Trading update

Zoo Digital Group PLC
23 January 2006



ZOO DIGITAL GROUP PLC
('ZOO' or 'the Group')





TRADING UPDATE AND STRATEGIC REVIEW



ZOO Digital Group PLC, the DVD technology and video games publisher, today
announces a trading update. Following disappointing revenues in its video games
publishing business, results for the Group for the full year will be materially
behind market expectations.  Whilst the new DVD interactive games market
pioneered by ZOO performed well, sales in the traditional video games business
were disappointing reflecting the overall trend in the market and lower than
expected Christmas trading volumes from retailers.



ZOOtech, the technology division of the Group, continues to focus its activities
on licensing its innovative proprietary technology.  As stated at the time of
the release of the interim results on 14 December 2005, it is clear that the
North American market offers ZOOtech significant opportunities including the
potential for large individual deals with major corporates.  The Group continues
to make progress on several significant contracts which it is focused on
completing within the next few months.

The overall effect on the Group is that the results for the year to 31st March
2006 are likely to fall significantly below market expectations and the Group
may report a loss.

Strategic Review

Due to challenging market conditions in video games publishing, the
disappointing results for the titles produced and published and the problems of
product slippage from suppliers versus the growth experienced in the consumer
interactive DVD market, the Group is undertaking an immediate review of its
strategy. The Group will also undertake a full review of its management and
operations, through all operating divisions, and has immediately implemented
cost saving measures.

ZOO will announce further trading updates with regards to the strategic,
management and operating review, and the likely effect this will have on the
Group's financial performance for the year to 31st March 2006.





Enquiries:


Ian Stewart                                 James Chandler/Helen Thomas
CEO, ZOO Digital Group plc                  Weber Shandwick Square Mile
0114 241 3700                               020 7067 0747



John Llewellyn-Lloyd
Noble & Company Limited
020 7763 2200


Notes to Editors:



About ZOO Digital Group PLC

ZOO is divided into two separate divisions; ZOOtech Ltd ('ZOOtech') and ZOO
Digital Publishing Ltd ('ZDPL').



ZOOtech Ltd ('ZOOtech')

ZOOtech focuses on R&D and licensing of DVD-EXTRA, the Group's highly original
development software capable of creating complex interactive content for
standard DVD players. The strategy for ZOOtech is simple; to create the industry
standard tool for the production of interactive DVD content and drive revenues
through licensing worldwide in a combination of up front fees and royalties.



ZOO Digital Publishing Ltd ('ZDPL')

ZDP focuses on the publishing and distribution of interactive entertainment
products across multiple platforms such as interactive DVD, PS2, Xbox, GBA and
PC.






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