<PAGE>   1
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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


                                    FORM 10-Q

                Quarterly Report Pursuant To Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                  For the quarterly period ended March 31, 1998


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


                      MALIBU ENTERTAINMENT WORLDWIDE, INC.
                          717 North Harwood, Suite 1650
                               Dallas, Texas 75201
                                 (214) 210-8701


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


Incorporated in Georgia       SEC File No.: 0-22458          IRS Employer Id.
                                                             No.: 58-1949379


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


         The Company (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 and (2) has been subject to such filing requirements for the past 90
days.

         At May 13, 1998, 48,376,773 shares of the Company's Common Stock were
outstanding.


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<PAGE>   2

                      MALIBU ENTERTAINMENT WORLDWIDE, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                                          1998             DECEMBER 31,
                                                                       (UNAUDITED)             1997
                                                                      --------------      --------------
<S>                                                                   <C>                 <C>           
ASSETS
Current
    Cash and cash equivalents                                         $    1,493,527      $    5,270,843
    Restricted cash                                                        1,307,457           1,302,724
    Inventories                                                            1,844,242           1,976,524
    Current portion of notes receivable                                       78,550              79,927
    Assets held for sale                                                   3,002,672           3,002,672
    Other current assets                                                     957,984           1,019,946
                                                                      --------------      --------------

         Total current assets                                              8,684,432          12,652,636
                                                                      --------------      --------------

Property and equipment, less accumulated depreciation                    115,465,153         116,125,918
                                                                      --------------      --------------

Other noncurrent
    Investments in and advances to limited partnerships                    2,200,781           2,180,410
    Notes receivable                                                          38,816              41,823
    Other assets                                                             236,470             163,805
    Debt issuance costs, less accumulated amortization                     2,573,043           3,155,526
    Intangible assets, less accumulated amortization                       1,024,962           1,029,986
                                                                      --------------      --------------

           Total other noncurrent assets                                   6,074,072           6,571,550
                                                                      --------------      --------------

                                                                      $  130,223,657      $  135,350,104
                                                                      ==============      ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
    Current portion of notes payable                                  $   22,384,141      $    1,060,411
    Current portion of notes payable to shareholder                        8,000,000                  --
    Accounts payable                                                       5,189,345           5,623,907
    Accrued expenses                                                       6,857,977           6,719,027
    Accrued expenses related to assets held for sale                       1,005,223           1,073,714
                                                                      --------------      --------------

           Total current liabilities                                      43,436,686          14,477,059

    Line of credit                                                         7,500,000           7,500,000
    Term loan revolver                                                    10,000,000          10,000,000
    Notes payable to shareholder                                          42,805,350          48,301,668
    Notes payable                                                          7,273,997          28,836,505
    Accrued interest due to shareholder                                    2,074,806           1,094,781
    Other accrued expenses                                                 4,136,639           4,403,856
                                                                      --------------      --------------

           Total liabilities                                             117,227,478         114,613,869
                                                                      --------------      --------------


    Shareholders' equity
     Common stock, 100,000,000 shares authorized with no par
          value; 48,376,776 shares issued and outstanding                141,212,037         141,212,037
     Outstanding warrants                                                  2,085,100           2,085,100
      Notes receivable from employees                                     (5,968,153)         (5,864,523)
     Accumulated deficit                                                (124,332,805)       (116,696,379)
                                                                      --------------      --------------

           Total shareholders' equity                                     12,996,179          20,736,235
                                                                      --------------      --------------

                                                                      $  130,223,657      $  135,350,104
                                                                      ==============      ==============
</TABLE>




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                      MALIBU ENTERTAINMENT WORLDWIDE, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            FOR THE
                                                                       THREE MONTHS ENDED
                                                                           MARCH 31,

                                                                     1998              1997
                                                                 ------------      ------------
<S>                                                              <C>               <C>         
OPERATING REVENUES
Entertainment revenue                                            $  9,130,367      $  7,170,920
                                                                 ------------      ------------

OPERATING EXPENSES
Entertainment expenses                                              9,615,307         7,050,939
General and administrative expenses                                 1,759,330         1,793,199
Other expenses                                                        131,828           158,082
Depreciation and amortization                                       2,453,845         1,367,654
                                                                 ------------      ------------

Total operating expenses                                           13,960,310        10,369,874
                                                                 ------------      ------------


Operating loss                                                     (4,829,943)       (3,198,954)

OTHER (EXPENSE) INCOME
Interest expense                                                   (2,986,754)         (792,968)
Interest income                                                       134,220           149,993
Equity in net losses of limited partnerships, net of tax                   --           (24,691)
Other                                                                  46,051           (66,438)
                                                                 ------------      ------------

Net loss                                                         $ (7,636,426)     $ (3,933,058)
                                                                 ============      ============

Basic and diluted loss per share of common stock                 $      (0.16)     $      (0.14)
                                                                 ============      ============

Weighted average number of shares of
    common stock used in calculating
    net loss per share                                             48,376,773        28,896,467
                                                                 ============      ============
</TABLE>




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                      MALIBU ENTERTAINMENT WORLDWIDE, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   FOR THE THREE MONTHS ENDED
                                                                                           MARCH 31,
                                                                                   1998                 1997
                                                                                -------------      -------------
<S>                                                                             <C>                <C>           
Operating activities:
    Net loss                                                                    $  (7,636,426)     $  (3,933,058)
    Adjustments to reconcile net loss to
       net cash used by operating activities
    Equity in net losses of limited partnerships,
      net of tax                                                                           --             24,691
    Depreciation and amortization                                                   2,453,845          1,367,654
    Amortization of loan costs                                                        582,483            186,678
    (Gain) loss on sale of property and equipment                                     (36,868)            66,438
    Changes in assets and liabilities
      Decrease (increase) in accounts receivable                                      (46,029)            31,380
      Increase in interest on notes receivable from employees                        (103,630)          (102,975)
      Decrease (increase) in inventories                                              132,282           (230,134)
      Decrease (increase) in other assets                                              35,326           (852,423)
      Increase in debt issuance costs
        and intangible assets                                                          (5,585)          (100,000)
      Decrease in accounts payable                                                   (434,562)           (70,477)
      Increase in accrued expenses                                                    138,950            128,838
      Increase in accrued interest due shareholder                                    980,025                 --
      Decrease in accrued expenses related to assets
        held for sale and other                                                      (335,708)           (97,912)
                                                                                -------------      -------------

        Cash used by operating activities                                          (4,275,897)        (3,581,300)
                                                                                -------------      -------------

Investing activities:
    Purchases of property and equipment                                            (1,851,173)        (5,753,624)
    Proceeds from sale of property and equipment                                      105,570             20,950
    Principal payments under notes receivable                                           4,384            122,794
    Increase in notes receivable                                                           --            (68,750)
    Decrease (increase) in investments in and advances to
       limited partnerships                                                           (20,371)            23,824
    Increase in restricted cash                                                        (4,733)           (69,010)

                                                                                -------------      -------------
        Cash used in investing activities                                          (1,766,323)        (5,723,816)
                                                                                -------------      -------------

Financing activities:
    Proceeds from borrowings                                                        2,503,682            227,500
    Payments of borrowings                                                           (238,778)          (257,902)
    Decrease in stock subscription receivable                                              --         16,076,260
    Payment of contingent liability for stock price guarantee                              --           (777,861)

                                                                                -------------      -------------
        Cash provided by financing activities                                       2,264,904         15,267,997
                                                                                -------------      -------------

(Decrease) Increase in cash and cash equivalents                                   (3,777,316)         5,962,881
Cash and cash equivalents, beginning of period                                      5,270,843          2,583,735
                                                                                -------------      -------------

Cash and cash equivalents, end of period                                        $   1,493,527      $   8,546,616
                                                                                =============      =============
</TABLE>




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                      MALIBU ENTERTAINMENT WORLDWIDE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MARCH 31, 1998 AND MARCH 31, 1997
                                   (UNAUDITED)


BASIS OF PRESENTATION

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the accompanying
consolidated financial statements include all adjustments necessary to present
fairly, in all materials respects, the consolidated financial position and
results of operations of the Company and its subsidiaries as of the dates and
for the periods presented. The Company's business is seasonal in nature and the
Company is engaged in the implementation of a new business plan. Operating
results for the three-month period ended March 31, 1998 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1998.

         For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's report on Form 10-K for the year
ended December 31, 1997.

NET LOSS PER SHARE OF COMMON STOCK

         Net loss per share of common stock is computed by dividing net loss
applicable to common stock by the weighted average number of shares of common
stock outstanding during the periods presented.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Results of Operations

         For the three months ended March 31, 1998, the Company had a net loss
of $7.6 million ($.16 per share), compared to a net loss of $3.9 million ($.14
per share) for the comparable period last year.

         Operating revenue increased by $1.9 million (26%) for the three months
ended March 31, 1998 from $7.2 million for the three months ended March 31, 1997
to $9.1 million for the three months ended March 31, 1998. The increase in
operating revenue was primarily due to an increase in entertainment revenue from
the three family entertainment centers (FECs), which were converted to
SpeedZones ($2.6 million). The increase was offset by the decrease in
entertainment revenue from the FECs which were operated in both years ($0.2
million), the decrease in revenue from the FECs which were sold in May 1997
($0.4 million) and the FECs closed in 1997 pending final disposition ($ 0.1 
million). The Company believes that weather 



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<PAGE>   6
conditions associated with El Nino caused revenues in the first quarter of 1998
to be lower than expected.

         Entertainment expenses increased by $2.5 million for the three months
ended March 31, 1998 compared to the same period in the prior year primarily as
a result of greater operating costs associated with the increase in
entertainment revenue generated by the SpeedZone product ($2.6 million). The
increase in entertainment expenses was partially offset by the ($0.8 million)
decrease in expenses from the FECs which were sold in May 1997 or closed during
1997 pending final disposition. 

         Depreciation and amortization increased due to an increase in
depreciation for the SpeedZones ($0.4 million) and on games purchased in the
latter part of 1997 ($0.7 million).

         Interest expense increased by $2.2 million for the three months ended
March 31, 1998 as compared to the same period in the prior year primarily due to
the increase in the outstanding balance of third party debt.

         The business of the Company is highly seasonal. Approximately
two-thirds of the Company's revenues have historically been generated during the
six-month period of April through September. As a result, the Company's
operating income can be expected to be substantially lower in the first and last
quarters of the year than the second and third quarters. As a result of this
seasonality and the fact that the Company's business plan is in the early stages
of implementation, the Company believes that the results of operations for the
three months ended March 31, 1998 are not necessarily indicative of the
Company's future results of operations.

Liquidity and Capital Resources

         During the first quarter of 1998, the Company financed its operations
primarily through financing from the Company's largest shareholder, MEI Holdings
($2.3 million). The Company's principal uses of cash during the first quarter of
1998 were to finance operations ($4.2 million) and capital improvements ($1.7
million). The Company's capital expenditures totaled $1.7 million for the three
months ended March 31, 1998 compared to $5.7 million for the comparable 1997
period.

         The Company presently expects that the conversion of certain other FECs
to the SpeedZone concept and the development of new SpeedZone parks will require
the Company to secure additional capital resources, which could involve the
issuance of debt or equity securities, securitization of assets or other capital
transactions. The cost of conversion of existing FECs to the SpeedZone concept,
or the development of new SpeedZone parks, will be dependent upon various
factors, including land acquisition, construction and other costs, but is
expected to be substantial ($10-$20 million per facility). The Company also
intends to consider other transactions, including acquisition of other
businesses, and other business combinations, that could create long-term
shareholder value. The pursuit of any acquisition opportunities which may become
available and the implementation of the Company's business plan is expected to
require the Company to issue additional debt or equity securities or to consider
possible changes in its capitalization or structure. Accordingly, there can be
no assurances that the Company will 


                                       6
<PAGE>   7

be able fully to implement its business plan or to pursue those or other
opportunities that otherwise might be available to the Company or as to the
timing or terms thereof.

         In addition, the Company expects to seek to refinance its existing
indebtedness, including indebtedness held by its largest shareholder. Any
refinancing could involve the issuance of additional debt or equity securities,
or rights in respect thereof, the terms of which cannot be predicted but could
involve, among other possible transactions, additional asset sales, spin-offs or
other transactions. There can be no assurance that such refinancing will be
available to the Company or as to the amount and terms thereof.

Impact of Year 2000 issue

         The Company is currently studying what, if any, measures are necessary
to resolve any potential impact of the year 2000 problem on the processing of
date-sensitive information by its computer systems. The year 2000 problem is the
result of computer programs being written using two digits (rather than four) to
define the applicable year. Any of the Company's programs that have
time-sensitive information may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations. Based on preliminary
information, costs of addressing potential problems are not expected to be
material, nor is the year 2000 issue expected to have a material adverse effect
on the Company. The inability of third parties with whom the Company transacts
business to adequately address their year 2000 issues is outside the Company's
control. There can be no assurance, however, that the failure of the Company or
such third parties to adequately address their respective year 2000 issues will
not have a material adverse effect on the Company.

Legal Proceedings

         Due to the nature of the attractions at the Company's parks, the
Company has been, and will likely continue to be, subject to a significant
number of personal injury lawsuits, certain of which may involve claims for
substantial damages. The Company also is from time to time a party to other
claims and legal proceedings, and is subject to environmental, zoning and other
legal requirements. As of the date of this Report, the Company does not believe
that any such matter is reasonably likely to have a material adverse effect on
the Company's financial position or the results of operations. However, there
necessarily can be no assurance in this regard or that the Company will not be
subject to material claims or legal proceedings or requirements in the future.

Forward-Looking Statements

         This report (including the documents incorporated by reference herein)
contains certain forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) and information relating to
the Company that is based on the beliefs of the Company's management, as well as
assumptions made by and information currently available to the management of the
Company. When used herein, words such as "anticipate," "believe," 



                                       7
<PAGE>   8

"estimate," "expect," "intend" and similar expressions, as they relate to the
Company or the Company's management, identify forward-looking statements. Such
statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions relating
to the operations and results of operations of the Company and cost of capital
resources; competitive factors and pricing pressures; general economic
conditions; the failure of market demand for the types of entertainment
opportunities the Company provides or plans to provide in the future and for
family entertainment in general to be commensurate with management's
expectations or past experience; impact of present and future laws; ongoing need
for capital; changes in operating expenses; adverse changes in governmental
rules or policies; changes in demographics and other factors. Should one or more
of these assumptions prove incorrect, actual results or outcomes may vary
materially from those described herein as anticipated, believed, estimated,
expected or intended. Accordingly, shareholders are cautioned not to place undue
reliance on such forward-looking statements.


PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         During 1997, the Company issued 200,000 shares of Common Stock under
the Company's Management Incentive Plan to an employee of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
Exhibit No.                   Description
-----------                   -----------
<S>            <C>
     10.1      1993 Company Nonemployee Director Stock Option Plan as amended
               effective January 10, 1995 (filed herewith) 

     27        Financial Data Schedule (for Sec purposes only)
</TABLE>

(b) No reports of Form 8-K were filed during the period covered by this report.




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<PAGE>   9

                                   SIGNATURES


         In accordance with the requirements of the Exchange Act, the Company
caused this report to be signed on behalf by the undersigned, thereunto duly
authorized.


                                MALIBU ENTERTAINMENT WORLDWIDE, INC.


                                      By: /s/ Richard M. FitzPatrick
                                          -------------------------------------
                                                  Richard M. FitzPatrick
                                                  Chief Financial Officer

May 14, 1998





                                       9
<PAGE>   10

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit No.                   Description
-----------                   -----------
<S>            <C>
     10.1      1993 Company Nonemployee Director Stock Option Plan as amended
               effective January 10, 1995 (filed herewith) 

     27        Financial Data Schedule 
</TABLE>