Consumer Study Shows Immersion VibeTonz Features Influence Mobile Phone and Content Purchasing Behavior; Immersion and Ipsos-Insight Release New Consumer Research Study.

SAN JOSE, Calif. -- Immersion Corporation (Nasdaq:IMMR), a leading developer and licensor of touch feedback technology, today released the results of a market research study designed to measure consumer response and willingness to purchase mobile phones and downloadable content enhanced by VibeTonz(TM) technology. Conducted by Ipsos-Insight Corporation, the study included 300 mobile phone users between the ages of 14 and 54 in five U.S. metropolitan markets: Boston, Chicago, suburban New Jersey, San Francisco, and Seattle.

In key study results, half or more of the users rated:

--VibeTonz-enabled content as unique, fun, and useful.

--VibeTonz features as an important consideration for their next mobile phone purchase, indicating that they would pay an average of $23 more for a full set of VibeTonz features in a new phone.

--The synchronized touch sensations produced by VibeTonz technology as something they would pay a premium for in downloaded games and ringtones. The thirty percent of respondents with prior content-download experience also expressed a strong interest in buying more downloaded ringtones with this feature.

In addition, four in ten mobile phone users would consider switching operators (and by default, handsets) to get ringtones with the VibeTonz feature, while three in ten would switch to get VibeTonz-enabled games. Since half of the study participants plan to replace mobile phones within a year, these preferences could have considerable future impact on both operators and handset manufacturers.

Todd Board, senior vice president of Ipsos-Insight, said, "Our study shows strong user agreement with sentiments such as unique, useful, and fun. It is a feature respondents believe is consistent with their desired image, and one that would impress their friends and other mobile phone users. Since the participants' current choice of operators and handsets closely mirrors the U.S. market, I believe the study paints a reliable picture of overall mobile phone user sentiments."

According to John Grundy, vice president and general manager of Immersion's Mobility business group, "This study confirms that VibeTonz touch sensations, which can enhance both new and existing content and services, add depth and dimension to improve the quality of the user's communications experience. People like VibeTonz effects, they're willing to pay to get them in a handset, and they would be more likely to buy content and services that feature them. We see this study as clear validation that VibeTonz technology provides realism and differentiation for content and services that can boost both loyalty and revenues for operators, handset manufacturers, and content developers."

Study Design and Results

Ipsos-Insight conducted the Immersion-sponsored study in shopping malls, interviewing 60 people in each of five U.S. metropolitan markets. Participants were first screened for decision-making influence on mobile phone purchases. All completed a 35-minute computer-assisted personal interview that included direct participant experience of VibeTonz-enhanced ringtones, games, emoticons, handset navigation, and alerts before answering questions. The detailed questions measured the level of user acceptance and interest in VibeTonz effects, whether participants would pay for the features, and how much.

Breaking out study results by mobile phone feature shows strong user acceptance in many areas and significant potential impact on future purchasing behavior.

Ringtones

The ARC Group reports that revenue from ringtone sales worldwide was $3.5 billion in 2003, with an outlook for continued strong growth.

The impact of adding intricately orchestrated touch sensations to ringtones could be a significant factor in increasing ringtone sales. In this study, more than half of these likely decision makers strongly agree that VibeTonz-enabled ringtones are fun, unique, and useful. Respondents showed consistent opinions that would affect their buying decisions:

--Nearly two-thirds said they would purchase a VibeTonz ringtone feature for their mobile phone

--Two-thirds said they would change ringtones more often if their phone had VibeTonz technology

--Forty percent said they would consider switching providers for the feature

--Almost three in four said the benefits of the feature would be an important consideration when shopping for their next phone

The study found a surprisingly robust impulse among users to customize their phones, as nine out of ten respondents have chosen distinctive ringtones for their phone. But half the respondents who have downloaded ringtones or games said they obtained four or fewer in the past three months. This indicates a real opportunity for increasing purchases of ringtone downloads and presents a significant revenue opportunity for operators and content developers.

Among those users experienced with downloading content, over half would download more ringtones if their phone had VibeTonz touch sensations synchronized to the music.

Games

ARC projects worldwide revenue for mobile gaming to be $2.4 billion in 2004, growing to $8.4 billion in 2008. As an example of the growing popularity of downloads, Verizon Wireless announced on October 26 that its Get It Now downloads exceeded 69 million in the first nine months of 2004, and totaled more than a 103 million downloads since it introduced the service less than two years ago.

The study corroborated the growing interest in mobile gaming and indicated that adding VibeTonz effects to games would encourage brisk sales and even more play.

--Forty percent of respondents said they would buy VibeTonz-enhanced games for their phone

--Almost half said they would play games more often if their phone had games with touch sensations

--Among those who had downloaded content in the past, twenty-five percent would pay more for games if their phone had vibration-enabled gaming

--About one-third would consider switching providers to get vibration-enabled gaming

More than forty percent consider VibeTonz effects in games to be an important factor to consider when purchasing their next phone.

Pricing

Todd Board of Ipsos-Insight says, "Extrapolating from our study, nearly two-thirds of current mobile phone users in the United States would seriously consider purchasing a feature that enables touch sensations in sync with ringtones and other audible signals. In addition, sophisticated analysis allowed us to project pricing that would maximize revenue and encourage trial."

While maximized revenue points vary for different effects (ringtones, games, and other features), the average price premium respondents would expect to pay for a new phone equipped with the full range of VibeTonz capabilities was about $23. Survey results also enabled Ipsos-Insight to determine price points for individual features to maximize revenues or to generate the highest trial rates.

For more information, visit www.vibetonz.com or direct electronic mail inquiries to [e-mail].

About Immersion (www.immersion.com)

Founded in 1993, Immersion Corporation is a recognized leader in developing, licensing, and marketing digital touch technology and products. Bringing value to markets where man-machine interaction needs to be made more compelling, safer, or productive, Immersion helps its partners broaden market reach by making the use of touch feedback as critical a user experience as sight and sound. Immersion's technology is deployed across personal computing, entertainment, medical training, mobility, automotive, and 3D simulation markets. Immersion and its wholly-owned subsidiaries hold more than 240 issued patents worldwide.

About Ipsos-Insight

Ipsos-Insight is a member of the Ipsos Group, the third-largest, survey-based marketing research company in the world. Founded in 1975 in Paris, Ipsos now has a presence in 35 countries and conducts research in more than 100, with a staff of over 3,700 completing more than 6 million consumer and B2B interviews annually.

Forward Looking Statements

This press release contains "forward-looking statements" that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of Immersion Corporation and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements, other than the statements of historical fact, are statements that may be deemed forward-looking statements, including any projections of earnings, revenues, or other financial matters; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning consumer and market adoption of VibeTonz technology or consumer and market acceptance of force feedback products in general; future development of force feedback products; proposed products or services; any statements regarding future economic conditions or performance; statements of belief; and any statement or assumptions underlying any of the foregoing. Immersion's actual results might differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with Immersion's business which include, but are not limited to, delay in or failure to achieve commercial demand for Immersion's products or a delay in or failure to achieve the acceptance of force feedback as a critical user experience.

For a more detailed discussion of these factors, and other factors that could cause the Company's actual results to vary materially, interested parties should review the risk factors listed in the Company's most current Form 10-K and Forms 10-Q, which are on file with the U.S. Securities and Exchange Commission. The forward-looking statements in this press release reflect the Company's beliefs and predictions as of the date of this release. The Company disclaims any obligation to update these forward-looking statements as a result of financial, business, or any other developments occurring after the date of this release.

Immersion and VibeTonz are trademarks of Immersion Corporation. All other trademarks are the property of their respective owners.