Zombie Studios Inc.

Overview

Acquired by AIS in 2000. From the press release:

Acquisition Expands AIS' Scope With New Internet, Gaming And Design Expertise

Seattle, WA, February 7, 2000 -AIS (Advanced Interactive Systems), the emerging global leader in high-tech, interactive computer simulation training and entertainment systems, today announced the acquisition of Zombie(tm), a cutting-edge, Web-based design studio, gaming and Internet portal company.

"This is a perfect match on several levels," said Al Davis, Chief Executive Officer and President of AIS. "Combining Zombie's very advanced technology and high-level architecture with our existing expertise and sales capabilities adds tremendous value for our customers and gives AIS an established avenue into the gaming and Web market. Zombie also brings a very creative team to work with our own talented people, further strengthening our position in the marketplace. We envision developing new games and training protocols by combining our simulation technology with their gaming expertise."

"This merger is exciting," said Mark Long, co-president and founder of Zombie. "We see potential to leverage leading-edge technology developed by Zombie to a much wider customer base. It is a mix that makes sense. The companies are surprisingly alike in cultures and the way we do business -- our aggressive styles, our desire to be the best, and of course, our focus on military-style simulations."

Long and Zombie co-president and founder Joanna Alexander will continue to manage the subsidiary and also become Vice Presidents of AIS.

"This is a win-win for both companies," said Davis. "Zombie gains by accessing our global sales force, resources for future growth, international presence and skill at marketing simulator technology. AIS gains immediate access to the international gaming market, as well as Zombie's applied research and development capabilities in such areas as computer graphics and gaming via the Web. We fully expect that this integration of AIS and Zombie will yield tremendous results for our current and potential customers around the world."

About Zombie

Mark Long and Joanna Alexander founded Seattle-based Zombie in 1994. They started the company after completing the design of a virtual reality (VR) game console for Hasbro in 1993. Zombie has designed and/or produced eight original titles for DOS, Win3.1, Win95, Win 98, Mac OS formats and completed three console ports to Playstation, and Sega 32X formats.

Zombie also designed and developed a motion-based, real-time, 3D ride for the new DisneyQuest center in Orlando, Florida, and produced a music video. Long previously worked with Sarnoff Labs in defense simulation. Alexander, Zombie co-president/technology director, conducted virtual reality research at Sarnoff. While at Sarnoff, Alexander formed and led the team responsible for design and development of the Hasbro console game system.

Zombie clients include Take2 Games, Panasonic, Activision, BMG, Disney, and GT Interactive. The company has strategic relationships with Encore Software, Ripcord Games, Microsoft, Silicon Graphics, Sarnoff Labs, Wildstorm Comics, RTime, and the William Morris Agency.

In 1998, Zombie released "Spec Ops: Rangers Lead the Way," the first in a series of highly realistic, real-time, three-dimensional, third-person games based on elite warfare units. Spec Ops set itself apart from the rest of the shooting game genre by incorporating real-world military combat in genuine global hot spots, with weapons and tactics used by the U.S. Armed Services. Zombie's interactive tank battle simulator "Spearhead" also was released in 1998. "Spec Ops2: Green Berets," sequel to the genre-busting Spec Ops, was released recently and currently is arriving at stores.

In addition to single-player computer use, Alexander said the Spec Ops games have multi-player capability on the Internet. "An exciting feature of these games is that players can enter an Internet 'lobby' (similar to a chat room), hosted on a Zombie server and connect with other users anywhere in the world to play, she said."

Zombie also is developing a series of Internet portals, called "The CentralHQ Network," designed to serve the specific needs of members of the U.S. military and their families. The network's properties include all branches of the military, combining free email/fax/voice messaging; online banking and bill paying services; and customizable and military-tailored content. It is designed to serve as the home page for the approximately 2.8 million military households that are online.

About AIS

Founded in 1993, AIS is a dynamic, multi-dimensional applied technology company that develops and markets the world's most sophisticated, super-realistic computer simulation training and entertainment systems. In 1998, AIS unveiled PRISim(tm), a dramatic advancement in fully interactive computer simulation systems that has set the international standard for firearms and judgment training for law enforcement and the military. The patented AIS "ShootBack(tm)" cannon makes PRISim as real as it gets. AIS also continues to enhance and market its original product -- the TechnoHunt(tm) archery simulator that emulates true-to-life bow hunting environments and lets archers customize range training to fit their own skill levels.

In late 1998, AIS expanded its reach into the international training and simulation market through its acquisition of Nitor, a British-based company that creates ranges and specialized training centers for elite military and anti-terrorist units around the globe, and markets its own simulation system, Ultima. AIS further strengthened its existing research and development capabilities in 1999 when it acquired Reality By Design (RBD), a Boston-based company that develops cutting-edge virtual reality training systems for the military and other applications.

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