Interactive Magic to Acquire The WarGamer.com.

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--June 3, 1999--

Network Company Brings 3 million advertising impressions and

150,000 unique monthly visitors to iEN

Interactive Magic (NASDAQ-NMS:IMGK), developer and operator of Internet Entertainment Communities, announced today that it will acquire The Wargamer,( http://www.wargamer.com ), one of the most popular sites on the Internet dedicated to military history, strategy games, and military simulations.

The acquisition reflects Interactive Magic's continuing strategy to acquire additional Internet Entertainment Communities.

"This is a great alliance for both Interactive Magic and The Wargamer," said Interactive Magic CEO J. W. Stealey. "This strategic move will be beneficial to both of our companies and is the latest in a series of steps designed to build our global Internet Entertainment Communities. New customer traffic, website impressions and advertising revenue are all growing steadily at all of Interactive Magic's Internet Entertainment Community websites: The iMagic Entertainment Network ( http://www.imagicgames.com ), GameHub (gamehub.net), and MPG-Net ( http://www.mpgn.com ). Visitor traffic at our community sites has grown from roughly 50,000 per month last year to more than 500,000 unique visitors each month by April of this year. We have gone from negligible advertising impressions, to more than 12 million impressions per month by April, and continues to show significant growth. We intend to continue an aggressive Internet growth strategy as we add more products, strategic partners, promotions, and features for our Internet Communities customers."

With more than 150,000 visitors each month, The Wargamer is considered one of the leading historic and military gaming sites on the Internet. In addition to hosting the PCTESTPILOT.com flight simulation site, The Wargamer features unique editorial content, candid gaming reviews, dedicated support for a wide range of war and strategy games, one of the largest collection of free custom scenarios on the Internet, and opponent locating and matching services. The site also is the home of the "The Wargamer Scenario Archive", the oldest and most comprehensive Internet collection of free custom computer game scenarios. More than 1.5 million scenarios have been downloaded since the archive was created.

"We are looking forward to becoming a part of the iMagic Entertainment Network family," said Mario Kroll, The Wargamer's Director of Operations. "iMagic has shown a strong dedication to being the best in online gaming and we are thrilled with this new partnership. We believe The Wargamer will play a significant role in providing Interactive Magic with high quality, candid content, targeted at both hard-core and casual players of war, strategy, and military history games and military simulations."

Interactive Magic (NASDAQ-NMS: IMGK) was founded in 1994 and became publicly traded on the Nasdaq exchange in 1998. Interactive Magic is a leading provider in hot Internet computer games and entertainment websites including iMagic Entertainment Network or iEN ( http://www.imagicgames.com ) and GameHub ( http://www.gamehub.net ) the preferred provider of online games for AT&T WorldNet's 1.6 million customers. Interactive Magic has strategic or OEM/bundling arrangements with numerous companies including AT&T (NYSE: T), America Online (NYSE: AOL), Earthlink (Nasdaq: ELNK), Columbia House, Software-Of-The-Month Club, Diamond Multimedia (Nasdaq: DIMD), Thrustmaster (Nasdaq: TMSR), CH Products and Logitech (Nasdaq: LOGIY). For more information, contact Lynne Beaman at lbeaman@imagicgames.com or call (919) 461-0722 ext. 3048. For Interactive Magic Investor Relations information please contact Nancy Campbell of Citigate Dewe Rogerson at (212) 688-6840.

Forward-Looking Statements: Except for the descriptions of historical facts contained herein, statements in this news release concerning future results, performance or expectations are forward-looking statements. Actual results, performance or developments could differ materially from those expressed or implied by such forward-looking statements as a result of known or unknown risks, uncertainties and other factors including those described from time to time in the company's filings with the Securities and Exchange Commission, under "Risk Factors" and elsewhere, including risks of delays in development and introduction of new products, dependence on new product introductions which achieve significant market acceptance and the uncertainties of consumer preferences, the rate and degree of market acceptance of online gaming, the ability to negotiate profitable terms for online gaming products and services, dependence on third party software developers for significant portion of new products, risks of rapid technological change and platform changes, intense competition, seasonality, dependence upon third party distribution and risks associated with international business and other risks.

IMagic Entertainment Network, MPG-Net and GameHub are trademarks and Interactive Magic is a registered trademark of Interactive Magic, Inc. All other trademarks are property of their respective owners. Copyright 1999 Interactive Magic, Inc. All rights reserved.