MAJESCO ENTERTAINMENT COMPANY ANNOUNCES SECOND QUARTER FISCAL 2008 FINANCIAL RESULTS

Maintains Fiscal 2008 Guidance

EDISON, N.J. - June 16, 2008 -- Majesco Entertainment Company Inc. (NASDAQ: COOL), an innovative provider of video games for the mass market, today reported financial results for the fiscal second quarter ended April 30, 2008.

Jesse Sutton, Chief Executive Officer of Majesco Entertainment, said, "We continue to execute on our mass market, family-friendly strategy and build on our presence in one of the industry's fastest growing genres. Our second quarter results are in line with our expectations and reflect the impact of our release schedule and seasonality of our business. For the first six months of 2008, our combined DS and Wii business, which is at the core of our mass market strategy, is up roughly 50% versus last year. We remain on pace to achieve modest gross margin gains in 2008 and continue to believe that we can achieve cash break even or better at an operating level with full fiscal year net revenue between $53 and $58 million.

"We launched six new titles in the second quarter and 10 titles year to date. Two titles shipped for Nintendo's Wii system, seven for Nintendo's DS handheld, and one title for the PSP® (PlayStation®Portable), aimed to maintain our focus on the family-friendly market," continued Sutton. "We are prudently expanding our portfolio of titles and our studio is on schedule in developing its first titles. With our targeted strategy, improved operating execution and commitment to cost controls we are well positioned to continue improving our financial performance."

Generally Accepted Accounting Principles (GAAP) and Non-GAAP Metrics

To facilitate a comparison between the three and six months ended April 30, 2008 and 2007, the Company has presented both GAAP and non-GAAP financial results. GAAP financial measures, including operating income, net income, and basic and diluted earnings/loss per share, have been adjusted to report non-GAAP financial measures which exclude gains on the increase in the value of common stock to be issued in settlement of the class action litigation and related charges, net, and the change in the fair value of warrants issued in connection with our September 2007 equity financing. These non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance and the Company's prospects for the future. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to GAAP results.

In the fiscal year ended October 31, 2007, the Company recorded a $2.8 million charge in connection with the expected settlement of class action litigation. The charge was comprised of $2.5 million, representing the fair value, on the date the agreement was executed, of the common stock expected to be distributed when the settlement becomes effective and $0.3 million representing the increase in the value of the shares from that date through October 31, 2007.

The Company will adjust the fair value of the liability to the fair value of the shares expected to be distributed at each balance sheet date and record the resulting change as a non-cash charge, or gain, to earnings in each period until the shares are distributed. Due to fluctuations in the Company's stock price, this resulted in a non-cash gain of $0.3 million during the six months ended April 30, 2008. The settlement provides that if the fair value of the stock falls below $2.5 million, the Company will issue additional shares, subject to certain limitations, with a fair market value equal to the amount of the decrease. Therefore, the liability will not be adjusted below $2.5 million.

During the fourth quarter of 2007, the Company raised $5.9 million in an equity financing. As part of that transaction, the Company issued warrants that contain a provision that under certain circumstances in which the Company is sold, merged, or otherwise enters into a "fundamental transaction", as defined in the warrant agreement, with a company that is not publicly traded, the warrants may be settled by a cash payment. As a result, the warrants were recorded as a liability at their fair value of$2.1 million, in accordance with FASB statement No. 150, Accounting For Certain Financial Instruments with Characteristics of Both Liabilities and Equity, and FASB Staff position 150-1 Issuers Accounting for Freestanding Financial Instruments Composed of More Than One Option or Forward Contract Embodying Obligations under FASB Statement 150. In addition, the Company will measure the fair value of the warrants at each balance sheet date, and record the change in fair value as a non-cash charge or gain to earnings each period. A reduction in the Company's stock price since January 31, 2008 resulted in a non-cash gain of $0.1 million during the quarter ended April 30, 2008 and $0.6 million during the six months ended April 30, 2008. The warrants were valued at $0.7 million at April 30, 2008.

Comparison of Three Months Ended April 30, 2008 to April 30, 2007

-- Net revenue was $12.8 million in 2008 compared to $14.6 million in 2007. The decrease is due primarily to the release of our firsttwo Wii games, Cooking Mama: Cook Off and Bust-a-Move Bash!, in the second quarter last year.

-- Net revenue for the second quarter of 2008 was comprised of 26.5 percent from sales of games for console systems, including 25 percent contributed from Wii. Seventy-three and one-half percent of net sales were from games for handheld systems with 70.5 percent coming from games for DS and 3 percent from PSP® (PlayStation®Portable). This compares to the second quarter of 2007 when 63 percent of revenue was contributed from games for console systems, including 55 percent from Wii. Thirty-seven percent of revenue was generated from handheld systems, including 33 percent from games developed for DS.

-- In the second quarter of 2008, 89 percent of revenue came from domestic sales with 11 percent from international. This compares to the second quarter of 2007 when 98 percent of revenue came from domestic sales with only 2 percent from international.

-- Gross margin was 34.7 percent, compared to 42.0 percent in 2007. The decrease was primarily attributable to the introduction of our two Wii games in the second quarter last year, including Cooking Mama: Cook Off. These games both had high price points and stronger margins as compared to our other games.

-- The GAAP operating loss was $0.3 million, which included a $0.4 million non-cash compensation expense, compared to 2007 operating loss of $0.9 million, which included a non-cash compensation charge of $0.4 million and a $2.5 million charge for shareholder litigation. Non-GAAP 2008 operating loss was $0.3 million, compared to non-GAAP operating income of $1.4 million in 2007.

-- GAAP net loss was $0.3 million, or $0.01 per share, which included a $0.1 million non-cash gain in the fair value of warrants issued, compared to second quarter 2007 GAAP net loss of $1.3 million, or $0.06 per share, which included a $2.5 million charge for the shareholder litigation. Non-GAAP net loss was $0.4 million, or $0.1 per share, compared to a non-GAAP net income of $1.0 million, or $0.04 per share in 2007.

-- Interest expense and financing costs were $0.1 million in 2008 versus $0.5 million in 2007, as the Company benefited from the capital raised last fall, and lower factoring fees.

-- At April 30, 2008, the company had cash and cash equivalents of $8.1 million.

Comparison of Six Months Ended April 30, 2008 to April 30, 2007

-- Net revenue was $31.4 million in 2008 compared to $29.1 million in 2007.

-- Net revenue was comprised of 24 percent from sales of games for console systems, including 22 percent contributed from Wii. Seventy-six percent of net sales were from games for handheld systems, virtually all of which came from games for DS. This compares to the first six months of 2007 when 37 percent of revenue was contributed from games for console systems, including 28 percent generated by sales of games for Wii. Almost 50 percent of net sales were from handheld systems, including 42 percent from games developed for DS. DS sales increased 93 percent in the first six months of 2008 versus the year ago period.

-- In the first six months of fiscal 2008, 95 percent of revenue came from domestic sales with 5 percent from International. This compares to 92 percent domestic and 8 percent international in the same period last year. Domestic sales increased 11% over 2007, which included $2.9 million from the sale of Dance Dance Revolutionproducts.

-- Gross margin was 38.0 percent compared to 36.6 percent in the same period during 2007.

-- The Company's GAAP operating income was $2.1 million in 2008 versus an operating loss of $1.1 million during the same period in 2007, which included a $2.5 million charge for the shareholder litigation. Non-GAAP operating income for the first six months of 2008 was $1.8 million, compared to $1.2 million for the same period in 2007.

-- GAAP net income was $2.4 million, or $0.09 per share, compared to a 2007 net loss of $2.3 million, or $0.10 per share, which included a $2.5 million charge for the shareholder litigation. Non-GAAP net income was $1.5 million, or $0.06 per share, compared to breakeven in 2007.

-- Interest expense and financing costs were $0.3 million for the first six months of 2008 versus $1.2 million during the same period in 2007. The reduction was attributable to the Company's ability to self finance all of its purchasing requirements following a financing of $5.9million in September 2007, in addition to the $2.7 million of net income earned during the first quarter of 2008.

Announced Product Line-up

Second Quarter 2008 ending April 30, 2008:

All of the following titles were released in North America during the Company's second quarter:

-- Pet Pals: Animal Doctor for DS invites players to step into the challenging world of veterinary medicine by diagnosing and treating 30 different medical cases created by real vets.

-- Blokus Portable: Steambot Championship for the PSP® (PlayStation®Portable), is based on the world-renowned Blokus board game and blends its award-winning strategic gameplay with the anime characters from the Steambot Chronicles series.

-- Eco-Creatures: Save The Forest for DS is a real-time strategy game in which players control units of woodland creatures through a unique environmental adventure.

-- Nanostray 2 for DS is the sequel to the very first 3D shooter available on DS and delivers thrilling non-stop shooting action combined with stunning graphics.

-- Wild Earth: African Safari for Wii is a first person safari adventure that challenges players to capture award-winning photos of the continent's exotic wild life.

-- Toy Shop for DS puts players at the helm of a struggling toy shop where they'll need to create fun toys that sell, while managing store inventory, customers and budget.

Fiscal 2008

To date, the Company has announced the following titles that are expected for release during the rest of fiscal 2008:

-- Nancy Drew: The Mystery of the Clue Bender Society for DS is the follow up to The Deadly Secret of Olde World Park and offers mystery buffs and Nancy Drew fans a fresh interactive caper with new gameplay elements including snowmobiling and boating.

-- Babysitting Mania for DS is based on the hit online PC simulation from Gogii Games that challenges players to manage unruly kids, lists of chores and out-of-control houses without losing their cool.

-- Zoo Hospital for Wii is the first Wii game of its kind that lets players experience a veterinarian's job by performing various surgical procedures on 48 different animals that they can then care for in their enclosures to ensure a healthy recovery.

-- Three adventure games for younger Wii players from the best-selling, award-winning Humongous properties catalog: Freddi Fish in Kelp Seed Mystery, Pajama Sam in Don't Fear the Dark and SPY Fox in Dry Cereal. All three integrate the Wii Remote in point-and-click style adventure play that the entirefamily can enjoy together.

-- Rollin' Rascals for DS challenges players to roll adorable round pets around obstacles and into identical twos to clear them from the game board in this addictive puzzler.

-- Air Traffic Chaos for DS lets players take charge as an air traffic controller at the world's busiest airports so they can safely maintain an efficient flight schedule and order on the runways.

-- Blast Works: Build, Trade, Destroy for Wii, is an innovative interpretation of a geometric shooter that lets players build their own personalized game experiences and then share their creations with friends via WiiConnect24.

-- Wonder World Amusement Park for Wii brings to life a fully 3D world of boardwalk games, rides and prizes across multiple themed areas that players can explore with personalized avatars.

-- Cake Mania® 2 for DS is the sequel to the best-selling DS game based on Sandlot Games' award-winning downloadable title. Players lead Jill Evans through more than 200 different levels of baking and frosting madness with an all-new customer base, exotic locations, kitchen upgrades and multiple endings. A playable demo will also be featured in approximately 10,000 Nintendo DS Download Stations at major retail locations nationwide this summer.

-- Orchard for online and retail PC is a simulation that challenges players to manage all facets of a retail business, including planting and harvesting crops, developing new recipes, buying ingredients and hiring a workforce.

-- Cooking Mama: World Kitchen for Wii is the sequel to the best-selling Cooking Mama Cook Off game that has sold more than 430,000 units and challenges players to use the Wii Remote as the ultimate cooking utensil.First Quarter 2009 ending January 31, 2009:

To date, the Company has announced the following titles that are expected for release during the fiscal first quarter of 2009:

-- Major Minor's Majestic March for Wii marks the return of the creative team behind the renowned PaRappa the Rapper franchise-legendary game designer and multimedia musician Masaya Matsuura and famed New York artist Rodney Alan Greenblat. The game turns the Wii Remote into a "special" baton the bandleader Major Minor uses to keep tempo, recruit new band members and pick up valuable items, while marching through whimsical locations.

-- Cake Mania: In the Mix! for Wii marks the first introduction of Sandlot Games' best-selling PC title on the Wii system. The game integrates motion-based control with the series' signature cake-baking multi-tasking gameplay style.

-- Our House for Wii turns the Wii Remote into the ultimate creation tool that lets players design, build and decorate their own personalized trophy home, and then share it with friends in an online neighborhood via WiiConnect24.

-- Our House for DS is the first game from Majesco Studios Santa Monica. This companion game to the Wii version lets players work as contractors and then use their work-for-hire earnings to design, build and decorate their own personalized trophy home.

-- Wonder World Amusement Park for DS is the second game from Majesco Studios Santa Monica. This companion game to the Wii version launching in July lets players experience a complete day at the park in the palm of their hands. Using the Touch Screen, players can toss, drive, shoot, whack, fish and spin in more than two dozen mini-games throughout five themed zones.

-- Jillian Michaels' Fitness Ultimatum 2009 for Wii is the first game of its type to combine a celebrity fitness trainer with the Wii and innovative Wii Fit Balance BoardTM accessory to offer players a fun and entertaining way to get in shape.

Fiscal 2008 Outlook

The Company reconfirmed its outlook for fiscal 2008 full year net revenue to be in the range of $53 million to $58 million. The Company expects 59 percent ofits net revenue to be from handheld titles, with virtually all titles for DS, and 41 percent from console titles, almost entirely from titles for Wii. In 2007, 64 percent of its net revenue was from handheld titles, with 56 percent from titles for DS, while 30 percent was from console titles with 20 percent from Wii titles. The Company also expects that its mix of international revenues for the year will approximate 12 percent of worldwide revenues, a slight decline from previous years' range of 15 to 20 percent. The Company expects full-year 2008 gross margins to show modest improvement over the 33.9 percent reported in 2007. The Company's guidance assumes the release of approximately 25 titles in 2008 with approximately 9 Wii, 14 DS titles and 2 other. This compares to 19 titles in 2007, comprised of 2 Wii, 13 DS and 4 other. The Company's results are impacted by seasonality from the December holiday period and variability based on release schedules.

Conference Call

At 4:30 PM ET today, management will host an earnings conference call. To access the call in the U.S., please dial 1-877-317-6701 and international callers please dial 1-412-317-6701. The access code for the call is 4881586. Please dial in approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days from the "Investor Relations" section of the company's Web site at http://www.majescoentertainment.com. In addition, a replay of the call will be available via telephone for seven business days beginning two hours after the call. To listen to the telephone replay in the U.S., please dial 1-877-344-7529 and for international callers, dial 1-412-317-0088. Enter access code 4881586.

About Majesco Entertainment Company

Headquartered in Edison, NJ, with an international office based in Bristol, UK, Majesco Entertainment Company (NASDAQ: COOL) is an innovative provider of video games for the mass market, with a focus on publishing video games for leading portable systems and the Wii console. Product highlights include Nancy Drew, Cooking Mama 2: Dinner with Friends and Zoo Hospital for Nintendo DS and Cooking Mama: Cook Off for the Wii system. More information about Majesco can be found online at the newly relaunched www.majescoentertainment.com.


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