Microsoft Adds Popular Titles to Xbox Line-up

Microsoft Corp. added two new popular and much-anticipated Sega game titles to its Xbox line-up Friday. The
company said new Sega Corp. subsidiary SEGA-AM2 Co. Ltd. will develop Shenmue II, which Sonic Team Ltd. is working on a networked
RPG game, Phantasy Star Online (working title).

“By bringing Shenmue II and Phantasy Star Online to Xbox, we are bringing Sega’s renowned franchises to even more gamers worldwide,”
said Peter Moore, president and chief operating officer of Sega of America. “We expect that both titles will be killer apps on Xbox
and that the technical capabilities of the platform will surely bring both games to new levels in terms of graphics and experience.”

The Shenmue series made its debut on Sega’s Dreamcast console before the company withdrew from the hardware market. The game has
sold a record 1.2 million copies worldwide. Sega released Shenmue II for Dreamcast on Sept. 6, and is now developing the game for
Microsoft’s Xbox console.

Microsoft said, “In the development of Shenmue II, the full potential of Xbox has been utilized to convey the game’s magnificence.”

Meanwhile, Phantasy Star Online has amassed more than 300,000 registrants since its launch on Dreamcast, and has garnered 14 awards
worldwide, including the Fifth Annual Japan Game Award. Microsoft said the game is the first consumer networked RPG game that is
compatible worldwide. Unlike other current networked RPG games, Phantasy Star Online includes a word select system that allows
players to communicate with other players worldwide, and a visual lobby that expands the breadth of communications by adding graphic
elements to text-based chat. The game is compatible with five languages.

Microsoft indicated that Phantasy Star Online for Xbox will provide content that will be a major factor in its broadband network
strategy.

“In addition to the numerous Xbox game titles previously released by Sega, the significance of major titles such as Shenmue II and
Phantasy Star Online being added to the lineup is just enormous,” said Robbie Bach, chief Xbox officer at Microsoft. “Gamers will
have the opportunity to enjoy masterpieces by world-renowned Yu Suzuki and Yuji Naka through the powerful graphics, sound and
broadband network capabilities of Xbox.”

Microsoft plans to launch the Xbox console on Nov. 15, with an estimated retail price of $299.99.