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Multimedia Games Reports Revenues Up

18 November 2004

AUSTIN, Texas -- (PRESS RELEASE) -- Multimedia Games, Inc. (NASDAQ: MGAM) today reported operating results for its fiscal fourth quarter, ended September 30, 2004, in line with the results previewed by the Company last month .

                         Summary of Q4 Results
       (In millions, except per-share and player terminal data)

                                              For the Three
                                               Months Ended
                                               September 30,
                                                2004     2003   Change
                                            --------------------------
Revenue(1)                                     $42.7    $30.7    38.9%
EBITDA(2)                                      $22.7    $18.2    24.9%
Net income                                     $ 7.2    $ 7.4   (3.1)%
Diluted EPS(3)                                 $0.24    $0.25   (4.0)%
Average installed player terminals:
   Class II
   (Legacy and Reel Time Bingo(TM) games)        9,967  9,874     0.9%
   Class III Washington State                    3,365  2,790    20.6%
   Other gaming units
   (Charity and C-TILG(4) games)                 2,386    ---     N/A


                    Summary of Fiscal Year Results
                 (In millions, except per-share data)

                                             For the Twelve
                                              Months Ended
                                              September 30,
                                                2004     2003 Change
                                             -------- ----------------
Revenue(1)                                  $  153.7 $  124.7    23.3%
EBITDA(2)                                   $   87.7 $   73.0    20.1%
Net income                                  $   32.8 $   31.7     3.5%
Diluted EPS(3)                              $   1.07 $   1.08   (0.9)%

Clifton Lind, Multimedia Games' ("Multimedia's") President and Chief Executive Officer, commented, "The results we are reporting today are consistent with the preliminary results we reported last month. Fiscal fourth quarter revenues rose approximately 39% over last year, while EBITDA improved approximately 25% to $22.7 million, resulting in an EBITDA margin (EBITDA divided by Total revenue) of approximately 53%.

"Since the end of our fiscal fourth quarter, there have been notable developments in several of the markets that we serve. In Oklahoma, our largest market, voters approved new gaming legislation that includes a model compact that redefines legal games for Native American tribes choosing to enter into tribal-state compacts, and allows limited expansion of gaming to four racetracks in the state. With the passage of the Oklahoma gaming legislation,

Multimedia is carefully evaluating its player terminal placements and locations throughout the state. This evaluation may lead us to modify pricing, placement, and win-per-day expectations, and our plans for further expansion in the market. Since Multimedia expected this legislation to pass, we intend to convert our existing game offerings to include those covered by the compact, once it is legal to do so and we have the support of our tribal customers. While we are aggressively working to maintain our market share, the performance of player terminals at each location must satisfy certain economic expectations. Once we can offer Oklahoma customers our new compact-compliant products, featuring well-developed gaming engines and market-proven content, we will compete based on the merits of those products, which we believe will prove to be among the best-earning games in the market.

"Over the past few days, we have added a meaningful number of units to our installed base of recurring-revenue C-TILG player terminals at two California tribal casinos. We also generate recurring revenue from several hundred units supplied by other publicly traded, licensed vendors operating on this system. We acknowledge the current uncertainty regarding the role of video lottery terminals such as the C-TILG units under certain tribal-state compacts in California, and remain committed to providing our customers with a wide range of gaming options.

"Since entering the charity bingo market eleven months ago, we have made substantial progress, and we now have a significant installed based of charity units in two distinct markets. We continue to believe that our expertise both in developing and providing electronic bingo gaming systems and in tracking evolving charity gaming legislation will postion us to continue to be first to market in this developing market.

"Our server-based solutions for the gaming industry have been well received by Native American tribes, charity operations, and state-run lotteries. We believe each of these to be growth markets, and our ability to quickly and cost-effectively leverage our intellectual property and technological and operating expertise will allow us to further expand our sources of revenues and earnings. With our large installed base of player terminals generating recurring revenues in multiple markets, we have a strong foundation for future growth. Our goals for fiscal 2005 include successfully navigating the transition in the Oklahoma market, while also pursuing growth in the installed base of recurring revenue units. In addition, we are pursuing gaming system sales and an expansion of the number of placements in the charity, casino and lottery markets, actions which will further diversify our earnings base. We also intend to achieve cost savings in all operating areas where we can do so without slowing our development of new products or our entrance into new markets."

Fiscal 2005 First Quarter Financial Guidance

Multimedia Games' Q1 2005 financial guidance is detailed in the table below. Multimedia's establishment of Q1 FY 2005 guidance reflects input from the Company's Audit Committee and executive management team, whose joint recommendations were considered by Multimedia's Board of Directors. Multimedia is providing financial guidance for the current fiscal quarter, and the quarterly financial guidance excludes expectations for contributions from player terminal sales, which, in the Company's experience, are more difficult to predict than the earnings the Company anticipates deriving from Class II and Other Gaming Unit placements. The Company's Audit Committee and Board of Directors continue to review the practice of providing guidance in light of the many changing factors in the markets served by the Company.

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