Xplosiv, the budget arm of computer games developer and publisher Empire Interactive, has been bolstered by an agreement with Activision, granting it European distribution rights over 30 popular titles. In the year to 31 December 2001 Xplosiv contributed £1.8m to total group sales of £11.1m and chief executive Ian Higgins reckons that the deal will easily increase the division's 2002 contribution by £1m. Activision is one of the leading US-based games developers and as such the agreement grants Empire distribution rights over some fairly high-profile titles including Tony Hawk's Pro Skater 2 and Solider of Fortune. As a result, Xplosiv boasts a stable of around 80 well known PC-based titles, retailing for either £4.99 or £9.99. These games are sold through petrol stations and department stores as well as from more specialist outlets such as Electronics Boutique and Dixons. Higgins says that this enables the label to generate a higher number of impulse-based sales. Although Xplosiv only accounts for a relatively small percentage of group sales Higgins hopes that it will 'underpin' the larger console games business. Broker Beeson Gregory forecasts a £300,000 profit for the coming year, with sales hitting £21.3m and earnings of 0.35. Empire thus stands on a monstrous forward p/e of 102, although this should reduce considerably in time. Hold.