UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                    FORM 10-Q


(Mark One)

     |X|  Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934 for the quarterly period ended June 27, 2004.

     |_|  Transition  report  pursuant to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934 for the transition  period from  _____________ to
          _______________.

                         Commission File Number 0-15782


                             CEC ENTERTAINMENT, INC.
             (Exact name of registrant as specified in its charter)


                   Kansas                                  48-0905805
       (State or other jurisdiction of                  (I.R.S. Employer
       incorporation or organization)                  Identification No.)


                            4441 West Airport Freeway
                               Irving, Texas 75062
                    (Address of principal executive offices,
                               including zip code)


                                 (972) 258-8507
                         (Registrant's telephone number,
                              including area code)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or such shorter  period that the registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes |X| No |_|

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [X] No [_]

     At August 2, 2004,  an aggregate of 36,643,833  shares of the  registrant's
Common  Stock,  par value of $.10 each  (being  the  registrant's  only class of
common stock), were outstanding.




<PAGE>



                             CEC ENTERTAINMENT, INC.
                                TABLE OF CONTENTS


Page

Part I - Financial Information:

   Item 1.  Financial Statements:

      Condensed Consolidated Balance Sheets .................................  3
      Condensed Consolidated Statements of Earnings and Comprehensive Income.  4
      Condensed Consolidated Statement of Shareholders' Equity ..............  6
      Condensed Consolidated Statements of Cash Flows .......................  7
      Notes to Condensed Consolidated Financial Statements ..................  8

   Item 2.  Management's Discussion and Analysis of Financial Condition
      and Results of Operations ............................................. 10

   Item 3.  Quantitative and Qualitative Disclosures about Market Risk ...... 14

   Item 4.  Controls and Procedures ......................................... 14

Part II - Other Information:

   Item 1.  Legal  Proceedings .............................................. 15

   Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases of
      Equity Securities ..................................................... 15

   Item 4.  Submission of Matters to a Vote of Security Holders ............. 15


   Item 6.  Exhibits and Reports on Form 8-K ................................ 16

Signatures .................................................................. 17

Certifications .............................................................. 18



<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>

                                           CEC ENTERTAINMENT, INC.
                                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                       (Thousands, except share data)
                                                                                   June 27,    December 28,
                                                                                     2004          2003
                                                                                  ---------    ------------
                                                                                 (unaudited)
                                                   ASSETS
<S>                                                                               <C>           <C>
Current assets:
   Cash and cash equivalents ...................................................  $  11,069     $   8,067
   Accounts receivable .........................................................     12,313        13,103
   Inventories .................................................................     11,326        12,491
   Prepaid expenses ............................................................      8,641         7,608
   Deferred tax asset ..........................................................      1,487         1,487
                                                                                  ---------     ---------
      Total current assets .....................................................     44,836        42,756
                                                                                  ---------     ---------

Property and equipment, net ....................................................    546,410       536,124
                                                                                  ---------     ---------

Other assets ...................................................................      1,415         1,471
                                                                                  ---------     ---------
                                                                                  $ 592,661     $ 580,351
                                                                                  =========     =========

                                    LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt ...........................................  $     168     $     168
   Accounts payable ............................................................     26,561        30,126
   Accrued liabilities .........................................................     35,891        28,610
                                                                                  ---------     ---------
      Total current liabilities ................................................     62,620        58,904
                                                                                  ---------     ---------

Long-term debt, less current portion ...........................................     63,100        64,581
                                                                                  ---------     ---------

Deferred rent ..................................................................      5,798         5,153
                                                                                  ---------     ---------

Deferred tax liability .........................................................     58,054        50,714
                                                                                  ---------     ---------

Accrued insurance ..............................................................      8,500         8,500
                                                                                  ---------     ---------

Shareholders' equity:
   Common stock, $.10 par value; authorized 100,000,000 shares; 54,997,150
      and 54,481,913 shares issued, respectively ...............................      5,500         5,448
   Capital in excess of par value ..............................................    229,910       219,071
   Retained earnings ...........................................................    426,586       378,911
   Accumulated other comprehensive income ......................................        557           695
   Less treasury shares of 17,601,868 and 16,042,418, respectively, at cost ....   (267,964)     (211,626)
                                                                                  ---------     ---------
                                                                                    394,589       392,499
                                                                                  ---------     ---------
                                                                                  $ 592,661     $ 580,351
                                                                                  =========     =========


                          See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>


                             CEC ENTERTAINMENT, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)
                       (Thousands, except per share data)

                                                        Three Months Ended
                                                   -----------------------------
                                                   June 27, 2004   June 29, 2003
                                                   -------------   -------------

Food and beverage revenues .......................   $ 108,739       $ 101,233
Games and merchandise revenues ...................      55,826          50,856
Franchise fees and royalties .....................         852             793
Interest income ..................................           7               3
                                                     ---------       ---------
                                                       165,424         152,885
                                                     ---------       ---------

Costs and expenses:
   Cost of sales:
      Food, beverage and related supplies ........      21,307          18,245
      Games and merchandise ......................       7,218           6,965
      Labor ......................................      47,688          43,754
                                                     ---------       ---------
                                                        76,213          68,964
   Selling, general and administrative expenses ..      20,495          19,444
   Depreciation and amortization .................      12,730          11,052
   Interest expense ..............................         287             181
   Other operating expenses ......................      30,855          29,124
                                                     ---------       ---------
                                                       140,580         128,765
                                                     ---------       ---------

Income before income taxes .......................      24,844          24,120

Income taxes .....................................       9,514           9,359
                                                     ---------       ---------

Net income .......................................      15,330          14,761

Other comprehensive income (loss), net of tax:
   Foreign currency translation ..................        (124)            660
                                                     ---------       ---------

Comprehensive income .............................   $  15,206       $  15,421
                                                     =========       =========


Earnings per share:
   Basic:
      Net income .................................   $     .41       $     .36
                                                     =========       =========
      Weighted average shares outstanding ........      37,507          40,485
                                                     =========       =========
   Diluted:
      Net income .................................   $     .40       $     .36
                                                     =========       =========
      Weighted average shares outstanding ........      38,604          40,983
                                                     =========       =========


            See notes to condensed consolidated financial statements.

<PAGE>


                             CEC ENTERTAINMENT, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)
                       (Thousands, except per share data)

                                                         Six Months Ended
                                                   -----------------------------
                                                   June 27, 2004   June 29, 2003
                                                   -------------   -------------

Food and beverage revenues .......................   $ 245,078       $ 222,077
Games and merchandise revenues ...................     125,567         113,264
Franchise fees and royalties .....................       1,713           1,658
Interest income ..................................          14              12
                                                     ---------       ---------
                                                       372,372         337,011
                                                     ---------       ---------

Costs and expenses:
   Cost of sales:
      Food, beverage and related supplies ........      45,785          40,215
      Games and merchandise ......................      15,860          14,489
      Labor ......................................     100,927          91,688
                                                     ---------       ---------
                                                       162,572         146,392
   Selling, general and administrative expenses ..      44,747          40,635
   Depreciation and amortization .................      24,959          21,957
   Interest expense ..............................         574             464
   Other operating expenses ......................      62,252          58,661
                                                     ---------       ---------
                                                       295,104         268,109

Income before income taxes .......................      77,268          68,902

Income taxes .....................................      29,593          26,734
                                                     ---------       ---------

Net income .......................................      47,675          42,168

Other comprehensive income (loss), net of tax:
   Foreign currency translation ..................        (138)            943
                                                     ---------       ---------

Comprehensive income .............................   $  47,537       $  43,111
                                                     =========       =========


Earnings per share:
   Basic:
      Net income .................................   $    1.26       $    1.03
                                                     =========       =========
      Weighted average shares outstanding ........      37,910          40,667
                                                     =========       =========
   Diluted:
      Net income .................................   $    1.22       $    1.02
                                                     =========       =========
      Weighted average shares outstanding ........      39,107          41,036
                                                     =========       =========


            See notes to condensed consolidated financial statements.

<PAGE>


                             CEC ENTERTAINMENT, INC.
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                   (Unaudited)
                                   (Thousands)


                                                            Amounts       Shares
                                                           ---------      ------

Common stock and capital in excess of par value:
   Balance, beginning of year ........................     $ 224,519      54,482
   Stock options exercised ...........................         8,677         503
   Net tax benefit from exercise of options ..........         1,844
   Stock issued under 401(k) plan ....................           397          13
   Payment for fractional shares .....................           (27)
                                                           ---------     -------
   Balance, June 27, 2004 ............................       235,410      54,998
                                                           ---------     -------

Retained earnings:
   Balance, beginning of year ........................       378,911
   Net income ........................................        47,675
                                                           ---------
   Balance, June 27, 2004 ............................       426,586
                                                           ---------

Accumulated other comprehensive income (loss):
   Balance, beginning of year ........................           695
   Foreign currency translation ......................          (138)
                                                           ---------
   Balance, June 27, 2004 ............................           557
                                                           ---------

Treasury shares:
   Balance, beginning of year ........................      (211,626)     16,042
   Treasury stock acquired ...........................       (56,338)      1,560
                                                           ---------     -------
   Balance, June 27, 2004 ............................      (267,964)     17,602
                                                           ---------     =======

Total shareholders' equity ...........................     $ 394,589
                                                           =========














            See notes to condensed consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>

                                         CEC ENTERTAINMENT, INC.
                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (Unaudited)
                                               (Thousands)


                                                                                 Six Months Ended
                                                                          ------------------------------
                                                                          June 27, 2004    June 29, 2003
                                                                          -------------    -------------
<S>                                                                         <C>              <C>
Operating activities:
   Net income .........................................................     $ 47,675         $ 42,168
   Adjustments to reconcile net income to cash
      provided by operations:
   Depreciation and amortization ......................................       24,959           21,957
   Deferred income tax expense ........................................        7,340            6,063
   Tax benefit from exercise of stock options .........................        1,844              132
   Other ..............................................................        1,294            1,434
   Net change in receivables, inventories, prepaids, payables and
      accrued liabilities .............................................        4,638           14,383
                                                                            --------         --------
         Cash provided by operations ..................................       87,750           86,137
                                                                            --------         --------

Investing activities:
   Purchases of property and equipment ................................      (36,003)         (42,136)
   Increase in other assets ...........................................          (87)            (338)
                                                                            --------         --------
         Cash used in investing activities ............................      (36,090)         (42,474)
                                                                            --------         --------

Financing activities:
   Payments on debt and line of credit ................................       (1,481)         (30,769)
   Exercise of stock options ..........................................        8,677              645
   Redeemable preferred stock dividends ...............................                          (113)
   Purchase of treasury stock .........................................      (56,338)         (16,807)
   Other ..............................................................          484              544
                                                                            --------         --------
         Cash used in financing activities ............................      (48,658)         (46,500)
                                                                            --------         --------

Increase (decrease) in cash and cash equivalents ......................        3,002           (2,837)
Cash and cash equivalents, beginning of period ........................        8,067           12,214
                                                                            --------         --------
Cash and cash equivalents, end of period ..............................     $ 11,069         $  9,377
                                                                            ========         ========









                        See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>


                             CEC ENTERTAINMENT, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Interim financial statements:

     In the  opinion of  management,  the  accompanying  condensed  consolidated
financial  statements  for the  periods  ended June 27,  2004 and June 29,  2003
reflect  all  adjustments  (consisting  only of  normal  recurring  adjustments)
necessary  to  present  fairly the  Company's  financial  condition,  results of
operations  and cash flows in  accordance  with  generally  accepted  accounting
principles.

     Certain  information  and  footnote  disclosures  normally  included in the
consolidated financial statements prepared in accordance with generally accepted
accounting  principles have been omitted.  The unaudited condensed  consolidated
financial  statements  referred to above should be read in conjunction  with the
financial statements and notes thereto included in the Company's Form 10-K filed
with the  Securities  and Exchange  Commission  for the year ended  December 28,
2003.  Results of  operations  for the periods  ended June 27, 2004 and June 29,
2003 are not necessarily indicative of the results for the year.


2.   Earnings per common share:

     Basic  earnings per common share  ("EPS") is computed by dividing  earnings
applicable  to common  shares by the weighted  average  number of common  shares
outstanding.  Diluted EPS adjusts for the effect of potential common shares from
dilutive stock options using the treasury stock method. Net income applicable to
common shares has been adjusted for  redeemable  preferred  stock  accretion and
dividends for the applicable  periods.  Earnings per common and potential common
shares were computed as follows (thousands, except per share data):

<TABLE>
<CAPTION>
                                                             Three Months Ended         Six Months Ended
                                                            ---------------------     ---------------------
                                                            June 27,     June 29,     June 27,     June 29,
                                                              2004         2003         2004         2003
                                                            --------     --------     --------     --------
<S>                                                         <C>          <C>          <C>          <C>
Net income ............................................     $ 15,330     $ 14,761     $ 47,675     $ 42,168
Accretion of redeemable preferred stock ...............                       (22)                      (48)
Redeemable preferred stock dividends ..................                       (54)                     (113)
                                                            --------     --------     --------     --------
Adjusted income applicable to common shares ...........     $ 15,330     $ 14,685     $ 47,675     $ 42,007
                                                            ========     ========     ========     ========

Basic:
   Weighted average common shares outstanding .........       37,507       40,485       37,910       40,667
                                                            ========     ========     ========     ========
   Earnings per common share ..........................     $    .41     $    .36     $   1.26     $   1.03
                                                            ========     ========     ========     ========

Diluted:
   Weighted average common shares outstanding .........       37,507       40,485       37,910       40,667
   Potential common shares for stock options ..........        1,097          498        1,197          369
                                                            --------     --------     --------     --------
   Weighted average shares outstanding ................       38,604       40,983       39,107       41,036
                                                            ========     ========     ========     ========
   Earnings per common and potential
      common share ....................................     $    .40     $    .36     $   1.22     $   1.02
                                                            ========     ========     ========     ========
</TABLE>

<PAGE>



                             CEC ENTERTAINMENT, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



3.   Stock based compensation:

     The Company accounts for its stock based  compensation  under the intrinsic
value method of  Accounting  Principles  Board Opinion No. 25,  "Accounting  for
Stock  Issued to  Employees"  and related  interpretations  ("APB 25"),  and has
adopted the  disclosure-only  provisions  of Statement  of Financial  Accounting
Standards No. 123, "Accounting for Stock Based Compensation" ("SFAS 123"). Under
APB 25, no stock based  compensation costs is reflected in net income for grants
of stock options to employees  because the Company  grants stock options with an
exercise price equal to the market value of the stock on the date of grant.  Had
compensation  cost for the Company's stock option plans been determined based on
the fair value method at the grant date for awards under those plans  consistent
with the method  prescribed  by SFAS No. 123, the Company's pro forma net income
and earnings per share would have been as follows  (thousands,  except per share
data):

<TABLE>
<CAPTION>
                                                              Three Months Ended        Six Months Ended
                                                            ---------------------     ---------------------
                                                            June 27,     June 29,     June 27,     June 29,
                                                              2004         2003         2004         2003
                                                            --------     --------     --------     --------
<S>                                                         <C>          <C>          <C>          <C>
Net income,as reported ................................     $ 15,330     $ 14,761     $ 47,675     $ 42,168
Fair value based compensation expense, net of taxes ...       (1,451)      (1,629)      (2,886)      (3,253)
                                                            --------     --------     --------     --------
Pro-forma net income ..................................       13,879       13,132       44,789       38,915
Accretion and dividends of redeemable
   preferred stock, as reported .......................                       (76)                     (161)
                                                            --------     --------     --------     --------
Pro-forma net income applicable to common shares ......     $ 13,879     $ 13,056     $ 44,789     $ 38,754
                                                            ========     ========     ========     ========

Earnings per Share:
Basic:
   As reported ........................................     $    .41     $    .36     $   1.26     $   1.03
   Pro forma ..........................................     $    .37     $    .32     $   1.18     $    .95

Diluted:
   As reported ........................................     $    .40     $    .36     $   1.22     $   1.02
   Pro forma ..........................................     $    .36     $    .32     $   1.15     $    .94

</TABLE>


4.   Stock split:

     All share and per share  information have been  retroactively  adjusted for
the  effects  of a three  for two  stock  split in the form of a  special  stock
dividend effected and distributed on March 15, 2004.



<PAGE>


Item 2: Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Results of Operations


     A summary of the results of  operations  of the Company as a percentage  of
revenues is shown below.

<TABLE>
<CAPTION>
                                                            Three Months Ended                 Six Months Ended
                                                       -----------------------------   ----------------------------
                                                       Jun. 27, 2004   Jun. 29, 2003   Jun. 27, 2004   Jun. 29,2003
                                                       -------------   -------------   -------------   ------------
<S>                                                       <C>             <C>             <C>             <C>
     Revenues ....................................        100.0%          100.0%          100.0%          100.0%
                                                          -----           -----           -----           -----
     Costs and expenses:
        Cost of sales:
           Food, beverage and related supplies ...         12.9            11.9            12.3            12.0
           Games and merchandise .................          4.4             4.6             4.3             4.3
           Labor .................................         28.8            28.6            27.1            27.2
                                                          -----           -----           -----           -----
                                                           46.1            45.1            43.7            43.5
        Selling, general and administrative ......         12.4            12.8            12.0            12.1
        Depreciation and amortization ............          7.7             7.2             6.7             6.5
        Interest expense .........................           .2              .1              .2              .1
        Other operating expenses .................         18.6            19.0            16.7            17.4
                                                          -----           -----           -----           -----
                                                           85.0            84.2            79.3            79.6
                                                          -----           -----           -----           -----
     Income before income taxes ..................         15.0            15.8            20.7            20.4
     Income tax expense ..........................          5.7             6.1             7.9             7.9
                                                          -----           -----           -----           -----
     Net income ..................................          9.3%            9.7%           12.8%           12.5%
                                                          =====           =====           =====           =====

     Number of Company-owned stores:
        Beginning of period ......................          420             388             418             384
        New ......................................           10               4              12               8
        Closed ...................................                           (1)                             (1)
                                                          -----           -----           -----           -----
        End of period ............................          430             391             430             391
                                                          =====           =====           =====           =====

     Number of franchise stores:
        Beginning of period ......................           48              50              48              50
        New ......................................            1               1               1               1
                                                          -----           -----           -----           -----
        End of period ............................           49              51              49              51
                                                          =====           =====           =====           =====

</TABLE>

Second Quarter 2004 Compared to Second Quarter 2003

     Revenues

     Revenues  increased  8.2% to $165.4  million in the second  quarter of 2004
from  $152.9  million in the second  quarter of 2003 due to an  increase  in the
number  of  Company-operated  restaurants.  During  the full  year of 2003,  the
Company opened 32 new restaurants,  acquired three restaurants from a franchisee
and closed one  restaurant.  During  the first six months of 2004,  the  Company
opened 12 new restaurants and has 430  Company-operated  restaurants at June 27,
2004.  Comparable store sales increased 0.1% in the second quarter of 2004. Menu
prices increased approximately 0.5% between the quarters.


<PAGE>



     Costs and Expenses

     Costs and  expenses as a percentage  of revenues  increased to 85.0% in the
second quarter of 2004 from 84.2% in the second quarter of 2003.

     Cost of sales  increased as a percentage of revenues to 46.1% in the second
quarter  of 2004 from  45.1% in the  comparable  period  of 2003.  Cost of food,
beverage and related supplies as a percentage of revenues  increased to 12.9% in
the second  quarter of 2004 from 11.9% in the second  quarter of 2003  primarily
due to a 71%  increase in average  cheese  prices paid in the second  quarter of
2004 compared to the same quarter of the prior year.  This  increase  negatively
impacted food cost by approximately $2.1 million.  Cost of games and merchandise
as a percentage of revenues decreased to 4.4% in the second quarter of 2004 from
4.6% in the second  quarter of 2003 due  primarily  to higher costs in the prior
year associated  with the initial rollout of a guest value program.  Store labor
expenses as a percentage of revenues  increased  slightly to 28.8% in the second
quarter of 2004 from 28.6% in the second quarter of 2003.

     Selling,  general and  administrative  expenses as a percentage of revenues
decreased  to 12.4% in the  second  quarter  of 2004  from  12.8% in the  second
quarter  of 2003  due  primarily  to a  decrease  in  advertising  expense  as a
percentage of revenues.

     Depreciation and amortization expense as a percentage of revenues increased
to 7.7% in the second  quarter  of 2004 from 7.2% in the second  quarter of 2003
primarily due to capital invested in new stores and remodels.

     Interest  expense as a  percentage  of  revenues  increased  to 0.2% in the
second  quarter  of 2004  from  0.1% in the  second  quarter  of 2003  due to an
increase in outstanding debt.

     Other operating  expenses decreased as a percentage of revenues to 18.6% in
the second  quarter of 2004 from 19.0% in the second  quarter of 2003  primarily
due to a decrease in insurance expense and asset write-offs.

     The Company's  effective income tax rate was 38.3% in the second quarter of
2004  compared  to 38.8% in the second  quarter  of 2003 due to lower  estimated
state tax rates.

     Net Income

     The Company had net income of $15.3  million in the second  quarter of 2004
compared  to $14.8  million in the second  quarter of 2003 due to the changes in
revenues and expenses  discussed above. The Company's diluted earnings per share
increased 11.1% to $.40 per share in the second quarter of 2004 from $.36 in the
second  quarter of 2003 due to the 3.9% increase in net income  discussed  above
and a 5.8% decrease in the number of weighted average shares outstanding.


First Six Months of 2004 Compared to First Six Months of 2003

     Revenues

     Revenues  increased 10.5% to $372.4 million in the first six months of 2004
from $337.0 million in the first six months of 2003 primarily due to an increase
in the number of  Company-operated  stores and an increase of 2.8% in comparable
store  sales.  During  the  full  year  of  2003,  the  Company  opened  32  new
restaurants,  acquired  three  restaurants  from a  franchisee  and  closed  one
restaurant.  During  the first six  months of 2004,  the  Company  opened 12 new
restaurants  and has 430  Company-operated  restaurants  at June 27, 2004.  Menu
prices increased 0.7% between the two periods.


<PAGE>



     Costs and Expenses

     Costs and  expenses as a percentage  of revenues  decreased to 79.3% in the
first six months of 2004 from 79.6% in the first six months of 2003.

     Cost of sales  increased as a percentage  of revenues to 43.7% in the first
six  months of 2004 from  43.5% in the first six  months of 2003.  Cost of food,
beverage and related supplies as a percentage of revenues  increased to 12.3% in
the first six months of 2004 from  12.0% in the first six  months of 2003.  Food
costs were negatively  impacted by approximately $3.2 million due to an increase
in average  cheese  prices paid in the first six months of 2004  compared to the
first six  months of 2003.  Cost of games and  merchandise  as a  percentage  of
revenues  remained constant at 4.3% in both the first six months of 2004 and the
first six months of 2003.  Store  labor  expenses  as a  percentage  of revenues
decreased  slightly  to 27.1% in the first six  months of 2004 from 27.2% in the
first six months of 2003.

     Selling,  general and  administrative  expenses as a percentage of revenues
decreased  to 12.0% in the first six  months of 2004 from 12.1% in the first six
months  of  2003  primarily  due  to a  decrease  in  advertising  expense  as a
percentage of revenues.

     Depreciation and amortization expense as a percentage of revenues increased
to 6.7% in the  first six  months  of 2004 from 6.5% in the first six  months of
2003 primarily due to capital invested in new stores and remodels.

     Interest  expense as a  percentage  of  revenues  was 0.2% in the first six
months of 2004 compared to 0.1% in the first six months of 2003 primarily due to
an increase in outstanding debt.

     Other operating  expenses decreased as a percentage of revenues to 16.7% in
the  first  six  months  of 2004  from  17.4% in the  first  six  months of 2003
primarily  due to the  increase  in  comparable  store sales and the fact that a
significant portion of operating costs are fixed.

     The Company's  effective  income tax rate was 38.3% in the first six months
of 2004 compared to 38.8% in the first six months of 2003 due to lower estimated
state tax rates.

     Net Income

     The Company had net income of $47.7 million in the first six months of 2004
compared to $42.2  million in the first six months of 2003 due to the changes in
revenues and expenses  discussed above. The Company's diluted earnings per share
increased  19.6% to $1.22 per share in the first six months of 2004  compared to
$1.02 per share in the first six months of 2003 due to the 13.1% increase in net
income  discussed  above and a 4.7%  decrease in the number of weighted  average
shares outstanding.



Financial Condition, Liquidity and Capital Resources

     Cash  provided by  operations  increased to $87.8  million in the first six
months  of 2004 from  $86.1  million  in the  comparable  period  of 2003.  Cash
outflows from  investing  activities for the first six months of 2004 were $36.1
million,  primarily  related to capital  expenditures.  Net cash  outflows  from
financing  activities  for the first six  months  of 2004  were  $48.7  million,
primarily related to the repurchase of the Company's common stock. The Company's
primary  requirements  for cash  relate to  planned  capital  expenditures,  the
repurchase of the Company's  common stock and debt service.  The Company expects
that it will satisfy such  requirements from cash provided by operations and, if
necessary, funds available under its line of credit.

     Cash provided by  operations  is a significant  source of liquidity for the
Company.  Since substantially all of the Company's sales are for cash and credit
cards, and accounts payable are generally due in five to 30 days, the Company is
able to carry current  liabilities in excess of current assets.  The net working
capital  deficit  increased  from $16.1  million at  December  28, 2003 to $17.8
million at June 27, 2004 due  primarily  to the timing of  payments  for various
accrued expenses.

<PAGE>



     The Company has  initiated  several  strategies  to increase  revenues  and
earnings over the long-term that require capital expenditures.  These strategies
include: (a) new restaurant development and acquisitions of existing restaurants
from franchisees,  (b) a game enhancement initiative that includes new games and
a game rotation plan (c) major remodels or reconfigurations,  and (d) expansions
of the square  footage of  existing  restaurants.  In  addition,  the Company is
currently  testing  revisions  to the  building  exterior  along  with  interior
enhancements in conjunction with a game enhancement initiative.

     The game  enhancement  initiative  began in 2003 and has an average capital
cost of  approximately  $60,000 per restaurant.  The primary  components of this
plan are to provide new and transferred  games and rides and, in certain stores,
enhancements  to  the  toddler  area.  The  major  remodel  or   reconfiguration
initiative includes a reallocation of the space between the dining and game room
areas,  expansion of the space allocated to the game room and an increase in the
number of games.  The typical  capital cost of this  initiative  will range from
$225,000 to $400,000 per  restaurant.  Expanding the square  footage of existing
restaurants  can range in cost from  $200,000 to $900,000  per  restaurant,  but
generally have an average capital cost of approximately  $500,000.  The exterior
and interior remodel includes a new exterior identity  including a revised Chuck
E. Cheese logo and  signage,  colorful  new  awnings,  and updating the exterior
design  of the  buildings.  The  interior  component  of this  remodel  includes
painting,  updating decor, a new menu board and enhanced lighting.  This remodel
also includes new games and rides in conjunction  with the transfer of games and
rides between stores. The typical capital cost of this initiative is expected to
range from $160,000 to $175,000 per restaurant.

     In 2004,  the Company  plans to add 33 to 37  restaurants,  which  includes
opening new restaurants and acquiring existing restaurants from franchisees. The
Company currently anticipates its cost of opening such new restaurants will vary
depending upon many factors including the size of the restaurants, the amount of
any  landlord  contribution  and  whether  the  Company  acquires  land  or  the
restaurant is an in-line or freestanding  building.  The average capital cost of
all new restaurants  expected to open in 2004 is approximately  $1.2 million per
restaurant.  At the  beginning  of  2004,  the  Company  identified  development
opportunities  for  approximately  300 restaurants  including those  restaurants
expected to open in 2004.

     The Company  expects the aggregate  capital costs in 2004 of completing the
game enhancement initiative,  major remodels or reconfigurations,  and expanding
the square footage of existing  restaurants to total approximately $17.5 million
and impact approximately 125 restaurants.

     During the first six months of 2004, the Company opened 12 new  restaurants
and impacted a total of 63 existing restaurants with capital  expenditures.  The
Company  currently   estimates  that  capital   expenditures  in  2004  will  be
approximately $75 million. The Company plans to finance its capital expenditures
through  cash flow from  operations  and,  if  necessary,  borrowings  under the
Company's line of credit.

     From time to time, the Company repurchases shares of its common stock under
a plan authorized by its Board of Directors.  The plan authorizes repurchases in
the open market or in private transactions.  Beginning in 1993 through the first
six months of 2004,  the  Company has  repurchased  approximately  16.9  million
shares of the  Company's  common  stock,  retroactively  adjusted  for all stock
splits, at an aggregate purchase price of approximately $269 million. During the
first  six  months  of 2004,  the  Company  repurchased  1,559,450  shares at an
aggregate purchase price of approximately $56.3 million. At the end of the first
six  months  of  2004,   approximately  $21.7  million  remained  available  for
repurchase under the current $75 million  repurchase  authorization  approved by
the  Company's  Board of Directors in the first quarter of 2004. In August 2004,
the Company  announced that it completed  repurchases under the current plan and
announced a new plan to repurchase  shares of the  Company's  common stock at an
aggregate purchase price of up to $100 million .

     The Company has available  borrowings under its line of credit agreement of
$132.5 million that is scheduled to mature in December 2005.  Interest under the
line of credit is  dependent  on  earnings  and debt  levels of the  Company and
ranges  from  prime or, at the  Company's  option,  LIBOR  plus  0.75% to 1.50%.
Currently,  any borrowings  under this line of credit would be at the prime rate
or LIBOR plus 0.75%. As of June 27, 2004, there were $63.0 million in borrowings
under this line of credit and outstanding letters of credit of $7.6 million. The
line of credit agreement contains certain restrictions and conditions as defined


<PAGE>



in the  agreement  that  require  the  Company to  maintain  net worth of $374.4
million as of June 27, 2004, a fixed charge  coverage  ratio at a minimum of 1.5
to  1.0  and  a  maximum  total  debt  to  earnings  before   interest,   taxes,
depreciation,  amortization and rent ratio of 3.25 to 1.0.  Borrowings under the
line of credit  agreement are unsecured but the Company has agreed to not pledge
any of its existing assets to secure future indebtedness.  At June 27, 2004, the
Company  was in  compliance  with all of the above debt  covenants.  The Company
intends to extend the maturity date of its line of credit agreement.


Website Access to Company Reports

     Our website  address is  www.chuckecheese.com.  Our annual  reports on Form
10-K,  quarterly  reports on Form 10-Q,  current reports on Form 8-K, Forms 3, 4
and 5 filed by our officers,  directors and stockholders  holding 10% or more of
our common  stock and all  amendments  to those  reports are  available  free of
charge  through  our  website,  as soon as  reasonably  practicable  after  such
material  is  electronically  filed  with or  furnished  to the  Securities  and
Exchange Commission.


Forward Looking Statements

     Certain statements in this report, other than historical  information,  may
be considered forward-looking statements within the meaning of the "safe harbor"
provisions  of the Private  Securities  Litigation  Reform Act of 1995,  and are
subject to various risks,  uncertainties and assumptions.  Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect,  actual  results  may differ  from those  anticipated,  estimated  or
expected.  Among the key factors that may have a direct bearing on the Company's
operating  results,  performance  or  financial  condition  are its  ability  to
implement  its  growth  strategies,   national,   regional  and  local  economic
conditions affecting the restaurant/entertainment  industry,  competition within
each   of   the   restaurant   and   entertainment   industries,   store   sales
cannibalization,  success  of  its  franchise  operations,  negative  publicity,
fluctuations  in  quarterly  results  of  operations,   including   seasonality,
government regulations, weather, school holidays, commodity, insurance and labor
costs.


Item 3. Quantitative and Qualitative Disclosures about Market Risk

     The  Company  is subject to market  risk in the form of  interest  risk and
foreign  currency  risk.  Both  interest  risk  and  foreign  currency  risk are
immaterial to the Company.


Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

     An  evaluation   was  performed   under  the   supervision   and  with  the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the  Company's  disclosure  controls and  procedures as of the end of the period
covered by this report.  Based on that  evaluation,  the  Company's  management,
including the Chief  Executive  Officer and Chief Financial  Officer,  concluded
that the Company's  disclosure  controls and procedures were effective as of the
time of  such  evaluation  in  timely  alerting  them  to  material  information
(including information relating to our consolidated subsidiaries) required to be
included in our Exchange Act Filings.  There have been no significant changes in
the  Company's   internal   controls  over   financial   reporting   that  could
significantly affect these controls during the most recent fiscal quarter.


<PAGE>


                           PART II - OTHER INFORMATION



Item 1. Legal Proceedings.

     On June 2, 2000,  a purported  class  action  lawsuit  against the Company,
entitled  Freddy  Gavarrete,  et al. v. CEC  Entertainment,  Inc.,  dba Chuck E.
Cheese's, et. al., Cause No. 00-08132 FMC (RZx), was filed in the Superior Court
of the State of  California  in the County of Los  Angeles  (the  "Court").  The
lawsuit  was filed by one former  restaurant  manager  purporting  to  represent
restaurant  managers of the Company in California from 1996 to the present.  The
lawsuit  alleges  violations  of the state wage and hour laws  involving  unpaid
overtime  wages and seeks an  unspecified  amount in damages.  On September  29,
2003, the Company entered into a settlement agreement with the Plaintiffs, which
was subject to approval by the Court,  whereby the Company will pay $4.2 million
plus  up to  $50,000  for  administrative  fees  to  settle  all  claims  of the
Plaintiffs. On June 18, 2004, the Court entered an order granting final approval
of the settlement agreement.  The settlement amount has been paid in full by the
Company with the exception of administrative fees.

Item 2. Changes in  Securities,  Use of Proceeds and Issuer  Purchases of Equity
Securities.


     The following table presents  information  related to repurchases of common
stock the Company made during the second quarter of 2004:

<TABLE>
<CAPTION>
                                                                                   Maximum Dollar
                                                                Total Number       Amount that May
                         Total Number of    Average Price     Shares Purchased    Yet be Purchased
     Fiscal Period       Shares Purchased   Paid per Share   Under the Program    Under the Program

<S>           <C> <C>        <C>               <C>                <C>               <C>
Mar.29 - Apr. 25, 2004       669,700           $ 34.73            669,700           $ 24,916,806
Apr. 26 - May 23, 2004        91,900           $ 35.33             91,900           $ 21,669,805
May 24 - June 27, 2004             0                                    0           $ 21,669,805
                            --------                             --------
Total                        761,600           $ 34.80            761,600
                            ========                             ========

     In August  2004,  the Company  announced  completion  of its  previously  announced  program to
     repurchase up to $75,000,000 of the Company's  common stock and the  authorization by its Board
     of Directors of a new program to repurchase up to $100,000,000 of the Company's common stock.
</TABLE>


Item 4. Submission of Matters to a Vote of Security Holders.

     On May 20, 2004,  at the  Company's  annual  meeting of  shareholders,  the
Company's shareholders  re-elected Michael H. Magusiak and Walter Tyree to serve
the Company as  directors.  The  following  votes were cast with  respect to the
election of these directors:

                                               For           Withheld
        Michael H. Magusiak                33,629,755        1,679,290
        Walter Tyree                       33,791,348        1,517,697

     Richard M. Frank,  Richard T. Huston, Tim T. Morris, Louis P. Neeb, Cynthia
I. Pharr Lee,  and Raymond E.  Wooldridge's  term of office as  directors of the
Company continued after the meeting.


<PAGE>



     Next, the  shareholders  approved the adoption of a Restricted  Stock Plan.
The Restricted Stock Plan provides for the granting of Common Stock to employees
for such  consideration,  if any, and subject to such  restrictions on transfer,
rights of first refusal, repurchase provisions,  forfeiture provisions and other
terms and conditions as are established by a committee appointed by the Board of
Directors. Subject to any adjustments made as a result of various changes in the
capitalization  of the Company,  the aggregate  number of shares of Common Stock
which may be granted under the  Restricted  Stock Plan shall not exceed  500,000
shares,  including  any  shares of Common  Stock  previously  awarded  which are
forfeited  or  terminated.  The  following  votes were cast with  respect to the
adoption of the Restricted Stock Plan:

            For            Against          Abstain            No Vote
         25,022,331       6,248,556         571,825           3,466,333

     Next,  the  shareholders  approved an amendment  to the 1997  Non-Statutory
Stock Option Plan that  increased the number of shares of Common Stock which may
be issued  under the 1997  Non-Statutory  Stock Option Plan from  10,181,250  to
10,781,250.  The votes  cast with  respect  to this  proposal  to  authorize  an
amendment to the 1997 Non-Statutory Stock Option Plan were as follows:

            For            Against          Abstain            No Vote
         22,678,894       8,581,972         581,846           3,466,333

     Next, the shareholders approved an amendment to the Non-Employee  Directors
Stock  Option  Plan that would:  (a)  increase  the number of shares  subject to
options that may be granted on the day a Non-Employee  Director is first elected
or  appointed  to the Board from 11,250 to 15,000  shares;  and (b) increase the
number of shares  subject to options  that may be granted on the fifth  Business
Day in January of each year to each  Non-Employee  Director  who was  previously
elected to the Board from 6,000 to 7,500 shares.  The votes cast with respect to
this  proposal to authorize an amendment  to the  Non-Employee  Directors  Stock
Option Plan were as follows:

            For            Against          Abstain            No Vote
         24,223,002       7,043,881         575,829           3,466,333

     Finally,  the  shareholders  approved  an  amendment  to  the  Non-Employee
Directors  Stock Option Plan that increased the number of shares of Common Stock
which may be issued  under the  Non-Employee  Directors  Stock  Option Plan from
337,500 to 437,500. The votes cast with respect to this proposal to authorize an
amendment to the Non-Employee Directors Stock Option Plan were as follows:

            For            Against          Abstain            No Vote
         23,844,875       7,423,926         573,911           3,466,333

Item 6. Exhibits and Reports on Form 8-K.

     a)   Exhibits

          31.1   Certification  of the Chief Executive Officer  pursuant to Rule
                 13a-14(a)/15d-14(a).

          31.2   Certification  of the Chief Financial Officer  pursuant to Rule
                 13a-14(a)/15d-14(a).

          32.1   Certification  of the  Chief Executive Officer  pursuant  to 18
                 U.S.C.  Section  1350 as Adopted Pursuant to Section 906 of The
                 Sarbanes-Oxley Act of 2002.

          32.2   Certification  of the  Chief Financial Officer  pursuant  to 18
                 U.S.C.  Section  1350 as Adopted Pursuant to Section 906 of The
                 Sarbanes-Oxley Act of 2002.


<PAGE>


     b)   Reports on Form 8-K

          During the second  quarter and to present,  we filed or furnished  the
          following reports on Form 8-K:

          A current report on Form 8-K, dated April 14, 2004,  announcing  first
          quarter 2004 financial results.

          A current report on Form 8-K, dated July 14, 2004,  announcing  second
          quarter 2004 financial results.





                                   SIGNATURES




     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                             CEC ENTERTAINMENT, INC.



Dated: August 5, 2004        By:  /s/ Christopher D. Morris
                                  -------------------------
                                  Christopher D. Morris
                                  Senior Vice President, Chief Financial Officer