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Irvine, CA, February 27, 1997 -- Graphix Zone (NASDAQ: GZON), a major independent entertainment and interactive music publisher, announced the expansion of its games business today with the acquisition of Inscape (a partnership between HBO, Warner Music Group and Nash New Media) as well as acquisitions from several individual developers. Inscape, best known for its ground-breaking, graphically rich role-playing games, including the award-winning The Residents' Bad Day on the Midway and The Dark Eye, will become the company's game division and its premier game imprint.

In addition to securing top Inscape assets, Graphix Zone also takes on key members of the management and creative teams. Joining Graphix Zone Chairman Ron Posner and President Norm Block on the senior management team are Rob Sebastian (Inscape) as vice president marketing and David Boss, (Inscape) vice president and general manager. Inscape's creative team, headed by Rebekah Behrendt, project director, and Brock LaPorte, vice president of technology, continue their responsibilities for Inscape title development under the new operating structure. Inscape's partner will become a shareholder of Graphix Zone as a result of the deal.

"Our entry in the games arena represents a grassroots consolidation effort designed to build the critical mass we believe is necessary t operate in today's multimedia marketplace," stated Posner. "By combining the assets of Graphix Zone, Inscape and others, we are establishing a diversified product line and strong management foundation from which to continue our consolidation efforts in the multimedia arena."

"We intend to build upon our games business so that it can operate in this highly competitive market by acquiring outstanding assets at optimal cost and minimal creative risk," continued Posner. "The economics of the distribution channel has been the driving force behind the consolidation moves we see throughout the industry, creating great opportunities for Graphix Zone to acquire additional properties."

"In the games arena Graphix Zone will focus on the three most profitable gaming genres -- action/adventure, role playing and strategy -- as well as build brands, either from original properties or outstanding licenses like Tales From The Crypt, Wheel of Fortune and Jeopardy," stated Sebastian. "This merger combines the best of Inscape's creativity with Graphix Zone's financial acumen and allows us to greatly expand the breadth and scope of our games line-up."

For the past 12 years, Posner has been a leader in the consolidation of the PC business software industry, having engineered over 10 transactions for five different companies, including the merger of WordStar with SoftKey and Spinnaker in a $250 million transaction that created one of the largest independent software companies, SoftKey International, now worth over $500 million. Posner more recently has focused on the consolidation of the multimedia publishing industry and was instrumental in the merger of Grapix Zone and StarPress, which itself was created in 1995 by Posner through the merger of Great Bear Technology and StarPress Multimedia.

Graphix Zone intends to focus on three growing markets: games, entertainment and Internet products. Game titles will be developed and distributed under the Inscape banner, while interactive music, branded entertainment and Internet products will continue to be sold under the Graphix Zone label.

Graphix Zone intends to release 12 - 16 titles in 1997, building the slate with assets acquired from Inscape and individual developers. Acquisitions from Inscape include: Tales From The Crypt (Inscape internal project), Ground Effect (Angel Studios), HyperWar (Ground Zero Productions) and KGB Files (Blue Sky).

Graphix Zone's library includes more than 60 CD-ROMs and enhanced CD-ROMs, including interactive music titles, film and television adaptions, education and reference titles. The titles include, among others: Herbie Hancock Presents Living Jazz, Willie: The Life and Music of Willie Nelson, Under the Covers featuring The Eagles, NIXON: The CD-ROM and The Crow: Complete Interactive Collection.. Graphix Zone Internet products include: SmartNet Internet Everything, SmartNet Power Accessories, SmartNet Singles series and ExpressNet Suite with Netscape Navigator 2.0 and 3.0.

Based in Irvine, Calif., Graphix Zone, Inc. publishes interactive multimedia products on CD-ROM, hybrid and Internet platforms and will publish on future platforms such as DVD.

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