Commercial Video Industry Embraces High Definition; Media Processors From Sigma Designs Support Hospitality, Signage and Other Applications.

MILPITAS, Calif. -- Sigma Designs (Nasdaq:SIGM), a leader in digital media processing for consumer appliances, today announced that LodgeNet, the leading provider of broadband services to the hospitality industry, is now demonstrating support for high definition video entertainment services, based on media processors from Sigma Designs. LodgeNet's demonstration of a high definition video-on-demand system, using Sigma's EM8605 media processor marks the turning point for broader adoption of high definition for premium hotels. Additionally, many other hardware suppliers to the hospitality, digital signage and cinema industries have launched products that feature high definition output, taking commercial video applications to the next level.

The hospitality market for digital entertainment has shown continuous growth over the last several years, driven by demand for greater features and convenience of in-room services. Leading system integrators provide hotels with complete digital entertainment solutions for movies-on-demand, Internet access, music and gaming features. As a natural evolution of the premium entertainment services offered by leading hotels, guests are now starting to enjoy the cinema-level quality of high definition television, enhancing the quality of all the aforementioned features.

Likewise, retail applications of digital signage provide in-store consumer messaging for selection, merchandising and promotions, providing advertisers and retailers the opportunity to influence consumer buying decisions where they shop. Digital signage for in-store merchandizing is a relatively new technology where dynamic video trailers on flat-panel screens replace advertising posters. Major retailers such as Wal-Mart and Best Buy have adopted this technology as part of a progressive marketing strategy. The movement towards highly visible, high definition plasma displays provides an increasingly impactful medium within stores, restaurants, malls and other consumer venues. Other commercial applications such as digital theatre advertising have also followed suit with the movement to high definition.

Nearly all of the key hardware suppliers to the hospitality and digital signage industry have also launched products that support high definition video streams using media processors from Sigma. These include Enseo, a provider of solutions for digital signage, hotels, and theatre advertising; they recently introduced the Alchemy HD, a high definition Digital Media Engine which transforms a PC into a powerful media playback platform capable of driving multiple channels of SD and HD MPEG video and audio decoding. In addition, Visual Circuits, who has shipped solutions for retail signage, entertainment, and other applications, launched its first foray into high definition in April with the Mantis MC(TM), which is a multi-channel, high definition video player which integrates 32-bit accelerated graphics with high definition (HD) video.

Sigma Designs has been a supplier to the commercial streaming industry for more than 10 years and has delivered a wide range of solutions into hospitality, signage and other commercial applications. Sigma media processors represent a commanding share of each of these segments. Sigma media processors are used in systems which represent the vast majority of integrators for hotel entertainment systems. Sigma media processors are used by Eagle Broadband, Enseo, Vela, and Visual Circuits, again representing the vast majority of hardware suppliers to hospitality, retail signage and digital cinema applications.

"We are at the relative beginning of a worldwide shift to high definition video for the complete range of consumer and commercial uses," said Ken Lowe, vice president of strategic marketing. "In many ways, these commercial uses portend widespread demand for the near-cinema quality of high definition video, building more momentum as consumers gain increased exposure in the hotels, stores and other common locations."

Safe Harbor Statement

This press release may contain forward-looking statements, including statements about the projected timing and extent of customer shipments as well as the expected use of Sigma's MPEG decoder products. Actual results could vary from those projected in the forward looking statements as a result of various factors, including worldwide economic conditions, changes in the customer's ability or desire to complete the roll-out, consumer reaction to the new products and services being offered, the ability of Sigma to deliver sufficient quantity and quality of MPEG decoder chips, prices for the Sigma chips, alternative offerings by competitors, and the ability of the parties to work together successfully to achieve the rollout.

About Sigma Designs, Inc.

Sigma Designs (Nasdaq:SIGM) specializes in silicon-based MPEG decoding for streaming video, progressive DVD playback, and advanced digital set-top boxes. The company's award-winning REALmagic(R) Video Streaming Technology is used in both commercial and consumer applications providing highly integrated solutions for high-quality decoding of MPEG-1, MPEG-2 and MPEG-4. Headquartered in Milpitas, Calif., the company also has sales offices in China, Europe, Hong Kong, Japan, Korea and Taiwan. For more information, please visit the company's web site at www.sigmadesigns.com/.

About LodgeNet

LodgeNet Entertainment Corporation is one of the world's largest providers of interactive television systems and broadband services to hotels, including resort and casino hotels, throughout the United States and Canada as well as select international markets. These services include on-demand movies, music and music videos, Nintendo(R) video games, Internet on television, and other interactive television services, as well as high-speed Internet access, all designed to serve the needs of the lodging industry and the traveling public. LodgeNet provides service to more than one million rooms, including 967,000 interactive guest pay rooms, in more than 5,800 hotel properties worldwide. LodgeNet estimates that during 2003 more than 260 million travelers had access to LodgeNet's interactive television systems. LodgeNet is listed on NASDAQ and trades under the symbol LNET.

REALmagic and Sigma Designs are registered trademarks of Sigma Designs. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.