Midway Reports 2007 Q2 Results

Chicago, Illinois, August 2, 2007 - Midway Games Inc. (NYSE: MWY) today announced results of operations for the three month period ended June 30, 2007. The Company also confirmed its prior full year guidance and provided revenue and earnings guidance for the third quarter ending September 30, 2007.

Second quarter results

Net revenues for the 2007 second quarter were $31.8 million, compared to the 2006 second quarter net revenues of $25.9 million and ahead of prior guidance of approximately $29 million. The 2007 second quarter net loss was $14.3 million, or a loss of $0.16 per basic and diluted share, compared with a 2006 second quarter net loss of $31.0 million, or a loss of $0.34 per basic and diluted share.

On a non-GAAP basis, excluding the impact of stock-option expenses and certain non-cash items, the 2007 second quarter loss was $11.0 million or a loss of $0.12 per basic and diluted share, compared to the Company’s previous non-GAAP guidance of a loss of approximately $0.14 per basic and diluted share. For the 2006 second quarter, on a non-GAAP basis, the Company had a loss of $29.9 million, or a loss of $0.33 per basic and diluted share. A reconciliation of non-GAAP results to GAAP results is provided at the end of this press release.

Other recent operating highlights include:

Midway launched in North America The Lord of the Rings Online: Shadows of Angmar for PC, and worldwide Mortal Kombat: Armageddon for the Wii, Hour of Victory for the Xbox 360, Hot Brain for the PSP, and Touchmaster for the Nintendo DS.

Several of Midway’s games shown at this year’s E3 Media & Business Summit received awards and critical praise including Stranglehold with first runner up for IGN’s “Best Action Game," Unreal Tournament 3 with runner up for IGN’s “Best Graphics Technology" and “PS3 Best First Person Shooter," and finalist for GameSpot’s “Best Shooter," as well as multiple other accolades and nominations.

Midway, in conjunction with developer Epic Games, Inc., and Sony Computer Entertainment America, announced that the highly anticipated and award-winning Unreal Tournament 3 will be exclusive to the PlayStation 3 and PC in 2007. Unreal Tournament 3 will also be the first console game to feature robust user generated content including multiplayer maps, custom game modes and much more.

Midway also announced upcoming Nintendo exclusives including Cruis'n and Game Party for Wii; and Ultimate Mortal Kombat, The Bee Game, and Foster's Home for Imaginary Friends for Nintendo DS.

David F. Zucker, president and chief executive officer, commented, “In addition to successful second quarter launches including The Lord of the Rings Online and Mortal Kombat: Armageddon for the Wii, we continued to extend our casual games business. Along with Touchmaster brought to the Nintendo DS and Hot Brain for the PSP, we released six of our classic titles on the PlayStation Online Store, and we have become one of the top sellers of classic arcade games on Microsoft’s Xbox Live Arcade." >

Outlook

During the third quarter, the Company expects to release worldwide Stranglehold for the PS3, Xbox 360, and PC, and Hour of Victory for PC; MYST for the Nintendo DS in Europe; and Big Buck Hunter for the PC in North America. For the third quarter ending September 30, 2007, Midway expects the following:

Net revenues of approximately $50 million, with a net loss of approximately $0.23 per basic and diluted share.

On a non-GAAP basis, Midway expects a third quarter loss of approximately $0.17 per basic and diluted share, which excludes approximately:

* $0.01 of stock option expense and deferred income tax expense related to goodwill, and

* $0.05 of non-cash convertible debt interest expense.

For the year ending December 31, 2007, Midway’s full year outlook remains unchanged:

Net revenues are expected to grow approximately 36% to $225 million with a net loss of approximately $0.44 per basic and diluted share.

On a non-GAAP basis, Midway expects a loss of approximately $0.27 per basic and diluted share, which excludes approximately:

* $0.02 of stock option expense,

* $0.13 of non-cash convertible debt interest expense, and

* $0.02 of deferred income tax expense related to goodwill.

Mr. Zucker concluded, “The response to our 2007 line-up at E3 was overwhelmingly positive, and we believe this sets the stage for our upcoming releases of Stranglehold, BlackSite: Area 51, and Unreal Tournament 3, as well as our other titles for the remainder of this year. We are at the culmination of the first part of our next generation strategy, and we are very excited to show the market the fruits of our labors starting with Stranglehold."