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 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>



                             CEC ENTERTAINMENT, INC.
                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----

Part I - Financial Information:

   Item 1.  Financial Statements:

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

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

   Item 3. Quantitative and Qualitative Disclosures about Market Risk ....... 15

   Item 4.  Controls and Procedures.......................................... 15

Part II - Other Information:

   Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases of
      Equity Securities...................................................... 16

   Item 6.  Exhibits and Reports on Form 8-K................................. 17

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

Exhibits..................................................................... 18


<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
                                                                               -----------     ------------
                                                                               (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...................................................    549,613         536,124
                                                                                ---------       ---------

Other assets..................................................................      1,319           1,471
                                                                                ---------       ---------
                                                                                $ 595,502       $ 580,351
                                                                                =========       =========

                                    LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt..........................................  $     190       $     168
   Accounts payable...........................................................     22,701          30,126
   Accrued liabilities........................................................     41,336          28,610
                                                                                ---------       ---------
      Total current liabilities...............................................     64,227          58,904
                                                                                ---------       ---------

Long-term debt, less current portion..........................................     82,035          64,581
                                                                                ---------       ---------

Deferred rent.................................................................      6,125           5,153
                                                                                ---------       ---------

Deferred tax liability........................................................     61,447          50,714
                                                                                ---------       ---------

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 .........................................................    448,614         378,911
   Accumulated other comprehensive income ....................................        982             695
   Less treasury shares of 18,959,168 and 16,042,418, respectively, at cost...   (315,545)       (211,626)
                                                                                ---------       ---------
                                                                                  373,150         392,499
                                                                                ---------       ---------
                                                                                $ 595,502       $ 580,351
                                                                                =========       =========


                         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
                                                          --------------    --------------

<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........        21,828            25,158
   Depreciation and amortization.......................        13,070            11,381
   Interest expense....................................           401               503
   Other operating expenses............................        32,618            30,553
                                                            ---------         ---------
                                                              147,919           142,622
                                                            ---------         ---------

Income before income taxes.............................        35,703            27,516

Income taxes...........................................        13,675            10,676
                                                            ---------         ---------

Net income ............................................        22,028            16,840

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

Comprehensive income...................................     $  22,453         $  16,565
                                                            =========         =========


Earnings per share:
   Basic:
      Net income ......................................     $     .60         $     .43
                                                            =========         =========
      Weighted average shares outstanding..............        36,834            38,831
                                                            =========         =========

   Diluted:
      Net income  .....................................     $     .58         $     .42
                                                            =========         =========
      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
                                                          --------------    --------------

<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........        66,575            65,793
   Depreciation and amortization.......................        38,029            33,338
   Interest expense....................................           975               967
   Other operating expenses............................        94,870            89,214
                                                            ---------         ---------
                                                              443,023           410,731
                                                            ---------         ---------

Income before income taxes.............................       112,971            96,418

Income taxes...........................................        43,268            37,410
                                                            ---------         ---------

Net income ............................................        69,703            59,008

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

Comprehensive income...................................     $  69,990         $  59,676
                                                            =========         =========


Earnings per share:
   Basic:
      Net income ......................................     $    1.86         $    1.47
                                                            =========         =========
      Weighted average shares outstanding..............        37,551            40,061
                                                            =========         =========

   Diluted:
      Net income  .....................................     $    1.80         $    1.45
                                                            =========         =========
      Weighted average shares outstanding..............        38,726            40,584
                                                            =========         =========



                 See notes to condensed consolidated financial statements.

</TABLE>

<PAGE>


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


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

Common stock and capital in excess of par value:
   Balance, beginning of year........................     $ 224,519      54,482
   Stock options exercised...........................        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........................       378,911
   Net income........................................        69,703
                                                          ---------
   Balance, September 26, 2004.......................       448,614
                                                          ---------

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...........................     $ 373,150
                                                          =========















            See notes to condensed consolidated financial statements.



<PAGE>


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


                                                                                Nine Months Ended
                                                                        ----------------------------------
                                                                        Sept. 26, 2004      Sept. 28, 2003
                                                                        --------------      --------------

<S>                                                                       <C>                  <C>
Operating activities:
   Net income .......................................................     $  69,703            $  59,008
   Adjustments to reconcile net income to cash
      provided by operations:
   Depreciation and amortization.....................................        38,029               33,338
   Deferred income tax expense.......................................        10,733                8,485
   Tax benefit from exercise of stock options........................         2,290                  344
   Other ............................................................         1,920                2,032
   Net change in receivables, inventories, prepaids, payables and
      accrued liabilities............................................         8,731               21,978
                                                                          ---------            ---------
         Cash provided by operations.................................       131,406              125,185
                                                                          ---------            ---------

Investing activities:
   Purchases of property and equipment...............................       (52,870)             (60,202)
   Disposition of property and equipment.............................           791
   Increase in other assets..........................................           (21)                (753)
                                                                          ---------            ---------
         Cash used in investing activities...........................       (52,100)             (60,955)
                                                                          ---------            ---------

Financing activities:
   Proceeds from debt and line of credit.............................        17,476                4,594
   Exercise of stock options ........................................        11,920                2,435
   Redeemable preferred stock dividends..............................                               (112)
   Purchase of treasury stock .......................................      (103,919)             (71,634)
   Deposit for redeemable preferred stock redemption.................                             (2,795)
   Other ............................................................           461                  368
                                                                          ---------            ---------
         Cash used in financing activities...........................       (74,062)             (67,144)
                                                                          ---------            ---------

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 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.   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 ......................................     $ 22,028     $ 16,840     $ 69,703     $ 59,008
Accretion of redeemable preferred stock..........                                                 (49)
Redeemable preferred stock dividends.............                                                (112)
                                                      --------     --------     --------     --------
Adjusted income applicable to common shares......     $ 22,028     $ 16,840     $ 69,703     $ 58,847
                                                      ========     ========     ========     ========

Basic:
   Weighted average common shares outstanding....       36,834       38,831       37,551       40,061
                                                      ========     ========     ========     ========
   Earnings per common share.....................     $    .60     $    .43     $   1.86     $   1.47
                                                      ========     ========     ========     ========

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...............................     $    .58     $    .42     $   1.80     $   1.45
                                                      ========     ========     ========     ========

</TABLE>

<PAGE>


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



3.   Stock based compensation:

     The Company accounts for its stock based  compensation  under the intrinsic
value method of  Accounting  Principles  Board Opinion No. 25,  "Accounting  for
Stock  Issued to  Employees"  and related  interpretations  ("APB 25"),  and has
adopted the  disclosure-only  provisions  of Statement  of Financial  Accounting
Standards No. 123, "Accounting for Stock Based Compensation" ("SFAS 123"). Under
APB 25, no stock based compensation costs 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 ................................     $ 22,028     $ 16,840     $ 69,703     $ 59,008
Fair value based compensation expense, net of taxes....       (1,444)      (1,626)      (4,330)      (4,879)
                                                            --------     --------     --------     --------
Pro-forma net income...................................       20,584       15,214       65,373       54,129
Accretion and dividends of redeemable
   preferred stock, as reported........................                                                (161)
                                                            --------     --------     --------     --------
Pro-forma adjusted income applicable to common
   shares..............................................     $ 20,584     $ 15,214     $ 65,373     $ 53,968
                                                            ========     ========     ========     ========

Earnings per Share:
Basic:
   As reported.........................................     $    .60     $    .43     $   1.86     $   1.47
   Pro forma...........................................     $    .56     $    .39     $   1.74     $   1.35

Diluted:
   As reported.........................................     $    .58     $    .42     $   1.80     $   1.45
   Pro forma...........................................     $    .54     $    .38     $   1.69     $   1.33

</TABLE>


4.   Stock split:

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






<PAGE>


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

Results of Operations


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

<TABLE>
<CAPTION>
                                                           Three Months Ended                 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......        11.9             14.8             12.0             13.0
         Depreciation and amortization............         7.1              6.7              6.8              6.6
         Interest expense.........................          .2               .3               .2               .2
         Other operating expenses.................        17.8             17.9             17.1             17.6
                                                         -----            -----            -----            -----
                                                          80.6             83.8             79.7             81.0
                                                         -----            -----            -----            -----
      Income before income taxes..................        19.4             16.2             20.3             19.0
      Income taxes ...............................         7.4              6.3              7.8              7.4
                                                         -----            -----            -----            -----
      Net income .................................        12.0%             9.9%            12.5%            11.6%
                                                         =====            =====            =====            =====

      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 80.6% in the
third quarter of 2004 from 83.8% 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 11.9% in the third  quarter of 2004 from 14.8% 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 7.1% in the third  quarter  of 2004 from  6.7% 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 0.2% in the third
quarter of 2004 from 0.3% 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 17.8% in
the third quarter of 2004 from 17.9% 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  30.8% to $22.0  million in the third
quarter of 2004  compared to $16.8  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  38.1% to $.58 per share in the third  quarter of
2004 from $.42 in the third  quarter  of 2003 due to the 30.8%  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.


<PAGE>


     Costs and Expenses

     Costs and  expenses as a percentage  of revenues  decreased to 79.7% in the
first nine months of 2004 from 81.0% in the first nine months of 2003.

     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 6.8% in the first nine  months of 2004 from 6.6% 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 0.2% 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  17.6% 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 18.1% to $69.7 million in the first nine
months of 2004 from $59.0 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  24.1% to $1.80 per share in the first nine months
of 2004  compared to $1.45 per share in the first nine months of 2003 due to the
18.1% 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 $131.4  million in the first nine
months  of 2004 from  $125.2  million  in the  comparable  period of 2003.  Cash
outflows from investing  activities for the first nine months of 2004 were $52.1
million,  primarily  related to capital  expenditures.  Net cash  outflows  from
financing  activities  for the first  nine  months of 2004 were  $74.1  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.

<PAGE>


     Cash provided by  operations  is a significant  source of liquidity for the
Company.  Since substantially all of the Company's sales are for cash and credit
cards, and accounts payable are generally due in five to 30 days, the Company is
able to carry current  liabilities in excess of current assets.  The net working
capital  deficit  increased  from $16.1  million at  December  28, 2003 to $19.7
million at  September  26,  2004 due  primarily  to the timing of  payments  for
various accrued expenses and an increase in the number of restaurants.

     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.


<PAGE>


     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.

     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.



<PAGE>


Item 3. Quantitative and Qualitative Disclosures about Market Risk

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


Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

     An  evaluation   was  performed   under  the   supervision   and  with  the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the  Company's  disclosure  controls and  procedures as of the end of the period
covered by this report.  Based on that  evaluation,  the  Company's  management,
including the Chief  Executive  Officer and Chief Financial  Officer,  concluded
that the Company's  disclosure  controls and procedures were effective as of the
time of  such  evaluation  in  timely  alerting  them  to  material  information
(including information relating to our consolidated subsidiaries) required to be
included in our Exchange Act Filings.  There have been no significant changes in
the Company's internal controls over financial  reporting during the most recent
fiscal  quarter  that could  significantly  affect our  internal  controls  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>
                                                                        Cummulative          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 to present,  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: November 4, 2004           By:  /s/ Christopher D. Morris
                                  ----------------------------------------------
                                  Christopher D. Morris
                                  Senior Vice President, Chief Financial Officer