Multimedia Games’ First Quarter Revenue Rises 21.6% to $34.8

Multimedia Games’ First Quarter Revenue Rises 21.6% to $34.8 Million; Reports Diluted EPS of $0.21 Inclusive of $0.07 Per Diluted Share Benefit from Non-Recurring Items

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Interested parties may also access the conference call live on the Internet at http://ir.multimediagames.com/events.cfm. Approximately two hours after the call has concluded, an archived version of the webcast will be available for replay at the same location at http://ir.multimediagames.com/events.cfm.

About Multimedia Games Holding Company, Inc.

Through its wholly owned subsidiaries, Multimedia Games Holding Company, Inc. (“Multimedia Games”) develops and distributes gaming technology. The company is a creator and supplier of comprehensive systems, content and electronic gaming units for Native American gaming markets, as well as for commercial casinos and charity and international bingo markets. Revenue is primarily derived from gaming units in operation domestically and internationally installed on revenue-sharing arrangements. Multimedia Games also supplies the central determinant system for the video lottery terminals (“VLTs”) installed at racetracks in the State of New York. The company is focused on pursuing market expansion and new product development for Class II, Class III and VLT markets. Additional information may be found at www.multimediagames.com.

Cautionary Language

This press release contains forward-looking statements based on Multimedia Games' current expectations and projections, which are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. The words "believe", "will", "expect", "continue", "intend", "plan", "seek", "estimate", project", "may", or the negative or other variations thereof or comparable terminology as they relate to Multimedia Games and its products, plans, and markets are intended to identify such forward-looking statements. All forward-looking statements are based on current expectations and projections of future events.

These forward-looking statements reflect the current views, models, and assumptions of Multimedia Games, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Multimedia Games' performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of Multimedia Games to maintain strategic alliances, unit placements or installations, grow revenue, garner new market share, secure new licenses in new jurisdictions, successfully develop or place proprietary product, comply with regulations, or have its games approved by relevant jurisdictions. Other important risks and uncertainties that may affect the Company's business are detailed from time to time in the "Certain Risks" and "Risk Factors" sections of Multimedia Games' Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and elsewhere in Multimedia Games' filings with the Securities and Exchange Commission. All forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this press release. Multimedia Games expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

- financial tables follow -

CONDENSED CONSOLIDATED BALANCE SHEETS As of December 31, 2011 and September 30, 2011 (In thousands, except share and per-share amounts) (Unaudited)

	December 31,			September 30,
ASSETS	2011			2011
CURRENT ASSETS:
Cash and cash equivalents	$	53,745		$	46,710
Accounts receivable, net of allowance for doubtful accounts of $473 and $400, respectively		15,360			16,004
Inventory		8,968			7,291
Prepaid expenses and other		3,936			5,300
Current portion of notes receivable, net		14,397			14,280
Federal and state income tax receivable		1,204			142
Total current assets		97,610			89,727
Property and equipment and leased gaming equipment, net		46,313			47,399
Long-term portion of notes receivable, net		7,885			10,449
Intangible assets, net		27,006			28,395
Value added tax receivable, net of allowance of $787 and $817, respectively		2,878			2,787
Other assets		2,398			2,471
Total assets	$	184,090		$	181,228

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	3,700		$	3,700
Accounts payable and accrued liabilities		22,170			25,855
Deferred revenue		1,518			1,131
Total current liabilities		27,388			30,686
Long-term debt, less current portion		32,375			33,300
Other long-term liabilities		657			679
Deferred revenue, less current portion		369			661
Total liabilities		60,789			65,326
Stockholders’ equity:
Preferred stock:
Series A, $0.01 par value, 1,800,000 shares authorized, no shares issued and outstanding		—			—
Series B, $0.01 par value, 200,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.01 par value, 75,000,000 shares authorized, 35,210,640 and 34,559,522 shares issued, and 27,090,362 and 26,832,065, shares outstanding, respectively		352			346
Additional paid-in capital		98,709			95,063
Treasury stock, 8,120,278 and 7,727,457 common shares at cost, respectively		(62,048	)		(60,164	)
Retained earnings		86,891			81,109
Accumulated other comprehensive loss, net		(603	)		(452	)
Total stockholders’ equity		123,301			115,902
Total liabilities and stockholders’ equity	$	184,090		$	181,228

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended December 31, 2011 and 2010 (In thousands, except per-share amounts) (Unaudited)

	Three Months Ended December 31,
	2011			2010
REVENUES:
Gaming operations	$	24,901		$	21,995
Gaming equipment and system sales		9,593			6,085
Other		301			527
Total revenues		34,795			28,607

OPERATING COSTS AND EXPENSES:
Cost of gaming operations revenue ⁽¹⁾		2,015			1,938
Cost of equipment and system sales		4,158			3,248
Selling, general and administrative expenses		11,503			11,380
Research and development		3,634			3,196
Amortization and depreciation		9,690			9,988
Total operating costs and expenses		31,000			29,750
Operating income (loss)		3,795			(1,143	)

OTHER INCOME (EXPENSE):
Interest income		453			793
Interest expense		(372	)		(835	)
Other income (expense)		919			(89	)
Income (loss) before income taxes		4,795			(1,274	)
Income tax benefit (expense)		987			(100	)
Net income (loss)	$	5,782		$	(1,374	)

Basic earnings (loss) per common share	$	0.21		$	(0.05	)

Diluted earnings (loss) per common share	$	0.21		$	(0.05	)

Shares used in earnings (loss) per common share:

Basic		27,265,844			27,649,184

Diluted		28,108,576			27,649,184

(1)

Cost of revenues exclude depreciation and amortization of gaming equipment, content license rights and other depreciable assets, which are included separately in the amortization and depreciation line item.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended December 31, 2011 and 2010

	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:	(In thousands)
Net income (loss)	$	5,782		$	(1,374	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Amortization and depreciation		9,690			9,988
Accretion of contract rights		1,896			1,740
Share-based compensation		554			489
Other non-cash items		447			41
Interest income from imputed interest		(418	)		(686	)
Changes in operating assets and liabilities		(4,028	)		2,575

NET CASH PROVIDED BY OPERATING ACTIVITIES		13,923			12,773

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment and leased gaming equipment		(9,189	)		(9,264	)
Transfer of leased gaming equipment to inventory		1,177			122
Acquisition of intangible assets		(1,404	)		(789	)
Repayments under development agreements		2,361			3,542

NET CASH USED IN INVESTING ACTIVITIES		(7,055	)		(6,389	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options, warrants and related tax benefit		3,098			575
Principal payments of long-term debt		(925	)		(187	)
Purchase of treasury stock		(1,884	)		(2,030	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		289			(1,642	)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS		(122	)		(338	)
Net increase in cash and cash equivalents		7,035			4,404
Cash and cash equivalents, beginning of period		46,710			21,792
Cash and cash equivalents, end of period	$	53,745		$	26,196

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