SEGA and Imagination Technologies Announce Licensing Agreement

SEGA Licenses High-End PowerVR Graphics Technology for Advanced Arcade Systems

March 18, 2004 - London, UK - Imagination Technologies [LSE:IMG], a leader in system-on-chip intellectual property (SoC IP), and SEGA CORPORATION [TSE:7964] today announce a licensing agreement between the companies for the development of next generation arcade systems based on new high-end PowerVR graphics technology.

SEGA, the leader in the arcade market, will use a new high-performance PowerVR graphics processor as the basis of its future arcade systems. SEGA may also supply system boards based on this processor to other leading amusement game companies.

Says Hiroshi Yagi, Corporate Officer in AM Product R&D Division, SEGA CORPORATION: “The inherent benefits of PowerVR, which are well known to SEGA, will be utilized to deliver interactive experiences that will amaze gamers worldwide and continue SEGA’s legacy of innovation and excellence. SEGA’s new arcade platform, which will be at the forefront of Sega’s current board strategy across all video game genres, will deliver cutting edge gaming, exceeding any other videogame system in the world.”

Says John Metcalfe, VP Business Development, Imagination Technologies: “We are thrilled to once again be cooperating with SEGA at the forefront of video gaming. Together we have already proven our excellence in arcade games with the Naomi family, and it is safe to say that once again gamers will be looking eagerly to the arcades to see where the future of video gaming lies.”

SEGA previously utilised PowerVR technology as the basis of its Naomi and Naomi2 arcade platforms, which were employed not only by SEGA but also by many of the other leading amusement game companies.

About SEGA CORPORATION

SEGA(R) Corporation is a worldwide leader in interactive entertainment both inside and outside the home, encompassing consumer business, amusement machine sales and amusement centre operations. The company develops, publishes and distributes interactive entertainment software products for a variety of hardware platforms including PC, wireless devices, and those manufactured by Nintendo, Microsoft and Sony Computer Entertainment Inc. SEGA(R) Corporation's Web site is located at http://sega.jp.