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    Microsoft and 4Kids Entertainment Form Alliance

    REDMOND, Wash. and NEW YORK (Jan. 17, 2006) ? Microsoft Corp. (Nasdaq: MSFT) announced today an alliance with 4Kids Entertainment, Inc. (NYSE: KDE) ? the children?s entertainment company whose expertise in brand positioning has led to such powerhouse properties as Yu-Gi-Oh!?, Pok?mon? and Teenage Mutant Ninja Turtles? ? to develop a unique children?s entertainment property.

    Under the agreement, 4Kids Entertainment will serve as the licensing agent for a forthcoming children?s entertainment property on a global basis for Microsoft Game Studios. The exclusive representation agreement encompasses all broadcast, home video, music and merchandise licensing rights.

    Alfred R. Kahn, Chairman and CEO of 4Kids Entertainment, said: ?We are thrilled to serve as the partner of choice and act as the vehicle for Microsoft to broaden its appeal among a more mainstream market focusing on children and family entertainment. We are confident our strong track record in developing integrated marketing and merchandising programs designed specifically for kids will enhance the future success of Microsoft Game Studios.?

    Ed Ventura, director of Franchise Development at Microsoft said: ?We are excited to explore the opportunities our collective efforts can create when we combine 4Kids?s proven expertise in bringing engaging children?s properties to life with Microsoft?s leadership and knowledge of interactive entertainment.?
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