Sound Source Interactive Announces Plan to Enter into Game Console Software Market; Sony PlayStation and Nintendo Gameboy

Business Wire, March 25, 1999

CALABASAS, Calif.--(BUSINESS WIRE)--March 25, 1999--Sound Source Interactive Inc. (Nasdaq:SSII), a leading U.S. publisher of children's interactive software, Thursday unveiled its plan to enter into the dedicated game console software market, with initial products to be developed for the Sony PlayStation and Nintendo Gameboy.

The company will expand its product offerings of children's titles to include software for these platforms under signed agreements with Sony Computer Entertainment America, a subsidiary of Sony Corp. (NYSE:SNE), and Nintendo of America Inc., a subsidiary of Nintendo Company Ltd.

Almost all of the company's coveted exclusive content licenses with major motion picture studios include the worldwide rights to publish software for dedicated game console platforms. To date, Sound Source has shipped more than 1 million CD-ROM units from its licenses to retail storefronts and 3 million to OEM customers in a very crowded marketplace.

An analysis of the company's opportunity in dedicated console software indicates that 70 million Nintendo Gameboy units and 50 million Sony PlayStation units have been shipped worldwide. This, coupled with a relatively limited selection of titles available for children, produces a much stronger market than that enjoyed by the company's CD-ROM line.

The projected financial impact of this product expansion is improved further by the wholesale pricing, which is typically 100 percent greater than that for edutainment CD-ROMs.

The company is engaged in talks with licensors and strategic partners regarding the development and marketing of applicable licensed characters for these formats.

Its current marketing and distribution agreements with TDK Recording Media Europe S.A., the European subsidiary of TDK Corp. (NYSE:TDK), and Macmillan Digital Publishing includes options to distribute Sound Source Interactive software in formats other than CD-ROM.

TDK is currently engaged as the company's exclusive distributor of CD-ROM titles for Western Europe. It has the option of expanding the agreement to include South America, Asia and other international markets.

Macmillan Digital Publishing has the distribution option for North America. The company is in the process of selecting the strongest combinations of licensing, publishing and marketing partners with which to launch its game console software franchise.

The company's plan is to publish game console software for some of its most popular titles first. For example, "The Land Before Time" CD-ROM series has sold more than 500,000 units since its launch and continues to sell as an evergreen title. Including OEM bundles, "The Land Before Time" series has shipped more than 1 million units.

Other titles preliminarily slated for the new format will be announced shortly.

"This decision has been a long time in coming, but the time is right, the resources are available and the interest in our titles in both game consoles and DVD-ROM is at an all-time high," commented Vincent Bitetti, chairman and CEO of Sound Source Interactive.

"Our discussions with strategic partners have included the requisite support, both financial and operational, for us to make the transition into these new platforms. The opportunity being presented to us in these discussions is a reflection of the perceived strength and size of our market. We believe that the financial opportunity inherent in this expansion is very compelling."

Sound Source Interactive is a leading publisher of children's interactive software in the United States. The company is a comprehensive, fully functional software studio, producing an expanding list of award-winning software products that are based on licensed content from major motion pictures and long-standing television series.

The company has exclusive licenses from Universal Studios, Viacom (Paramount Pictures Corp.), Warner Bros., CBS Entertainment, MGM/UA, Harvey Entertainment Co., 20th Century Fox, New Line Cinema, Sony Signatures, Polygram and Carolco Pictures. Sound Source Interactive has headquarters in Calabasas.

Statement Under the Private Securities Litigation Reform Act of 1995.

With the exception of historical information, the matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of the company could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: the company's ability to deliver product and secure strategic relationships; competitive products; continuing market demand for the particular licensed content; and consumer spending patterns. Consult the risk factors listed from time to time in the company's reports on Form 10-QSB and 10-KSB and annual reports to stockholders.