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


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

(Mark One)

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


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

                         Commission File Number 0-15782


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


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


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


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

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

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

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





<PAGE>


                                EXPLANATORY NOTE

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

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

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

     This  amendment No. 1 on Form 10-Q/A to the Company's  quarterly  report on
Form 10-Q for the  fiscal  quarter  ended  June 27,  2004  ("Original  Filing"),
initially filed with the Securities and Exchange Commission ("SEC") on August 5,
2004,  is being  filed to reflect  restatements  of the  Company's  consolidated
balance  sheets at June 27, 2004 and the  Company's  consolidated  statements of
earnings,  changes in stockholders'  equity and consolidated  cash flows for the
three and six months ended June 27, 2004 and June 29, 2003 and the notes related
thereto.  For a more detailed  description  of these  restatements,  see Note 2,
"Restatement of Financial Statements" to the accompanying condensed consolidated
financial  statements and the section  entitled  "Restatement"  in  Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of  Operations
contained in this Form 10-Q/A.

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

     Except for the foregoing amended information, this Form 10-Q/A continues to
describe  conditions as of the date of the Original Filing,  and does not update
disclosures  contained  herein to reflect  events that occurred at a later date.
Other  events  occurring  after  the  filing  of the  Original  Filing  or other
disclosures  necessary  to  reflect  subsequent  events  have  been  or  will be
addressed  in our amended  Quarterly  Reports on Form  10-Q/A for the  quarterly
periods  ended  September 26, 2004 which is being filed  concurrently  with this
filing of this Form 10-Q/A and any reports filed with the SEC subsequent to this
filing.


<PAGE>


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



<PAGE>


                             CEC ENTERTAINMENT, INC.
                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----

Part I - Financial Information:

   Item 1.  Financial Statements:

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

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

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

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

Part II - Other Information:

   Item 1.  Legal Proceedings.............................................   23

   Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases
      of Equity Securities................................................   23

   Item 4.  Submission of Matters to a Vote of Security Holders...........   23

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

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

Certifications............................................................   26



<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

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

Property and equipment, net.....................................................         551,313           538,756
                                                                                       ---------         ---------

Other assets....................................................................           1,415             1,471
                                                                                       ---------         ---------
                                                                                       $ 597,564         $ 582,983
                                                                                       =========         =========

                                         LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt............................................       $     720         $     554
   Accounts payable.............................................................          26,561            30,126
   Accrued liabilities..........................................................          35,891            28,610
                                                                                       ---------         ---------
      Total current liabilities.................................................          63,172            59,290
                                                                                       ---------         ---------

Long-term debt, less current portion............................................          74,120            75,205
                                                                                       ---------         ---------

Deferred rent...................................................................          48,130            42,816
                                                                                       ---------         ---------

Deferred tax liability..........................................................          39,055            32,849
                                                                                       ---------         ---------

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

Shareholders' equity:
   Common stock, $.10 par value; authorized 100,000,000 shares; 54,997,150
      and 54,481,913 shares issued, respectively ...............................           5,500             5,448
   Capital in excess of par value...............................................         229,910           219,071
   Retained earnings ...........................................................         396,584           350,735
   Accumulated other comprehensive income ......................................             557               695
   Less treasury shares of 17,601,868 and 16,042,418, respectively, at cost.....        (267,964)         (211,626)
                                                                                       ---------         ---------
                                                                                         364,587           364,323
                                                                                       ---------         ---------
                                                                                       $ 597,564         $ 582,983
                                                                                       =========         =========


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


<PAGE>


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

                                                                   Three Months Ended
                                                             -------------------------------
                                                             June 27, 2004     June 29, 2003
                                                             -------------     -------------
                                                             (as restated)     (as restated)

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

Costs and expenses:
   Cost of sales:
     Food, beverage and related supplies................          21,307            18,245
     Games and merchandise..............................           7,218             6,965
     Labor..............................................          47,688            43,754
                                                               ---------         ---------
                                                                  76,213            68,964
   Selling, general and administrative expenses.........          20,047            19,134
   Depreciation and amortization........................          13,880            12,150
   Interest expense.....................................             485               367
   Other operating expenses.............................          31,436            29,544
                                                               ---------         ---------
                                                                 142,061           130,159
                                                               ---------         ---------

Income before income taxes..............................          23,363            22,726

Income taxes............................................           8,947             8,818
                                                               ---------         ---------

Net income .............................................          14,416            13,908

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

Comprehensive income....................................       $  14,292         $  14,568
                                                               =========         =========


Earnings per share:
   Basic:
     Net income ........................................       $     .38         $     .34
                                                               =========         =========
     Weighted average shares outstanding................          37,507            40,485
                                                               =========         =========
   Diluted:
     Net income  .......................................       $     .37         $     .34
                                                               =========         =========
     Weighted average shares outstanding................          38,604            40,983
                                                               =========         =========


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

<PAGE>


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

                                                                     Six Months Ended
                                                             -------------------------------
                                                             June 27, 2004     June 29, 2003
                                                             -------------     -------------
                                                             (as restated)     (as restated)

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

Costs and expenses:
   Cost of sales:
     Food, beverage and related supplies................          45,785            40,215
     Games and merchandise..............................          15,860            14,489
     Labor..............................................         100,927            91,688
                                                               ---------         ---------
                                                                 162,572           146,392
   Selling, general and administrative expenses.........          43,879            40,138
   Depreciation and amortization........................          27,258            24,154
   Interest expense.....................................             968               837
   Other operating expenses.............................          63,387            59,379
                                                               ---------         ---------
                                                                 298,064           270,900
                                                               ---------         ---------

Income before income taxes..............................          74,308            66,111

Income taxes............................................          28,459            25,651
                                                               ---------         ---------

Net income .............................................          45,849            40,460

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

Comprehensive income....................................       $  45,711         $  41,403
                                                               =========         =========


Earnings per share:
   Basic:
     Net income ........................................       $    1.21         $     .99
                                                               =========         =========
     Weighted average shares outstanding................          37,910            40,667
                                                               =========         =========
   Diluted:
     Net income  .......................................       $    1.17         $     .98
                                                               =========         =========
     Weighted average shares outstanding................          39,107            41,036
                                                               =========         =========


                  See notes to condensed consolidated financial statements.

</TABLE>

<PAGE>


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


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

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

Retained earnings:
   Balance, beginning of year (as restated)....................       350,735
   Net income..................................................        45,849
                                                                    ---------
   Balance, June 27, 2004 (as restated)........................       396,584
                                                                    ---------

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

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

Total shareholders' equity.....................................     $ 364,587
                                                                    =========















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



<PAGE>


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

                                                                                         Six Months Ended
                                                                                  -------------------------------
                                                                                  June 27, 2004     June 29, 2003
                                                                                  -------------     -------------
                                                                                  (as restated)     (as restated)
<S>                                                                                  <C>               <C>
Operating activities:
   Net income ...............................................................        $ 45,849          $ 40,460
   Adjustments to reconcile net income to cash
     provided by operations:
   Depreciation and amortization.............................................          27,258            24,154
   Deferred income tax expense...............................................           6,206             4,980
   Tax benefit from exercise of stock options................................           1,844               132
   Other ....................................................................           5,963             4,973
   Net change in receivables, inventories, prepaids, payables and
     accrued liabilities.....................................................           4,638            14,383
                                                                                     --------          --------
      Cash provided by operations............................................          91,758            89,082
                                                                                     --------          --------

Investing activities:
   Purchases of property and equipment.......................................         (39,787)          (44,893)
   Increase in other assets..................................................             (87)             (338)
                                                                                     --------          --------
      Cash used in investing activities......................................         (39,874)          (45,231)
                                                                                     --------          --------

Financing activities:
   Payments on debt and line of credit.......................................          (1,705)          (30,957)
   Exercise of stock options ................................................           8,677               645
   Redeemable preferred stock dividends......................................                              (113)
   Purchase of treasury stock ...............................................         (56,338)          (16,807)
   Other ....................................................................             484               544
                                                                                     --------          --------
      Cash used in financing activities......................................         (48,882)          (46,688)
                                                                                     --------          --------

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









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


<PAGE>


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


1.   Interim financial statements:

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

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


2.   Restatement of Financial Statements:

     Subsequent to the issuance of the Company's interim condensed  consolidated
financial  statements for the period ended June 27, 2004, and following a review
of  its  lease-related   accounting  policies,   the  Company's  management  has
determined that it was  appropriate to adjust its prior financial  statements to
correct certain errors contained in those financial  statements  relating to the
computation of depreciation,  lease  classification,  straight-line rent expense
and the related deferred rent liability.

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

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



<PAGE>


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


2.   Restatement of Financial Statements (continued):

     The  following  is a  summary  of  the  impact  of the  Restatement  on the
consolidated  balance  sheets  at  December  28,  2003 and June  27,  2004,  the
consolidated  statements  of earnings for the three month and six month  periods
ended June 27, 2004 and June 29, 2003, and the  consolidated  statements of cash
flows for the six month periods ended June 27, 2004 and June 29, 2003.

<TABLE>
<CAPTION>
                                                                      June 27, 2004
                                                       --------------------------------------------
                                                       As Previously
                                                         Reported        Adjustment     As Restated
                                                       -------------     ----------     -----------

<S>                                                      <C>              <C>            <C>
Consolidated Balance Sheet:
   Property and equipment, net....................       $ 546,410        $  4,903       $ 551,313
   Total assets...................................         592,661           4,903         597,564
   Current portion of long-term debt..............             168             552             720
   Long-term debt, less current portion...........          63,100          11,020          74,120
   Deferred rent..................................           5,798          42,332          48,130
   Deferred tax liability.........................          58,054         (18,999)         39,055
   Retained earnings..............................         426,586         (30,002)        396,584
   Total shareholders' equity.....................         394,589         (30,002)        364,587
</TABLE>


<TABLE>
<CAPTION>
                                                             Three Months ended June 27, 2004
                                                       --------------------------------------------
                                                       As Previously
                                                         Reported        Adjustment     As Restated
                                                       -------------     ----------     -----------

<S>                                                      <C>              <C>            <C>
Consolidated Statement of Earnings:
   Depreciation and amortization..................       $  12,730        $  1,150       $  13,880
   Interest expense...............................             287             198             485
   Other operating expense........................          31,303             133          31,436
   Total costs and expenses.......................         140,580           1,481         142,061
   Income before income taxes.....................          24,844          (1,481)         23,363
   Income taxes...................................           9,514            (567)          8,947
   Net income.....................................          15,330            (914)         14,416
   Basic earnings per share.......................             .41            (.03)            .38
   Diluted earnings per share.....................             .40            (.03)            .37
</TABLE>

<PAGE>


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


2.   Restatement of Financial Statements (continued):

<TABLE>
<CAPTION>
                                                                 Three Months ended June 29, 2003
                                                       --------------------------------------------
                                                       As Previously
                                                         Reported        Adjustment     As Restated
                                                       -------------     ----------     -----------

<S>                                                      <C>              <C>            <C>
Consolidated Statement of Earnings:
   Depreciation and amortization..................       $  11,052        $  1,098       $  12,150
   Interest expense...............................             181             186             367
   Other operating expense........................          29,434             110          29,544
   Total costs and expenses.......................         128,765           1,394         130,159
   Income before income taxes.....................          24,120          (1,394)         22,726
   Income taxes...................................           9,359            (541)          8,818
   Net income.....................................          14,761            (853)         13,908
   Basic earnings per share.......................             .36            (.02)            .34
   Diluted earnings per share.....................             .36            (.02)            .34
</TABLE>


<TABLE>
<CAPTION>
                                                              Six Months ended June 27, 2004
                                                       --------------------------------------------
                                                       As Previously
                                                         Reported        Adjustment     As Restated
                                                       -------------     ----------     -----------

<S>                                                      <C>              <C>            <C>
Consolidated Statement of Earnings:
   Depreciation and amortization..................       $  24,959        $  2,299       $  27,258
   Interest expense...............................             574             394             968
   Other operating expense........................          63,120             267          63,387
   Total costs and expenses.......................         295,104           2,960         298,064
   Income before income taxes.....................          77,268          (2,960)         74,308
   Income taxes...................................          29,593          (1,134)         28,459
   Net income.....................................          47,675          (1,826)         45,849
   Basic earnings per share.......................            1.26            (.05)           1.21
   Diluted earnings per share.....................            1.22            (.05)           1.17


Consolidated Statement of Cash Flows:
   Cash provided by operations....................       $  87,750        $  4,008       $  91,758
   Cash used in investing activities..............         (36,090)         (3,784)        (39,874)
   Cash used in financing activities..............         (48,658)           (224)        (48,882)
</TABLE>



<PAGE>


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


2.   Restatement of Financial Statements (continued):

<TABLE>
<CAPTION>
                                                           Six Months ended June 29, 2003
                                                       --------------------------------------------
                                                       As Previously
                                                         Reported        Adjustment     As Restated
                                                       -------------     ----------     -----------

<S>                                                      <C>              <C>            <C>
Consolidated Statement of Earnings:
    Depreciation and amortization..................      $  21,957        $  2,197       $  24,154
    Interest expense...............................            464             373             837
    Other operating expense........................         59,158             221          59,379
    Total costs and expenses.......................        268,109           2,791         270,900
    Income before income taxes.....................         68,902          (2,791)         66,111
    Income taxes...................................         26,734          (1,083)         25,651
    Net income.....................................         42,168          (1,708)         40,460
    Basic earnings per share.......................           1.03            (.04)            .99
   Diluted earnings per share......................           1.02            (.04)            .98

Consolidated Statement of Cash Flows:
    Cash provided by operations....................      $  86,137        $  2,945       $  89,082
    Cash used in investing activities..............        (42,474)         (2,757)        (45,231)
    Cash used in financing activities..............        (46,500)           (188)        (46,688)

</TABLE>



<PAGE>


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


3.   Earnings per common share:

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

<TABLE>
<CAPTION>
                                                                 Three Months Ended               Six Months Ended
                                                            -----------------------------   -----------------------------
                                                              June 27,        June 29,        June 27,        June 29,
                                                                2004            2003            2004            2003
                                                            -------------   -------------   -------------   -------------
                                                            (as restated)   (as restated)   (as restated)   (as restated)
<S>                                                            <C>             <C>             <C>             <C>
Net income ............................................        $ 14,416        $ 13,908        $ 45,849        $ 40,460
Accretion of redeemable preferred stock................                             (22)                            (48)
Redeemable preferred stock dividends...................                             (55)                           (113)
                                                               --------        --------        --------        --------
Adjusted income applicable to common shares............        $ 14,416        $ 13,831        $ 45,849        $ 40,299
                                                               ========        ========        ========        ========

Basic:
   Weighted average common shares outstanding..........          37,507          40,485          37,910          40,667
                                                               ========        ========        ========        ========
   Earnings per common share (as restated).............        $    .38        $    .34        $   1.21        $    .99
                                                               ========        ========        ========        ========

Diluted:
   Weighted average common shares outstanding..........          37,507          40,485          37,910          40,667
   Potential common shares for stock options...........           1,097             498           1,197             369
                                                               --------        --------        --------        --------
   Weighted average shares outstanding.................          38,604          40,983          39,107          41,036
                                                               ========        ========        ========        ========
   Earnings per common and potential
      common share (as restated).......................        $    .37        $    .34        $   1.17        $    .98
                                                               ========        ========        ========        ========
</TABLE>


<PAGE>


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



4.   Stock based compensation:

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

<TABLE>
<CAPTION>
                                                                    Three Months Ended         Six Months Ended
                                                            -----------------------------   ----------------------------
                                                              June 27,        June 29,        June 27,        June 29,
                                                                2004            2003            2004            2003
                                                            -------------   -------------   -------------   -------------
                                                            (as restated)   (as restated)   (as restated)   (as restated)
<S>                                                           <C>             <C>             <C>             <C>
Net income, as reported ...............................       $ 14,416        $ 13,908        $ 45,849        $ 40,460
Fair value based compensation expense, net of taxes....         (1,451)         (1,629)         (2,886)         (3,253)
                                                              --------        --------        --------        --------
Pro-forma net income...................................         12,965          12,279          42,963          37,207
Accretion and dividends of redeemable
  preferred stock, as reported........................                             (76)                           (161)
                                                              --------        --------        --------        --------
Pro-forma net income applicable to common shares.......       $ 12,965        $ 12,203        $ 42,963        $ 37,046
                                                              ========        ========        ========        ========

Earnings per Share:
Basic:
   As reported.........................................       $    .38        $    .34        $   1.21        $    .99
   Pro forma...........................................       $    .35        $    .30        $   1.13        $    .91

Diluted:
   As reported.........................................       $    .37        $    .34        $   1.17        $    .98
   Pro forma...........................................       $    .34        $    .30        $   1.10        $    .90
</TABLE>



5.   Stock split:

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






<PAGE>


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

     Restatement

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

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

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

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


<PAGE>


Results of Operations


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

<TABLE>
<CAPTION>
                                                      Three Months Ended                   Six Months Ended
                                                -------------------------------     ------------------------------
                                                Jun. 27, 2004     Jun. 29, 2003     Jun. 27, 2004     Jun. 29,2003
                                                -------------     -------------     -------------     ------------
<S>                                                 <C>               <C>               <C>               <C>
Revenues....................................        100.0%            100.0%            100.0%            100.0%
                                                    -----             -----             -----             -----
Costs and expenses:
   Cost of sales:
     Food, beverage and related supplies....         12.9              11.9              12.3              12.0
     Games and merchandise..................          4.4               4.6               4.3               4.3
     Labor..................................         28.8              28.6              27.1              27.2
                                                    -----             -----             -----             -----
                                                     46.1              45.1              43.7              43.5
   Selling, general and administrative......         12.1              12.5              11.8              11.9
   Depreciation and amortization............          8.4               7.9               7.3               7.2
   Interest expense.........................           .3                .2                .3                .2
   Other operating expenses.................         19.1              19.3              17.0              17.5
                                                    -----             -----             -----             -----
                                                     86.0              85.0              80.1              80.3
                                                    -----             -----             -----             -----
Income before income taxes..................         14.0              15.0              19.9              19.7
Income tax expense .........................          5.4               5.8               7.7               7.6
                                                    -----             -----             -----             -----
Net income .................................          8.6%              9.2%             12.2%             12.1%
                                                    =====             =====             =====             =====

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

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


Second Quarter 2004 Compared to Second Quarter 2003

     Revenues

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


<PAGE>


     Costs and Expenses

     Costs and  expenses as a percentage  of revenues  increased to 86.0% in the
second quarter of 2004 from 85.0% in the second quarter of 2003.

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

     Selling,  general and  administrative  expenses as a percentage of revenues
decreased  to 12.1% in the  second  quarter  of 2004  from  12.5% in the  second
quarter  of 2003  due  primarily  to a  decrease  in  advertising  expense  as a
percentage of revenues.

     Depreciation and amortization expense as a percentage of revenues increased
to 8.4% in the second  quarter  of 2004 from 7.9% in the second  quarter of 2003
primarily due to capital invested in new stores and remodels.

     Interest  expense as a  percentage  of  revenues  increased  to 0.3% in the
second  quarter  of 2004  from  0.2% in the  second  quarter  of 2003  due to an
increase in outstanding debt.

     Other operating  expenses decreased as a percentage of revenues to 19.1% in
the second  quarter of 2004 from 19.3% in the second  quarter of 2003  primarily
due to a decrease in insurance expense and asset write-offs.

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

     Net Income

     The Company had net income of $14.4  million in the second  quarter of 2004
compared  to $13.9  million in the second  quarter of 2003 due to the changes in
revenues and expenses  discussed above. The Company's diluted earnings per share
increased  8.8% to $.37 per share in the second quarter of 2004 from $.34 in the
second  quarter of 2003 due to the 3.7% increase in net income  discussed  above
and a 5.8% decrease in the number of weighted average shares outstanding.


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

     Revenues

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

     Costs and Expenses

     Costs and  expenses as a percentage  of revenues  decreased to 80.1% in the
first six months of 2004 from 80.3% in the first six months of 2003.

<PAGE>


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

     Selling,  general and  administrative  expenses as a percentage of revenues
decreased  to 11.8% in the first six  months of 2004 from 11.9% in the first six
months  of  2003  primarily  due  to a  decrease  in  advertising  expense  as a
percentage of revenues.

     Depreciation and amortization expense as a percentage of revenues increased
to 7.3% in the  first six  months  of 2004 from 7.2% in the first six  months of
2003 primarily due to capital invested in new stores and remodels.

     Interest  expense as a  percentage  of  revenues  was 0.3% in the first six
months of 2004 compared to 0.2% in the first six months of 2003 primarily due to
an increase in outstanding debt.

     Other operating  expenses decreased as a percentage of revenues to 17.0% in
the  first  six  months  of 2004  from  17.5% in the  first  six  months of 2003
primarily  due to the  increase  in  comparable  store sales and the fact that a
significant portion of operating costs are fixed.

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

     Net Income

     The Company had net income of $45.8 million in the first six months of 2004
compared to $40.5  million in the first six months of 2003 due to the changes in
revenues and expenses  discussed above. The Company's diluted earnings per share
increased  19.4% to $1.17 per share in the first six months of 2004  compared to
$.98 per share in the first six months of 2003 due to the 13.3%  increase in net
income  discussed  above and a 4.7%  decrease in the number of weighted  average
shares outstanding.



Financial Condition, Liquidity and Capital Resources

     Cash  provided by  operations  increased to $91.8  million in the first six
months  of 2004 from  $89.1  million  in the  comparable  period  of 2003.  Cash
outflows from  investing  activities for the first six months of 2004 were $39.9
million,  primarily  related to capital  expenditures.  Net cash  outflows  from
financing  activities  for the first six  months  of 2004  were  $48.9  million,
primarily related to the repurchase of the Company's common stock. The Company's
primary  requirements  for cash  relate to  planned  capital  expenditures,  the
repurchase of the Company's  common stock and debt service.  The Company expects
that it will satisfy such  requirements from cash provided by operations and, if
necessary, funds available under its line of credit.

     Cash provided by  operations  is a significant  source of liquidity for the
Company.  Since substantially all of the Company's sales are for cash and credit
cards, and accounts payable are generally due in five to 30 days, the Company is
able to carry current  liabilities in excess of current assets.  The net working
capital  deficit  increased  from $16.5  million at  December  28, 2003 to $18.3
million at June 27, 2004 due  primarily  to the timing of  payments  for various
accrued expenses.

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

<PAGE>


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

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

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

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

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

     The Company has available  borrowings under its line of credit agreement of
$132.5 million that is scheduled to mature in December 2005.  Interest under the
line of credit is  dependent  on  earnings  and debt  levels of the  Company and
ranges  from  prime or, at the  Company's  option,  LIBOR  plus  0.75% to 1.50%.
Currently,  any borrowings  under this line of credit would be at the prime rate
or LIBOR plus 0.75%. As of June 27, 2004, there were $63.0 million in borrowings
under this line of credit and outstanding letters of credit of $7.6 million. The
line of credit agreement contains certain restrictions and conditions as defined
in the  agreement  that  require  the  Company to  maintain  net worth of $374.4
million as of June 27, 2004, a fixed charge  coverage  ratio at a minimum of 1.5
to  1.0  and  a  maximum  total  debt  to  earnings  before   interest,   taxes,
depreciation,  amortization and rent ratio of 3.25 to 1.0.  Borrowings under the
line of credit  agreement are unsecured but the Company has agreed to not pledge
any of its existing assets to secure future indebtedness.  At June 27, 2004, the
Company  was in  compliance  with all of the above debt  covenants.  The Company
intends to extend the maturity date of its line of credit agreement.

<PAGE>


Website Access to Company Reports

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


Forward Looking Statements

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


Item 3. Quantitative and Qualitative Disclosures about Market Risk

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


Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

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


<PAGE>


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

     The Company  performed an evaluation,  under the  supervision  and with the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the  Company's  disclosure  controls and  procedures as of the end of the period
covered by this report.  Based on that  evaluation,  which  included the matters
discussed above, the Company's management, including the Chief Executive Officer
and Chief Financial Officer,  concluded that the Company's  disclosure  controls
and procedures  were not effective as of June 27, 2004 in ensuring that material
information  relating to the Company,  including its consolidated  subsidiaries,
required  to be  disclosed  by the  Company in reports  that it files or submits
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

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

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

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


<PAGE>


                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings.

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

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

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

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

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

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


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

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

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

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

<PAGE>


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

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

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

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

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

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

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

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

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

     a)   Exhibits

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

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

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

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

<PAGE>


b)   Reports on Form 8-K

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

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

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





                                   SIGNATURES




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


                             CEC ENTERTAINMENT, INC.


Dated: March 18, 2005        By:  /s/ Richard M. Frank
                                  ------------------------------
                                  Richard M. Frank
                                  Chief Executive Officer
                                  (Principal Executive Officer)

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

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