Mad Catz Interactive (MCZAF) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Conference Call:	Today, February 9th, 2011 at 5:00 p.m. ET
Dial-in number:	212/231-2901 (U.S. & International)
Webcast:	www.madcatz.com (Select “Investors”)
Replay Information:	See release text

News Announcement	For Immediate Release
Contact:
Darren Richardson, Allyson Vanderford	Joseph Jaffoni, Norberto Aja, Jim Leahy
Chief Executive Officer, Interim CFO	Jaffoni & Collins Incorporated
Mad Catz Interactive, Inc.	212/835-8500 ormcz@jcir.com
619/683-9830

MAD CATZ FISCAL 2011 Q3 NET SALES RISE 91% TO $93 MILLION;
73% INCREASE IN NET INCOME AND DILUTED EPS OF $0.15

— Highest Quarterly Net Sales, Gross Profit, Net Income and EBITDA in Company History —

San Diego, California — February 9, 2011 — Mad Catz Interactive, Inc. (“Mad Catz” or “the Company”) (AMEX/TSX: MCZ), a leading third-party interactive entertainment accessory provider, today announced record quarterly financial results for its fiscal 2011 third quarter ended December 31, 2010.

For the quarter ended December 31, 2010, Mad Catz generated net sales of $93.0 million, the highest quarterly sales in the Company’s history and a 90.6% increase from net sales of $48.8 million in the fiscal 2010 third quarter. Net sales in North America, the Company’s largest market, grew 129.6% to $56.4 million in the fiscal 2011 third quarter, while net sales to Europe increased 52.9% year-over-year to a record $35.1 million. Gross profit in the fiscal 2011 third quarter rose 65.6% to $26.4 million from the prior year period while gross profit margin declined by 4.3 percentage points to 28.4%, primarily due to a shift in the Company’s sales mix which included higher levels of licensed products.

Reflecting tax expense of $4.6 million in the fiscal 2011 third quarter versus $1.6 million in the prior year fiscal third quarter, the Company reported a 73.4% rise in net income to $9.7 million, or $0.15 per diluted share, compared with net income of $5.6 million, or $0.09 per diluted share a year ago.

EBITDA, a non-GAAP measure (defined as earnings before interest, taxes, depreciation and amortization), in the three months ended December 31, 2010, increased by 83.4% to a quarterly record $16.0 million, compared to EBITDA of $8.7 million in the prior year quarter. Adjusted net income and adjusted diluted earnings per share, which exclude the impact of amortization of intangibles, stock-based compensation and goodwill impairment (if any), were $10.2 million and $0.16, respectively, in the fiscal third quarter versus $6.2 million and $0.10, respectively, in the prior year quarter. EBITDA, Adjusted net income and adjusted diluted earning per share are non-GAAP financial measures and are reconciled to the most comparable GAAP measure in the financial tables at the end of this release.

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Mad Catz Interactive, Inc., 2/9/11 page 2

In the fiscal 2011 nine-month period ended December 31, 2010, the Company generated record net sales of $150.3 million, a 62.0% increase from the $92.7 million in the first nine months of the prior fiscal year. Gross profit for the fiscal 2011 year-to-date period increased 46.1% to a record $42.8 million, from $29.3 million in the prior year while gross profit margin was 28.5% compared to 31.6% a year ago. Total operating expenses in the first nine months of fiscal 2011 were $25.7 million, up 17.7% from $21.9 million in the prior year-to-date period and, as a percentage of net sales, declined to 17.1% from 23.6% a year ago. The Company recorded an operating profit of $17.1 million and $7.4 million in the first nine months of fiscal 2011 and fiscal 2010, respectively, representing growth of 129.9%. Reflecting tax expense of $5.6 million in the fiscal 2011 year-to-date period and $2.0 million in the comparable year-ago period, the Company reported net income of $9.4 million, or $0.16 per diluted share, compared with a net income of $3.6 million, or $0.07 per diluted share a year ago.

In the fiscal 2011 year-to-date period, EBITDA rose to a record $19.3 million, a 88.1% increase compared to EBITDA of $10.3 million in the first nine months of fiscal 2010. Adjusted net income and adjusted diluted earnings per share, which exclude the impact of amortization of intangibles and stock-based compensation, were $10.7 million and $0.18, respectively, in the fiscal 2011 year-to-date period versus $5.9 million and $0.11, respectively, in the comparable year ago period.

Third Quarter Fiscal 2011 Financial Highlights:

• Net sales for the third quarter of fiscal 2011 increased 90.6% from the prior year quarter:

• North American net sales rose 129.6% to $56.4 million or 60.7% of quarterly sales;

• European net sales rose 52.9% to $35.1 million or 37.8% of quarterly sales; and

• Net sales to other countries increased 14.4% to $1.4 million or 1.5% of quarterly sales.

• Gross sales by product group were as follows:

• Xbox 360® accounted for 31% of total gross sales in both periods;

• PlayStation 3® accounted for 19% of total gross sales vs. 17% in the prior year;

• Wii® products represented 19% of total gross sales vs. 14% in the prior year;

• PC represented 12% of total gross sales vs. 23% a year ago;

• Handhelds represented 2% of total gross sales vs. 3% a year ago; and

• All other platforms represented 17% of total gross sales vs. 12% in the prior year.

• Gross sales by category were as follows:

• Specialty controllers represented 29% of total gross sales vs. 21% a year ago;

• Audio products represented 24% of total gross sales vs. 10% in the prior year;

• Games represented 16% of total gross sales vs. 2% a year ago;

• Controllers represented 16% of total gross sales vs. 26% a year ago;

• Accessories represented 9% of total gross sales vs. 30% a year ago;

• PC devices represented 6% of total gross sales vs. 8% in the prior year; and

• All other sales represented less than 1% of total gross sales vs. 3% a year ago.

• Reported net position of bank loan less cash at December 31, 2010, of $15.9 million, compared to $17.4 million at December 31, 2009 and $1.6 million as of March 31, 2010.

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Mad Catz Interactive, Inc., 2/9/11 page 3

New Products Shipped in and Subsequent to Third Quarter of Fiscal 2011 include:

• Cyborg R.A.T. 9 Wireless Pro Gaming Mouse;

• Cyborg Gaming Lights with amBX Technology for the PC;

• Rock Band 3product range, including wireless Keyboards, Mustang ProGuitar, PRO-Drums and PRO-Cymbals Kit;

• Mad Catz Wireless Racing Wheel for the Xbox 360 video game system; and,

• Three Licensed Limited EditionCall of Duty®: Black OpsTritton™ Powered Professional Gaming Audio Headsets for console & PC.

Recent Key Developments and License Agreements:

• Announced agreement with THQ Inc. to produce branded videogame accessories based on the WWE® All Stars™ intellectual property;

• Released the limited editionSonic the HedgehogFigure Inductive Charger featuring a six inch tall Sonic and charge base for use with the Wii;

• Entered into agreement with Epic Games, Inc. to produce a range of accessories forGears of War 3, scheduled to be released exclusively for Xbox 360® during the 2011 holiday season;

• Secured license forMarvel® Vs. Capcom® 3: Fate of Two Worlds— Arcade FightStick: for the Xbox® 360 and PS3, expected to be available concurrent with the mid-February game launch; and,

• Entered into an agreement with Microsoft® Corporation to produce a range of licensed, co-branded audio headsets under the Company’s Tritton brand and Microsoft’s Xbox 360® brand.

Commenting on the results, Darren Richardson, President and Chief Executive Officer of Mad Catz, said, “We are very pleased with the record results for the fiscal 2011 third quarter and fiscal 2011 year-to-date periods. As we continue to execute on our initiatives to re-position Mad Catz as a provider of premium products that enhance the gaming experience, we remain focused on further leveraging our manufacturing and distribution capabilities and aligning ourselves with key titles. Our line ofRock Band 3peripherals andCall of Duty: Black Opsproducts, both of which met with strong consumer demand, are great examples of this alignment with the industry’s biggest franchises. In addition, we enjoyed great success with Tritton Technologies, our gaming audio line acquired in early fiscal 2011. These, along with our highly acclaimed Cyborg pro gaming mice, provide us with the strongest product portfolio in Mad Catz’ history. In addition, our strategy to focus on premium products has resulted in three consecutive years of year-over-year growth in third quarter and nine month net sales, gross profit, earnings, EPS and EBITDA results.

“Reflecting the excellent fiscal third quarter retail sell-in of our range of products, we ended the quarter with $9.9 million of cash, $51.2 million of accounts receivable, $32.5 million of inventories and accounts payable of $55.3 million, including the outstanding balance under our bank loan. We expect significant improvements in our fiscal 2011 year-end balance sheet, including a positive cash position net of bank borrowings, and believe our strengthened balance sheet will allow us the financial flexibility to further grow sales, earnings and free cash flow while pursuing other means to enhance shareholder value.”

Mad Catz Interactive, Inc., 2/9/11 page 4

Mr. Richardson concluded, “Looking ahead, we continue to actively build and roll out a diversified pipeline of exciting products, such as the recently announced audio headset partnership with Microsoft, theMarvel vs. CapcomArcade FightSticks for the Xbox 360 and PS3, and the range of accessories forGears of War 3. Building on what was a great holiday quarter, we are confident in our positioning for the fourth quarter of fiscal 2011 and fiscal 2012 as a whole.”

The Company will host a conference call and simultaneous webcast on February 9, 2011, at 5:00 p.m. ET, which can be accessed by dialing 212/231-2901. Following its completion, a replay of the call can be accessed for 30 days at the Company’s Web site (www.madcatz.com, select “Investors”) or for 7 days via telephone at 800/633-8284 (reservation #21509221) or, for International callers, at 402/977-9140.

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Mad Catz Interactive, Inc., 2/9/11 page 5

About Mad Catz Interactive, Inc.

Mad Catz is a leading global provider of innovative products for the interactive entertainment industry. Mad Catz develops and markets accessories for videogame systems and PCs under its Mad Catz (casual gaming), Saitek (simulation), Cyborg (pro gaming), Eclipse (home and office) and Tritton (gaming audio) brands. Mad Catz also operates e-commerce and content websites for videogame and PC products under its GameShark brand, develops, manufactures and markets proprietary earphones under its AirDrives brand, and publishes and distributes video/PC games. Mad Catz distributes its products through most of the leading retailers offering interactive entertainment products and has offices in North America, Europe and Asia. For additional information please go to www.madcatz.com, as well aswww.store.gameshark.com,www.saitek.com,www.cyborggaming.com,www.eclipsetouch.com,www.trittontechnologies.com,www.gameshark.com andwww.airdrives.com.

Mad Catz product updates and demonstrations can be found onFacebook,Twitter orYouTube.

Safe Harbor for Forward Looking Statements: This press release contains forward-looking statements about the Company’s business prospects that involve substantial risks and uncertainties. The Company assumes no obligation to update the forward-looking statements contained in this press release as a result of new information or future events or developments. You can identify these statements by the fact that they use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “should,” “plan,” “goal,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: the ability to maintain or renew the Company’s licenses; competitive developments affecting the Company’s current products; first party price reductions; the ability to successfully market both new and existing products domestically and internationally; difficulties or delays in manufacturing; or a downturn in the market or industry. A further list and description of these risks, uncertainties and other matters can be found in the Company’s reports filed with the Securities and Exchange Commission and the Canadian Securities Administrators.

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Mad Catz Interactive, Inc., 2/9/11 page 6

MAD CATZ INTERACTIVE, INC.
Consolidated Statements of Operations
(unaudited, in thousands of US$, except share and per share data)

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2010			2009			2010			2009
Net sales	$	92,957		$	48,763		$	150,276		$	92,745
Cost of sales		66,556			32,822			107,429			63,424
Gross profit		26,401			15,941			42,847			29,321
Operating expenses:
Sales and marketing		4,935			3,696			10,982			8,747
General and administrative		4,047			3,465			10,565			9,533
Research and development		1,089			741			2,780			2,033
Acquisition related items		102			—			708			—
Amortization of intangible assets		244			395			708			1,567
Total operating expenses		10,417			8,297			25,743			21,880
Operating income		15,984			7,644			17,104			7,441
Interest expense, net		(1,046	)		(645	)		(2,284	)		(1,637	)
Foreign exchange gain (loss), net		(736	)		109			(41	)		(310	)
Other income		46			42			223			138
Income before income taxes		14,248			7,150			15,002			5,632
Income tax expense		4,552			1,558			5,554			2,007
Net income	$	9,696		$	5,592		$	9,448		$	3,625
Basic net income per share	$	0.18		$	0.10		$	0.17		$	0.07
										��
Diluted net income per share	$	0.15		$	0.09		$	0.16		$	0.07
Weighted average shares — basic		55,278,606			55,098,549			55,158,786			55,098,549
Weighted average shares — diluted		66,684,037			65,316,293			65,819,064			55,098,549

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Mad Catz Interactive, Inc., 2/9/11 page 7

MAD CATZ INTERACTIVE, INC.
Consolidated Balance Sheets
(unaudited in thousands of US$)

	December 31,			March 31,
	2010			2010
Assets
Current assets:
Cash	$	9,921		$	2,245
Accounts receivable, net		51,239			14,620
Other receivables		290			123
Inventories		32,511			16,975
Deferred tax assets		17			17
Income taxes receivable		21			21
Other current assets		1,559			1,410
		95,558			35,411
Deferred tax assets		739			766
Other assets		784			626
Property and equipment, net		3,684			3,452
Intangible assets, net		5,805			2,828
Goodwill		11,387			8,466
Total assets	$	117,957		$	51,549
Liabilities and Shareholders’ Equity
Current liabilities:
Bank loan	$	25,813		$	3,829
Accounts payable		29,488			11,871
Accrued liabilities		15,978			7,988
Notes payable		333			—
Contingent consideration, current		1,035			—
Income taxes payable		4,265			1,670
		76,912			25,358
Other long term liabilities		1,690			357
Contingent consideration		3,297			—
Notes payable		14,500			14,500
Total liabilities		96,399			40,215
Shareholders’ equity:
Common stock		49,681			48,865
Other comprehensive income		(95	)		(55	)
Accumulated deficit		(28,028	)		(37,476	)
Total shareholders’ equity		21,558			11,334
Total liabilities and shareholders’ equity	$	117,957		$	51,549

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Mad Catz Interactive, Inc., 2/9/11 page 8

MAD CATZ INTERACTIVE, INC.
Supplementary Data
(unaudited, in thousands of US$)

Geographical Sales Data

The Company’s net sales were generated in the following geographic regions:

	Three months ended				Nine months ended
	December 31,				December 31,
	2010		2009		2010		2009
Net sales:
United States	$	52,908	$	23,375	$	87,311	$	48,520
Europe		35,141		22,982		55,720		38,811
Canada		3,530		1,201		4,332		2,555
Other countries		1,378		1,205		2,913		2,859
	$	92,957	$	48,763	$	150,276	$	92,745

Adjusted Net Income Reconciliation (non GAAP)

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2010		2009		2010		2009
Pre-tax Income	$	14,248	$	7,150	$	15,002	$	5,632
Amortization of intangible assets		244		541		708		2,008
Stock-based compensation cost		128		150		458		458
Adjusted pre-tax income*		14,620		7,841		16,168		8,098
Adjusted provision for income taxes (at effective rate)		4,462		1,610		5,463		2,201
Adjusted net income*	$	10,158	$	6,231	$	10,705	$	5,897
Adjusted diluted earnings per share*	$	0.16	$	0.10	$	0.18	$	0.11

* Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures and are not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. Mad Catz believes that certain non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the Company’s performance by excluding certain items that may not be indicative of the Company’s core business, operating results or future outlook. Mad Catz’ management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing the Company’s operating results, as well as when planning, forecasting and analyzing future periods. These non-GAAP measures, specifically those that adjust for stock-based compensation and amortization of intangibles, also facilitate comparisons of the Company’s performance to prior periods.

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Mad Catz Interactive, Inc., 2/9/11 page 9

EBITDA Reconciliation (non GAAP)

EBITDA represents net loss plus interest, taxes, depreciation and amortization.

	Three months ended				Nine months ended
	December 31,				December 31,
	2010		2009		2010		2009
Net Income	$	9,696	$	5,592	$	9,448	$	3,625
Adjustments:
Interest expense		1,046		645		2,284		1,637
Income tax expense		4,552		1,558		5,554		2,007
Depreciation and amortization		690		920		2,036		3,003
EBITDA	$	15,984	$	8,715	$	19,322	$	10,272

EBITDA represents net loss plus interest, taxes, depreciation and amortization. EBITDA is not intended to represent cash flows for the period, nor is it being presented as an alternative to operating income or net income as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States. As defined, EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. We believe, however, that in addition to the operating performance measures found in our financial statements, EBITDA is a useful financial performance measurement for assessing our Company’s operating performance. Our management uses EBITDA as a measurement of operating performance in comparing our performance on a consistent basis over prior periods, as it removes from operating results the impact of our capital structure, including the interest expense resulting from our outstanding debt, and our asset base, including depreciation and amortization of some of our assets.

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