Further strengthening its online multiplayer development capabilities, Activision, Inc. announced today that the company has entered into an agreement to acquire DemonWare, the leading provider of network middleware technologies for console and PC games headquartered in Dublin, Ireland. The acquisition will enable Activision to gain efficiencies related to online game development and positions the company to take advantage of the growth in online gameplay that will be driven by the next-generation consoles.

Activision has utilized DemonWare's technologies in its games since 2005, most recently in its best-selling title Call of Duty 3. DemonWare has two main products -- DemonWare's Matchmaking+, which provides advanced community services for multiplayer gaming, including player matching, user profiling and gaming statistics across current-and next-gen consoles and PCs; and DemonWare's State Engine, a cross-platform network engine that ensures that console-to-console communications are secure and as lag-free as possible.

"In the next two-to-four years, we expect that online gaming will grow significantly as a result of a more seamless plug and play experience provided by the next-generation consoles," states Mike Griffith, CEO of Activision Publishing. "The acquisition of DemonWare will enable us to eliminate many of the challenges associated with online multiplayer game development, reducing development time and risk, and allowing us to deliver consistent, high-quality online gaming experiences. In addition to increasing our talent pool of highly skilled engineers, DemonWare's suite of technologies combined with Activision own library of tools and technologies will enable us to easily share online development capabilities on multiple platforms across our development studios."

"Activision and DemonWare have worked together on several highly successful multiplayer titles, and we have a shared vision on where the future of online gaming lies," states Dylan Collins, CEO of DemonWare. "Our technology has been used in some of the most innovative multiplayer games on both the console and PC platforms, so consumers should be incredibly excited about the plans we have for Activision's online gaming strategy moving forward."

Under the terms of the agreement, DemonWare will become a wholly owned subsidiary of Activision and the company's management team and key employees will sign long-term employment contracts with Activision. DemonWare will continue to be headquartered in Dublin, Ireland, with offices in Vancouver, B.C. The transaction is expected to be completed no later than the close of Activision's first quarter of fiscal year 2008. The closing of the transaction is subject to the completion of certain customary closing conditions. Financial terms of the agreement were not disclosed.