VIS entertainment has successfully completed the financing of a funding vehicle for the development of the sequel to its million-selling game, State of Emergency.

Numerous shareholders in VIS have backed a new special-function company which will provide project finance for State of Emergency 2, enabling VIS to complete development and negotiate terms with a publisher.

It is envisaged that the sequel will be launched in late 2004.

The deal is unique to the games industry. The separate company will effectively act as project funder, bridging the gap between development and a publishing deal.

This special arrangement is a demonstration of the faith which our investors have in VIS, commented Chris van der Kuyl, President and CEO of VIS. Now we will concentrate on bringing State of Emergency 2 to market while negotiating with publishers from a position of strength. The first game topped the UK and US charts at its launch last year and sold well in excess of one million copies. We are confident that the sequel will be even more successful.

Commenting on the successful fund raising, VIS Chairman Ken Lewandowski, said: We are delighted to be announcing this fund raising as it now allows the company to focus on the job of delivering fantastic games and building even bigger hit franchises.

In addition to SoE 2, VIS is working on some other incredibly exciting projects with major publishers for release in 2004 and 2005. Whilst this has been a trying time for the company, I am pleased to report that all our projects are on track with our publishing partners.

In July VIS entertainment disclosed a programme of cost savings and efficiencies which has reduced overheads by 25 per cent. The company – which recently opened a new state-of-the-art studio in Edinburgh - has several games titles in production for various platforms.