San Jose, CA (March 18, 2004) -- Namco Hometek and Flagship Studios announced today that the two companies have entered a publishing agreement.

The agreement will bring Flagship's first PC game to market. Flagship Studios was founded in July 2003, by the creators of Diablo®, one of the best-selling PC game franchises of all time.

"Flagship Studios is a top notch development group in its talent and industry wisdom," said Nobuhiro Kasahara, president and chief executive officer of Namco Hometek Inc. "We look forward to beginning a strong, long-term relationship with Flagship so that we can make great games together."

"This very exciting deal with Flagship Studios marks Namco's official entry into the PC games publishing business," said Robert Ennis, chief operating officer and chief financial officer of Namco Hometek Inc. "Flagship shares our vision in bringing to market the most innovative and exciting games. We are thrilled to be working with such a talented development team."

The team at Flagship Studios began working on their new title in 2003 when the company was formed. While no specific details about the game have been released, Flagship has confirmed its commitment to supporting the online gaming community and is focusing on creating a product with hundreds of hours of addictive and compelling game play. They have also posted initial concept art on their web site reflecting the style of the upcoming game.

"When looking for a publishing partner, it was critical for us to find a company that shares our passion for making great games," said Bill Roper, CEO and co-founder of Flagship Studios. "Namco has fifty years of experience in creating top-quality products and has created some of the most compelling video game franchises in the industry. We look forward to working with them to set new standards in the arena of PC games."

About Flagship Studios
Flagship Studios is a creator of innovative entertainment software, designing games that focus on ease of play, replayablility and fun. The studio was formed in 2003 by former executives and developers from Blizzard North® and represents the creators of the worldwide, best-selling Diablo® franchise. With members that are renowned within the gaming industry, Flagship Studios embodies a team that has worked together for over a decade and have numerous #1-selling games and multiple Game of the Year awards to their credit.

About Nacmo Hometek Inc.
Namco Hometek Inc. is the U.S. consumer division of Namco Limited, a Tokyo-based world leader in the high-tech entertainment industry. Based in San Jose, CA, Namco Hometek Inc. is an award-winning video games publisher for the next generation game consoles. Namco has created some of the industry's greatest video game franchises: Tekken®, SOULCALIBUR®, Dead to Rights®, Pac-Man World™, Ridge Racer®, Time Crisis® and Ace Combat®.