Encore Signs Publishing Agreement with Lost Toys

Battle Engine Aquila, a unique mech land and air combat game, to be released this holiday season for PCs

Los Angeles, CA - August 20, 2003 - Encore, a majority-owned subsidiary of Navarre Corporation (NASDAQ: NAVR), today announced that it has signed an exclusive North American agreement with UK-based Lost Toys to publish the PC version of Battle Engine Aquila, a mech combat game with land and air engagement. Under this agreement, Encore is managing sales, distribution and marketing for the game, while Lost Toys is delivering the content. Terms of the agreement were not disclosed.

Battle Engine Aquila is scheduled for release in PC CD-ROM format to major retail outlets nationwide this holiday season for approximately $40.

Said Michael Bell, Encore's CEO, "Encore is focused on building its publishing program, in which we apply our sales, marketing and PR expertise to third-party-developed games. We already have a number of strong partners in this program - including JoWooD, Victory Simulations, Conspiracy Entertainment and Prolific Publishing - and other agreements are in the works. We're excited that Lost Toys has joined this program."

Added Jeremy Longley, Director at Lost Toys Limited, "Encore is the perfect partner to bring the PC version of Battle Engine Aquila to the North American market. We are delighted by the company's focus and enthusiasm, and are confident that they can achieve the sales success this game deserves."

Shooter Puts Players at the Helm of Advanced War Machine

Battle Engine Aquila is a fierce and frenetic shooter that puts players at the helm of the most advanced war machine ever created. Tasked with protecting a world from hostile rebel forces, players employ an impressive arsenal of pulse cannons, micro missiles, spread bombs and more to prevail in the game's continuously evolving war zone.

The battle begins on the planet Allium, where rising sea levels have resulted in a significant reduction in habitable land and rising tensions

between two major planetary factions. As the game's central character

Hawk Winter, players are thrust into this rapidly escalating conflict as the pilot of the most powerful weapon in the war. To win the conflict, players can take advantage of the game's key features:

• Ability to attack enemies by ground or air

• A huge selection of powerful weaponry, including guns, missiles, cannons, bombs, lasers, grenades and torpedoes

• Modifiable weapon load outs, selectable wingmen and a host of allied troop, tank, air and sea craft support

• More than 40 missions in a branching storyline with multiple endings

• "EVO" versions of every mission, which are significantly harder and present new challenges, such as enemy forces with more entrenched positions or greater numbers of enemy forces

• Several modes of play, including Single-Player, Co-Op Mode (two players team up to battle missions together), Skirmish Mode (pitting two players and their entire armies against each other) and Versus Mode (one-on-one fights between two Battle Engines in deadly arenas). Multi-player modes are two player, split-screen, on a single PC.

• Optimized to take advantage of the latest graphics cards

About Encore
Encore, a majority-owned subsidiary of Navarre Corporation (NASDAQ: NAVR), is a leading interactive publisher in the PC CD-ROM and videogame markets. The company will release close to a dozen new entertainment titles in the coming months through licensing or publishing agreements with Marvel (DaredevilT), JoWooD Productions (Silent Storm, AquaNox 2: Revelation, Cold Zero and Chaser among others), Victory Simulations (Redline: Xtreme Air Racing 2), Conspiracy Entertainment (Rally Championship) and Prolific Publishing (Marine Aquarium 2.0). The company also offers PC titles or compilations in nearly every major software category from business and productivity to education and kids, including brand names such as Sesame StreetT, Advantage and SafeworldT.