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                                                                    EXHIBIT 10.1




                                         November 5, 1999



Mr. Neil D. Nicastro
999 N. Sheridan Road
Lake Forrest, IL 60045

Dear Mr. Nicastro:

         Reference is made to your Employment Agreement with Midway Games Inc.
dated July 1, 1996, as amended March 15, 1998, (the "Midway Employment
Agreement").

         This letter reflects our agreement that the Midway Employment Agreement
will be deemed amended, effective immediately as follows:

         1. The date "June 30, 2001" appearing in paragraph 2 of the Midway
Employment Agreement is changed to "October 30, 2004".

         2. Your base salary referred to in paragraph 3(a) of the Midway
Employment Agreement is $600,000 per annum.

         3. Paragraphs 6(a) and 6(b) of the Midway Employment Agreement are
amended in their entireties to read as follows:

         "(a) In the event Nicastro shall die during the term of this
         Agreement but prior to his "Retirement Date" (as hereinafter
         defined), Midway shall, in addition to the benefits which may
         become payable pursuant to subparagraph 3(c), pay death
         benefits as hereinafter provided to such person or persons as
         Nicastro shall, at his option, from time to time designate by
         written instrument delivered to Midway, each subsequent
         designation to be deemed to revoke all prior designations, or
         if no such designation is made to his estate, for a period of
         ten (10) years, in equal monthly payments commencing the
         first day of the month following death. Such annual death
         benefits shall be equal to one-half (1/2) of the aggregate of
         (a) the annual base salary payable to Nicastro as of the date
         of death and (b) the average annual bonus payable to Nicastro
         during the three full fiscal years of his employment prior to
         the date of death, but in no event shall the annual death
         benefit be less than Three Hundred Thousand Dollars
         ($300,000) per annum or greater than the amount of the annual
         base salary payable to Nicastro as of the date of death."

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         "(b) The Retirement Date shall mean the later to occur of (i)
         the date on which Nicastro shall become forty-five (45) years
         old or (ii) the date of the termination of Nicastro's
         employment by Midway. Midway will pay to Nicastro on the
         first day of the first month following his Retirement Date,
         and on the first day of each month thereafter for a period of
         ten (10) years in equal monthly payments, an annual
         retirement income benefit equal to one-half (1/2) of the
         aggregate of (a) the annual base salary payable to Nicastro
         as of the date of termination of his employment by Midway and
         (b) the average annual bonus payable to Nicastro during the
         three full fiscal years of his employment prior to the date
         of termination of his employment by Midway, but in no event
         shall the annual retirement income benefit be less than Three
         Hundred Thousand Dollars ($300,000) per annum or greater than
         the amount of the annual base salary payable to Nicastro as
         of the date of termination of his employment by Midway. In
         the event that Nicastro shall die after his Retirement Date
         but before the retirement benefits provided for herein shall
         be fully paid, the balance thereof shall thereafter be paid
         in monthly installments to his estate."

         In all other respects, the Midway Employment Agreement is hereby
confirmed and is in full force and effect.

         Please indicate your agreement to the foregoing by signing this letter
in the place provided below.

                                       Very truly yours,

                                       Midway Games Inc.



                                       By: /s/ Harold H. Bach, Jr.
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                                            Harold H. Bach, Jr.
                                            Executive Vice President - Finance

Accepted and Agreed to:



/s/ Neil D. Nicastro
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Neil D. Nicastro