=================================================================


                          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 September 27, 1996

     -    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


                     SHOWBIZ PIZZA TIME, 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.)


                         P.O. Box 152077
                    4441 West Airport Freeway
                       Irving, Texas  75015
             (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 -

    At  September 27, 1996, an aggregate of 18,361,705  shares of
the registrant's Common Stock, par value of $.10 each (being the
registrant's only class of common stock), were outstanding.


=================================================================


                PART  I  -  FINANCIAL  INFORMATION



Item 1.  Financial  Statements  

          INDEX  TO  CONSOLIDATED FINANCIAL  STATEMENTS

          ShowBiz  Pizza  Time,  Inc.:


                                                         Page
                                                         ----

Cnsolidated balance sheets as of September 27, 1996 
(unaudited)and December 29, 1995...........................  2

Consolidated statements of earnings for the three 
months ended September 27, 1996 
and September 29, 1995 (unaudited).......................... 3


Consolidated statements of earnings for the 
nine months ended September 27, 1996 and 
September 29, 1995 (unaudited).............................. 4

Consolidated statement of shareholders' equity 
for the nine months ended September 27, 
1996 (unaudited)............................................ 5

Consolidated statements of cash flows for 
the nine months ended September 27, 1996 
and September 29, 1995 (unaudited)........................... 6

Notes to consolidated financial statements................... 7



page 1


<TABLE>

                   SHOWBIZ  PIZZA  TIME,  INC.
                   CONSOLIDATED BALANCE  SHEETS
            SEPTEMBER 27, 1996 AND DECEMBER 29, 1995 
                  (Thousands, except share data)


                              ASSETS


                                              Sept.27,     Dec. 29,
                                                1996         1997
                                             ---------     --------
                                                 ( unaudited)  
<S>                                           <C>        <C>
Current assets:
 Cash and cash equivalents..............       $ 3,798    $  5,589
 Accounts receivable, including 
   receivables from related parties of 
   $1,422 and $415, respectively..........       3,577       3,327
 Current portion of notes receivable, 
   including receivables from 
   related parties of $228 and $327, 
   respectively............................        474          608
 Inventories...............................      3,791        3,589
 Prepaid expenses..........................      3,145        2,781
 Current portion of deferred tax 
   asset...................................      9,635        4,147
                                               -------      -------
      Total current assets.................     24,420       20,041
                                               -------      -------
Investments in related parties.............        817          761
                                               -------      -------
Property and equipment ....................    157,919      137,181
                                               -------      -------
Deferred tax asset.........................     17,341       28,582
                                               -------      -------
Other assets:
 Notes receivable, less current portion,
   including receivables from related 
   parties of $2,269 and $1,983, 
   respectively ...........................      7,207        7,072
 Deferred charges, less amortization ......      2,010        2,599
 Other ....................................      2,627        2,774
                                             ---------     ---------
                                                11,844       12,445
                                             ---------     ---------
                                             $ 212,341    $ 199,010
                                             =========     ========
</TABLE>

             LIABILITIES  AND  SHAREHOLDERS'  EQUITY

<TABLE>

<S>                                           <C>           <C>
Current liabilities:
 Current portion of long-term debt......        $ 945        $   95 
 Accounts payable and accrued 
   liabilities..........................       34,599        29,836 
                                              -------       -------
 Total current liabilities..............       35,544        29,931
                                              -------       -------
Long-term debt, less current portion...        31,735        35,753 
                                              -------       -------
Deferred credits.......................         3,713         3,443 
                                              -------       -------
Other liabilities......................         1,010         1,391 
                                               ------       -------
Redeemable preferred stock, $60 par value, 
  redeemable for $2,974 in 2005..........       2,082         2,005 
                                              -------       -------
Shareholders' equity: 
 Common stock, $.10 par value; authorized 
   50,000,000 shares; 21,470,881 
   and 21,435,092 shares issued, 
   respectively .......................        2,147         2,143 
 Capital in excess of par value........      153,194       153,516 
 Retained earnings ....................       15,455         4,733 
 Deferred compensation.................       (2,276)       (3,642)
 Less treasury shares of 3,109,176 
  at both dates, at cost..............       (30,263)      (30,263)
                                             -------       -------
                                             138,257       126,487 
                                             -------       -------
                                            $212,341      $199,010 
                                            ========      ========
</TABLE>

         See notes to consolidated financial statements.



Page 2

                                 


                   SHOWBIZ  PIZZA  TIME,  INC.
               CONSOLIDATED STATEMENTS OF EARNINGS
                           (Unaudited)
                (Thousands, except per share data)


<TABLE>
                                                   Three Months Ended         
                                          Sept. 27, 1996      Sept. 29, 1995   
                                          --------------      --------------
<S>                                        <C>                <C>         
Food and beverage revenues . . . . . . .    $ 50,863           $  46,175 
Games and merchandise revenues . . . . .      22,607              19,805 
Franchise fees and royalties . . . . . .         977                 751 
Interest income, including related 
 party income of $57 and $74, 
 respectively. . . . . . . . . . . . . .         296                 218 
Joint venture income . . . . . . . . . .          34                  27 
                                             -------             -------
                                              74,777              66,976 
                                             -------             ------- 

Costs and expenses:
 Cost of sales . . . . . . . . . . . . .      36,130              34,124 
 Selling, general and administrative 
   expenses, including related party 
   expenses of $31 in both periods . . . .    11,299              11,515 
 Depreciation and amortization . . . . . .     6,327               5,684 
 Interest expense. . . . . . . . . . . . . .     882                 786 
 Loss on property transactions . . . . . . .      81                  63 
 Other operating expenses. . . . . . . . . .  14,065              14,517 
                                             -------             ------- 
                                              68,784              66,689 
                                             -------             ------- 

Income before income taxes . . . . . . . . .   5,993                 287 
                                             -------             ------- 

Income taxes:
 Current expense . . . . . . . . . . . . . .     977                 355 
 Deferred (benefit) expense. . . . . . . . .   1,479                (129)
                                             -------             ------- 
                                               2,456                 226 
                                             -------             ------- 

 Net income . . . . . . . . . . . . . . . .  $ 3,537             $    61 
                                             =======             ======= 

Earnings per common and common equivalent share:

Primary:

 Net income  . . . . . . . . . . . . . . .     $  .19             $   .00 
                                              =======             ======= 
 Weighted average shares outstanding . . . .   18,556              18,164 
                                              =======             ======= 

Fully diluted:

 Net income  . . . . . . . . . . . . . . .     $  .19              $  .00 
                                              =======             ======= 
 Weighted average shares outstanding . . .     18,589              18,173 
                                              =======             ======= 


          See notes to consolidated financial statements.

</TABLE>

page 3


                    SHOWBIZ  PIZZA  TIME,  INC.
                CONSOLIDATED STATEMENTS OF EARNINGS
                            (Unaudited)
                (Thousands, except per share data)


<TABLE>

                                           Nine Months Ended    
                                Sept. 27,1996       Sept. 29, 1995 
                                -------------       ----------------
<S>                              <C>                   <C>

Food and beverage revenues . . .   $ 152,984            $ 138,903
Games and merchandise revenues . .    66,158               60,128
Franchise fees and royalties . . .     2,945                2,604
Interest income, including related 
  party income of $183 and $172,
  respectively . . . . . . . . . .       843                  654
Joint venture income . . . . . . . .     147                   81
                                     -------              -------
                                     223,077              202,370
                                     -------              -------
Costs and expenses:
  Cost of sales . . . . . . . . . .  108,290              105,078 
  Selling, general and administrative 
   expenses, including related party 
   expenses of $94 in both periods .  32,982               33,975 
 Depreciation and amortization . . .  18,306               16,535 
 Interest expense. . . . . . . . . .   2,635                2,239 
 Loss on property transactions . . .     193                 102 
 Other operating expenses. . . . . .  42,067              41,851 
                                     -------             ------- 
                                     204,473             199,780 
                                     -------             ------- 

Income before income taxes . . . .    18,604               2,590 
                                     -------             ------- 
Income taxes:
  Current expense. . . . . . . . . .   2,403                 880 
  Deferred expense . . . . . . . . .   5,224                 264 
                                      -------             ------- 
                                       7,627               1,144 
                                      -------             ------- 
Net income . . . . . . . . . . . . . $10,977             $ 1,446 
                                     =======             ======= 

Earnings per common and common equivalent share:
Primary:
 Net income  . . . . . . . . . . . .  $   .58            $   .07 
 Weighted average shares outstanding . 18,494             18,146 
                                      =======             ======= 

Fully diluted:
 Net income  . . . . . . . . . . . .  $   .58             $   .07 
                                      =======             ======= 
 Weighted average shares outstanding . 18,565              18,177 
                                      =======             ======= 


          See notes to consolidated financial statements.
</TABLE>

Page 4
         

                    SHOWBIZ  PIZZA  TIME,  INC.
          CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                           (Unaudited) 
                (Thousands, except per share data)

<TABLE>

         
     Common       Capital in    Deferred             Treasury 
     Stock         Excess of    Retained   Compen-     Stock       
Shares  Par Value  Par Value    Earnings   sation  Shares  Cost 
------  ---------  ---------    --------   ------  ------  ----
<S><C>   <C>       <C>          <C>       <C>      <C>   <C>
Balances, December 29, 1995. . . . .
 21,435   $ 2,143   $ 153,516    $ 4,733  $(3,642)  3,109 $(30,263)

Net income . . . . . . .          10,977 

Redeemable preferred stock 
  accretion. . . . . . . . . .       (77) 

Redeemable preferred stock dividends,
    $3.60 per share. . . . . .      (178) 

Stock options exercised. . . .      
    29          3          203  

Tax expense from the exercise of stock 
    options and stock grants . . . 
                          (529)
 
  Stock issued under 401K plan...          
     8           1          52  

  Stock split costs. . . . . .            
                           (31) 

  Cash redemption of fractional shares...
    (1)                    (17)
 
  Amortization of deferred compensation..          1,366       
 ------      -------    --------      -------     -------   -----   ------
Balances, September 27, 1996....
 21,471      $ 2,147  $ 153,194       $15,455     $(2,276)  3,109  (30,263)
 ======      =======   =========      =======     =======   =====   ======



                 See notes to consolidated financial statements.

</TABLE>


Page 5




                           SHOWBIZ  PIZZA  TIME,  INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (Thousands)

                                        
<TABLE>

                                              Nine Months Ended        
                                          ------------------------------    
                                        Sept. 27, 1996      Sept. 29, 1995  
                                        ----------------     --------------- 
<S>                                           <C>              <C>
Operating activities:
 Net income  . . . . . . . . . . . . .         $10,977           $ 1,446 
 Adjustments to reconcile net income to cash
       provided by operations:
  Depreciation and amortization. . . . . . . .  18,306            16,535 
  Deferred tax expense . . . . . . . . . . . .   5,224               264 
  Loss on property transactions. . . . . . . .     193               102 
  Compensation expense under stock grant plan.   1,366             1,366 
  Other. . . . .                                   270               411 
  Net change in receivables, inventory, prepaids, 
    payables and accrued liabilities . . . . . . 3,947               113 
                                                ------            ------ 
      Cash provided by operations. . . . . . .  40,283            20,237 
                                                ------            ------ 

Investing activities:
  Purchases of property and equipment. . . . . (38,650)         (19,273)
  Additions to notes receivable. . . . . . . .  (1,868)          (2,293)
  Payments received on notes receivable. . . .   1,867            1,851 
  (Increase) decrease in investments, deferred
        charges and other assets . . . . . . .      48             (633)
                                                ------           ------ 
     Cash used in investing activities . . . . (38,603)         (20,348)
                                                ------           ------ 

Financing activities:
  Payments on debt and line of credit . . . .   (6,700)        (30,495)
  Proceeds from debt and line of credit. . . .   3,600          31,645 
  Reduction of capital lease obligations . . .     (68)            (42)
  Reduction of minority interest . . . . . . . .  (364)
  Exercise of stock options  . . . . . . . . . .   206              69 
  Redeemable preferred stock dividends . . . . .  (178)           (178)
  Other. . . . . . . . . . . . . . . . . . . .      33              97 
                                                ------          ------ 
    Cash provided by (used in) financing 
      activities . . . . . . . . . . . . . . .  (3,471)          1,096 
                                                ------          ------ 

Increase (decrease) in cash and 
  cash equivalents . . . . . . . . . . . . . .  (1,791)            985 
Cash and cash equivalents, beginning 
    of period. . . . . . . . . . . . . . . . .   5,589           2,381 
                                               -------          ------ 
Cash and cash equivalents, end of period . . . $ 3,798         $ 3,366 
                                                ======          ====== 

                 See notes to consolidated financial statements.

</TABLE>

Page 6




                           SHOWBIZ  PIZZA  TIME,  INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           NINE MONTHS ENDED SEPTEMBER 27, 1996 AND SEPTEMBER 29, 1995
                                   (Unaudited)


1.    Interim financial statements:
       
     In the opinion of management, the accompanying financial statements
for the  periods ended September 27, 1996 and September 29, 1995 reflect
all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the Company's financial condition, results of
operations and cash flows.

     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
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 29, 1995. Results of operations for the
periods ended September 27, 1996 and September 29, 1995 are not
necessarily indicative of the results for the year.

2.    Earnings per common and common equivalent share:

     Earnings per common and common equivalent share were computed based
on the weighted average number of common and common equivalent shares
outstanding during the period.  Net income available per common share has
been adjusted for the items indicated below, and earnings per common and
common equivalent share (adjusted for a three for two stock split effected
May 22, 1996) were computed as follows (thousands, except per share data):


<TABLE>
                      Three Months Ended       Nine Months Ended 
                    ----------------------   ---------------------   
                    Sept. 27,   Sept. 29,    Sept. 27,  Sept. 29,
                       1996        1995         1996       1995  
                    --------     --------    ---------  --------    

<S>                   <C>          <C>        <C>       <C>
Net income .........   $ 3,537      $  61      $10,977   $ 1,446
Accretion of redeemable 
   preferred stock........(26)        (26)         (77)      (78)
Redeemable preferred  
   stock dividends........(59)        (59)        (178)     (178)
                        -----       -----        -----     -----
Adjusted income (loss) 
  applicable to common
  and common equivalent 
  shares................$ 3,452    $ (24)       $10,722   $1,190 
                         ======    =====         ======    =====    
Primary:
  Weighted average number 
    of common shares 
    outstanding         18,229    18,039         18,226   18,069 
  Common stock equivalents:
     Stock purchase 
      options.........     327       125            268       77 
                        ------     -----          ------   -----
  Weighted average 
    number of shares 
    outstanding.......  18,556    18,164         18,494   18,146 
                        ======    ======         ======   ======
  Earnings per common 
    and common 
    equivalent share.. $   .19    $  .00          $ .58    $ .07 
                       =======     ======          =====     ====
Fully diluted:

  Weighted average 
    number of common 
    shares outstanding..18,229     18,039        18,226   18,069 

  Common stock equivalents:
     Stock purchase 
      options........     360         134           339      108 
                        ------     ------        ------   ------
  Weighted average 
    number of shares 
    outstanding        18,589     18,173         18,565   18,177 
                       ======     ======         ======   ======
  Earnings per common 
    and common 
    equivalent share...$  .19     $  .00          $ .58   $  .07 
                        ======     ======          ======   =====


</TABLE>

page 7
                                    

                         SHOWBIZ  PIZZA  TIME,  INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          NINE MONTHS ENDED SEPTEMBER 27, 1996 AND SEPTEMBER 29, 1995
                                   (Unaudited)



  
3.    Significant transactions:

     In September 1996, the Company purchased all of the Chuck E. Cheese's
restaurants owned by its largest franchisee, McBiz Corporation ("McBiz"). 
Under the terms of the transaction, the Company  purchased 19 restaurants
operated by McBiz plus the 49% minority interest of one restaurant
previously operated as a joint venture by the two companies.  In addition
to the cash purchase price of $2.6 million, the Company reimbursed McBiz
for remodeling costs for three restaurants which had been recently
remodeled.  The transaction was structured as an asset purchase with the
Company assuming no liabilities.

     In August 1996, the Company's line of credit agreement was amended
to provide the Company with available borrowings of up to $15 million and
extended the maturity date to June 1998.   In September 1996, the Company
prepaid $5 million in term notes.  As a result of these transactions, the
Company's credit facility totals $43 million, which consists of $28
million in term notes and the $15 million line of credit.  Interest under
the amended line of credit is dependent on earnings and debt levels of the
Company and ranges from prime plus 0% to .5% or at the Company's option,
LIBOR plus 2% to 3%.Currently, any borrowings under this line of credit
would be at prime plus 0% or, at LIBOR plus 2%.  At September 27, 1996,
$3.6 million was outstanding under the line of credit. The Company is
required to comply with certain financial ratio tests during the terms of
the loan agreements.  These tests did not change significantly with the
recent amendment to increase the line of credit. 


Page 8


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


Results of Operations

Third Quarter 1996 Compared to Third Quarter 1995
--------------------------------------------------

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

<TABLE>

                                            Three Months Ended        
                                     ----------------------------------
                                    Sept. 27, 1996      Sept. 29, 1995
                                    --------------      --------------
<S>                                    <C>                   <C>
Revenue  .................              100.0%                100.0%  
                                        -----                 -----     
 Costs and  expenses:              
  Cost of sales...........                48.3                 50.9    
  Selling, general and 
    administrative.......                 15.1                 17.2        
  Depreciation and 
    amortization.........                  8.5                  8.5     
  Interest expense.......                  1.2                  1.2     
  Loss on property 
    transactions.........                   .1                   .1           
  Other operating 
    expenses.............                 18.8                 21.7   
                                         ------               ------  
                                          92.0                 99.6         
                                         =====                =====
Income before income 
  taxes.................                   8.0                   .4           
Income tax expense .....                   3.3                   .3     
                                         ------               ------ 
Net income .............                   4.7%                   .1%  
                                         =====                 =====

</TABLE>

  Revenues
  --------

     Revenues increased to $74.8 million in the third quarter of 1996 from
$67.0 million in the third quarter of 1995 primarily due to an increase
of 10.3% in comparable store sales of the Company's Chuck E. Cheese's
restaurants which were open during all of the third quarters of both 1996
and 1995. In addition, the Company purchased 19 restaurants from its
largest franchisee in September 1996.  Management believes that several
factors contributed to the comparable store sales increase with the
primary factor being sales increases at repositioned stores.  Menu prices
increased approximately 2.5% between the periods.

   Costs and Expenses
    -----------------

     Costs and expenses as a percentage of revenues decreased to 92.0% in
the third quarter of 1996 from 99.6% in the third quarter of 1995.

     Cost of sales decreased as a percentage of revenues to 48.3% in the
third quarter of 1996 from 50.9% in the comparable period of 1995.  Cost
of food, beverage, prize and merchandise items as a percentage of
restaurant sales increased to 17.9% in the third quarter of 1996 from
17.7% in the third quarter of 1995 primarily due to an increase in the
cost of cheese between the two periods.  Restaurant labor expenses as a 
percentage of restaurant sales decreased to 28.0% during the third quarter
of 1996 from 30.2% in the third quarter of 1995 primarily due to an
increase in comparable store sales and more effective utilization of
hourly employees.

     Selling, general and administrative expenses as a percentage of
revenues declined to 15.1% in the third quarter of 1996 from 17.2% in the
comparable period of 1995 primarily due to comparable store sales
increases and a reduction in advertising costs between the two periods.

     Depreciation and amortization expenses as a percentage of revenues
remained constant at 8.5% in the third quarters of both 1996 and 1995.


Page 9


    Interest expense increased to approximately $882,000 in the third
quarter of 1996 from $786,000 in the third quarter of 1995 due primarily
to increased borrowing since the third quarter of 1995.

     The Company provided for a loss on property transactions of
approximately $81,000 in the third quarter of 1996  and  $63,000 in the
third quarter of 1995 due to the replacement of assets arising from the
enhancement of facilities and entertainment packages of restaurants.

     Other operating expenses decreased as a percentage of revenues to
18.8% in the third quarter of 1996 from 21.7% in the third quarter of 1995
primarily due to a decrease in insurance costs, the increase in comparable
store sales and the fact that a significant portion of operating costs are
fixed.


  Net Income
  -----------

      The Company had net income of $3.5 million in the third quarter of
1996 compared to $61,000 in the third quarter of 1995 due to the changes
in revenues and expenses discussed above.  The Company's primary and fully
diluted earnings per share was $.19 per share in the third quarter of 1996
compared to $.00 per share in the third quarter of 1995.



First Nine Months of 1996 Compared to First Nine Months of 1995
---------------------------------------------------------------

     A summary of the results of operations of the Company as a percentage
of revenues for the first nine months is  shown below.

<TABLE>

                             Nine Months Ended         
                       -------------------------------------
                       Sept. 27, 1996         Sept. 29, 1995
                       --------------         --------------
<S>                       <C>                    <C>
Revenue.............       100.0%                 100.0% 
                           ------                 ------   
Costs and  expenses:               
 Cost of sales.........     48.5                  51.9       
 Selling, general and 
   administrative.......    14.8                  16.7          
 Depreciation and 
   amortization........      8.2                   8.2   
 Interest expense......      1.2                   1.1   
 Loss on property 
   transactions........       .1                    .1
 Other operating 
   expenses............     18.9                  20.7          
                          ------                ------ 
                           91.7                   98.7          
                          ======                ======
  Income before 
   income taxes..........    8.3                  1.3   
 Income tax expense......    3.4                   .6   
                          ------                ------
 Net income.............     4.9%                  .7%
                           =====                 =====

</TABLE>

  Revenues
   -------

     Revenues increased to $223.1 million in the first nine months  of
1996 from $202.4 million in the comparable period of 1995 primarily due
to an increase of 9.7% in comparable store sales of the Company's Chuck
E. Cheese's restaurants which were open during all of the first nine
months of both 1996 and 1995. In addition, the Company purchased 19
restaurants from its largest franchisee in September 1996.  Management
believes that several factors contributed to the comparable store sales
increase with the primary factor being sales increases at repositioned
stores.  Menu prices increased approximately 3.0% between the periods.


   Costs and Expenses
   -------------------

     Costs and expenses as a percentage of revenues decreased to 91.7% in
the first nine months of 1996 from 98.7% in the first nine months of 1995.


Page 10


     Cost of sales decreased as a percentage of revenues to 48.5% in the
first nine months of 1996 from 51.9% in the comparable period of 1995. 
Cost of food, beverage, prize and merchandise items as a percentage of
restaurant sales decreased to 17.6% in the first nine months of 1996 from
18.0% in the comparable period of  1995 primarily due to the increase in
menu prices. Restaurant labor expenses as a percentage of restaurant sales
decreased to 28.3% during the first nine months of 1996 from 30.8% in the
first nine months of 1995 primarily due to an increase in comparable store
sales and more effective utilization of hourly employees.

   Selling, general and administrative expenses as a percentage of
revenues declined to 14.8% in the first nine months of 1996 from 16.7% in
the comparable period of 1995 primarily due to comparable store sales
increases and a reduction in advertising costs between the two periods.

     Depreciation and amortization expenses as a percentage of revenues
remained constant at 8.2% in the first nine months of both 1996 and 1995.

     Interest expense increased to approximately $2.6 million in the first
nine months of 1996 from $2.2 million in the first nine months of 1995 due
primarily to increased borrowing since the third quarter of 1995.

     The Company had a loss on property transactions of $193,000 in the
first nine months of 1996 and $102,000 in 1995 due to the replacement of
assets arising from the enhancement of facilities and entertainment
packages of restaurants. The loss in 1995 was partially offset by a net
gain of $100,000 from the sale of certain assets which had been held for
resale. 

     Other operating expenses decreased as a percentage of revenues to
18.9% in the first nine months of 1996 from 20.7% in the comparable period
of 1995 primarily due to a decrease in insurance costs, the increase in
comparable store sales and the fact that a significant portion of
operating costs are fixed.  


  Net Income
  ----------

     The Company had net income of $11.0 million in the first nine months
of 1996 compared to $1.4 million in the first nine months of 1995 due to
the changes in revenues and expenses discussed above.  The Company's
primary and fully diluted earnings per share was $.58 per share in the
first nine months of 1996 compared to  $.07 per share in the first nine
months of 1995.




Financial Condition, Liquidity and Capital Resources
-----------------------------------------------------


     Cash provided by operations increased to $40.3 million in the first
nine months of 1996 from $20.2 million in the comparable period of 1995. 
Cash outflows from investing and financing activities for the first nine
months of 1996 were $38.6 million and $3.5 million, respectively.  The
Company's primary requirements for cash relate to planned capital
expenditures and debt service.  The Company expects that it will satisfy
such requirements from cash provided by operations and funds available
under its loan agreements. 

     In August 1996, the Company increased its line of credit to $15
million from $5 million and extended the maturity date to June 1998 from
June 1997.  Interest under the amended line of credit is dependent on
earnings and debt levels of the Company and ranges from prime plus 0% to
 .5% or, at the option of the Company, the London Interbank Offered Rate
("LIBOR") plus 2% to 3%. Currently, any borrowings under this line of
credit would be at prime plus 0% or at LIBOR plus 2%.  As of September
27,1996, $3.6 million was outstanding under the line of credit.  In
September 1996, the Company prepaid  $5 million in term notes.   The
Company's total credit facility of $43 million now consists of $28 million
in term notes and the $15 million line of credit.  The credit facility
includes term notes totaling $18 million with annual interest of 10.02%
maturing in 2001 and term notes totaling $10 million with annual interest
equal to LIBOR plus 3.5% maturing in 2000.  The Company is required to
comply with certain financial ratio tests during the terms of the loan
agreements.  These tests did not change significantly with the recent
amendment to increase the line of credit.  


page 11



     The Company believes that the success of its facility and
entertainment enhancement program in addition to new restaurant
development will continue to be significant factors in its ability to
generate increased revenues over the foreseeable future.  The Company
continues to evolve and expand its efforts to significantly enhance its
Chuck E. Cheese's locations.  This "repositioning" program is being
carried out on a market by market basis and involves: an improved exterior
identity, a facility upgrade, an expanded  free ball-crawl with tubes and
tunnels suspended from or reaching to the ceiling, and an enhancement of
the variety and number of games and rides offered to its guests.  The
Company completed 21 and 76 restaurants under this program in 1994 and
1995, respectively, and completed an  additional 91 restaurants during the
first nine months of 1996. The Company plans to reposition substantially
all Company-operated restaurants by the end of 1996 with the exception of
19 newly acquired restaurants  which will be repositioned no later than
the first quarter of 1997.  The Company anticipates that the repositioning
of the remaining restaurants will cost on the average approximately
$325,000 per restaurant.  However, this amount can vary significantly at
a particular restaurant depending on several factors, including the
restaurant's square footage, date of the most recent remodel and the
existing assets at the restaurant.  In the event certain site
characteristics considered essential to the success of a restaurant
deteriorate, the Company will consider closing  the restaurant or
relocating the restaurant to a more desirable site.

     In September 1996, the Company purchased all of the Chuck E. Cheese's
restaurants owned by its largest franchisee, McBiz Corporation ("McBiz"). 
Under the terms of the transaction, the Company purchased 19 restaurants
operated by McBiz plus the 49% minority interest of one restaurant
previously operated as a joint venture by the two companies.  In addition
to the cash purchase price of $2.6 million, the Company reimbursed McBiz
for remodeling costs for three restaurants which had been recently
remodeled.  The transaction was structured as an asset purchase with the
Company assuming no liabilities.

     The Company has implemented several strategies, including its
"repositioning" program, to strengthen the sales vitality of its existing
unit base in what management believes is a competitive market. At
September 27, 1996, approximately 77% of all Company- operated restaurants
have been repositioned.  As a result of its strategies, comparable store
sales increased 2.3%, 7.7%, 11.5% and 10.3% in the fourth quarter of 1995
and the first, second and third quarters of 1996, respectively.

     The Company believes it will realize substantial benefit from
utilization of approximately $50 million in net operating loss
carryforwards to reduce its federal income tax liability.  Such net
operating loss carryforwards expire from years 1999 through 2002. 
Although the use of such carryforwards could, under certain circumstances,
be limited, the Company is presently unaware of the occurrence of any
event which would result in the imposition of such limitation.  The
Company has adopted an amendment to its Restated Articles of Incorporation
which is intended to prevent changes in ownership of its common stock that
would cause such limitation.  In addition, the Company has investment tax
credit, job tax credit and alternative minimum tax credit carryforwards
of approximately $7 million of which $5.8 million expires from years 1997
through 2008.  Tax credit carryforwards can be utilized by the Company
only after all net operating loss carryforwards have been realized. If the
improvement in the Company's results of operations does not continue, a
portion of the net operating loss  and tax credit carryforwards could
expire prior to utilization resulting in a charge against income.  Taxable
income for the five years ending December 29, 1995 was approximately $48
million.  Based on the results of the repositioned restaurants and the
Company's current plans to reposition substantially all of its Company-
operated restaurants by the end of 1996 with the exception of 19 newly
acquired restaurants which will be repositioned no later than the first
quarter of 1997, the Company currently projects future taxable income
levels sufficient to realize its net operating loss and tax credit
carryforwards prior to their expiration after considering an allowance of
$1.1 million for the estimated expiration of tax credit carryforwards in
1997.


Page 12




                       PART II - OTHER INFORMATION
                      ----------------------------


Item 1.    Legal Proceedings.

     There are no legal proceedings against the Company which have arisen
in the ordinary course of its business or otherwise, which the Company
believes are material in amount. 

Item 2.  Changes in Securities.

     None to report during quarter for which this report is filed.


Item 3.  Defaults Upon Senior Securities.

     None to report during quarter for which this report is filed.


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

     None to report during quarter for which this report is filed.

Item 5.  Other Information.

     None to report during quarter for which this report is filed.


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


                              EXHIBIT INDEX
  a)  Exhibits

   Exhibit
   Number                    Description
   -------                    -----------
                     
  10(h)(1) Modification and Extension Agreement in the stated amount
           of $15,000,000.00, dated August 1,1996, between Bank One,
           Texas, N.A. and the Company.

  10(h)(2) Restated Revolving Credit Note in the stated amount of
           $15,000,000.00, dated August 1,1996, between Bank One,
           Texas, N.A. and the Company.

  10(i)    Amendment No. 1 to the Amended and Restated Employment
           Agreement, dated July 19, 1996, between Richard M. Frank
           and the Company.

  10(j)    Asset Purchase Agreement, dated September 16, 1996,
           between McBiz Corporation, McBiz Limited Partnership,
           McBiz of Iowa Limited Partnership and the Company.


  (b)  Reports on Form 8-K

  None filed during the quarter for which this report is filed.



page 13

  


                               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.




                                 SHOWBIZ PIZZA TIME, INC.





Dated: November 8, 1996      By: /s/ Larry G. Page         
                              -----------------------
                           Larry G. Page
                           Executive Vice President
                           and Chief Financial Officer





page 14




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

10(h)(1)   Modification and Extension Agreement in the stated amount
           of $15,000,000.00, dated August 1,1996, between Bank One,
           Texas, N.A. and the Company.

10(h)(2)   Restated Revolving Credit Note in the stated amount of
           $15,000,000.00, dated August 1,1996, between Bank One,
           Texas, N.A. and the Company.

10(i)    Amendment No. 1 to the Amended and Restated Employment
         Agreement, dated July 19, 1996, between Richard M. Frank
         and the Company.

10(j)    Asset Purchase Agreement, dated September 16, 1996,
         between Mcbiz Corporation, Mcbiz Limited Partnership,
         Mcbiz Of Iowa Limited Partnership and the Company.