SACRED JOINS ENCORE'S LINE-UP OF PC GAMES VIA A NEWLY SIGNED PUBLISHING AGREEMENT WITH ASCARON ENTERTAINMENT UK LTD.

Fantasy action RPG features an intricate combat system, complete freedom of exploration, new character types and horse-mounted battles

Los Angeles, CA - December 17, 2003 - Encore, a majority-owned subsidiary of Navarre Corporation (NASDAQ: NAVR), today announced that it has signed a new, exclusive North American agreement with UK-based Ascaron Entertainment UK Ltd. to publish Sacred, a fantasy action role-playing game for the PC. This agreement follows one signed by both companies this summer to publish Pirate Hunter and Patrician III, both of which shipped this fall.

Under this new agreement, Encore is managing sales, distribution and marketing for Sacred, while Ascaron is delivering the content. Terms of the agreement were not disclosed. The game is scheduled for release in PC CD-ROM format to major retail outlets nationwide in spring 2004 for approximately $40.

Said Michael Bell, Encore's CEO, "Sacred brings many firsts to the RPG genre, most notably free roaming access to the majority of the world and combat on horseback. These are just two exciting features among many that will set Sacred apart from other RPGs and surpass the expectations of even the most die-hard RPG fan."

Sacred's Dynamic World of Exploration

Unlike any other fantasy action RPG, Sacred offers players an enormous world comprised of 16 regions with virtually unlimited opportunities for exploration. This world contains highly detailed landscapes, complete with villages and towns and even a day/night cycle with varying weather systems. Regions vary from forests and mountains to deserts, catacombs and ice-covered landmasses. More than three quarters of the world are open to the players from the very start - no unlocks needed.

Other key features of the game include:

- A highly customizable and intricate fighting system that delivers unlimited spells, magic and combat "combo moves"

- Battles that can be fought on foot or on horseback

- A huge world with almost all of it available from the onset

- Weapons and armor that can be customized by forging them with upgrade items, rings or more powerful weapons and armor

- Six unique playable characters, each differing in fighting style, abilities and magic

- Two brand new never-before-seen RPG character types: Vampires and the Seraphim

- An epic-size storyline with more than 30 main missions, over 200 sub-quests and bonus quests

- Multiplayer for up to 16 players via Internet or LAN

Said Roger Swindells, Managing Director at Ascaron, "Sacred is our finest title to date, reflecting extensive feedback that we've received from our fans throughout its development. We have put an enormous amount of focus on such aspects of the game as its intricate fighting system and the new RPG character types. This attention to detail will really make a difference to RPG fans."

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 launch close to a dozen new entertainment titles in the coming months through licensing or publishing agreements with Marvel (DaredevilT) and JoWooD Productions (Silent Storm, Spellforce and Soldner, among others); in addition, several exciting new games were just released (Black Ops Entertainment's Fugitive Hunter: War on Terror; Ascaron's Patrician III and Pirate Hunter, Victory Simulations' Redline: Xtreme Air Racing 2). The company also offers PC titles or compilations in nearly every major software category from productivity to education.

About Ascaron

Ascaron Entertainment GmbH, a privately owned developer and publisher based in northern Germany, has been developing entertainment software for a variety of hardware platforms since its inception in 1991. The company's senior management team has over 100 years of games industry experience, and all are avid gamers. Ascaron is focused on delivering high-end RTS, Simulation and Action games for PC's that will entertain the more discerning consumer with many hours of in-depth game play.

Previous successes include The Patrician (1992), Elizabeth I (1996), the Anstoss football management brand (throughout the 1990s), and Port Royale (2002).