StockPotentials

Price (January 27) $0.85 52-Week Range $1.30-0.31 Shares O/S 55.1 million Market Cap $46.8 million 50-day Average Volume 46,900 200-day Average Volume 19,500 Fiscal Year-End March 31 Symbol TSX, AMEX: MCZ Website www.madcatz.com Financial Data (US$000s)

January 27, 2011

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MAD CATZ INTERACTIVE, INC.

Source: www.bigcharts.com

PROFILE
Mad Catz Interactive, Inc. (Mad Catz or the Company) is an American computer and video game peripherals manufacturer, headquartered in San Diego, California. The Company produces a wide range of accessories including control pads, memory cards, connection cables, and other human interface devices.

BUSINESS VENUE
Mad Catz operates in the ever-evolving video game arena, which is quickly becoming the most dominant force in entertainment. The Company does business with almost all of the top video game franchises.

CORPORATE STRATEGY
Mad Catzs strategy is to establish its brands in the various submarkets of the computer peripherals market. This allows Mad Catz to achieve economies of both scope and scale when developing, manufacturing, and distributing its products. The Companys growth has been mainly based on acquisitions. In 2007, Mad Catz acquired Joytech (generic controllers) and Saitek (specialty controllers). In 2010, the Company acquired Tritton Technologies (audio/video). These three product lines combine for over half of Mad Catzs current revenues.

eResearch Analysts:
Mark Edwards, B.Comm. Bob Weir, B.Sc., B.Comm., CFA

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Note: Report prepared with public information only.

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Mad Catz Interactive, Inc. INVESTMENT CONSIDERATIONS

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The video game industry (US$10.5 billion in 2009) is quickly becoming the most dominant force in entertainment. In November 2009, Call Of Duty: Modern Warfare 2 became the biggest entertainment launch in history, selling almost five million copies in the first 24 hours of availability. These 4.7 million copies equate to approximately $401.6 million in a single day, according to the Guiness Book of World Records. The second and third biggest entertainment launches are video games as well. These were Grand Theft Auto IV and Halo 3, both of which are franchises that work with Mad Catz. Call Of Duty: Black Ops surpasses the $1 billion mark in sales, after six weeks of availability. Call Of Duty is currently the most popular video game franchise, and does business with Mad Catz. Mad Catz has the rights to the proprietary technologies needed to enter the pro-audio music production equipment industry. Avid Technologies, owner of the M-Audio brand had revenues in excess of $800 million in 2008. If Mad Catz were to bring pro-audio controllers to market, they would likely be compared to M-Audio (lower-end, but suitable for beginners and intermediate producers). The Company recently shipped the first RB3 MIDI Pro Adapters for Rock Band 3, which are the first video game peripheral of its kind. This adapter allows users to connect their own MIDI keyboards and digital drum sets to the game. This news is significant when considering Mad Catzs line of guitars, which feature over 50 buttons, where the player plays notes and chords in much the same way as a real musician would. Also, Mad Catz has production rights to many of the most sought after guitar manufacturers.

Strengths
Mad Catz does considerable business with the Call Of Duty franchise, along with other top franchises (NBA, NASCAR, Madden, etc). As long as video games exist, there will be a strong demand for both generic and highly-specialized controllers. The Companys financial position has been steadily improving (most ratios went from negative to positive from 2009 to 2010).

Challenges
It is difficult to maintain dominance and relevance, as Xbox now has a controller-free gaming and entertainment experience with Xbox Kinect, which employs motion-capture technology to control a character in a game. There is an even bigger push to similar technologies when considering PlayStation 3s controller-based motion capture and Nintendo Wii. The Company has high debt levels: about 80% of total capital. Financial performance has been volatile.

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Mad Catz Interactive, Inc. PRODUCT LINES

(1) Mad Catz

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The Mad Catz branding is used for the Companys typical or casual products, which are generally generic video game controllers for all major systems. Along with generic controllers, the Mad Catz banner also covers officially licensed controllers (Nascar, NBA, Call Of Duty, etc.), headsets, cables, and faceplates for collectors and promotional uses.

(2) Saitek
Saitek is Mad Catzs line of flight simulation controllers and accessories. Products under this banner include flight sticks, flight panels, controllers, pedals, and other equipment found in a real airplanes cockpit. These products would be considered speciality goods and, in turn, command a specialty price.

(3) Eclipse
Eclipse designs and distributes higher-end computer keyboards and mice. These products, which are designed to be aesthetically pleasing as well as durable. These products are priced slightly above brands such as Logitech, HP, Microsoft and are comparable to the price of Apples peripheral products.

(4) Cyborg
Cyborg is targeted towards the hardcore gaming enthusiast. Products with this branding include; keyboards, mice, flight sticks and gamepads (controllers). It is important to point out that all of these products are offered by other Mad Catz Brands, but with a different market in mind.

(5) Tritton Technologies

Tritton focuses on the connectivity side of computer peripherals. Tritton products include; higher-end gaming headsets, docking stations, external video cards, portable speakers and a wide-range of cables and other accessories.

(6) Airdrives
Airdrives exclusively makes one product, the Airdrives Interactive Stereo Earphone. This earphone bud with microphone features a patented outer-ear design.

(7) Flight Simulation

Mad Catzs latest product line is targeted at flight schools and flying enthusiasts. The product is a highly-realistic, full set of flight simulation equipment specifically designed to work with the other componenets.

MANAGEMENT
Thomas R. Brown Darren Richardson Allyson Vanderford Chairman of the Board President, Chief Executive Officer, Director Interim Chief Financial Officer, Corporate Controller

Brian Johnny Andersen Chief Operating Officer of Mad Catz Interactive, Inc., and Mad Catz, Inc. . Whitney Peterson Vice President - Corporate Development, General Counsel of Mad Catz, Inc.

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Mad Catz Interactive, Inc. SHARE STRUCTURE

Common Shares: Options: Fully Diluted: 55,098,549 7,748,037 62,846,586

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CORPORATE INFORMATION
Mad Catzs Head Office 7480 Mission Valley Road, Suite 101 San Diego, CA 92108 USA Office: (619) 683-9830; Toll Free (USA): (800) 831-1442 FAX: (619) 683-9839

ANALYST CERTIFICATION
The Research Analyst who was involved in the preparation of this Research Report hereby certifies that: (1) the views, opinions, and recommendations expressed in this Research Report reflect accurately the Research Analysts personal views concerning any and all securities and issuers that are discussed herein and are the subject matter of this Research Report; and (2) the fees, earnings, or compensation, in any form, payable to the Research Analyst, is not and will not, directly or indirectly, be related to the specific views, opinions, and recommendations expressed by the Research Analyst in this Research Report.

eResearch analyst on this report:

Bob Weir, B.Sc., B.Comm., CFA: Bob Weir has 44 years of investment research and analytical experience in both the equity and fixed-income sectors, and in the commercial real estate industry. He joined eResearch in 2004 and has been its President, CEO, and Managing Director, Research Services since May 2005. Prior to joining eResearch, Mr. Weir was at Dominion Bond Rating Service (DBRS), latterly as Executive Vice-President responsible for supervising the firms 34 analysts and conducting the day-to-day management affairs of the company. Declaration: I, Bob Weir, hereby state that I do not own, directly or indirectly, any shares in Mad Catz Interactive Inc.

StockPotentials Reports
The eResearch StockPotentials reports are written on companies that eResearch believes have interesting prospects, are smaller in size and, therefore, have little or no following on the Street, and which would benefit from the exposure that eResearch can provide through the dissemination of the reports via our extensive electronic distribution network. eResearch writes these reports solely from publicly-available information, and has not contacted or spoken with company management. Consequently, no Target Price or Recommendation is provided. eResearch does not receive a fee for the preparation and publication of StockPotentials report.

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