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JoyRide Studios Signs MicroSoft

CHICAGO, Jan. 20 -- Racing Champions Ertl announced today that it is entering into a license agreement with Microsoft Corporation to produce collectible figures and vehicles based on Microsoft Game Studio's Xbox(TM) and PC game properties. The first of these will be based upon the multi-million unit selling Halo(TM), to be followed by the highly anticipated Brute Force(TM). These products will be primarily targeted at video game players and packaged with extra material that expands upon the actual game play experience.

According to Peter Henseler, President of Racing Champions Ertl, "Microsoft's accomplishments in the video game market in recent years have been nothing short of amazing. We are thrilled to be in a position to tap into their efforts and create collectible figures and vehicles based on some of Microsoft's most popular PC and Xbox game titles. JoyRide Studios, in cooperation with Microsoft and Bungie® Studios, will deliver the collectible products that the millions of Halo fans deserve. This is an important license agreement that further expands our new JoyRide Studios product category into the multi-billion dollar video game market, as well as allowing Microsoft to continue providing exposure for its brands outside the video game aisle."

"Our alliance with JoyRide Studios gives us a unique opportunity to introduce our major game characters to broader audiences, as well as reintroduce them in new ways to our die hard fans," said Beth Featherstone, Senior Director of Marketing at Microsoft Game Studios. "There's no game more appropriate to launch this new venture with than Halo, the best-selling game on Xbox."

Racing Champions Ertl (www.rcertl.com) is a leading producer and marketer of innovative collectibles and toys targeted at males of all ages. The Company's diverse product offerings include scaled die-cast replicas of John Deere agricultural equipment and NASCAR stock cars, other licensed vehicle replicas, pre-teen toys, sports trading cards, racing apparel and souvenirs, and collectible figures. These products are sold under the Company's market-focused brand names, including Racing Champions®, Ertl®, Ertl Collectibles®, American Muscle(TM), AMT®, W. Britain®, Press Pass®, and JoyRide Studios(TM). The Company reinforces its brands and enhances the authenticity of its products by linking them with highly recognized licensed properties including NASCAR, NHRA, John Deere, Harley- Davidson, Case, Polaris, Honda, Caterpillar, Ford, GM, Chrysler, Texaco, Universal Studios, Warner Brothers, Hit Entertainment, Nintendo, Sega, and Electronic Arts. The Company's products are marketed through multiple channels of distribution, including mass retailers and specialty and hobby wholesalers and retailers, OEM dealers, and to corporate accounts for promotional purposes. The Company sells through more than 20,000 retail outlets located in North America, Europe, and Asia Pacific.

Microsoft Game Studios is a leading worldwide publisher and developer of games for the PC, Xbox video game system and online platforms. Comprising a network of top developers, Microsoft Game Studios is committed to creating innovative and diverse game portfolios for the PC (http://www.microsoft.com/games/), including such franchises as "Age of Empires®," "Flight Simulator" and "Zoo Tycoon(TM)"; Xbox (http://www.xbox.com/), including such franchises as "Halo(TM)," "Project Gotham Racing(TM)" and "NFL Fever"; and Zone.com (http://www.zone.com/), the official games channel for the MSN® network and home to such hits as "Bejeweled" and "OutSmart(TM)."

Bungie® Studios was founded in 1991 with two goals: to develop games that combine brilliant technology, beautiful art, intelligent stories and deep game-play, and then sell enough of those games to achieve their real goal of total world domination. Over the last ten years they produced games like the Marathon Trilogy and the first two Myth games, hailed as classics by critics and gamers around the world. Halo, their latest game, has achieved phenomenal success on Microsoft's Xbox video game system. More information on Bungie can be found at http://www.bungie.net.

Certain statements contained in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as "anticipate," "believe," "could," "expect," "intend," "may," "planned," "potential," "should," "will" and "would." Such forward- looking statements are inherently subject to known and unknown risks and uncertainties. Such uncertainties and other operational matters are discussed further in the Company's quarterly and annual filings with the Securities and Exchange Commission. The Company's actual results and future developments could differ materially from the results or developments expressed in, or implied by, these forward-looking statements. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release.

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