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Two analysts and top management from two six sector firms examine the Video Games sector in this 17 - page Special Focus - Video Games Issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info590.htm

TWST: Would you begin for us today by defining your coverage universe?

Mr. Preissler: We cover the digital media broad spectrum, and what we mean by that is anything that really relies upon the convergence of technology and rich media, content such as video or audio, to fill the medium. Examples of that are video game software, the entertainment software space, a lot of the consumer devices and services that are examples of this convergence, such as TiVo (TIVO), Yahoo! (YHOO), CNET (CNET), and so on. So it’s anything at that junction of technology and rich media.

TWST: On the entertainment software side, which companies do you include in your coverage?

Mr. Preissler: Right now we’re covering Electronic Arts, (Nasdaq:ERTS) Activision (ATVI) and Acclaim (AKLM). Broadly, we’re going to be covering the entire space.

TWST: On the entertainment software side, which companies do you include in your coverage?

Mr. Preissler: Right now we’re covering Electronic Arts (ERTS), Activision (ATVI) and Acclaim (AKLM). Broadly, we’re going to be covering the entire space.

TWST: Who do these companies serve? What is it that they produce?

Mr. Preissler: The game industry has really changed dramatically with regard to the power of the hardware platform. So these are now full, multimedia-type productions and are on a par with movies and television and so on, and what they are producing is rich media entertainment. These productions can run the gamut from arcade games to interactive movies.

TWST: Are there any new games coming to market that you are particularly excited about?

Mr. Preissler: I think there are some really exciting games, particularly from Activision and Electronic Arts, which are the top companies out there. Doom III from Activision I think is really interesting, because it’s really setting the bar for a new type of multimedia horror-type game. Another game, Sims Online, I think is interesting in that it’s going to be the first mass market online game, where traditionally online games were just for high-end power users, real core gamers. This is something that is going to try to get mom, dad and the kids all online playing a game together. And then of course there are all the movie games that will do well in any event, such as Lord of the Rings, The Two Towers, which is from Electronic Arts, the Harry Potter games and so on. So those will all be exciting as well. And I think beyond that we’re going to see the Star Wars Galaxies, which is another online community type of game that obviously carries the Star Wars brand, which I think is positioned to do well in any market.

TWST: What’s topping your list today?

Mr. Preissler: I think the companies that really emerge as the premier companies in the space are Electronic Arts and Activision. Electronic Arts is a premier company, it’s the number one publisher, but it’s also the premier valuation in the sector too.

This special report includes:

1) Video Games & Entertainment Software - In an in-depth (2,800 words) interview, James R. Preissler, a Director of Digital Media Research at Investec, examines the outlook for the sector and shares specific stock recommendations.

2) Entertainment Software Publishers - In an in-depth (4,800 words) interview, Paul D. Kaump, a Vice President and Senior Research Analyst at Dougherty & Company, examines the outlook for the sector and shares specific stock recommendations.

3) CEO interviews (average 2,500 words). Top management of two - sector firms examine the outlook for their firm and the sector.