Telecommunications Giant GTE and new entertainment venture GameWorks form unique technology alliance

IRVING, Texas and UNIVERSAL CITY, Calif. - GameWorks, the new breed of club that
defines play, has selected GTE Communications Corp. as its exclusive
telecommunications provider throughout the United States. Founded by Sega
Enterprises, Universal Studios, Inc., and DreamWorks SKG, and developed by a
design team under the visionary guidance of Steven Spielberg, GameWorks
currently operates clubs in Seattle, Las Vegas and Ontario, Calif.

The latest GameWorks locations to open this fall are in Grapevine, Texas (20
minutes northwest of Dallas) on Oct. 30; and in Tempe, Ariz. (15 minutes east of
Phoenix) on Nov. 20. The company plans to open about 100 more venues worldwide
by 2002.

GTE will provide transport of voice, video and data within and between all
the GameWorks locations, as well as all local, long distance and Internet
services. Using high-speed data links, GTE will also provide the inter-venue
connectivity that will allow players in different GameWorks clubs across the
country to compete with one another. In addition, GTE will market a special
package of telecommunications services to GameWorks members.

"GTE is proud to be associated with the GameWorks venture," said Clarence F.
"Butch" Bercher, president of GTE Communications Corp. "Their vision to
connect gameplay across both current and future GameWorks locations makes
intensive use of telecommunications; and GTE's ability to deliver a broad range
of capabilities on a national basis is ideally suited to their needs."

"Sharing innovative ideas with the talented people of GTE allows GameWorks
to deliver the concept of bringing people together and connecting them over
games," commented Michael Montgomery, president and COO of Sega GameWorks. "In
the near future, players at GameWorks will be able to physically and
interactively compete with other competitors simultaneously at all GameWorks
locations. With this alliance, there will be no geographical barriers or
limitations facing guests at GameWorks clubs."

GameWorks is a club-like destination providing a variety of zones that
allows for a diversity of entertainment and social experiences associated with
games. The three main sections include the Arena, a high-energy area featuring
GameWorks' signature and multi-player games; the loading Dock, a competitive
zone where guests put the newest games to the test; and the Loft, a relaxing
environment offering classic video games, sports games, and a full-service

Signature games, exclusive to GameWorks, include Vertical Reality and
GameArc. Up to 12 players are strapped into chairs on Vertical Reality, which
rise and fall, up to 24 feet, as they conquer new levels. GameArc - a high-end
networked game, features state-of-the-art video display and an elaborate sound
system, where up to eight players battle against each other in an intense

GTE's networks of high-speed data links, connecting each of the GameWorks
locations, are being developed to enable GameArc players in several cities to
compete and see each other via real-time video hook-ups.

With revenues of more than $21 billion in 1996, GTE is one of the largest
publicly held telecommunications companies in the world. In the United States,
GTE offers local and wireless service in 29 states and long-distance service in
all 50 states. GTE was the first among its peers to offer "one-stop shopping"
for local, long-distance and Internet access services. Outside the United
States, where GTE has operated for more than 40 years, the company serves
approximately 7 million customers.

GameWorks is the premier club where guests can play, eat, drink and
socialize - everything good, all at once. GameWorks is the main business of
Sega GameWorks L.L.C. Other Sega GameWorks activities include Game Operations,
which owns and operates numerous arcades and SegaCityt locations, and Game
Sales, the exclusive distributor of Sega arcade games for North and South
America. The managing members of Sega GameWorks L.L.C. are wholly-owned
subsidiaries of each Sega Enterprises, DreamWorks SKG and Universal Studios,
Inc. Universal Studios, Inc., is a unit of the Seagram Company, Ltd. a global
beverage and entertainment company.

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