Dogz and Catz Dash Past 1.5 Million Mark; PF.Magic's Virtual Petz Brand Established as Leader in Category

Business Wire, Feb 19, 1998

SAN FRANCISCO--(BUSINESS WIRE)--Feb. 19, 1998--PF.Magic, creators of the world's first virtual Petz(TM) -- Dogz(TM) and Catz(TM), sinks its claws into the leadership position and redefines the burgeoning virtual pets category with record-setting sales figures for its computer desktop and plush toy products.

Sales for virtual Petz, comprised of Dogz, Catz, Dogz II, and Catz II, roared past the 1.5 million mark worldwide, selling 300,000 copies of Dogz II and Catz II alone in its first two months of release. The success of virtual Petz has created a ripple effect enabling PF.Magic to leverage the strength of the Dogz and Catz brand into the plush toy market.

Distributed by Trendmasters, Dogz and Catz plush toys became a top-selling plush toy at leading toy retailers like Toys 'R Us. This marks one of the first times a software company has crossed marketing boundaries from computer desktops to the plush toy market.

"Our continuously increasing sales prove that the virtual pets category is a long-lasting new genre of entertainment, and is much more than just a key chain toy fad," said John Scull, managing director of PF.Magic. "We're very excited the Petz brand has become so well recognized and received, both in the computer desktop and plush toy markets."

Dogz and Catz sales have been enhanced by PF.Magic's innovative Web-based marketing campaigns, which account for a significant portion of the company's overall sales. More than three million visitors have logged onto PF.Magic's Web site (http://www.petz.com) since the original Dogz were released in 1995, at a current rate of over 200,000 visits per month. The Web site empowers animal lovers to download product demos, or "adoption kits," and take their favorite virtual Petz for a "test walk" before "adopting" them. Curious consumers download adoption kits at a rate of more than 100,000 per month.

PF.Magic's online presence has given birth to a subculture of Petz enthusiasts, and fostered a huge community of Petz lovers. To spread the Petz gospel, hundreds of proud owners have created their own Web sites dedicated solely to sharing and showcasing their adopted Petz.

Avid Petz lovers have even created Petz Clubz (go to http://www.petz.net/linkz/petzpals.htm for listing of clubs), which attract people from all corners of the world. Thousands also participate in the Web site's online discussion forums on a weekly basis.

What's more, PF.Magic's strategic distribution partnership with Mindscape has extended the reach of virtual Petz to the far corners of the consumer market. Virtual Petz now have homes on the shelves of all leading software outlets like CompUSA, Babbages, EB as well as mass consumer outlets such as Best Buy, and Walmart, as well as alternate channels like pet stores, and drug and grocery stores.

About PF.Magic

PF.Magic's original virtual Petz, the world's first interactive virtual Petz, initially dashed onto computer desktops in the fall of 1995 with the release of Dogz, creating a worldwide craze for virtual Petz. Catz pounced onto the scene in the spring of 1996, followed by those wacky Oddballz in the fall of 1996. Virtual Petz II, Dogz II and Catz II, scampered onto computer desktops in 1997. Virtual Petz were the first interactive titles to combine artificial intelligence and 3-D animation to bring real life to computer desktops.

To date, PF.Magic has sold more than 1.5 million copies of virtual Petz worldwide and won many awards for its pioneering work in the interactive virtual Petz market. Petz lovers continue to adopt and sample the original virtual Petz, Dogz, Catz and Oddballz, from the PF.Magic Web site at http://www.petz.com. Also in 1997, plush toy versions of Dogz and Catz were introduced into the toy market by Trendmasters, Inc. under a licensing agreement with PF.Magic.

From its toy and game-filled offices in San Francisco's "Multimedia Gulch," PF.Magic is known for its interactive living characters and innovative entertainment products. Since its beginning in 1991, the Company has developed several award-winning, character-based products in addition to the virtual Petz line. These include Ballz(TM), the humorous 3-D fighting game on the Sega Genesis, SNES and 3DO, and Max Magi(TM), the world's first electronic magic kit hosted by an intelligent 3-D character. PF.Magic is privately held.

Your virtual Petz Web site is located on the World Wide Web at http://www.petz.com. -0-

Note to Editors: Dogz, Catz, Oddballz and your virtual Petz are trademarks, and PF.Magic is a registered trademark of PF.Magic, Inc. 1998 PF.Magic, Inc. All rights reserved. All other trademarks are the property of their respective trademark owners.

CONTACT: PF.Magic

Brooke Boynton, 415/495-0400

brooke@pfmagic.com

http://www.pfmagic.com

or

Arbuthnot Communications

Lesli Arbuthnot, 415/495-0100

lesli@arbuthnot.com