FOR IMMEDIATE RELEASE
                     
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                        ATARI AND IBM ANNOUNCE STRATEGIC MANUFACTURING
                     
                        CONTRACT FOR MULTIMEDIA ENTERTAINMENT SYSTEM
                     
                     
                     
        June 28, 1993 - Sunnyvale, CA -- Atari Corporation announced
                     
today that it has contracted with the IBM Corporation's Charlotte,
                     
North Carolina, facility to manufacture the Atari Jaguar, Atari's new
                     
64-bit multimedia entertainment system.
                     
                     
                     
        IBM's multi-year contract is valued at $500 million.
                     
                     
                     
        The Atari Jaguar, to be made in the United States, is an
                     
interactive multimedia entertainment system which features over 16
                     
million colors in 24-bit true color graphics and produces shaded 3-D
                     
polygons for manipulation in "real world" in real time.  A 32-bit
                     
expansion port will allow for future connection into cable and
                     
telephone networks, a digital signal processing port for modem usage
                     
and connection to digital audio peripherals.  The Jaguar will also
                     
feature a double-speed compact disc peripheral.
                     
                     
                     
        "This system is clearly the wave of the future," said Sam
                     
Tramiel, president of Atari.  "Because the Jaguar will feature such an
                     
array of visual and audio special effects, we wanted to work with a
                     
premier company that we are confident can manufacture the quality
                     
product we have developed."
                     
                     
                     
        The Charlotte-based IBM plant, which for 15 years has
                     
manufactured and developed products only for other IBM business, just
                     
recently began working with outside companies to meet their production
                     
needs.  The Atari Jaguar project represents one of IBM's first
                     
entries into manufacturing for the mass consumer electronics market.
                     
                     
                     
        "This is a wonderful opportunity to work with Atari and their new
                     
system," said Herbert L. Watkins, director of Applications Solutions
                     
manufacturing at IBM Charlotte.  "Everyone expect IBM to manufacture
                     
complex information technology products, and with this, we'll show
                     
that we can competitively build a sophisticated consumer product."
                     
                     
                     
        In addition to assembling the Jaguar, IBM will be responsible for
                     
the component sourcing, quality testing, packaging, and distribution.
                     
The Jaguar, announced on June 3, is based on an Atari designed
                     
proprietary 64-bit RISC processor that features four times the
                     
technology currently seen in the marketplace today.  The sound system
                     
is based on Atari's proprietary, high-speed, Digital Signal Processor
                     
dedicated to audio which can produce CD quality sound.
                     
                     
                     
        The Jaguar will be available on a limited basis in the fall,
                     
focusing on the New York market.  A national roll-out is expected next
                     
year and the Jaguar will retail for approximately $200.
                     
                     
                     
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Atari Corporation manufactures and markets personal computers and
                     
video games for the home, office and educational marketplaces
                     
throughout the world.  Atari headquarters are located at 1196 Borregas
                     
Avenue, Sunnyvale, California 94089.
                     
                     
                     
The IBM Corporation's Charlotte facility manufacturers and develops
                     
for IBM and other companies a wide variety of products, such as
                     
banking systems, automotive diagnostic systems, and electronic circuit
                     
boards.  The site includes 2.3 million square feet of work space on a
                     
1,200-acre site.  Its address is 10001 W.T. Harris Blvd., Charlotte,
                     
North Carolina 28257.  Telephone (704)594-1000.
                     
                     

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