MICROSOFT TO ACQUIRE DIGITAL ANVIL
December 5, 2000

Microsoft today announced it has reached a preliminary agreement to acquire Digital Anvil. Under the terms of the pending acquisition, Microsoft would gain the rights to select Digital Anvil titles, including FreeLancer and a yet-to-be-announced title currently in development for the Xbox.

Microsoft and Digital Anvil have worked closely since 1997 to develop games for the PC. The addition of Digital Anvil comes on the heels of other successful game acquisitions by Microsoft, including FASA Interactive Technologies, creators of the MechWarrior franchise; Access Software, creators of Links golf simulation titles; and Bungie Software, creators of the upcoming Halo. Following the planned acquisition, Digital Anvil will continue to create titles from its Austin headquarters as part of Microsoft's growing pool of in-house development talent.

"The acquisition of Digital Anvil will strengthen our commitment to producing top-quality PC and Xbox titles," said Ed Fries, vice president of games publishing at Microsoft. "'FreeLancer' is a true expression of Digital Anvil's innovative spirit. By combining our internal resources with the Digital Anvil team's development talent, we will ensure the realization of their creative visions."

In a related announcement, Chris Roberts, founder and CEO of Digital Anvil, said he would be departing the company after the completion of FreeLancer.

"This acquisition is a positive growth opportunity for Digital Anvil," Roberts said. "Under the Microsoft umbrella, 'FreeLancer' and other games will be supported by a strong infrastructure and realized in the spirit in which they were conceived."