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                 [LETTERHEAD OF ACCLAIM ENTERTAINMENT, INC.]

August 13, 1999

Mr. William Sorenson
530 Monterey Avenue
Pelham Manor, New York 10803

Dear Bill:

The following sets forth the terms and conditions relating to your employment by
Acclaim:

1.  Acclaim hereby employs you as its Executive Vice President and Chief
Financial Officer for the Employment Period (as defined in Paragraph 9). By your
signature below, please acknowledge your acceptance of such employment, your
agreement to be in charge of and responsible for all of the duties normally
associated with said positions including, without limitation, the
responsibilities set forth on Schedule 1, your agreement faithfully and to the
best of your abilities to perform such other services consistent with your
position as a senior executive officer as may from time to time be assigned to
you by the Board of Directors of Acclaim (the "Board") and/or either of the
Co-Chairmen of the Board (the "Co-Chairmen") and your agreement to devote
substantially all of your business time, skill and attention to such services.
Notwithstanding anything to the contrary in this Letter, you shall not be
prevented from investing and managing your assets in such form or manner as will
not unreasonably interfere with the services to be rendered by you hereunder, or
from acting as a director, trustee, officer of, or on a committee of, or a
consultant to, any other firm, trust or corporation where such positions do not
unreasonably interfere with the services to be rendered by you hereunder.

2.  A.  Acclaim shall pay to you, and you shall accept from Acclaim, for your
services during the Employment Period, (i) a salary at the rate of $400,000
per annum (the "Base Salary"), payable in accordance with Acclaim's customary
executive payroll policy as in effect from time to time, but not less frequently
than monthly, and (ii) a bonus in an amount and payable as provided in Part C
of this Paragraph 2.

    B.  The Base Salary shall be reviewed by the Board annually and may be
increased if the Board, in its sole and absolute discretion, determines that
such increase is advisable based on such factors as the Board shall consider
appropriate from time to time.

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    C.  You shall be eligible to receive a bonus (the "Bonus") with respect to
each fiscal year ending during the Employment Period in an amount targeted at
100% of your then Base Salary. Any Bonus payable to you shall be based on and
subject to the achievement by Acclaim of certain financial goals established by
the Board in its sole and absolute discretion and based on your individual
contributions to Acclaim's overall success and team performance, as determined
by the Board in its sole and absolute discretion and subject to Acclaim's Annual
Incentive Plan; provided, however, that, subject to the last sentence of this
Part C, in no event shall the Bonus with respect to the fiscal year ending
August 31, 2000 be less than $350,000. A Bonus shall be payable annually as
promptly as practicable following the public announcement of Acclaim's results
of operations for the applicable fiscal year and, in any event, not later than
30 days after the date on which Acclaim files its annual report on Form 10-K
(or any successor form thereto) for such fiscal year (whether or not such
payment date is during the Employment Period). A Bonus shall not be payable to
you if, prior to the end of the Employment Period, your employment hereunder
shall have been terminated by you voluntarily or by Acclaim for Cause (as
defined in Part A of Paragraph 4).

    D.  Acclaim shall provide you with an automobile allowance of $1,200 per
month.

    E.  Acclaim shall grant you an option (the "Option") under, and subject to
the terms of, Acclaim's 1998 Stock Incentive Plan (the "Plan") to purchase
200,000 shares of Acclaim's common stock, par value $0.02 per share (the "Common
Stock"), exercisable at the fair market value of a share of Common Stock on the
date of grant. The Option shall be exercisable in three equal installments on
the first, second and third anniversaries of the Effective Date. To the extent
permitted by law and subject to the Plan, the Option shall be an "incentive
stock option" within the meaning of Section 422(b) of the Internal Revenue
Code of 1986, as amended.

    F.  Acclaim shall issue to you 100,000 shares of Common Stock (the
"Restricted Stock"), which shares shall vest as set forth, and upon the other
terms described, in Exhibit A attached hereto.

    G.  You shall be entitled to participate, on the same basis, subject to the
same qualifications, as other similarly situated executive officers of Acclaim,
in any pension, profit sharing, stock purchase, stock option, savings, bonus,
health insurance, hospitalization, and other fringe benefit plans and policies
in effect with respect to similarly situated executive officers of Acclaim
generally. Annual grants, if any, of stock options to you to purchase shares of
Common Stock shall be subject to the sole discretion of the Compensation
Committee of the Board. In addition, Acclaim shall provide you with term life
insurance in the amount of $1,000,000, payable to your designees.

    H.  Acclaim shall reimburse you for all reasonable out-of-pocket expenses
incurred by you in connection with the performance of your duties hereunder,
upon presentation of appropriate documentation therefor.

    I.  During the Employment Period, you shall be entitled to paid vacations of
20 business days per annum, with a maximum of 10 consecutive business days to be
taken at any

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one time, and otherwise in accordance with Acclaim's vacation policies in effect
from time to time.

3.  If, during the Employment Period, you shall be unable substantially to
perform the duties required of you pursuant to the provisions of this Letter due
to any Disability (as defined below), Acclaim shall have the right to terminate
your employment pursuant to this Letter by giving you not less than 30 days'
written notice, at the end of which time, if such disability has continued, your
employment shall be terminated. You shall retain your status and continue to
receive your full compensation hereunder during the period prior to any
termination hereunder because of a disability. As used in this Letter, the term
"Disability" shall mean your inability to substantially perform your duties
under this Letter by reason of a non-intentionally self-inflicted medical
disability, including mental or physical illness, as certified by a physician
appointed by Acclaim which medical disability has lasted for a period of
180 days in any 12 consecutive months.

4.  A.  Acclaim shall have the right to terminate your employment pursuant to
this Letter for Cause. "Cause" for termination means (i) any act of fraud,
embezzlement, or other misappropriation or any other act or omission by you that
amounts to a willful breach of your fiduciary duty to Acclaim or its direct or
indirect clients, (ii) your conviction of a felony or any crime involving moral
turpitude under state or federal law, or the equivalent under foreign law, (iii)
your material breach of any rules or regulations of employment, or any policies
related thereto, which may be adopted or amended from time to time by Acclaim of
which you have been given written notice and which are consistent with this
Letter, (iv) your refusal to perform satisfactorily your duties and obligations
under this Letter, (v) (not used), (vi) your willful refusal to carry out the
reasonable instructions of either of the Co-Chairmen of Acclaim or the Board,
(vii) the happening of any event which, under the provisions of any federal,
state or foreign laws applicable to Acclaim or its activities, disqualifies you
from acting in any capacity provided for herein, including, without limitation,
any event which disqualifies you under the Securities Act of 1933 or the
Securities Exchange Act of 1934 or (viii) your default of any material
obligations under this Letter (other than those specified in clauses (i) through
(vi) above); provided, however, that Acclaim shall have given you written notice
specifying any event or breach specified in clauses (iii) through (vi) and
(viii) above and permitted you to cure any such breach within the period of 15
days after receipt of such notice if such breach is capable of being cured and
you have failed to cure such breach within such 15 days; provided, further,
however, that Acclaim shall not be obligated to provide you with notice and
opportunity to cure more than one event or breach under each of clauses (iii)
through (vi) and (viii) above. If your employment is terminated by Acclaim for
Cause, Acclaim's obligations to you shall terminate immediately, except as
expressly provided in Part B of Paragraph 8 hereof.

    B.  If, during the Employment Period (as defined in Paragraph 9), there
shall occur a "Change in Control" (as defined below) of Acclaim and, within one
year thereafter, there shall occur a change in your "Circumstances of
Employment" (as defined below), you may terminate your employment pursuant to
this Letter by written notice to Acclaim and you shall be entitled to receive
the benefits provided in Part A of Paragraph 8 hereof; provided, however, that
you shall first have given Acclaim written notice specifying any event or breach
specified in this clause and Acclaim is permitted to cure any such breach within
the period of 15 days after receipt of

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notice of such breach Acclaim has failed to cure such breach within such 15
days; provided, further, however, that you shall not be obligated to provide
Acclaim with notice and opportunity to cure more than one event or breach under
each of clauses (a) through (f) as contained in the last paragraph of this
Part B of Paragraph 4.

    A   "Change in Control" shall be deemed to occur upon (a) the sale by
Acclaim of all or substantially all of its assets to any person (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), the
consolidation of Acclaim with any person, or the merger of Acclaim with any
person as a result of which merger Acclaim is not the surviving entity as a
publicly held corporation, or (b) the sale or transfer or issuance of shares of
Common Stock by Acclaim and/or any one or more of its stockholders (other than
Gregory E. Fischbach or James R. Scoroposki), as the case may be, in one or more
transactions, related or unrelated, to one or more persons as a result of which
any person and its "affiliates" (as hereinafter defined), other than Gregory E.
Fischbach or James R. Scoroposki, shall own more than 15% of the outstanding
Common Stock, unless such sale or transfer has been approved in advance by the
Board. An "affiliate" shall mean any person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, any other person.

    Your "Circumstances of Employment" shall be deemed to have changed if there
shall have occurred any of the following events: (a) a material reduction or
change in your duties or reporting responsibilities; (b) a material breach by
Acclaim of any provision of this Letter; (c) a material reduction in the fringe
benefits made available by Acclaim to you; (d) a material diminution in your
status, working conditions or economic benefits; (e) any action which
substantially impairs your prestige or esteem in relation to any other employee
of Acclaim; or (f) a reduction in your Base Salary.

    5.  A. If terminated by Acclaim for Cause, you agree, to the extent
permitted by law, that neither you nor your spouse nor any of your minor
children shall, during your employment with Acclaim and for one year thereafter,
directly or indirectly, own, manage, operate, join or control, or participate in
the ownership, management, operation or control of, or be a director or employee
of, or a consultant to, any business, firm or corporation which is conducting
any business which is substantially similar to or competes in any substantial
respect with the business of Acclaim or any affiliate thereof as conducted or as
contemplated to be conducted at the date of termination; provided, however, that
the provisions of this Paragraph 5 shall not apply to your investments in shares
of stock registered under the Securities Exchange Act of 1934 which (i) shall
have an initial cost of less than $200,000 or (ii) shall constitute less than
five percent of the outstanding shares of such stock.

    B. You agree that you shall not, during the Employment Period and for one
year thereafter, (i) persuade or attempt to persuade any video game software
developer, producer, manufacturer, licensor, supplier or other person providing
services or goods to Acclaim not to do business with Acclaim or any affiliate
thereof or to reduce the amount of business it does with Acclaim or any
affiliate thereof; (ii) persuade or attempt to persuade any customer not to do
business with Acclaim or any affiliate thereof or to reduce the amount of
business it does with Acclaim or any affiliate thereof; (iii) solicit for
yourself or any person other than Acclaim the

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business of any video game software developer, producer, manufacturer, licensor,
supplier or other person providing services or goods to Acclaim or any affiliate
thereof, or customer or potential customer who did business with Acclaim or any
affiliate thereof within one year prior to the termination of the Employment
Period; (iv) persuade or attempt to persuade any employee of Acclaim or any
affiliate thereof, or any individual who was an employee of Acclaim or any
affiliate thereof during the six months prior to termination of the Employment
Period, to leave Acclaim's or such affiliate's employ or to become employed by
any person other than Acclaim or any affiliate thereof, nor (v) if you shall
voluntarily terminate your employment hereunder, perform any consulting services
for any person, partnership, corporation, or other entity who has engaged in
business with Acclaim or any affiliate thereof during the one year immediately
preceding such termination.

    C. You also agree that, during the Employment Period and at all times
thereafter, you shall not disclose or use any confidential, proprietary or
secret information including, without limitation, trade secrets of Acclaim or
any affiliate thereof, relating to Acclaim or any affiliate thereof or any of
its or their respective customers or video game software developers, producers,
manufacturers, licensors, suppliers or other persons providing goods or services
to Acclaim or any affiliate thereof with which Acclaim or such affiliate does
business, other than information already in the public domain or independently
developed by a third party who has no contractual or other arrangement with
Acclaim.

6.  You acknowledge and agree that, because of the unique and extraordinary
nature of your services, any breach of the provisions of Paragraph 5 hereof will
cause irreparable injury and incalculable harm to Acclaim and that it shall,
accordingly, be entitled to injunctive or other equitable relief.

7.  Acclaim shall indemnify you (and your legal representatives or other
successors) to the fullest extent permitted by the laws of the State of Delaware
and its existing certificate of incorporation and by-laws, and you shall be
entitled to the protection of any insurance policies Acclaim may elect to
maintain generally for the benefit of officers, against all costs, charges and
expenses whatsoever incurred or sustained by you (or your legal representatives
or other successors) in connection with any action, suit or proceeding to which
you (or your legal representatives or other successors) may be made a party by
reason of your being or having been an officer or employee of Acclaim and its
subsidiaries and affiliates including, without limitation, any joint venture or
partnership in which Acclaim or any of its subsidiaries has an interest.

8.  A. If your employment hereunder is terminated other than upon your death or
disability (i) by you pursuant to Part B of Paragraph 4 hereof, (ii) by you in
the event of a material reduction in the stature of your duties or where you are
directed to report directly to an officer who is less than the Chief Executive
Officer of the Company, (iii) by you in the event of a reduction in your Base
Salary, or (iv) by Acclaim other than for Cause, Acclaim shall pay to you the
Base Salary that would otherwise have been payable to you for the 24-month
period commencing with the termination of the Employment Period, at the same
intervals as such payments would have been made had your employment not been
terminated. In addition, if your employment hereunder is terminated as
contemplated by the first sentence of this Part A, (a) you

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shall be provided with outplacement services for six months following the
termination of your employment hereunder, (b) you shall be entitled to Acclaim's
then available medical, dental, life and disability benefits for the 24-month
period commencing with the termination of the Employment Period and (c)
notwithstanding anything to the contrary contained in the Plan, in the stock
option or other agreements between you and Acclaim or in the stock option or
other certificates delivered to you, the contractual restrictions relating to
the Restricted Stock issued pursuant to Part F of Paragraph 2 hereof shall
immediately terminate and all options previously granted to you shall become
immediately vested and exercisable in full; provided, however, that with
respect to clauses (ii) and (iii) contained in this Part A of Paragraph 8, prior
to any termination by you, you shall first have given Acclaim written notice
specifying any event or breach specified in the aforementioned clauses and
Acclaim is permitted to cure any such breach within the period of 15 days
after receipt of such notice of such breach and Acclaim has failed to cure such
breach within such 15 days; and provided, further, however, that you shall
not be obligated to provide Acclaim with notice and opportunity to cure more
than one event or breach under each of clauses (ii) and (iii) contained in this
Part A of Paragraph 8.

    B. If your employment hereunder is terminated (i) by your voluntary action
for any reason except as contemplated by Part B of Paragraph 4 or by you
pursuant to Part A (ii) or (iii) of Paragraph 8 hereof, (ii) upon your death or
disability or (iii) by Acclaim for Cause, Acclaim shall pay, in lieu of any
other payments hereunder (including Bonus payments, except, if your employment
hereunder is terminated by reason of clause (ii) hereof, for any Bonus payments
due for periods prior to termination), your Base Salary that has actually
accrued to the date of termination. Upon the making of such payments pursuant to
this Part B, Acclaim shall have no further obligation to you under this Letter.

    C. You may not terminate this agreement for any reason other than as set
forth in Part B of Paragraph 4 and Part A of Paragraph 8.

9.  The term of your employment hereunder shall commence on August 18, 1999 (the
"Effective Date") and terminate on the third anniversary thereof, subject to
earlier termination as provided in Paragraphs 3, 4 Part B and 8 Part A hereof or
upon your death (the "Employment Period"). The Employment Period may be extended
upon the mutual agreement of the parties hereto.

10. All notices hereunder shall be in writing and shall be sent by registered or
certified mail, return receipt requested; if intended for Acclaim, such notices
shall be addressed to it at One Acclaim Plaza, Glen Cove, New York 11542,
Attention: Gregory E. Fischbach, with a copy to Rosenman & Colin LLP, 575
Madison Avenue, New York, New York 10022, Attention: Jayshree Parthasarathy,
Esq., or at such other address of which Acclaim shall have given notice to you
in the manner herein provided; and, if intended for you, such notices shall be
mailed to you at your address first set forth above or at such other address of
which you shall have given notice to Acclaim in the manner herein provided.

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11. This Letter constitutes the entire understanding among the parties with
respect to the matters referred to herein and no waiver of or modification to
the terms hereof shall be valid unless in writing signed by the party to be
charged and only to the extent therein set forth. All prior and contemporaneous
agreements and understandings with respect to the subject matter of this Letter
are hereby terminated and superseded by this Letter.

12. If any provision of this Letter is held to be invalid, illegal or
unenforceable in any respect for any reason, the balance of this Letter shall
remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.

13. This Letter shall be binding upon and inure to the benefit of the parties
hereto, their respective heirs, administrators, executors, personal
representatives, successors and assigns.

14. This Letter shall be construed under the laws of the State of New York
applicable to agreements wholly to be executed and to be performed therein.

15. Any dispute, claim, controversy or claim arising out of, relating to or in
connection with this Letter, or the breach, termination or validity thereof,
shall be brought exclusively in any Federal or State court in the State of New
York, County of New York. Both parties hereto expressly and irrevocably submit
to the jurisdiction of said courts and irrevocably waive any objection which
either of them may now or hereafter have to the laying of venue of any action,
suit or proceeding arising out of or relating to this Letter brought in such
courts, irrevocably waive any claim that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum and further
irrevocably waive the right to object, with respect to such claim, action, suit
or proceeding brought in any such court, that such court does not have
jurisdiction over such party. The parties hereto hereby irrevocably consent to
the service of process by registered mail, postage prepaid, or by personal
service within or without the State of New York. Nothing contained herein shall
affect the right to serve process in any manner permitted by law.

16. Acclaim shall be entitled to withhold from amounts payable to you hereunder
such amounts as may be required by applicable law.

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     Please sign this Letter below to indicate your agreement with and
acceptance of the terms set forth above.

                                                Very truly yours,

                                                ACCLAIM ENTERTAINMENT, INC.


                                                By /s/ Gregory E. Fischbach
                                                   -----------------------------
                                                Name:  Gregory E. Fischbach
                                                Title: President Chief Executive
                                                       Officer and Co-Chairman

Agreed to and Accepted:

/s/ William G. Sorenson
------------------------
WILLIAM G. SORENSON

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                                  Schedule 1

                               Responsibilities

o   Primary responsibilities will be to direct and control Financial operations
    and corporate development to include: accounting, tax, reporting, treasury,
    cash management as well as planning/forecasting, capital spending, risk
    management and acquisitions and divestitures.

o   Additional responsibilities include:

    o   Directs the organizational financial planning and accounting policies,
        the relationships with lending institutions, shareholders and the
        financial community.

    o   Oversees treasury, budgeting, audit, tax, accounting, purchasing, real
        estate and insurance activities.

    o   Ensures procedures and systems are in place to maintain proper records,
        accounting controls and services.

    o   Directs cash management activities as custodian of funds, securities
        and assets of the organization.

    o   Issues periodic financial and operating reports.

    o   Directs the preparation and issuance of the corporations Annual Report,
        10(k), 10Q's and other documentation required by the SEC or for public
        information.

    o   Oversees and influences the business plan strategy and formulation
        through proactive business partnerships, both internally and externally.

    o   Assists in acquisitions, business line extensions and other investment
        opportunities as directed by the CEO or Co-Chairman.

    o   Assumes primary responsibility for the integrity and accuracy of all
        financial reports and statements.

    o   Develops technical and functional bench strength throughout the Finance
        organization, improves capability and productivity through targeted
        training and career development.

    o   Manages external audits.

    o   Oversees the proper filing of all taxes.

    o   And any other duty normally carried out by the Chief Financial Officer
        of a public company.

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                                  Exhibit A

                        Terms of Restricted Stock Sale

Number of shares: 100,000 shares of Common Stock

Purchase Price: $0.02 per share, payable upon sale

Restrictions: Shares may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of until (1) the first anniversary of the
Effective Date, with respect to up to 33,333 shares, (2) the second anniversary
of the Effective Date, with respect to up to 66,666 shares, and (3) the third
anniversary of the Effective Date, with respect to all 100,000 shares.

If employment is terminated pursuant to the first sentence of Paragraph 8A of
the Letter to which this Exhibit A is attached, the above restrictions shall
immediately terminate.

If employment is terminated other than pursuant to the first sentence of
Paragraph 8A of the Letter to which this Exhibit A is attached, all shares as to
which the restrictions shall not theretofore have terminated shall be delivered
immediately to Acclaim and Acclaim shall purchase them for a purchase price of
$0.02 per share.