NTN COMMUNICATIONS INC, S-3/A, 1995-11-08

NTN COMMUNICATIONS INC
S-3/A, 1995-11-08
TELEVISION BROADCASTING STATIONS

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<PAGE>

As filed with the Securities and Exchange Commission on November 8, 1995
Reg. No. 33-97780

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1
TO
FORM S-3

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

NTN COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)

Delaware The Campus 31-1103425
(State or other 5966 La Place Court (I.R.S. Employer
jurisdiction of Carlsbad, California 92008 Identification No.)
incorporation or (619) 438-7400
organization

(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Ronald E. Hogan, Chief Financial Officer
NTN Communications, Inc.
The Campus
5966 La Place Court
Carlsbad, California 92008
(619) 438-7400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

With a copy to:
Dale E. Short, Esq.
Troy & Gould Professional Corporation
1801 Century Park East, Suite 1600
Los Angeles, California 90067
(310) 553-4441

Approximate date of commencement of proposed sale to public:
As soon as practicable after this Registration Statement becomes effective.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
_____________________

CALCULATION OF REGISTRATION FEE

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Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be offering price aggregate offering registration
securities to be registered registered(1) per share price fee
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<S> <C> <C> <C> <C>
Common Stock, $.005 par value . . . . 1,165,955 shares(2) $4.875(3) $5,684,031(3)
Common Stock, $.005 par value . . . . 50,000 shares(4) $7.50(5) $375,000(5)
Common Stock, $.005 par value . . . . 37,500 shares(4) $6.75(5) $253,125(5)
Common Stock, $.005 par value . . . . 30,000 shares(4) $5.125(5) $153,750(5)
Total . . . . . . . . . . . . . 1,283,455 shares $6,465,906 $2,230(6)
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(Footnotes on next cover page)
</TABLE>

<PAGE>
(1) In accordance with Rule 416 of the General Rules and Regulations under the
Securities Act of 1933, there are also being registered such indeterminate
number of additional shares of Common Stock as may become issuable pursuant
to anti-dilution provisions of the stock purchase agreements relating to
the initial issuance of the shares being registered.
(2) Includes 53,455 shares of Common Stock which may become issuable pursuant
to certain anti-dilution provisions of the stock purchase agreements
relating to the original issuance of 600,000 of the shares registered
hereunder.
(3) Estimated solely for the purpose of calculating the registration fee and
based, pursuant to Rule 457(c), on the average of the high and low sale
prices of Registrant's Common Stock as reported on the American Stock
Exchange on October 3, 1995.

(4) Consists of the shares underlying the warrants described herein.

(5) Pursuant to Rule 457(g), calculated based on the exercise prices of the
warrants to purchase shares of Common Stock of the Company.

(6) Of which $2,177 was previously paid.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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ii
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NTN COMMUNICATIONS, INC.

Cross-Reference Sheet
Pursuant to Item 501(b) of Regulation S-K, showing the location in the
Prospectus of the answers to the items in Part I of Form S-3.

FORM S-3 ITEM NUMBER AND CAPTION PROSPECTUS CAPTION

1. Front of the Registration Statement and Facing Page; Outside Front Cover
Front Cover Page of Prospectus Page

2. Inside Front and Outside Back Cover Inside Front Cover Page and Back
Pages of Prospectus Cover Page

3. Summary Information, Risk Factors and Risk Factors
Ratio of Earnings to Fixed Charges

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Outside Front Cover Page; Price
Range of Common Stock and
Dividend Policy

6. Dilution Not Applicable

7. Selling Security Holders Selling Securityholders

8. Plan of Distribution Outside Front Cover Page; Plan
of Distribution

9. Description of Securities to Be Outside Front Cover Page;
Registered Description of Securities

10. Interest of Named Experts and Counsel Not Applicable

11. Material Changes Certain Recent Developments

12. Incorporation of Certain Information by Incorporation of Certain
Reference Documents by Reference

13. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act
Liabilities

<PAGE>

SUBJECT TO COMPLETION, DATED NOVEMBER 8, 1995
PROSPECTUS

NTN COMMUNICATIONS, INC.
1,230,000 Shares

This Prospectus relates to the offer by certain securityholders named
herein (the "Selling Securityholders") for sale to the public from time to
time of up to 1,230,000 shares (the "Shares") of common stock, $.005 par
value (the "Common Stock"), of NTN Communications, Inc. See "Selling
Securityholders." Unless otherwise indicated herein, references herein to
the "Company" mean NTN Communications, Inc. and its subsidiaries, including
New World Computing, Inc. ("New World").

Of the shares of Common Stock offered hereby, 512,500 are held by Jon
Van Caneghem, the President and former sole shareholder of New World, 117,500
are issuable upon the exercise of certain warrants to purchase Common Stock
of the Company (the "Warrants") and the remainder are offered by certain
Selling Securityholders advised by Dimensional Fund Advisors, Inc. See
"Selling Securityholders."

The Company will not receive any proceeds from the sale of the Common
Stock offered hereby, with the exception of the exercise price of such of the
Warrants as may be exercised. See "Use of Proceeds" and "Description of
Securities."

The Common Stock is traded on the American Stock Exchange ("AMEX") under
the symbol "NTN." As of November 6, 1995, the last sale price for the Common
Stock as reported on the AMEX was $4.50. See "Price Range of Common Stock
and Dividend Policy."

SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN MATERIAL RISKS ASSOCIATED WITH AN INVESTMENT IN THE SHARES OFFERED
HEREBY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

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Price to Proceeds to Selling
Public Securityholders (1)
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Per Share of Common Stock $ (2) $
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Total $
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(1) All proceeds from the sale of the Shares offered hereby will be received by
the Selling Securityholders. The amount shown is without deduction for
brokerage fees which may be paid by the Selling Securityholders and for
offering expenses, estimated at $36,000, payable by the Company. See "Use
of Proceeds."

(2) Based on the last reported sale price of the Common Stock on the AMEX on
_______, 1995.

The date of this Prospectus is ________, 1995.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

<PAGE>
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy or information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the following regional
offices: Seven World Trade Center, New York, New York 10048, and Northwestern
Atrium Center, 500 W. Madison Street, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Common Stock is listed on the AMEX, and the Company's reports, proxy
or information statements and other information filed with the AMEX may be
inspected at the AMEX's offices at 86 Trinity Place, New York, New York, 10006-
1881.

Additional information regarding the Company and the Shares offered hereby
is contained in the Registration Statement of which this Prospectus is a part,
and the exhibits thereto, filed with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). For further information pertaining to
the Company and the Shares, reference is made to the Registration Statement and
the exhibits thereto, which may be inspected without charge at, and copies
thereof may be obtained at prescribed rates from, the office of the Commission
at Judiciary Plaza, 450 Fifth Street, Washington, D.C. 20549. Statements
contained herein concerning the provisions of any document are not necessarily
complete and in each instance reference is made to the copy of the document
filed as an exhibit or schedule to the Registration Statement. Each such
statement is qualified in its entirety by reference to the copy of the
applicable documents filed with the Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission under the
Exchange Act (Commission file no. 1-11460) are incorporated in this Prospectus
by reference: (a) the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, which contains consolidated financial statements for the
Company's year ended December 31, 1994; (b) the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995; (c) the Company's Current Report
on Form 8-K dated April 21, 1995; (d) the Company's Current Report on Form 8-K
dated July 5, 1995; (e) the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995; and (f) the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Shares offered hereby shall be deemed to
be incorporated by reference into this Prospectus and to be a part of this
Prospectus from the date of filing of such documents. Any statement contained
in a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.

The Company will provide, without charge, to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference (other than exhibits to such documents that are not specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to Ronald E. Hogan, Chief Financial Officer, NTN
Communications, Inc., The Campus, 5966 La Place Court, Carlsbad, California
92008. Telephone requests may be directed to Mr. Hogan at (619) 438-7400.

2.
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RISK FACTORS

THE SHARES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND INVOLVE A HIGH
DEGREE OF RISK. THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN
EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE SHARES OFFERED BY
THIS PROSPECTUS.

HISTORY OF SIGNIFICANT LOSSES; RECENT PROFITABILITY

The Company has a history of significant losses and had an accumulated
deficit of $20,106,000 as of September 30, 1995. The year ended December 31,
1994, in which the Company reported net earnings of $707,000, was the
Company's first year of profitable operations. The Company reported a net
loss of $867,000 for nine months ended September 30, 1995, and there can be
no assurance that the Company will operate profitably in the future. See
"Selected Consolidated Financial Data."

PENDING LITIGATION

The Company currently is defending litigation filed by stockholders of the
Company alleging violations by the Company of federal and state securities laws.
In June 1993, a class-action lawsuit against the Company was filed by certain
stockholders in the United States District Court for the Southern District of
California. The plaintiffs allege that announcements made by the Company
regarding a possible agreement in which the Company would sell certain equipment
and services to an arm of the Mexican Government were misleading. The
plaintiffs are seeking to recover unspecified damages for a drop in the market
price of the Company's Common Stock following a later announcement that the
anticipated agreement may be put out for bid. In September 1993, the class of
plaintiffs consisting of purchasers of Common stock during the period January
27, 1993 through June 24, 1993 was certified by the District Court. A motion by
the Company to dismiss the suit was denied in February 1994. Percipient
discovery has been undertaken by the parties.

In April 1995, a stockholder of the Company filed a class-action lawsuit
against the Company in the United States District Court for the Southern
District of California. The plaintiff seeks unspecified damages for alleged
violations of securities laws based upon public statements by the Company
regarding the projected results of operations of the Company and its wholly-
owned subsidiary, New World Computing ("New World"), for the fourth quarter 1994
and for fiscal 1994. The complaint filed in the action further alleges that
certain insiders sold stock following the projections based on information not
generally known to the public and seeks certification of a class of plaintiffs
consisting of purchasers of the Company's common stock during the period
November 9, 1994 through March 28, 1995. Preliminary discovery has been
undertaken by the parties.

In July 1995, the Company was named as a defendant in a separate action
filed in the United States District Court for the Northern District of Texas
based upon substantially the same allegations as set forth in the April 1995
class-action suit against the Company. The Company recently filed its answer to
the complaint, which includes third-party claims for contribution against the
plaintiff's stock representative.

The Company plans to defend vigorously these actions, but there can be no
assurance that one or more of these actions will not be decided adversely to the
Company. Should the plaintiffs in these actions prevail, depending upon the
amount of any damages awarded, such claims could have a material adverse effect
on the Company. The Company expects to continue to incur litigation costs and
expenses relating to these and the other pending legal proceedings discussed
below. See "Certain Recent Developments -- Recent Results of Operations."

The Company also is defending or prosecuting various lawsuits in federal
courts in both the United States and Canada involving Interactive Network, Inc.
("IN").

On June 11, 1992, the Company commenced an action against IN in the United
States District Court for the Northern District of California seeking a
declaration that the Company's United States programming does not infringe a
United States patent held by IN (the "IN/US Patent"), or, alternatively, that
such patent is invalid and unenforceable. On June 12, 1992 the Company, NTN
Canada, an unaffiliated licensee, and NTN Canada's subsidiary NTN Sports,

3.
<PAGE>

Inc. filed a similar action against IN in the Federal Court of Canada, Trial
Division, seeking a declaration that the Company's activities (and those of NTN
Canada and NTN Sports, Inc.) in Canada do not infringe a Canadian patent held by
IN (the "IN/Canada Patents"). The Company subsequently amended its claims to
include an assertion of invalidity of the IN/Canada patent based upon untrue and
material allegations made by IN in its patent petition. No discovery has been
undertaken, and the existence of this litigation has not affected the operations
of the Company's Canadian licensee in Canada.

In July 1993, the United States District Court granted IN a summary
judgment dismissing the Company's claims involving the IN/US Patent. The
Company's subsequent appeals of the summary judgment were denied. IN moved for
a court order awarding it attorneys' fees, and on September 15, 1995, the
District Court ordered NTN to pay IN an aggregate of $359,165 in attorneys' fees
and accrued interest. NTN intends to appeal the District Court's order. The
summary judgment did not affect the Company's current license with IN and did
not constitute any finding that the Company's programming is infringing on the
IN/US Patent.

On June 18, 1992, IN filed an action against the Company, NTN Sports, Inc.
and NTN Canada in the Federal Court of Canada, Trial Division, seeking a
declaration that the IN/Canada Patent is valid and infringed by the Company's
games broadcast and associated equipment sold in Canada, an injunction against
such alleged infringement, unspecified damages based on certain games sold in
Canada since the 1990 issuance of the IN/Canada Patent and interest and costs of
the action. IN has not taken any action in furtherance of this litigation, and
the existence of this litigation has not affected the operations of the
Company's Canadian licensee in Canada.

On April 28, 1993, the Company commenced an action against IN in the
Superior Court for the County of Santa Clara, California, seeking an injunction
against IN's making certain untrue statements regarding the Company, unspecified
damages and a declaration of the Company's rights with respect to the broadcast
of QB1. That action was subsequently stayed by the court, pending the outcome
of the Company's June 11, 1992 United States District Court action against IN.
The stay has now been lifted, and the Company intends to vigorously pursue its
claims.

On or about February 28, 1994, IN filed its own action against the Company
in the Superior Court for the County of Santa Clara, California, which sets
forth causes of action for malicious prosecution, defamation, interference with
economic relations and unfair competition. IN seeks compensatory damages and
punitive damages on all causes of action and injunctive relief with respect to
its claim for unfair competition. The Company has filed a motion for summary
judgment with respect to the claim for malicious prosecution, which is scheduled
to be heard on October 12, 1995. The responsibility for the Company's legal
fees in this action has been assumed by the Company's insurance carrier under
reservation of rights.

On May 5, 1994, IN filed an action against the Company in the United States
District Court for the Northern District of California seeking a declaration
that the Company's interactive boxing game, "Uppercut", infringes the IN/US
patent and request injunctive relief. The Company's motion for summary judgment
was granted by the District Court on the basis that an agreement between the
parties called for arbitration of this matter. IN's motion for reconsideration
of the Court's ruling was denied, and an order in favor of the Company was
entered on February 22, 1995 which included an award of approximately $57,000 in
attorneys' fees to the Company. IN has voluntarily dismissed its notice of
appeal of the District Court's ruling and the Company has since collected the
court-awarded attorneys' fees. The Company had previously submitted this matter
to arbitration for a declaration of non-infringement pursuant to an earlier
agreement between the parties which provided for arbitration and for a license
to the Company for a specified royalty if infringement were to be found. There
has not been any significant action taken in furtherance of the pending
arbitration.

On October 18, 1994, the Company filed a complaint against IN in the United
States District Court for the Northern District of California for alleged
trademark infringement, false designation of origin, unfair competition,
misappropriation and dilution in connection with the Company's exclusive license
from the Canadian Football League ("CFL"). In response, IN filed a motion to
dismiss the complaint, which was heard before the Court on February 17, 1995.
The Court found that, since IN was not yet playing its interactive game in
connection with CFL games, the Company's claim would appropriately be one based
upon declaratory relief. The Court gave the Company the opportunity to amend
its complaint, however, the Company will not pursue its claim at this time since
IN has ceased its business operations.

4.
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The Company believes, based in part on the advice of outside counsel, that
any adverse outcome of the foregoing litigation involving IN will not result in
a material adverse effect on the Company's financial position.

DEPENDENCE ON LICENSES FOR BROADCAST RIGHTS; LACK OF CERTAIN LICENSES

The Company's interactive sports games are broadcast in conjunction with
live telecasts of football, baseball, basketball and hockey games. In order to
effect this simultaneous broadcast, wherever possible the Company seeks to
obtain licenses from the owners of the broadcast rights to the sporting events
to utilize such telecasts for its interactive game programming. The Company's
original, exclusive license agreement with the National Football League ("NFL")
expired on March 31, 1995 and in August 1995, the Company entered into a new,
exclusive license with National Football League Properties, Inc. ("NFLP") for
QB1, which will expire on March 31, 1997 unless renewed by the NFLP. The
Company's rights under the license may not be transferred or assigned without
the NFLP's consent. For this purpose, an assignment includes, among other
things, a merger or consolidation of the Company or the termination of
employment of any of the Company's key management personnel. The Company has
also obtained approval from Major League Baseball for its proprietary
interactive baseball game, "Diamondball." The Company currently is broadcasting
QB1 in conjunction with college football games without any license. Limitations
on the Company's sports licenses could have an adverse effect upon the Company's
business. In addition, legal action by the owners or licensees of broadcast
rights to college football games seeking to enjoin further broadcasts by the
Company or money damages could preclude the playing of QB1 in connection with
college football games.

RELIANCE ON INDEPENDENT DISTRIBUTORS; DIRECT DISTRIBUTION BY NEW WORLD

The Company relies in large part on the efforts of independent distributors
to market and sell the NTN Network to its subscriber locations. The Company
currently uses approximately 25 distributors who cover 49 states. The Company
has entered into long-term agreements with certain of its distributors, but such
agreements are typically terminable upon short notice. The loss of a
significant number of these distributors would have a material adverse effect on
the Company's business until such time, if any, as the Company found alternate
means of servicing the markets currently served by such distributors.

Since June 1994, the Company's New World subsidiary has relied solely on
its in-house sales force to market and sell its products. Prior to such time,
New World's products had been distributed in North America under an affiliate-
label program with Broderbund Software, Inc. New World has only limited
experience in direct marketing and sales activities, and there can be no
assurance that it will be successful in directly marketing and selling its
products.

COMPETITION

The market for interactive entertainment systems is in its formative stages
and is characterized by frequent introductions of new software and hardware and
advancing technologies. Numerous companies have commercialized, are developing
or are expected to introduce interactive products that are or may become
directly competitive with the Company's products. Most of the Company's
competitors have substantial experience and expertise in the electronics
industry and in interactive entertainment hardware systems and multimedia
technology and in producing and selling consumer products through retail
distribution, and also have substantially greater engineering, marketing and
financial resources than the Company.

Numerous major companies in the movie, cable and telecommunications
industries and in the computer and software industries have publicly announced
large development budgets and deployment plans for and field testing of
interactive television services and are developing methods for delivery of
interactive multimedia products and services through existing or planned cable
and telephone networks. To the extent that these companies provide interactive
functionality through cable or telephone networks, their products will compete
directly with the Company's products. Some of these companies include large,
established companies such as AT&T Corp., Microsoft Corporation, Time Warner,
Inc., Telecommunications, Inc., Intel Corporation and Motorola, Inc. All of
these companies have also devoted substantial financial resources to development
projects and many of them have commenced trial testing or have

5.
<PAGE>

announced their intention to commence trial testing in the immediate future.
The Company also anticipates competition from emerging companies, including
those that may be formed by persons with substantial experience and credibility
in interactive technology. There can be no assurance that the Company can
compete successfully against these companies.

The Company also competes with other providers of interactive television
services to in-home viewers. Each of the major providers of interactive video
services, which include GTE Mainstreet, ACTV, Video Jukebox Network, IN,
Interactive Systems, Explore Technology and Call Interactive, is focused on
in-home delivery of programming. The Company's strategy for in-home delivery has
been to be a provider of programming to systems operated by others, and the
Company's programming currently is available through GTE Mainstreet. The
Company may also face potential competition from businesses engaged in
information gathering and related businesses which may seek to enter the markets
served by the Company, many of which are larger and have far greater personnel
and financial resources than does the Company. If such larger businesses enter
the markets, if existing competitors increase their activities in areas in which
the Company intends to do business or if the Company is unable to distribute its
programming to home viewers through systems operated by others, such
developments may have a materially adverse effect upon the Company.

The video game and personal computer industry also is characterized by
intense competition. New World's products compete with a variety of video games
and personal computer entertainment software on the market and with new games
and software continuously being introduced. Competition in the video game and
personal computer software industry extends to competition for shelf space in
retail outlets, and there can be no assurance that New World will be able to
compete successfully. New World will also face competition from all other forms
of interactive hardware and software providers such as the current computer
hardware and videogame manufacturers, as well as other providers of interactive
entertainment systems, including Sega, Nintendo, and 3DO, as well as many
others. Most of these competitors are large corporations with significantly
greater financial and marketing resources, market share and name recognition
than New World.

POTENTIAL FOR TECHNOLOGICAL OBSOLESCENCE

The computer industry and related services have been marked by rapid and
significant technological development and change. There can be no assurance
that technological development will not render the Company's interactive
technology and services obsolete within a relatively short period, or that the
Company will have the resources to respond to such technological change.

UNCERTAIN PROPRIETARY PROTECTION

The Company has two patent applications pending for its proprietary
interactive technology. In addition, the Company relies on a combination of
trademark and unfair competition laws, trade secrets and confidentiality
procedures and agreements to protect rights it considers proprietary. The
Company has copyrights for all of its programming, and the Company has
registered the trademark QB1 and has registered trademarks for a significant
number of its other services. However, no assurance can be given that such
patents will issue, or if issued, the scope of the protection afforded by such
patents. The Company currently is involved in litigation concerning the
enforceability, scope and validity of proprietary rights. See "Risk Factors -
Litigation."

New World regards all of its software as proprietary and attempts to
protect it. New World has no patents, and existing copyright laws afford only
limited practical protection for the New World's software. New World has
entered into license agreements with foreign entities for the translation of its
software into foreign languages and distribution in foreign countries. The laws
of some foreign countries do not protect proprietary rights to the same extent
as do the laws of the United States. In addition, New World has registered
trademarks on "New World," "Might & Magic" and "King's Bounty." However, no
assurance can be given as to the scope of protection afforded by such
trademarks, or that New World would be able to effectively enforce such
trademarks.

6.
<PAGE>

INFLUENCE OF MANAGEMENT

The Company's executive officers and directors and their affiliates own, in
the aggregate, approximately 9% of the outstanding Common Stock, and have the
right, through the exercise of currently exercisable options and warrants to
purchase 3,127,314 shares of Common Stock, to increase their percentage
ownership to 21%. Therefore, these stockholders, if acting together, would have
the ability to significantly influence the Company's affairs and operations.
See "Description of Securities."

ANTI-TAKEOVER PROVISIONS

The Company's Certificate of Incorporation and Bylaws contain certain
provisions that may discourage attempts to acquire control of the Company that
are not negotiated with the Company's Board of Directors. These provisions may
have the effect of discouraging takeover attempts that some stockholders might
deem to be in their best interests, including takeover proposals in which
stockholders might receive a premium for their shares over the then current
market price, as well as making it more difficult for individual stockholders or
a group of stockholders to elect directors. The Board of Directors believes,
however, that these provisions are in the best interests of the Company and its
stockholders because such provisions may encourage potential acquirors to
negotiate directly with the Board of Directors, which is in the best position to
act on behalf of all stockholders. The Certificate of Incorporation provides
that the affirmative vote of the holders of at least 80% of the total voting
power of all outstanding securities of the Company then entitled to vote
generally in the election of directors, voting together as a single class, is
required to amend certain provisions of the Certificate of Incorporation,
including among others, those provisions relating to the number, election and
term of directors; the removal of directors and the filing of vacancies; and the
supermajority voting requirements of the Certificate of Incorporation. These
voting requirements will have the effect of making more difficult any
amendments, even if a majority of the Company's stockholders believes that such
amendment would be in their best interest. See "Description of Securities --
Anti-Takeover Provisions."

VOLATILITY OF STOCK PRICE

Historically, the trading price of the Company's Common Stock has
fluctuated widely, and it may be subject to similar future fluctuations in
response to quarter-to-quarter variations in the Company's operating results,
announcements regarding litigation, technological innovations or new products by
the Company or its competitors, general conditions in the industries in which
the Company competes and other events or factors. In addition, in recent years,
broad stock market indices, in general, and the securities of technology
companies, in particular, have experienced substantial price fluctuations. Such
broad market fluctuations also may adversely affect the future trading price of
the Company's Common Stock. See "Price Range of Common Stock and Dividend
Policy."

DIVIDEND POLICY

The Company has never paid cash dividends on its Common Stock and
anticipates that for the foreseeable future earnings, if any, will be retained
for the operation and expansion of the Company's business. See "Price Range of
Common Stock and Dividend Policy."

EFFECT OF OUTSTANDING OPTIONS, WARRANTS AND PREFERRED STOCK

<PAGE>

effective registration statements covering the resale of the warrants and the
underlying warrant shares by the holders. The Company also has outstanding
162,612 shares of preferred stock which entitle holders thereof, upon surrender
of the shares of preferred stock, to receive 45,548 shares of Common Stock.
Such options, warrants and preferred stock could adversely affect the Company's
ability to obtain future financing, since the holders of those options, warrants
and preferred stock can be expected to exercise or surrender them for
conversion, as the case may be, at a time when the Company would be able to
obtain additional capital through a new offering of securities on terms more
favorable than those provided by such options, warrants and preferred stock.
For the life of such options, warrants and preferred stock, the holders are
given the opportunity to profit from a rise in the market price of the Common
Stock without assuming the risk of ownership. To the extent the trading price
of the Common Stock at the time of exercise of any such options or warrants
exceeds the exercise price, such exercise will also have a dilutive effect on
the Company's stockholders.

SHARES ELIGIBLE FOR FUTURE SALE

Approximately 5,153,000 shares of Common Stock outstanding as of the date
of this Prospectus, including the Shares offered hereby, are "restricted
securities," as that term is defined under Rule 144 promulgated under the Act.
All or substantially all of such shares are covered by currently effective
registration statements (or are in the process of being registered) and can be
offered and sold publicly by the beneficial owners at any time so long as
registration statements remain effective. Moreover, in general under Rule 144
as currently in effect, subject to the satisfaction of certain conditions, if
two years have elapsed since the later of the date of acquisition of restricted
shares from an issuer or from an affiliate of an issuer, the acquiror or
subsequent holder is entitled to sell in the open market, within any three-month
period, a number of shares that does not exceed the greater of 1% of the
outstanding shares of the same class or the average weekly trading volume during
the four calendar weeks preceding the filing of the required notice of sale. A
person who has not been an affiliate of the Company for at least the three
months immediately preceding the sale and who has beneficially owned shares of
Common Stock as described above for at least three years is entitled to sell
such shares under Rule 144(k) without regard to any of the limitations described
above. Of the 5,153,000 outstanding shares of Common Stock constituting
restricted shares, approximately 78,000 were eligible as of October 16, 1995 to
be resold publicly without restriction under Rule 144(k).

No predictions can be made with respect to the effect, if any, that sales
of Common Stock in the market or the availability of shares of Common Stock for
sale pursuant to currently effective registration statements or under Rule 144
will have on the market price of Common Stock prevailing from time to time.
Nevertheless, the possibility that substantial amounts of Common Stock may be
sold in the public market may adversely affect prevailing market prices for the
Common Stock and could impair the Company's ability to raise capital through the
sale of its equity securities.

CERTAIN RECENT DEVELOPMENTS

RECENT RESULTS OF OPERATIONS

As described under "Risk Factors -- Pending Litigation," the Company
currently is involved in a number of lawsuits. During the year ended
December 31, 1994 and the nine months ended September 30, 1995, the Company
incurred aggregate legal fees and expenses, including fees and expenses
relating to litigation matters, of approximately $980,000 and $1,509,000,
respectively. The Company expects to incur substantial additional legal fees
and expenses associated with its pending litigation for the balance of fiscal
1995 and, perhaps, future periods as well.

RECENT RETENTION OF INVESTMENT BANKER

In July 1995, the Company retained Donaldson, Lufkin & Jenrette to assist
in establishing the Company's long-term financial strategy.

<PAGE>

USE OF PROCEEDS

Other than the exercise price of such of the Warrants as may be exercised,
the Company will not receive any of the proceeds from the sale of the Common
Stock offered hereby. The Company will pay the costs of this offering, which
are estimated to be $36,000. Holders of the Warrants are not obligated to
exercise their Warrants, and there can be no assurance that such holders will
choose to exercise all or any of such Warrants. The gross proceeds to the
Company in the event that all of the Warrants are exercised would be $781,875
(30,000 shares at an exercise price of $5.125 per share, 37,500 shares at an
exercise price of $6.75 per share and 50,000 shares at an exercise price of
$7.50 per share).

The Company intends to apply the net proceeds it receives from the exercise
of the Warrants, to the extent any are exercised, to augment its working capital
and for general corporate purposes.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Company's Common Stock is listed on the AMEX under the symbol "NTN."
The prices below are the high and low sales prices for the Common Stock as
reported on the AMEX for periods shown.

<TABLE>
<CAPTION>
LOW HIGH
--- ----
1993
----
<S> <C> <C>
First Quarter . . . . . . . $4.37 $10.63
Second Quarter. . . . . . . 6.37 11.50
Third Quarter . . . . . . . 5.75 10.37
Fourth Quarter. . . . . . . 8.50 10.50

1994
----

First Quarter . . . . . . . 6.00 10.25
Second Quarter. . . . . . . 4.63 7.50
Third Quarter . . . . . . . 6.37 8.50
Fourth Quarter. . . . . . . 5.75 7.87

1995
----

First Quarter . . . . . . . 5.63 8.25
Second Quarter . . . . . . 4.44 5.81
Third Quarter . . . . . . . 4.06 6.25
Fourth Quarter
(through November 6, 1995) 4.25 5.32
</TABLE>

For a recent closing price for the Common Stock as reported on the AMEX see
the cover page of this Prospectus. As of October 16, 1995, there were 1,757
record owners of the Common Stock according to information available from the
Company's transfer agent.

To date, the Company has not declared or paid any cash dividends with
respect to its Common Stock, and the current policy of the Board of Directors is
to retain earnings, if any, after payment of dividends on the Company's
outstanding preferred stock to provide for the growth of the Company.
Consequently, no cash dividends are expected to be paid on the Company's Common
Stock in the foreseeable future. Further, there can be no assurance that the
proposed operations of the Company will generate the revenues and cash flow
needed to declare a cash dividend or that the Company will have legally
available funds to pay dividends.

<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The selected data presented below under the captions "Selected Consolidated
Statement of Operations Data" and "Selected Consolidated Balance Sheet Data"
for, and as of the end of, each of the years in the five-year period ended
December 31, 1994, are derived from the consolidated financial statements of NTN
Communications, Inc., which financial statements have been audited by KPMG Peat
Marwick LLP, independent certified public accountants. The consolidated
financial statements as of December 31, 1994 and 1993, and for each of the years
in the three-year period ended December 31, 1994, and the report thereon, are
incorporated by reference elsewhere in this Prospectus. The selected data
should be read in conjunction with the consolidated financial statements for the
three-year period ended December 31, 1994, the related notes and the independent
auditors' report which contains an explanatory paragraph that states that the
Company is a defendant in a class action lawsuit. The litigation is in its
early stages and no prediction can be made as to the likelihood of the ultimate
outcome. Accordingly, no provision for any liability that may result from
adjudication has been recognized in the consolidated financial statements. The
report also refers to a change in the method of accounting for investments in
debt and equity securities in 1994. The following selected consolidated
statement of operations data for the nine months ended September 30, 1995 and
1994 and related consolidated balance sheet data as of September 30, 1995 are
derived from the unaudited consolidated financial statements of the Company and
reflect all adjustments (including only normal recurring accruals) which in the
opinion of management are necessary for a fair presentation of the Company's
financial position and results of operations for these periods. The operating
results for the nine months ended September 30, 1995 are not necessarily
indicative of the results that may be expected for the full fiscal year. The
following data should be read in conjunction with "Management's Discussions and
Analysis of Results of Operations and Financial Condition" and the Consolidated
Financial Statements and notes thereto incorporated by reference in this
Prospectus.

SELECTED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(in thousands, except per share data)

<TABLE>
<CAPTION>
Nine Months
Years Ended December 31 Ended September 30,
--------------------------------------------------------- -----------------------
1994 1993 1992 1991 1990 1995 1994
----------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues. . . .. . . . . . . . . . . . . . .$24,646 $17,258 $10,702 $5,853 $5,871 $20,711 $16,730
Total cost of sales. . . . . . . . . . . . . . . .9,453 7,514 4,200 2,411 2,569 9,849 6,154
Gross profit . . . . . . . . . . . . . . . . . . .15,193 9,744 6,502 3,442 3,302 10,862 10,576
Total operating expenses . . . . . . . . . . . . .14,898 11,198 8,636 5,260 4,094 11,794 9,788
Interest income (expense), net . . . . . . . . . . (412) (434) - 576 1,087 65 415
Income taxes . . . . . . . . . . . . . . . . . . . - 281 106 - - - 77
Earnings (loss) before extraordinary item. . . . . 707 (1,301) (2,240) (2,394) (1,879) (867) 1,126
Extraordinary item . . . . . . . . . . . . . . . . - - - 3,889 - - -
Net earnings (loss). . . . . . . . . . . . . . . . $707 $(1,301) $(2,240) $1,495 $(1,879) $(867) $1,126
Earnings (loss) per share before
extraordinary item(1). . . . . . . . . . . . . . $.03 $(.08) $(.20) $(.38) $(.71) $(.04) $.05
Net earnings(loss) per share . . . . . . . . . . . $.03 $(.08) $(.20) $.24 $(.71) $(.04) $.05
Weighted average equivalent shares
outstanding(1) . . . . . . . . . . . . . . . . .21,124 17,135 11,344 6,263 2,661 19,618 21,122
</TABLE>

- --------------
(1) As adjusted to reflect a 1-for-20 reverse stock split effected in June
1991.

10.

<PAGE>

SELECTED CONSOLIDATED BALANCE SHEET DATA
(in thousands)

December 31 September 30
----------------------------------------------------------- -------------

1994 1993 1992 1991 1990 1995
---------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total current assets . . . . . . . . . . . . . . . $22,106 $23,102 $9,004 $5,119 $2,358 $29,451
Total assets . . . . . . . . . . . . . . . . . . . 31,239 27,240 10,171 5,604 2,630 42,657
Total current liabilities. . . . . . . . . . . . 4,958 2,933 2,554 2,810 11,506 10,047
Long-term debt, less current portion . . . . . . . 8 163 18 91 953 9
Shareholders' equity (deficiency). . . . . . . . . 25,457 23,653 7,432 2,703 (9,828) 31,528
</TABLE>

11.

<PAGE>

SELLING SECURITYHOLDERS

In a transaction with unaffiliated third parties, the Company sold an
aggregate of 600,000 shares of Common Stock to the Selling Securityholders named
in the table below whose names are followed by a cross (collectively, the "DFA
Securityholders"), at an initial purchase price of $4.3563 per share. In the
event that the Company sells any shares of Common Stock during the twelve-month
period ending April 28, 1996 at a price less than the initial purchase price per
share, the purchase price per share is subject to downward adjustment to the
price paid in such subsequent sale or sales. Such adjustment generally will be
accomplished by the Company issuing additional shares to the DFA
Securityholders, except that if the aggregate number of shares held by them and
other entities advised by Dimensional Fund Advisors Inc. would exceed 4.99% of
the total outstanding stock of the Company, the DFA Securityholders can require
the Company to make a cash refund to the extent necessary to avoid exceeding
such percentage ownership.

In connection with the foregoing transaction, the Company agreed to file
the Form S-3 Registration Statement of which this Prospectus is a part and to
grant to DFA Securityholders certain demand and piggyback registration rights
until such time as they, in the reasonable opinion of their respective counsel,
can sell their shares of Common Stock under the provisions of Rule 144(k) under
the Securities Act.

As part of the compensation for the efforts of Cappello Capital Corp. in
connection with arranging the above-described sale of Common Stock to the DFA
Securityholders, Lawrence K. Fleischman, Linda Cappello and Gerald K. Cappello
received Warrants to purchase, in the aggregate, 30,000 shares of Common Stock
at an exercise price of $5.125 per share. Such Warrants were issued in April
1995, are exercisable, in whole or in part, until April 2000, contain
antidilution provisions that require adjustments in the event of a stock
dividend, subdivision or combination of the number of outstanding shares of
Common Stock, recapitalization and certain other events, and provide for
piggyback registration rights until April 2002. Such Warrants also allow for a
cashless exercise if the market price of the Common Stock exceeds the exercise
price. The foregoing Warrants constitute "restricted securities" within the
meaning of Rule 144 of the regulations promulgated under the Securities Act. As
such, they generally are not currently transferable. However, the shares of
Common Stock issuable upon exercise of such Warrants are being offered hereby
and are currently transferable.

In March 1994 and June 1994, the Company issued to Continuum Capital, Inc.,
a financial consultant of the Company, in consideration of services rendered,
warrants to purchase 50,000 and 37,500 shares of Common Stock at exercise prices
of $7.50 and $6.75 per share, respectively. Such warrants are exercisable, in
whole or in part, for five years from their respective dates of grant, contain
antidilution provisions that require adjustments in the event of a stock
dividend, subdivision or combination of the member of outstanding shares of
Common Stock, recapitalization and certain other events, and provide for
piggyback registration rights commencing one year after their respective dates
of grant, and continuing for six years thereafter. The foregoing Warrants
constitute "restricted securities" within the meaning of Rule 144 of the
regulations promulgated under the Securities Act. As such, they generally are
not currently transferable. However, the shares of Common Stock issuable upon
exercise of such Warrants are being offered hereby and are currently
transferable.

The following table sets forth as of September 14, 1995 the number and
percent of shares of Common Stock owned or purchasable pursuant to warrants by
each of the Selling Securityholders, the number of shares of Common Stock
offered by each of them hereby, and the number and percent of shares of Common
Stock to be held by each of them after the conclusion of this offering. Other
than Jon Van Caneghem, the President of New World, no Selling Securityholder or
its affiliates has any position, office or other material relationship with the
Company.

12.

<PAGE>

Before Offering After Offering
------------------- ------------------

Number of Number of
Shares Number of Shares
Selling Beneficially Shares Beneficially
Securityholder Owned Percent(1) Being Offered Owned Percent
-------------- ----- ---------- ------------- ----- -------
<S> <C> <C> <C> <C> <C>
Jon Van Caneghem . . . . . . . . . . . . 750,000 3.4% 512,500 237,500 1.1%
DFA Group Trust -- Small
Company Subtrust+. . . . . . . . . . . 308,000(2) 1.4(2) 308,000(2) 0 0
U.S. 9-10 Small Company
Portfolio+ . . . . . . . . . . . . . . 161,500(2) *(2) 161,500(2) 0 0
DFA Group Trust - 6-10
Subtrust+. . . . . . . . . . . . . . . 124,200(2) *(2) 124,200(2) 0 0
U.S. 6-10 Small Company
Series+. . . . . . . . . . . . . . . . 6,300(2) *(2) 6,300(2) 0 0
Lawrence K. Fleischman . . . . . . . . . 12,000(3) * 12,000(3) 0 0
Linda Cappello . . . . . . . . . . . . . 10,800(3) * 10,800(3) 0 0
Gerald K. Cappello . . . . . . . . . . . 7,200(3) * 7,200(3) 0 0
Continuum Capital, Inc.. . . . . . . . . 87,500(3) * 87,500(3) 0 0
</TABLE>

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

+ Advised by Dimensional Fund Advisors Inc.
(1) Based on 21,788,375 shares of Common Stock outstanding as of October 16,
1995. An asterisk denotes beneficial ownership of less than 1%.
(2) Subject to adjustment as described above.
(3) Constitute shares of Common Stock issuable pursuant to currently
exercisable warrants.

13.

<PAGE>

PLAN OF DISTRIBUTION

Each of the Selling Securityholders has advised the Company that it may
sell, directly or through brokers, its Shares offered hereby in negotiated
transactions or in one or more transactions on the AMEX, or otherwise, at the
prices prevailing at the time of sale. In connection with such sales, the
Selling Securityholders and any participating broker may be deemed to be
"underwriters" of the Shares so sold within the meaning of the Securities Act,
although the offering of the Shares will not be underwritten by a broker-dealer
firm.

The Company will bear all costs and expenses of the registration of the
Shares under the Securities Act and certain state securities laws, other than
fees of counsel for the Selling Securityholders and any discounts or commissions
payable with respect to sales of such Shares.

The Company has informed the Selling Securityholders that the anti-
manipulation provisions of Rules 10b-6 and 10b-7 under the Exchange Act may
apply to their sales of the Shares and has furnished each of the Selling
Securityholders with a copy of these rules, as well as a copy of certain
interpretations thereof by the Securities and Exchange Commission. The Company
also has advised the Selling Securityholders of the requirement for delivery of
this Prospectus in connection with any sale of the Shares.

DESCRIPTION OF SECURITIES

The Company's authorized capital stock consists of 10,000,000 shares of
preferred stock, par value $.005 per share ("Preferred Stock"), and 50,000,000
shares of Common Stock. The Preferred Stock may be issued in one or more
series; the only series currently designated is a series of 5,000,000 shares of
Series A Convertible Preferred Stock (the "Series A Preferred Stock").

COMMON STOCK

On October 16, 1995, there were 21,788,375 shares of Common Stock
outstanding.

The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders. The holders of Common Stock
are entitled to receive ratably such dividends, if any, as may be declared by
the Company's Board of Directors out of legally available funds, after payment
of any dividends required on the outstanding Preferred Stock. Upon liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets that are legally available for
distribution, after payment of or provision for all debts and liabilities and
for any payments with respect to the Preferred Stock. The holders of Common
Stock have no preemptive, subscription or conversion rights, and there are no
redemption or sinking fund provisions applicable to such shares. All of the
outstanding shares of Common Stock are fully paid and nonassessable. The
rights, preferences and privileges of holders of Common Stock are subject to the
rights of the holders of shares of the Series A Preferred Stock, and may be
subject to the rights of the holders of such other Preferred Stock as the
Company may issue in the future, although the Company has no plans at this time
to issue additional Preferred Stock.

PREFERRED STOCK

On October 16, 1995, there were 162,612 shares of Series A Preferred Stock
outstanding. The holders of the Series A Preferred Stock are entitled to an
annual dividend of 10% of the original issue price of $1.00 per share, payable
semiannually on December 1 and June 1 of each year in cash or, at the option of
the Company, by means of the issuance of shares of Common Stock, which are to be
valued for this purpose at the fair market value of the Common Stock. The
Company is current in the payment of all dividends on the Series A Preferred
Stock. Upon liquidation, dissolution and winding up of the Company, each holder
of the Series A Preferred Stock shall be entitled to receive $1.00 per share
before any payment shall be made with respect to the outstanding shares of the
Common Stock. Each share of the Series A Preferred Stock is convertible into
approximately .2801 share of Common Stock at any time at the option of the
holders of the Series A Preferred Stock. The rate of conversion is subject to

14.

<PAGE>

certain antidilution provisions. The holders of the Series A Preferred Stock do
not have any voting, preemptive, subscription or redemption rights.

Additional shares of Preferred Stock may be issued without stockholder
approval. The Board of Directors is authorized to issue such shares in one or
more series and to fix the rights, preferences, privileges, qualifications,
limitations and restrictions thereof, including dividend rights and rates,
conversion rights, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting any series or the
designation of such series, without any vote or action by the shareholders. Any
Preferred Stock to be issued could rank prior to the Common Stock with respect
to dividend rights and rights on liquidation. The Board of Directors, without
stockholder approval, may issue Preferred Stock with voting and conversion
rights that could adversely affect the voting power of holders of Common Stock
or create impediments to persons seeking to gain control of the Company. The
Company has no present plan or arrangement to issue any additional shares of
common stock.

ANTI-TAKEOVER PROVISIONS

The provisions of the Company's Restated Certificate of Incorporation (the
"Certificate") and Bylaws (the "Bylaws"), summarized in the succeeding
paragraphs, may be deemed to have anti-takeover effects and may delay, defer or
prevent a tender offer, takeover attempt or change in control that a stockholder
might consider to be in such stockholder's best interest, including those
attempts that might result in a premium over the market price for the shares
held by stockholders.

AMENDMENT OF CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
BYLAWS

The Certificate provides that the affirmative vote of the holders of at
least 80% of the total voting power of all outstanding securities of the Company
then entitled to vote generally in the election of directors, voting together as
a single class, is required to amend certain provisions of the Certificate,
including those provisions relating to the number, election and term of
directors; the removal of directors and the filling of vacancies;
indemnification of directors, officers and others; and the supermajority voting
requirements in the Certificate. The Certificate further provides that the
Bylaws may be amended by the Board of Directors or by an affirmative vote of the
holders of not less than 80% of the total voting power of all outstanding
securities of the Company then entitled to vote generally in the election of
directors, voting together as a single class. These voting requirements will
have the effect of making more difficult any amendment by stockholders, even if
a majority of the Company's stockholders believes that such amendment would be
in their best interests.

CLASSIFIED BOARD OF DIRECTORS

The Certificate and the Bylaws divides the Board of Directors into three
classes, each class to be nearly equal in number as possible, each class serving
staggered three-year terms. Presently, two directors of the Company are subject
to re-election at each annual meeting of stockholders.

The classification of directors and provisions in the Certificate that
limit the ability of stockholders to increase the size of the Board of Directors
without the vote of at least 80% of the total voting power of all outstanding
voting securities, together with provisions in the Certificate that limit the
ability of stockholders to remove directors and that permit the remaining
directors to fill any vacancies on the Board, will have the effect of making it
more difficult for stockholders to change the composition of the Board of
Directors. As a result, at least two annual meetings of stockholders may be
required for the stockholders to change a majority of the directors, whether or
not a change in the Board of Directors would be beneficial to the Company and
its stockholders and whether or not a majority of the Company's stockholders
believes that such a change would be desirable.

CERTAIN STOCKHOLDER ACTION

The Certificate requires that stockholder action be taken at an annual
meeting or special meeting of stockholders called pursuant to a resolution
adopted by a majority of the Board of Directors and prohibits stockholder action
by written consent.

15.

<PAGE>

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

The Company is governed by the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Subject to certain exceptions
summarized below, Section 203 prohibits any Interested Stockholder from engaging
in a "business combination" with a Delaware corporation for three years
following the date such person became an Interested Stockholder. Interested
Stockholder, as defined, includes (i) any person who is the beneficial owner of
15% or more of the outstanding voting stock of the corporation and (ii) any
person who is an affiliate or associate of the corporation and who held 15% or
more of the outstanding voting stock of the corporation at any time within three
years before the date on which such person's status as an Interested Stockholder
is determined. Subject to certain exceptions, a "business combination"
includes, among other things: (i) any merger or consolidation involving the
corporation; (ii) the sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets having an aggregate market value equal to 10% or more of
either the aggregate market value of all assets of the corporation determined on
a consolidated basis or the aggregate market value of all the outstanding stock
of the corporation; (iii) any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the Interested
Stockholder, except pursuant to a transaction that effects a pro rata
distribution to all stockholders of the corporation; (iv) any transaction
involving the corporation that has the effect of increasing the proportionate
share of the stock of any class or series, or securities convertible into the
stock of any class or series, of the corporation that is owned directly or
indirectly by the Interested Stockholder; and (v) any receipt by the Interested
Stockholder of the benefit (except proportionately as a stockholder) of any
loans, advances, guarantees, pledges or other financial benefits provided by or
through the corporation.

Section 203 does not apply to a business combination if: (i) before a
person became an Interested Stockholder, the board of directors of the
corporation approved the transaction in which the Interested Stockholder became
an Interested Stockholder or the business combination; (ii) upon consummation of
the transaction that resulted in the person becoming an Interested Stockholder,
the Interested Stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commences (other than
certain excluded shares); or (iii) following a transaction in which the person
became an Interested Stockholder, the business combination is (a) approved by
the board of directors of the corporation and (b) authorized at a regular or
special meeting of stockholders (and not by written consent) by the affirmative
vote of the holders of at least 66-2/3% of the outstanding voting stock of the
corporation not owned by the Interested Stockholder.

SHARES ELIGIBLE FOR FUTURE PUBLIC SALE

There are 21,788,375 shares of Common Stock outstanding. Of such shares of
Common Stock, approximately 5,153,000 shares, including the Shares offered
hereby, are "restricted securities" within the meaning of Rule 144 of the
regulations promulgated under the Securities Act. All or substantially all of
such shares, including the Shares offered hereby, are covered by currently
effective registration statements and can be offered and sold publicly by the
beneficial owners at any time so long as the registration statements remain
effectively. Moreover, in general under Rule 144 as currently in effect, a
person (or persons whose shares are aggregated), including a person who may be
deemed to be an "affiliate" of the Company as that term is defined under the
Act, is entitled to sell within any three-month period a number of shares that
does not exceed the greater of (i) one percent of the then-outstanding shares of
Common Stock, or (ii) the average weekly trading volume in the Common Stock
during the four calendar weeks preceding such sale. If the shares in question
were acquired from the Company in transactions not involving a public offering,
then they may not be sold under Rule 144 until they have been outstanding for at
least two years. Sales under Rule 144 are also subject to certain requirements
as to the manner of sale, notice and the availability of current public
information about the Company. However, a person who is not deemed to have been
an affiliate of the Company during the 90 days preceding a sale by such person
is entitled to sell shares that have been outstanding for at least three years
without regard to the volume, manner of sale or notice requirements. Of the
5,153,000 outstanding shares of Common Stock constituting restricted shares,
approximately 78,000 were eligible as of October 16, 1995 to be resold publicly
without restriction under Rule 144(k).

16.

<PAGE>

that substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise capital through the sale of its equity
securities.

As of October 16, 1995, there were 4,661,730 shares of Common Stock
reserved for issuance upon the exercise of stock options outstanding under the
Company's stock option plans at exercise prices ranging from $2.25 to $8.25 per
share, of which options to purchase 2,837,866 shares are currently exercisable.
An additional 58,400 shares of Common Stock (plus any shares of Common Stock
covered by stock options currently outstanding under the Company's 1985
Incentive Stock Option Plan and 1985 Nonqualified Stock Option Plan which are
subsequently terminated or expire without being exercised) are reserved for
issuance upon the exercise of options available for future grant under the
Company's 1995 Stock Option Plan. In addition, the Company has outstanding
warrants to purchase an aggregate of 3,990,329 shares of Common Stock at
exercise prices ranging from $2.00 to $8.00 per share, all of which warrants are
currently exercisable. The Company also has currently effective registration
statements covering the resale of substantially all of the warrants (other than
those underlying the Shares offered hereby) and the shares issuable upon
exercise of such warrants (including the Shares offered hereby) by the holders.
The Company also has 162,612 shares of preferred stock outstanding which entitle
holders thereof to receive, upon surrender of the shares of preferred stock,
45,548 shares of Common Stock. Such options, warrants and preferred stock could
adversely affect the Company's ability to obtain future financing. Such options
and warrants are likely to be exercised and such preferred stock is likely to be
converted into shares of Common Stock, if at all, only at a time when the
exercise price or conversion price, as the case may be, is less than the market
price of the Common Stock. For the life of such options, warrants and preferred
stock, the holders are given the opportunity to profit from a rise in the market
price of the Common Stock without assuming the risk of ownership. Moreover, the
holders of those options, warrants and preferred stock can be expected to
exercise or surrender them, as the case may be, at a time when the Company would
be able to obtain additional capital through a new offering of securities on
terms more favorable than those provided by such options, warrants or preferred
stock. To the extent the trading price of the Common Stock at the time of
exercise of any such options or warrants exceeds the exercise price, such
exercise will also have a dilutive effect on the Company's stockholders.

TRANSFER AGENT AND WARRANT AGENT

The Transfer Agent for the Common Stock is American Stock Transfer & Trust
Company, New York, New York.

LEGAL MATTERS

Troy & Gould Professional Corporation, Los Angeles, California, has
rendered an opinion to the effect that the securities offered hereby by the
Selling Securityholders, when sold and paid for, will be duly and validly
issued, fully paid and nonassessable. Such counsel owns 12,671 shares of Common
Stock as of the date of this Prospectus.

EXPERTS

The financial statements and schedules of NTN Communications, Inc. as of
December 31, 1994, and for each of the years in the three-year period ended
December 31, 1994, incorporated by reference herein and elsewhere in the
registration statement have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
report of KPMG Peat Marwick LLP covering the December 31, 1994 financial
statements contains an explanatory paragraph that states that the Company is a
defendant in a class action lawsuit. The litigation is in its early stages and
no prediction can be made as to the likelihood of the ultimate outcome.
Accordingly, no provision for any liability that may result from adjudication
has been recognized in the financial statements. The report also refers to a
change in the method of accounting for investments in debt and equity securities
in 1994.

17.

<PAGE>

No dealer, salesman or other person has been authorized to give any
information or make any representations, other than those contained in this
Prospectus, in connection with the offering hereby, and, if given or made, such
information and representations must not be relied upon as having been
authorized by the Company or the Selling Securityholders. This Prospectus does
not constitute an offer to sell, or a solicitation of an offer to buy, any
securities to any person in any State or other jurisdiction in which such offer
or solicitation is unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company or the facts herein set
forth since the date hereof.

_______________

TABLE OF CONTENTS

Page
----
Available Information. . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain
Documents by Reference . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certain Recent Developments. . . . . . . . . . . . . . . . . . . . . 8
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Price Range of Common Stock
and Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . 9
Selected Consolidated Financial Data . . . . . . . . . . . . . . . .10
Selling Securityholders. . . . . . . . . . . . . . . . . . . . . . .12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . .14
Description of Securities . . . . . . . . . . . . . . . . . . . . .14
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

1,230,000 Shares of Common Stock

NTN COMMUNICATIONS, INC.

____________

PROSPECTUS
____________

November __, 1995

<PAGE>
PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The Company estimates that expenses in connection with the distribution
described in this Registration Statement will be as follows. All expenses
incurred with respect to the distribution will be paid by the Company.

<TABLE>
<S> <C>
SEC registration fee. . . . . . . . . . . . . . . . . . . . $ 2,230
Printing expenses . . . . . . . . . . . . . . . . . . . . . 5,000
Accounting fees and expenses. . . . . . . . . . . . . . . . 6,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . 20,000
Fees and expenses for qualification under
state securities laws. . . . . . . . . . . . . . . . . . 1,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 1,770
---------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,000
---------
---------
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Certificate of Incorporation and Bylaws permit the Company to
indemnify officers and directors of the Company to the fullest extent permitted
by Section 145 of the Delaware General Corporation Law. Section 145 of the
Delaware General Corporation Law makes provision for the indemnification of
officers, directors and other corporate agents in terms sufficiently broad to
indemnify such persons, under certain circumstances, for liabilities (including
reimbursements of expenses incurred) arising under the Securities Act.

The Stock Purchase Agreement, dated as of April 24, 1995, between the
Company and the Selling Securityholders, provides that the Company shall
indemnify the Selling Securityholders under certain circumstances and the
Selling Securityholders shall indemnify the Company and the officers and
directors of the Company under certain circumstances.

The Company has entered into indemnity agreements with certain of its
outside directors. Pursuant to the indemnity agreement, the Company agrees to
indemnify each outside director who is a party to the indemnity agreement under
certain circumstances in which such outside director or the Company is named as
a party to a proceeding (as that term is defined).

II-1

<PAGE>

ITEM 16. EXHIBITS

The following exhibits are filed herewith or incorporated by reference as a
part of this Registration Statement:

4.1 Specimen Common Stock certificate (previously filed as an exhibit to the
Company's registration statement on Form 8-A, File No. 0-19383, and
incorporated herein by reference)
4.2 Stock Purchase Agreements, dated as of April 24, 1995, between the Company
and the DFA Securityholders(1)
5 Opinion of Troy & Gould Professional Corporation
23.1 Consent of Troy & Gould Professional Corporation (included in Exhibit 5)

23.2 Consent of KPMG Peat Marwick LLP (included on page II-5 hereof)
24 Power of Attorney(2)

___________________

(1) Filed as an exhibit to the Company's report on Form 8-K dated April 21,
1995 and incorporated herein by reference.

(2) Previously filed.

ITEM 17. UNDERTAKINGS

(a) The undersigned Company hereby undertakes:

(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment
to this registration statement:

(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this registration statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;

provided, however, that (i) and (ii) do not apply if the registration
statement is on Form S-3, and the information required to be included
in a post-effective amendment is contained in periodic reports filed
by the registrant pursuant to section 13 or section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.

(b) The undersigned Company hereby undertakes:

That for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section
15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new

II-2

<PAGE>

registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.

II-3

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Carlsbad, State of
California, on November 8, 1995.

NTN COMMUNICATIONS, INC.

By: /s/ Patrick J. Downs
-------------------------------------
Patrick J. Downs,
Chief Executive Officer

Pursuant to the requirements of the Securities Act, this Amendment No. 1 to
Registration Statement on Form S-3 has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.

SIGNATURE TITLE DATE

Patrick J. Downs* Chairman of the Board of Directors November 8, 1995
- ------------------------
Patrick J. Downs and Chief Executive Officer

Daniel C. Downs* President, Chief Operating Officer November 8, 1995
- ------------------------
Daniel C. Downs and Director

Kenneth B. Hamlet* Executive Vice-President, General November 8, 1995
- ------------------------
Kenneth B. Hamlet Manager and Director

/s/ Ronald E. Hogan Senior Vice President - Finance and November 8, 1995
- ------------------------
Ronald E. Hogan Secretary (Principal Financial
and Accounting Officer)

Donald C. Klosterman* Director November 8, 1995
- ------------------------
Donald C. Klosterman

Norman Lear* Director November 8, 1995
- ------------------------
Norman Lear

Alan P. Magerman* Director November 8, 1995
- ------------------------
Alan P. Magerman

A.R. Rozelle* Director November 8, 1995
- ------------------------
A. R. Rozelle

*By /s Ronald E. Hogan
- ------------------------
Ronald E. Hogan,
Attorney-in-Fact

II-4

<PAGE>

The Board of Directors
NTN Communications, Inc.:

We consent to the use of our reports incorporated by reference and to the
references to our firm under the headings "Selected Consolidated Financial Data"
and "Experts" in the Prospectus.

Our report dated March 28, 1995, contains an explanatory paragraph that
states that the Company is a defendant in a class action lawsuit. The
litigation is in its early stages and no prediction can be made as to the
likelihood of the ultimate outcome. Accordingly, no provision for any liability
that may result from adjudication has been recognized in the consolidated
financial statements. Our report also refers to a change in the method of
accounting for investments in debt and equity securities in 1994.

KPMG Peat Marwick LLP

San Diego, California
November 7, 1995

II-5

<PAGE>

EXHIBIT INDEX

Sequential
Exhibit Page
Number Description Number
- ------ ----------- ----------

5 Opinion of Troy & Gould Professional Corporation

23.1 Consent of Troy & Gould Professional Corporation
(included in Exhibit 5)

23.2 Consent of KPMG Peat Marwick LLP (included on page II-5)

II-6

<PAGE>

[LETTERHEAD OF TROY & GOULD]

November 8, 1995

NTN 1.1

NTN Communications, Inc.
The Campus
5966 La Place Court
Carlsbad, California 92008

RE: REGISTRATION STATEMENT ON FORM S-3
----------------------------------

Gentlemen:

At your request, we have examined the Registration Statement on Form S-3
(the "Registration Statement") of NTN Communications, Inc. (the "Company")
which has been prepared for filing with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to 117,500
shares of Common Stock of the Company issuable pursuant to warrants described
in the Registration Statement (the "Warrant Shares"), 1,112,500 outstanding
shares of Common Stock of the Company (the "Outstanding Shares") and 53,455
shares of Common Stock of the Company issuable pursuant to the anti-dilution
adjustment provisions of the Stock Purchase Agreements (the "Stock Purchase
Agreements"), dated as of April 24, 1995, between the Company and the DFA
Securityholders (the "Anti-Dilution Shares") that may be resold by the
securityholders identified in the Registration Statement. The Warrant Shares,
the Outstanding Shares and the Anti-Dilution Shares are collectively referred
to herein as the "Shares." All capitalized terms not defined herein shall
have the definitions ascribed to them in the Registration Statement. We are
familiar with corporate proceedings heretofore taken by the Company in
connection with the sale of the Shares. In addition, we have examined such
records of the Company as in our judgement were necessary or appropriate to
enable us to render the opinions expressed herein.

Exhibit 5

<PAGE>

NTN Communications, Inc.
November 8, 1995
Page 2

Based upon the foregoing, it is our opinion that the Outstanding Shares
have been duly and validly authorized and issued, and are fully paid and
nonassessable, and that the Anti-Dilution Shares when issued in accordance
with the Stock Purchase Agreements and the Warrant Shares when issued in
accordance with the terms of their respective underlying warrants will have
been duly and validly authorized and will be validly issued, fully paid and
nonassessable.

We consent to the use of our name under the caption "Legal Matters" in
the Prospectus and the Registration Statement, and to the filing of this
opinion as an exhibit to the Registration Statement. By giving you this
opinion and consent, we do not admit that we are experts with respect to any
part of the Registration Statement or Prospectus within the meaning of the
term "expert" as used in Section 11 of the Securities Act of 1993, as
amended, or the rules and regulations promulgated thereunder, nor do we admit
that we are in the category of persons whose consent is required under
Section 7 of said Act.

Very truly yours,

/s/ TROY & GOULD
--------------------------------
Troy & Gould
Professional Corporation

Exhibit 5