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


                                   FORM 10-Q/A
                                (Amendment No. 1)

(Mark One)

     |X|  Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
          Exchange  Act of 1934 for the  quarterly  period ended  September  26,
          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 November 1, 2004, an aggregate of 36,338,978  shares of the registrant's
Common  Stock,  par value of $.10 each  (being  the  registrant's  only class of
common stock), were outstanding.





<PAGE>


                                EXPLANATORY NOTE

     As previously  disclosed in a Form 8-K filed on March 2, 2005,  following a
review of its lease-related  accounting policies,  CEC Entertainment,  Inc. (the
"Company")  determined  that it was  appropriate  to adjust its prior  financial
statements  (the  "Restatement")  to correct  certain errors  contained in those
financial  statements  relating  to  the  computation  of  depreciation,   lease
classification, straight-line rent expense and the related deferred liability.

     Historically,  when accounting for leases,  the Company has depreciated its
leasehold  improvements  over a  period  equal  to  the  lesser  of the  initial
non-cancelable  lease term plus periods of expected renewal,  or the useful life
of the assets.  The periods of expected renewal included option periods provided
for in the  lease  and  any  additional  periods  that  the  Company  considered
reasonably assured of exercising or acquiring.  When determining whether each of
its  leases  was an  operating  lease or a capital  lease  and when  calculating
straight-line rent expense,  the Company used the initial  non-cancelable  lease
term commencing  when the obligation to make current rent payments began.  Funds
received  from the lessor  intended  to  reimburse  the  Company for the cost of
leasehold improvements were netted against the amount recorded for the leasehold
improvement.

     Following  an  extensive  analysis  of its  lease  and  related  accounting
policies,  the Company  has now  determined  to use a  consistent  lease  period
(generally,  the initial  non-cancelable  lease term plus renewal option periods
provided  for in the lease  that can be  reasonably  assured)  when  calculating
depreciation of leasehold  improvements  and in determining  straight-line  rent
expense  and  classification  of its  leases as either an  operating  lease or a
capital lease.  The lease term and  straight-line  rent expense will commence on
the date when the Company takes  possession  and has the right to control use of
the leased  premises.  Funds received from the lessor  intended to reimburse the
Company for the cost of  leasehold  improvements  will be recorded as a deferred
credit  resulting from a lease  incentive and amortized over the lease term as a
reduction to rent expense. As a result, the accompanying  condensed consolidated
financial  statements have been restated from the amounts previously reported to
incorporate  the  effects  of these  policies.  See  Note 2 to the  consolidated
financial statements.

     This  amendment No. 1 on Form 10-Q/A to the Company's  quarterly  report on
Form 10-Q for the fiscal quarter ended September 26, 2004  ("Original  Filing"),
initially filed with the Securities and Exchange  Commission ("SEC") on November
4, 2004, is being filed to reflect  restatements  of the Company's  consolidated
balance sheet at September 26, 2004 and the Company's consolidated statements of
earnings,  changes in stockholders'  equity and consolidated  cash flows for the
nine  months  ended  September  26,  2004 and  September  28, 2003 and the notes
related thereto. For a more detailed description of these restatements, see Note
2,  "Restatement  of  Financial   Statements"  to  the  accompanying   condensed
consolidated  financial  statements and the section  entitled  "Restatement"  in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations contained in this Form 10-Q/A.

     For the  convenience of the reader,  this Form 10-Q/A includes the Original
Filing in its entirety. However, this Form 10-Q/A only amends and restates Items
1, 2 and 4, of Part I of the Original  Filing and no other material  information
in the Original  Filing is amended  hereby.  The  foregoing  items have not been
updated to reflect other events occurring after the Original Filing or to modify
or update those disclosures affected by subsequent events. In addition, pursuant
to the  rules  of the SEC,  Item 6 of Part II of the  Original  Filing  has been
amended  to  contain  currently-dated  certifications  from our Chief  Executive
Officer and Chief Financial Officer , as required by Sections 302 and 906 of the
Sarbanes-Oxley  Act of 2002. The  certifications  of our Chief Executive Officer
and Chief  Financial  Officer are attached to this  Form10-Q/A as Exhibits 31.1,
31.2, 32.1 and 32.2, respectively.

     Except for the foregoing amended information, this Form 10-Q/A continues to
describe  conditions as of the date of the Original Filing,  and does not update
disclosures  contained  herein to reflect  events that occurred at a later date.
Other  events  occurring  after  the  filing  of the  Original  Filing  or other
disclosures  necessary  to  reflect  subsequent  events  have  been  or  will be
addressed any reports filed with the SEC subsequent to this filing.


<PAGE>


     Concurrently  with  the  filing  of this  Form  10-Q/A,  we are  filing  an
amendment  on Form 10-K/A to our Annual  Report on Form 10-K for the fiscal year
ended December 28, 2003 ("2003 10-K") to provide  restatements  of the financial
statements or financial data as of and for the periods included in the 2003 10-K
and amended  quarterly  reports on Form 10-Q/A for the quarters  ended March 28,
2004,  June 27,  2004 and  September  26,  2004.  We have not amended and do not
intend to amend our previously  filed Annual Reports on Form 10-K other than the
2003 10-K or our Quarterly  Reports on Form 10-Q for the periods affected by the
Restatement  that  ended  prior to  December  28,  2003.  For this  reason,  the
consolidated  financial  statements,  auditors'  reports and  related  financial
information for all affected periods contained in any other prior reports should
no longer be relied upon.


<PAGE>


                             CEC ENTERTAINMENT, INC.
                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----

Part I - Financial Information:

   Item 1.  Financial Statements:

      Condensed Consolidated Balance Sheets...............................   5
      Condensed Consolidated Statements of Earnings and Comprehensive
        Income............................................................   6
      Condensed Consolidated Statement of Shareholders' Equity............   8
      Condensed Consolidated Statements of Cash Flows ....................   9
      Notes to Condensed Consolidated Financial Statements................  10

   Item 2. Management's Discussion and Analysis of Financial Condition
     and Results of Operations............................................  16

   Item 3. Quantitative and Qualitative Disclosures about Market Risk ....  21

   Item 4.  Controls and Procedures.......................................  21

Part II - Other Information:

   Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases
     of Equity Securities.................................................  24

   Item 6.  Exhibits and Reports on Form 8-K..............................  24

Signatures................................................................  25

Exhibits..................................................................  26


<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
<CAPTION>
                                               CEC ENTERTAINMENT, INC.
                                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                            (Thousands, except share data)
                                                                                       Sept. 26,       December  28,
                                                                                         2004              2003
                                                                                     -------------     -------------
                                                                                     (as restated)
                                                                                      (unaudited)
                                                        ASSETS
<S>                                                                                    <C>               <C>
Current assets:
   Cash and cash equivalents....................................................       $  13,311         $   8,067
   Accounts receivable..........................................................          10,398            13,103
   Inventories..................................................................          11,611            12,491
   Prepaid expenses.............................................................           7,763             7,608
   Deferred tax asset...........................................................           1,487             1,487
                                                                                       ---------         ---------
      Total current assets......................................................          44,570            42,756
                                                                                       ---------         ---------

Property and equipment, net.....................................................         555,258           538,756
                                                                                       ---------         ---------

Other assets....................................................................           1,319             1,471
                                                                                       ---------         ---------
                                                                                       $ 601,147         $ 582,983
                                                                                       =========         =========

                                         LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt............................................       $     742         $     554
   Accounts payable.............................................................          22,701            30,126
   Accrued liabilities..........................................................          41,336            28,610
                                                                                       ---------         ---------
      Total current liabilities.................................................          64,779            59,290
                                                                                       ---------         ---------

Long-term debt, less current portion............................................          92,942            75,205
                                                                                       ---------         ---------

Deferred rent...................................................................          50,793            42,816
                                                                                       ---------         ---------

Deferred tax liability..........................................................          41,881            32,849
                                                                                       ---------         ---------

Accrued insurance...............................................................           8,518             8,500
                                                                                       ---------         ---------

Shareholders' equity:
   Common stock, $.10 par value; authorized 100,000,000 shares; 55,168,260
      and 54,481,913 shares issued, respectively ...............................           5,517              5,448
   Capital in excess of par value...............................................         233,582           219,071
   Retained earnings ...........................................................         417,698           350,735
   Accumulated other comprehensive income ......................................             982               695
   Less treasury shares of 18,959,168 and 16,042,418, respectively, at cost.....        (315,545)         (211,626)
                                                                                       ---------         ---------
                                                                                         342,234           364,323
                                                                                       ---------         ---------
                                                                                       $ 601,147         $ 582,983
                                                                                       =========         =========


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


<PAGE>


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

                                                                       Three Months Ended
                                                                --------------------------------
                                                                Sept. 26, 2004    Sept. 28, 2003
                                                                --------------    --------------
                                                                (as restated)     (as restated)

<S>                                                               <C>               <C>
Food and beverage revenues.................................       $ 120,416         $ 112,286
Games and merchandise revenues.............................          62,394            56,886
Franchise fees and royalties...............................             807               962
Interest income ...........................................               5                 4
                                                                  ---------         ---------
                                                                    183,622           170,138
                                                                  ---------         ---------

Costs and expenses:
   Cost of sales:
     Food, beverage and related supplies...................          22,152            21,222
     Games and merchandise.................................           7,922             7,483
     Labor.................................................          49,928            46,322
                                                                  ---------         ---------
                                                                     80,002            75,027
   Selling, general and administrative expenses............          21,410            24,726
   Depreciation and amortization...........................          14,220            12,479
   Interest expense........................................             599               689
   Other operating expenses................................          33,169            31,095
                                                                  ---------         ---------
                                                                    149,400           144,016
                                                                  ---------         ---------

Income before income taxes.................................          34,222            26,122

Income taxes...............................................          13,108            10,135
                                                                  ---------         ---------

Net income ................................................          21,114            15,987

Other comprehensive income (loss), net of tax:
   Foreign currency translation............................             425              (275)
                                                                  ---------         ---------

Comprehensive income.......................................       $  21,539         $  15,712
                                                                  =========         =========


Earnings per share:
   Basic:
     Net income ...........................................       $     .57         $     .41
                                                                  =========         =========
     Weighted average shares outstanding...................          36,834            38,831
                                                                  =========         =========
   Diluted:
     Net income  ..........................................       $     .56         $     .40
                                                                  =========         =========
     Weighted average shares outstanding...................          37,970            39,749
                                                                  =========         =========


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

<PAGE>


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

                                                                       Nine Months Ended
                                                                --------------------------------
                                                                Sept. 26, 2004    Sept. 28, 2003
                                                                --------------    --------------
                                                                (as restated)     (as restated)

<S>                                                               <C>               <C>
Food and beverage revenues.................................       $ 365,494         $ 334,363
Games and merchandise revenues.............................         187,961           170,150
Franchise fees and royalties...............................           2,520             2,620
Interest income............................................              19                16
                                                                  ---------         ---------
                                                                    555,994           507,149
                                                                  ---------         ---------

Costs and expenses:
   Cost of sales:
     Food, beverage and related supplies...................          67,937            61,437
     Games and merchandise.................................          23,782            21,972
     Labor.................................................         150,855           138,010
                                                                  ---------         ---------
                                                                    242,574           221,419
   Selling, general and administrative expenses............          65,289            64,864
   Depreciation and amortization...........................          41,478            36,633
   Interest expense........................................           1,567             1,526
   Other operating expenses................................          96,556            90,474
                                                                  ---------         ---------
                                                                    447,464           414,916
                                                                  ---------         ---------

Income before income taxes.................................         108,530            92,233

Income taxes...............................................          41,567            35,786
                                                                  ---------         ---------

Net income ................................................          66,963            56,447

Other comprehensive income, net of tax:
   Foreign currency translation............................             287               668
                                                                  ---------         ---------

Comprehensive income.......................................       $  67,250         $  57,115
                                                                  =========         =========


Earnings per share:
   Basic:
     Net income ...........................................       $    1.78         $    1.41
                                                                  =========         =========
     Weighted average shares outstanding...................          37,551            40,061
                                                                  =========         =========
   Diluted:
     Net income  ..........................................       $    1.73         $    1.39
                                                                  =========         =========
     Weighted average shares outstanding...................          38,726            40,584
                                                                  =========         =========


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

<PAGE>


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


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

<S>                                                                 <C>           <C>
Common stock and capital in excess of par value:
   Balance, beginning of year..................................     $ 224,519      54,482
   Stock options exercised.....................................        11,920         674
   Net tax benefit from exercise of options....................         2,290
   Stock issued under 401(k) plan..............................           397          13
   Payment for fractional shares...............................           (27)         (1)
                                                                    ---------     -------
   Balance, September 26, 2004.................................       239,099      55,168
                                                                    ---------     =======

Retained earnings:
   Balance, beginning of year (as restated)....................       350,735
   Net income..................................................        66,963
                                                                    ---------
   Balance, September 26, 2004 (as restated)...................       417,698
                                                                    ---------

Accumulated other comprehensive income:
   Balance, beginning of year..................................           695
   Foreign currency translation................................           287
                                                                    ---------
   Balance, September 26, 2004.................................           982
                                                                    ---------

Treasury shares:
   Balance, beginning of year..................................      (211,626)     16,042
   Treasury stock acquired.....................................      (103,919)      2,917
                                                                    ---------      ------
   Balance, September 26, 2004.................................      (315,545)     18,959
                                                                    ---------      ======

Total shareholders' equity.....................................     $ 342,234
                                                                    =========















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



<PAGE>


<TABLE>
<CAPTION>
                                               CEC ENTERTAINMENT, INC.
                                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Unaudited)
                                                     (Thousands)


                                                                                          Nine Months Ended
                                                                                  ---------------------------------
                                                                                  Sept. 26, 2004     Sept. 28, 2003
                                                                                  --------------     --------------
                                                                                  (as restated)      (as restated)

<S>                                                                                  <C>                <C>
Operating activities:
   Net income ...............................................................        $ 66,963           $ 56,447
   Adjustments to reconcile net income to cash
     provided by operations:
   Depreciation and amortization.............................................          41,478             36,633
   Deferred income tax expense...............................................           9,032              6,861
   Tax benefit from exercise of stock options................................           2,290                344
   Other ...................................................................            8,924              7,339
   Net change in receivables, inventories, prepaids, payables and
     accrued liabilities.....................................................           8,731             21,978
                                                                                     --------           --------
      Cash provided by operations............................................         137,418            129,602
                                                                                     --------           --------

Investing activities:
   Purchases of property and equipment.......................................         (58,545)           (64,337)
   Disposition of property and equipment.....................................             791
   Increase in other assets..................................................             (21)              (753)
                                                                                     --------           --------
      Cash used in investing activities......................................         (57,775)           (65,090)
                                                                                     --------           --------

Financing activities:
   Proceeds from debt and line of credit.....................................          17,139              4,313
   Exercise of stock options ................................................          11,920              2,435
   Redeemable preferred stock dividends......................................                               (113)
   Purchase of treasury stock ...............................................        (103,919)           (71,634)
   Deposit for redeemable preferred stock redemption.........................                             (2,795)
   Other ....................................................................             461                368
                                                                                     --------           --------
      Cash used in financing activities......................................         (74,399)           (67,426)
                                                                                     --------           --------

Increase (decrease) in cash and cash equivalents ............................           5,244             (2,914)
Cash and cash equivalents, beginning of period...............................           8,067             12,214
                                                                                     --------           --------
Cash and cash equivalents, end of period.....................................        $ 13,311           $  9,300
                                                                                     ========           ========









                              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 September 26, 2004 and September 28,
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/A
filed with the  Securities  and Exchange  Commission for the year ended December
28, 2003.  Results of operations  for the periods  ended  September 26, 2004 and
September 28, 2003 are not necessarily indicative of the results for the year.


2.   Restatement of Financial Statements:

     Subsequent to the issuance of the Company's interim condensed  consolidated
financial  statements  for the period ended  September 26, 2004, and following a
review of its lease-related  accounting  policies,  the Company's management has
determined that it was  appropriate to adjust its prior financial  statements to
correct certain errors contained in those financial  statements  relating to the
computation of depreciation,  lease  classification,  straight-line rent expense
and the related deferred rent liability.

     Historically,  when accounting for leases,  the Company has depreciated its
leasehold  improvements  over a  period  equal  to  the  lesser  of the  initial
non-cancelable  lease term plus periods of expected renewal,  or the useful life
of the assets.  The periods of expected renewal included option periods provided
for in the  lease  and  any  additional  periods  that  the  Company  considered
reasonably assured of exercising or acquiring.  When determining whether each of
its  leases  was an  operating  lease or a capital  lease  and when  calculating
straight-line rent expense,  the Company used the initial  non-cancelable  lease
term commencing  when the obligation to make current rent payments began.  Funds
received  from the lessor  intended  to  reimburse  the  Company for the cost of
leasehold improvements were netted against the amount recorded for the leasehold
improvement.

     The Company has now determined to use a consistent lease period (generally,
the initial  non-cancelable  lease term plus renewal option periods provided for
in the lease that can be reasonably  assured) when  calculating  depreciation of
leasehold  improvements  and  in  determining  straight-line  rent  expense  and
classification  of its leases as either an operating  lease or a capital  lease.
The lease term and straight-line rent expense will commence on the date when the
Company  takes  possession  and has  the  right  to  control  use of the  leased
premises.  Funds received from the lessor  intended to reimburse the Company for
the  cost of  leasehold  improvements  will be  recorded  as a  deferred  credit
resulting  from a  lease  incentive  and  amortized  over  the  lease  term as a
reduction to rent expense. As a result, the accompanying  condensed consolidated
financial  statements have been restated from the amounts previously reported to
incorporate the effects of these policies.


<PAGE>


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


2.   Restatement of Financial Statements (continued):

     The  following  is a  summary  of  the  impact  of the  Restatement  on the
consolidated  balance  sheets at December 28, 2003 and September  26, 2004,  the
consolidated  statements  of earnings for the three month and nine month periods
ended September 26, 2004 and September 28, 2003, and the consolidated statements
of cash flows for the nine month periods ended  September 26, 2004 and September
28, 2003.

<TABLE>
<CAPTION>
                                                                    September 26, 2004
                                                        -------------------------------------------
                                                        As Previously
                                                          Reported        Adjustment      Restated
                                                        -------------     ----------      ---------

<S>                                                       <C>              <C>            <C>
Consolidated Balance Sheet:
    Property and equipment, net....................       $ 549,613        $  5,645       $ 555,258
    Total assets...................................         595,502           5,645         601,147
    Current portion of long-term debt..............             190             552             742
    Long-term debt, less current portion...........          82,035          10,907          92,942
    Deferred rent..................................           6,125          44,668          50,793
    Deferred tax liability.........................          61,447         (19,566)         41,881
    Retained earnings..............................         448,614         (30,916)        417,698
    Total shareholders' equity.....................         373,150         (30,916)        342,234
</TABLE>


<TABLE>
<CAPTION>
                                                           Three Months ended September 26, 2004
                                                        -------------------------------------------
                                                        As Previously
                                                          Reported        Adjustment      Restated
                                                        -------------     ----------      ---------

<S>                                                       <C>              <C>            <C>
Consolidated Statement of Earnings:
    Depreciation and amortization..................       $  13,070        $  1,150       $  14,220
    Interest expense...............................             401             198             599
    Other operating expense........................          33,036             133          33,169
    Total costs and expenses.......................         147,919           1,481         149,400
    Income before income taxes.....................          35,703          (1,481)         34,222
    Income taxes...................................          13,675            (567)         13,108
    Net income.....................................          22,028            (914)         21,114
    Basic earnings per share.......................             .60            (.03)            .57
    Diluted earnings per share.....................             .58            (.02)            .56
</TABLE>

<PAGE>



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


2.   Restatement of Financial Statements (continued):


<TABLE>
<CAPTION>
                                                           Three Months ended September 28, 2003
                                                        -------------------------------------------
                                                        As Previously
                                                          Reported        Adjustment      Restated
                                                        -------------     ----------      ---------

<S>                                                       <C>              <C>            <C>
Consolidated Statement of Earnings:
    Depreciation and amortization..................       $  11,381        $  1,098       $  12,479
    Interest expense...............................             503             186             689
    Other operating expense........................          30,985             110          31,095
    Total costs and expenses.......................         142,622           1,394         144,016
    Income before income taxes.....................          27,516          (1,394)         26,122
    Income taxes...................................          10,676            (541)         10,135
    Net income.....................................          16,840            (853)         15,987
    Basic earnings per share.......................             .43            (.02)            .41
    Diluted earnings per share.....................             .42            (.02)            .40
</TABLE>


<TABLE>
<CAPTION>
                                                           Nine Months ended September 26, 2004
                                                        -------------------------------------------
                                                        As Previously
                                                          Reported        Adjustment      Restated
                                                        -------------     ----------      ---------

<S>                                                       <C>              <C>            <C>
Consolidated Statement of Earnings:
    Depreciation and amortization..................       $  38,029        $  3,449       $  41,478
    Interest expense...............................             975             592           1,567
    Other operating expense........................          96,156             400          96,556
    Total costs and expenses.......................         443,023           4,441         447,464
    Income before income taxes.....................         112,971          (4,441)        108,530
    Income taxes...................................          43,268          (1,701)         41,567
    Net income.....................................          69,703          (2,740)         66,963
    Basic earnings per share.......................            1.86            (.08)           1.78
   Diluted earnings per share......................            1.80            (.07)           1.73

Consolidated Statement of Cash Flows:
    Cash provided by operations....................       $ 131,406        $  6,012       $ 137,418
    Cash used in investing activities..............         (52,100)         (5,675)        (57,775)
    Cash used in financing activities..............         (74,062)           (337)        (74,399)
</TABLE>




<PAGE>


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


2.   Restatement of Financial Statements (continued):

<TABLE>
<CAPTION>
                                                           Nine Months ended September 28, 2003
                                                        -------------------------------------------
                                                        As Previously
                                                          Reported        Adjustment      Restated
                                                        -------------     ----------      ---------

<S>                                                       <C>              <C>            <C>
Consolidated Statement of Earnings:
    Depreciation and amortization..................       $  33,338        $  3,295       $  36,633
    Interest expense...............................             967             559           1,526
    Other operating expense........................          90,143             331          90,474
    Total costs and expenses.......................         410,731           4,185         414,916
    Income before income taxes.....................          96,418          (4,185)         92,233
    Income taxes...................................          37,410          (1,624)         35,786
    Net income.....................................          59,008          (2,561)         56,447
    Basic earnings per share.......................            1.47            (.06)           1.41
   Diluted earnings per share......................            1.45            (.06)           1.39

Consolidated Statement of Cash Flows:
    Cash provided by operations....................       $ 125,185        $  4,417       $ 129,602
    Cash used in investing activities..............         (60,955)         (4,135)        (65,090)
    Cash used in financing activities..............         (67,144)           (282)        (67,426)
</TABLE>



<PAGE>


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


3.   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         Nine Months Ended
                                                            ---------------------     ---------------------
                                                            Sept 26,     Sept 28,     Sept 26,     Sept 28,
                                                              2004         2003         2004         2003
                                                            --------     --------     --------     --------
<S>                                                         <C>          <C>          <C>          <C>
Net income ............................................     $ 21,114     $ 15,987     $ 66,963     $ 56,447
Accretion of redeemable preferred stock................                                                 (49)
Redeemable preferred stock dividends...................                                                (113)
                                                            --------     --------     --------     --------
Adjusted income applicable to common shares............     $ 21,114     $ 15,987     $ 66,963     $ 56,285
                                                            ========     ========     ========     ========

Basic:
   Weighted average common shares outstanding..........       36,834       38,831       37,551       40,061
                                                            ========     ========     ========     ========
   Earnings per common share...........................     $    .57     $    .41     $   1.78     $   1.41
                                                            ========     ========     ========     ========

Diluted:
   Weighted average common shares outstanding..........       36,834       38,831       37,551       40,061
   Potential common shares for stock options...........        1,136          918        1,175          523
                                                            --------     --------     --------     --------
   Weighted average shares outstanding.................       37,970       39,749       38,726       40,584
                                                            ========     ========     ========     ========
   Earnings per common and potential
     common share......................................     $    .56     $    .40     $   1.73     $   1.39
                                                            ========     ========     ========     ========
</TABLE>


<PAGE>


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


4.   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 are 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           Nine Months Ended
                                                            -----------------------     -----------------------
                                                            Sept. 26,     Sept. 28,     Sept. 26,     Sept. 28,
                                                               2004          2003          2004          2003
                                                            ---------     ---------     ---------     ---------
<S>                                                          <C>           <C>           <C>           <C>
Net income,as reported ................................      $ 21,114      $ 15,987      $ 66,963      $ 56,447
Fair value based compensation expense, net of taxes....        (1,444)       (1,626)       (4,330)       (4,879)
                                                             --------      --------      --------      --------
Pro-forma net income...................................        19,670        14,361        62,633        51,568
Accretion and dividends of redeemable
  preferred stock, as reported........................                                                     (162)
                                                             --------      --------      --------      --------
Pro-forma adjusted income applicable to common
  shares...............................................      $ 19,670      $ 14,361      $ 62,633      $ 51,406
                                                             ========      ========      ========      ========

Earnings per Share:
Basic:
   As reported.........................................      $    .57      $    .41      $   1.78      $   1.41
   Pro forma...........................................      $    .53      $    .37      $   1.67      $   1.28

Diluted:
   As reported.........................................      $    .56      $    .40      $   1.73      $   1.39
   Pro forma...........................................      $    .52      $    .36      $   1.62      $   1.27
</TABLE>



5.   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

     Restatement

     Following a review of its lease-related  accounting  policies,  the Company
determined that it was  appropriate to adjust its prior financial  statements to
correct certain errors contained in those financial  statements  relating to the
computation of depreciation,  lease  classification,  straight-line rent expense
and the related deferred rent liability.

     Historically,  when accounting for leases,  the Company has depreciated its
leasehold  improvements  over a  period  equal  to  the  lesser  of the  initial
non-cancelable  lease term plus periods of expected renewal,  or the useful life
of the assets.  The periods of expected renewal included option periods provided
for in the  lease  and  any  additional  periods  that  the  Company  considered
reasonably assured of exercising or acquiring.  When determining whether each of
its  leases  was an  operating  lease or a capital  lease  and when  calculating
straight-line rent expense,  the Company used the initial  non-cancelable  lease
term commencing  when the obligation to make current rent payments began.  Funds
received  from the lessor  intended  to  reimburse  the  Company for the cost of
leasehold improvements were netted against the amount recorded for the leasehold
improvement.

     The Company has now determined to use a consistent lease period (generally,
the initial  non-cancelable  lease term plus renewal option periods provided for
in the lease that can be reasonably  assured) when  calculating  depreciation of
leasehold  improvements  and  in  determining  straight-line  rent  expense  and
classification  of its leases as either an operating  lease or a capital  lease.
The lease term and straight-line rent expense will commence on the date when the
Company  takes  possession  and has  the  right  to  control  use of the  leased
premises.  Funds received from the lessor  intended to reimburse the Company for
the  cost of  leasehold  improvements  will be  recorded  as a  deferred  credit
resulting  from a  lease  incentive  and  amortized  over  the  lease  term as a
reduction to rent expense. As a result, the accompanying  condensed consolidated
financial  statements have been restated from the amounts previously reported to
incorporate the effects of these policies.


     The effects of the  restatement  adjustments are discussed in Note 2 in the
notes to the condensed consolidated financial statements. The following has been
updated to give effect to the Restatement.




<PAGE>


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                 Nine Months Ended
                                               -------------------------------   -------------------------------
                                               Sept. 26, 2004   Sept. 28, 2003   Sept. 26, 2004   Sept. 28, 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....         12.1             12.5             12.2             12.1
     Games and merchandise..................          4.3              4.4              4.3              4.3
     Labor..................................         27.2             27.2             27.1             27.2
                                                    -----            -----            -----            -----
                                                     43.6             44.1             43.6             43.6
   Selling, general and administrative......         11.7             14.5             12.0             13.0
   Depreciation and amortization............          7.7              7.3              7.5              7.2
   Interest expense.........................           .3               .4               .3               .3
   Other operating expenses.................         18.1             18.3             17.1             17.7
                                                    -----            -----            -----            -----
                                                     81.4             84.6             80.5             81.8
                                                    -----            -----            -----            -----
Income before income taxes..................         18.6             15.4             19.5             18.2
Income taxes ...............................          7.1              6.0              7.5              7.1
                                                    -----            -----            -----            -----
Net income .................................         11.5%             9.4%            12.0%            11.1%
                                                    =====            =====            =====            =====

Number of Company-owned stores:
   Beginning of period......................          430              391              418              384
   New......................................            8               10               20               18
   Company purchased franchise stores.......            2                                 2
   Closed...................................                                                              (1)
                                                    -----            -----            -----            -----
   End of period............................          440              401              440              401
                                                    =====            =====            =====            =====

Number of franchise stores:
   Beginning of period......................           49               51               48               50
   New......................                                                              1                1
   Company purchased franchise store                   (2)                               (2)
                                                    -----            -----            -----            -----
   End of period............................           47               51               47               51
                                                    =====            =====            =====            =====
</TABLE>


Third Quarter 2004 Compared to Third Quarter 2003

     Revenues

     Revenues increased 7.9% to $183.6 million in the third quarter of 2004 from
$170.1  million in the third quarter of 2003 due primarily 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  its
franchisees and closed one restaurant. During the first nine months of 2004, the
Company opened 20 new restaurants and acquired two restaurants from a franchisee
and has 440 Company-operated restaurants at September 26, 2004. Comparable store
sales  increased 0.4% in the third quarter of 2004 despite a negative  impact of
approximately  0.5% to 0.6% or  $800,000  to  $900,000  in lost sales due to the
numerous hurricanes in the Southeast.  Menu prices increased  approximately 3.0%
between the quarters.


<PAGE>


     Costs and Expenses

     Costs and  expenses as a percentage  of revenues  decreased to 81.4% in the
third quarter of 2004 from 84.6% in the third quarter of 2003.

     Cost of sales  decreased as a percentage  of revenues to 43.6% in the third
quarter  of 2004 from  44.1% in the  comparable  period  of 2003.  Cost of food,
beverage and related supplies as a percentage of revenues  decreased to 12.1% in
the third quarter of 2004 from 12.5% in the third quarter of 2003  primarily due
to a 3%  increase  in menu prices  implemented  in June 2004.  Cost of games and
merchandise  as a percentage of revenues  decreased to 4.3% in the third quarter
of 2004 from 4.4% in the third  quarter of 2003 due  primarily to the menu price
increase.  Store labor  expenses as a percentage  of revenues were 27.2% in both
the third quarter of 2004 and the third quarter of 2003.

     Selling,  general and  administrative  expenses as a percentage of revenues
decreased to 11.7% in the third  quarter of 2004 from 14.5% in the third quarter
of 2003.  This decrease was  primarily  due to a $4.25 million legal  settlement
charge recorded in the third quarter of 2003 and an increase in total revenues.

     Depreciation and amortization expense as a percentage of revenues increased
to 7.7% in the third  quarter  of 2004 from  7.3% in the third  quarter  of 2003
primarily due to capital invested in new stores and remodels.

     Interest expense as a percentage of revenues decreased to 0.3% in the third
quarter of 2004 from 0.4% in the third  quarter  of 2003 due to higher  interest
expense in the third  quarter of 2003  related to the  Company's  commitment  to
reacquire its outstanding preferred stock.

     Other operating  expenses decreased as a percentage of revenues to 18.1% in
the third quarter of 2004 from 18.3% in the third quarter of 2003  primarily due
to a decrease in insurance expense as a percentage of revenues.

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

     Net Income

     The  Company's  net income  increased  32.1% to $21.1  million in the third
quarter of 2004  compared to $16.0  million in the third  quarter of 2003 due to
the changes in revenues and expenses  discussed  above.  The  Company's  diluted
earnings  per share  increased  40.0% to $.56 per share in the third  quarter of
2004 from $.40 in the third  quarter  of 2003 due to the 32.1%  increase  in net
income  discussed  above and a 4.5%  decrease in the number of weighted  average
shares outstanding.


First Nine Months of 2004 Compared to First Nine Months of 2003

     Revenues

     Revenues  increased 9.6% to $556.0 million in the first nine months of 2004
from  $507.1  million  in the  first  nine  months of 2003  primarily  due to an
increase  in the number of  Company-operated  stores and an  increase of 2.0% in
comparable store sales.  During the full year of 2003, the Company opened 32 new
restaurants,   acquired  three  restaurants  from  franchisees  and  closed  one
restaurant.  During the first nine  months of 2004,  the  Company  opened 20 new
restaurants  and  acquired  two  restaurants  from  a  franchisee  and  has  440
Company-operated  restaurants  at September 26, 2004.  Menu prices  increased on
average approximately 1.5% between the two periods.

     Costs and Expenses

     Costs and  expenses as a percentage  of revenues  decreased to 80.5% in the
first nine months of 2004 from 81.8% in the first nine months of 2003.

<PAGE>


     Cost of sales as a percentage of revenues remained constant at 43.6% in the
first nine months of 2004 and 2003. Cost of food,  beverage and related supplies
as a percentage of revenues  increased to 12.2% in the first nine months of 2004
from 12.1% in the first nine months of 2003. Food costs were negatively impacted
approximately  $3.1 million due to an increase of  approximately  32% in average
cheese  prices paid in the first nine months of 2004  compared to the first nine
months  of 2003.  This  increase  was  partially  offset  by the  impact of a 3%
increase  in menu  prices  implemented  in  June of  2004.  Cost  of  games  and
merchandise  as a percentage of revenues  remained  constant at 4.3% in both the
first  nine  months  of 2004 and the first  nine  months  of 2003.  Store  labor
expenses as a percentage  of revenues  decreased  slightly to 27.1% in the first
nine months of 2004 from 27.2% in the first nine months of 2003 primarily due to
the increase in comparable store sales.

     Selling,  general and  administrative  expenses as a percentage of revenues
decreased to 12.0% in the first nine months of 2004 from 13.0% in the first nine
months of 2003 primarily due to a $4.25 million legal settlement recorded in the
third quarter of 2003 and the increase in total revenues.

     Depreciation and amortization expense as a percentage of revenues increased
to 7.5% in the first nine  months of 2004 from 7.2% in the first nine  months of
2003 primarily due to capital invested in new stores and remodels.

     Interest expense as a percentage of revenues  remained  constant at 0.3% in
the first nine months of 2004 and the first nine months of 2003.

     Other operating  expenses decreased as a percentage of revenues to 17.1% in
the  first  nine  months of 2004 from  17.7% in the  first  nine  months of 2003
primarily  due to the  increase  in  comparable  store  sales and a decrease  in
insurance expense as a percentage of revenues.

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

     Net Income

     The Company's net income increased 18.6% to $67.0 million in the first nine
months of 2004 from $56.4 million in the first nine months of 2003 primarily due
to the changes in revenues and expenses  discussed above. The Company's  diluted
earnings per share  increased  24.5% to $1.73 per share in the first nine months
of 2004  compared to $1.39 per share in the first nine months of 2003 due to the
18.6% increase in net income  discussed  above and a 4.6% decrease in the number
of weighted average shares outstanding.



Financial Condition, Liquidity and Capital Resources

     Cash provided by operations  increased to $137.4  million in the first nine
months  of 2004 from  $129.6  million  in the  comparable  period of 2003.  Cash
outflows from investing  activities for the first nine months of 2004 were $57.8
million,  primarily  related to capital  expenditures.  Net cash  outflows  from
financing  activities  for the first  nine  months of 2004 were  $74.4  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 $16.5  million at  December  28, 2003 to $20.2
million at  September  26,  2004 due  primarily  to the timing of  payments  for
various accrued expenses and an increase in the number of restaurants.

<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 the game enhancement initiative.

     In 2004,  the Company  plans to add 33 to 34  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 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 $170,000 per restaurant.

     The Company  expects the aggregate  capital costs in 2004 of completing the
game enhancement initiative,  major remodels or reconfigurations,  expanding the
square footage of existing restaurants and the exterior and interior remodels to
total approximately $17 to $18 million and impact approximately 125 restaurants.

     During  the  first  nine  months  of  2004,   the  Company  opened  20  new
restaurants,  acquired two restaurants from a franchisee and impacted a total of
95  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.

     The Company has developed a preliminary  capital plan for 2005 totaling $95
to $105 million including a budget for existing stores of $30 to $35 million,  a
new store budget of approximately $55 to $60 million and a store maintenance and
corporate  budget of  approximately  $10 million.  This capital plan assumes the
continued success of exterior and interior remodels.

     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
nine months of 2004,  the Company has  repurchased  approximately  18.1  million
shares of the  Company's  common  stock,  retroactively  adjusted  for all stock
splits, at an aggregate purchase price of approximately $311 million. During the
first  nine  months of 2004,  the  Company  repurchased  2,916,750  shares at an
aggregate  purchase price of  approximately  $103.9  million.  At the end of the
first nine months of 2004,  approximately  $74.1 million remained  available for
repurchase under a current $100 million repurchase authorization approved by the
Company's Board of Directors in August 2004.

<PAGE>


     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  September  26,  2004,  there were $82.0  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 in the agreement  that require the Company to maintain net
worth of $303.8 million as of September 26, 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
September  26, 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

The Company's Audit  Committee of the Board of Directors (the "Audit  Committee)
held a  telephonic  meeting  with  management  on January 31,  2005.  Management
reached the conclusion,  and the Audit Committee  concurred,  that the Company's
controls over the  selection  and  monitoring  of  appropriate  assumptions  and
factors  affecting lease  accounting were  insufficient,  and, as a result,  the
Company's computation of depreciation, lease classification,  straight-line rent
expense and the related deferred rent liability had been incorrect. Accordingly,
management  determined,  and the Audit  Committee  concurred,  that the  Company
should report on Form 8-K that its  historical  financial  statements  should no
longer be relied upon. The Audit  Committee  also  concurred  with  management's
action plan to complete an extensive  analysis of these matters and quantify the
impact  of the  correction  of the  lease  accounting  errors  on the  Company's
financial statements for each of the prior periods affected.  Historically,  the
Company had  depreciated its leasehold  improvements  over a period equal to the
lesser of the  initial  non-cancelable  lease  term  plus  periods  of  expected
renewal,  or the useful  life of the assets.  The  periods of  expected  renewal
included  option periods  provided for in the lease and any  additional  periods
that the Company considered reasonably assured of exercising or acquiring.  When
determining whether each of its leases was an operating lease or a capital lease
and when calculating  straight-line  rent expense,  the Company used the initial
non-cancelable  lease term  commencing  when the obligation to make current rent
payments began. Funds received from the lessor intended to reimburse the Company
for the cost of leasehold  improvements  were netted against the amount recorded
for the leasehold improvement.

<PAGE>


     On March 1,  2005,  the Audit  Committee  held a  telephonic  meeting  with
management and the Company's  independent  registered  public  accounting  firm.
Management  presented  the  results  of its  completed  analysis  of  its  lease
accounting  practices,  including  the  quantification  of  the  impact  of  the
correction of the lease accounting errors on the Company's financial  statements
for  each  of  the  prior  periods  affected.   Management  affirmed  its  prior
determination,  and the Audit  Committee  concurred,  to restate  the  Company's
financial  statements for the three year periods ended December 28, 2003 and for
the first three  quarters of fiscal 2004 to reflect the  correction in its lease
accounting practices.

     The Company  performed an evaluation,  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,  which  included the matters
discussed above, the Company's management, including the Chief Executive Officer
and Chief Financial Officer,  concluded that the Company's  disclosure  controls
and  procedures  were not  effective as of September  26, 2004 in ensuring  that
material  information  relating  to  the  Company,  including  its  consolidated
subsidiaries,  required to be  disclosed by the Company in reports that it files
or  submits  under the  Exchange  Act is  recorded,  processed,  summarized  and
reported  within the time  periods  specified  in the  Securities  and  Exchange
Commission's rules and forms.

     In connection with correcting its lease accounting methodology, the Company
has instituted the following procedures:

     -    use  of  a   consistent   lease   period   (generally,   the   initial
          non-cancelable  lease term plus renewal option periods provided for in
          the  lease  that  can  be   reasonably   assured)   when   calculating
          depreciation   of   leasehold    improvements   and   in   determining
          straight-line  rent expense and classification of its leases as either
          an operating lease or a capital lease;
     -    commence  the lease term and  straight-line  rent  expense on the date
          when the Company takes  possession and the right to control use of the
          leased premises; and
     -    record  funds  received  from the lessor  intended  to  reimburse  the
          Company for the cost of leasehold  improvements  as a deferred  credit
          resulting from a lease  incentive and amortized over the lease term as
          a reduction to rent expense.

The Company has not identified any change in its internal control over financial
reporting that occurred  during the fiscal  quarter  covered by this report that
has  materially  affected,  or is reasonably  likely to materially  affect,  its
internal control over financial reporting.


<PAGE>


                           PART II - OTHER INFORMATION


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 third quarter of 2004:

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

<S>                               <C>                 <C>                 <C>                 <C>
Program approved in February 2004:
June 28 - July 25, 2004            279,500            $ 35.74             1,752,250           $ 11,680,912
July 26 - Aug. 22, 2004 (1)        323,600              36.07             2,075,850                -
Aug. 23 - Sept. 26, 2004              -                   -                   -                    -
                                  --------
Total                              603,100            $ 35.92
                                  ========

Program approved in August 2004:
June 28 - July 25, 2004               -                   -                   -                    -
July 26 - Aug. 22, 2004 (1)        267,600            $ 33.62               267,600           $ 91,002,327
Aug. 23 - Sept. 26, 2004           486,600              34.77               754,200           $ 74,080,836
                                  --------
Total                              754,200            $ 34.37
                                  ========

(1) In February 2004, the Company's  Board of Directors  approved a program to repurchase up to $75,000,000 of
the Company's  common stock.  In August 2004,  this program was completed and the Company's Board of Directors
approved a new program to repurchase up to $100,000,000 of the Company's common stock.
</TABLE>


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

     a)   Exhibits

          Exhibit
          Number    Description
          -------   -----------

           10(a)    Fourth Amendment to Credit Agreement in the stated amount of
                    $132,500,000,  dated  August  10,  2004,   between  Bank  of
                    America, N.A. and the Company.

           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 third quarter and through the original filing of this report, we
     filed or furnished the following reports on Form 8-K:

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

     A current  report on Form 8-K,  dated  October 13, 2004,  announcing  third
     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: March 18, 2005             By:  /s/ Richard M. Frank
                                  ---------------------------------
                                  Richard M. Frank
                                  Chief Executive Officer
                                  (Principal Executive Officer)

                                  /s/ Christopher D. Morris
                                  ---------------------------------
                                  Christopher D. Morris
                                  Senior Vice President, Chief Financial Officer
                                  (Principal Financial Officer)

                                  /s/ James Mabry
                                  ---------------------------------
                                  James Mabry
                                  Vice President, Controller and Treasurer
                                  (Principal Accounting Officer)