ARC INTERNATIONAL AND ON2 DEBUT VIDEO CODECS.

ARC International and On2 Technologies, Inc., The Duck Corporation, (AMEX:ONT) have collaborated to provide video codecs optimized for the ARC processor cores. On2 will port their VP6 codec to the ARC processor core. VP6 is On2's latest video compression software and it is used on PCs, set-top boxes, games and wireless consumer electronics products.

"By virtue of its flexible core IP architecture, the ARC processor family is an exciting new platform for VP6. The combination of low power consumption, and customizable architecture configurations will help bring VP6 to a new class of devices," said Eric Ameres, chief technology officer for On2.

"We are pleased by this relationship because we can bring VP6 to an entire new group of customers. The flexibility and strength of the ARC processor core provides a solid platform for us as we move more deeply into the consumer electronics market," added Douglas A. McIntyre, chairman, president and chief executive officer of On2.

"We have a large body of customers looking to incorporate video solutions into their next-generation digital media and consumer devices," said Derek Meyer, ARC Marketing vice president. "On2 shares our vision to provide customers with a fully optimized solution for this thriving market segment."

ARC Processor Cores

The ARC family of microprocessors is a set of powerful 32-bit configurable RISC CPU/DSP processor cores. The ARCtangent-A5 incorporates the ARCompact 16/32-bit ISA enabling a 40% reduction in code footprint compared to 32-bit only ISAs. The ARC 600 leverages the benefits of previous architectures (small size, ARCompact ISA) and incorporates a variety of low power features, making it an ideal solution for portable consumer devices. The ARC 700, the latest processor offering from ARC, is one of the smallest processors in its performance class. The ARC 700 can make unsurpassed tradeoffs in area for performance.

Information on VP6 can be found on the On2 website at http://www.on2.com/.

For information about the ARC Processor Cores, go to http://www.arc.com/ or call ARC at 408/437-3400.

About On2 Technologies, The Duck Corporation

On2 Technologies (AMEX:ONT) is a technology firm at the forefront of video compression. The company revolutionized digital media delivery with the creation of its advanced full- motion, full-screen, TrueMotion VP4/VP5/VP6 compression and streaming technologies. On2's TrueMotion codecs are used extensively in the video-on-demand, videoconferencing, Internet media, surveillance, and store-and-play markets. They operate with On2's own True Cast Server and Player software, as well as third-party player and server products. On2's software is used by such leading companies as Sony, NTT, AOL, BBC, ABC News, Nullsoft, SeaChange International, China Netcom, NHK, and Nanwang Multimedia. The VP6 decoder has an installation base of millions through its inclusion in AOL 9 Media Player, Winamp 5, Viewpoint Media Player, and others. On2 licenses its software for use in set-top boxes, consumer electronics devices and wireless applications and offers high-level video encoding, customized technical support, and consulting/integration services. Located in New York City, the company has an office in Clifton Park, NY, and operations in Cambridge, UK.

On2 can be found on the World Wide Web at http://www.on2.com/.

About ARC

ARC International is a provider of low-power, high-performance 32-bit RISC/DSP configurable processor cores, real-time operating systems and development tools for embedded system design. ARC's configurable, extendible cores assist customers in their rapid development of next generation digital media, consumer and communications devices, resulting in exceptionally competitive System-on-Chip products.

ARC International maintains a worldwide presence with corporate offices in Elstree, UK and San Jose, California, USA. The company has research and development offices located in England and the United States. ARC International is listed on the London Stock Exchange as ARC International plc.

ARC can be found on the World Wide Web at http://www.arc.com/.

For more information, call 831/466-4976 or 646/292-3533.