likely potential partners. We then held preliminary discussions on a confidential basis with short listed candidates as well as with certain other interested parties who approached us directly.

Following this initial review, more detailed discussions were progressed with a smaller number of potential acquirers and due diligence is now continuing with certain of these parties. The Board is pursuing this process with the utmost vigour and with the objective of securing an acceptable offer for the Company. It is our intention to bring this process to a satisfactory conclusion as soon as possible. However, at this point in the discussions, there can be no assurance that an offer for the Company will be forthcoming.

In parallel with the strategic review, the senior executive team has remained focused on its day-to-day management responsibilities in driving the business with the aim of achieving our FY05 operating objectives.

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