China Mobile Games, Entertainment Issues Details of Organizational Restructuring, Employee Changes

China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company")

, the largest publisher and a leading developer of mobile games in China, today announces the implementation of organizational restructuring and personnel changes in its game publishing business. The purpose of the restructuring is to streamline the Company's operations to better position it for profitable long-term growth. The Company has made the transition from a feature phone game developer to a mobile game publisher and developing platform, leading to rapid growth.  Since Mr. Shuling Ying was asked to oversee the Company's publishing business in October 2013, its publishing business has grown significantly, and now has teams of over 700 employees located in Beijing, Shanghai, Shenzhen and Chengdu.  However, the Company's rapid growth has also created operational challenges that it must carefully manage, including redundancies within its businesses which have resulted in inefficiencies. To make the Company more efficient and competitive and to continue producing high quality and innovative products, and to ensure the Company is positioned to be profitable and achieve sustainable growth, the chief executive officer has been tasked with conducting organizational reviews and structural realignments.  As part of the organizational restructuring of its publishing business, on June 19, 2014 the Company removed nine employees from their positions in the publishing business, including Mr. Ying.  The Company notes that these employees are awaiting reassignments within the Company.  The Company does not expect this restructuring, including the personnel changes, to have a material adverse impact on the Company's overall operations.  The Company expects the restructuring will enhance its productivity, helping to strengthen its leading market position. The Company is aware of market speculations about the reasons for the restructuring, including allegations of employee misconduct, which have led to significant fluctuations in its ADS price.  The Company announces that today its board of directors has authorized an independent committee, consisting solely of independent directors, to look into the market speculations.  In order to provide a high level of transparency to its shareholders, the Company will update shareholders on the results of its findings.