MIDWAY ACQUIRES AUSTRALIAN DEVELOPER RATBAG

- Developer of Upcoming Midway Title Brings Technology and Talent, and Establishes Midway Presence in Australia -

CHICAGO, Illinois, August 4, 2005 - Midway Games Inc. (NYSE:MWY), a leading interactive entertainment publisher and developer, announced today that it has acquired Ratbag Holdings Pty Ltd., a game development studio based in Adelaide, South Australia. Midway acquired the privately-held developer in a primarily stock transaction for 418,570 Midway shares. The studio is currently working on several unannounced Midway products for both current- and next-generation systems. The studio will be renamed Midway Studios - Australia.

Midway's President and Chief Executive Officer David F. Zucker commented, "This transaction is consistent with our strategy of adding depth to our internal product development organization and strengthening our ability to deliver high-quality, compelling and commercially successful content for current and future systems. Ratbag brings to Midway a rare combination of development expertise in driving and on-foot combat that they are incorporating into our games now in development."

Midway's Senior Vice President of Worldwide Studios Matt Booty said, "We are excited to add this proven studio with solid management and a strong development team to Midway, and establish a firm foothold in Australia, a great location for top entertainment industry talent. We plan to leverage their talent and technology across our internal development studios, which will support our goal of maintaining our leadership in high quality development."

Based in Adelaide, South Australia, Ratbag is an innovative developer of high-quality interactive entertainment products. Established in 1994, Ratbag's first title, Powerslide, was released in 1998 to critical and commercial success. The studio has grown into one of the world's premier racing game developers.

In addition to shares issued as consideration for the acquisition of Ratbag, rights to acquire a total of 38,050 shares of Midway common stock were issued to key Ratbag employees as retention incentives. The rights to acquire the stock will vest in stages over a period of three years, provided the employee remains at the Company. Ratbag employees who received the rights were: Tony Albrecht, Karl Burdack, Cam Dunn, Kim Forrest, Franta Fulin, Adam Mackay-Smith, Robin Maddock, Andrew Medlin, Sadhana Pereira, and David Todd.