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Activision Announces Acquisition Of Treyarch Invention

Activision, Inc. has acquired Treyarch Invention, LLC., a leading console software developer with a focus on action and action-sports video games. The acquisition further enables Activision to implement its multi-platform development strategy by bolstering its internal product development capabilities for the next-generation console systems, strengthening Activision's position in the action and action-sports genres. The transaction underscores Activision's commitment to acquiring proven technical and design talent that has a history of high-quality product creation, while over time enhancing the company's financial operating model. Activision has had a long-standing relationship with Treyarch who is currently in production on several next-generation games for Activision, including TONY HAWK'S PRO SKATER 2X, SPIDER-MAN THE MOVIE, SHAUN PALMER'S PRO SNOWBOARDER 2, KELLY SLATER'S PRO SURFER and MINORITY REPORT. Additionally, Treyarch has developed other popular games for Activision, including SPIDER-MAN and TONY HAWK'S PRO SKATER 2 for Sony Dreamcast. Under the terms of the agreement, Treyarch becomes a wholly owned subsidiary of Activision. Treyarch equity holders and employees will receive 545,974 shares of Activision common stock in connection with the acquisition. Up to 224,077 additional shares of Activision common stock also may be issued to Treyarch's equity holders and employees over the course of several years depending on the satisfaction of certain performance requirements and other criteria. The transaction was structured as a tax-free reorganization and will be accounted for under the purchase accounting rules. Activision does not expect this transaction to affect its previously announced revenue and earnings per share guidance for the fiscal year ended March 31, 2002 or for fiscal year 2003.

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