REALmagic DVR Slashes the Cost and Complexity of DVD Authoring.

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 16, 1999--

Sigma Designs Delivers Complete DVD Video

Production Solution to Businesses and Schools at

Remarkable Cost Savings

With the announcement of its revolutionary REALmagic(R) Digital Video Recorder (DVR(TM)) for less than $1,000, Sigma Designs(R), Inc. (Nasdaq:SIGM) has slashed the cost of creating and playing DVD video. A fully integrated solution, REALmagic DVR combines a high-performance DVD encoder with the award-winning quality of its Hollywood Plus(TM) DVD decoder on a single PCI add-in card.

At this week's DVD Pro '99 Conference and Exhibition in San Francisco, the leaders in DVD technology will demonstrate their latest wares to a growing audience of educators and corporate in-house production staff seeking to take advantage of DVD technology in their jobs. Up until now, DVD encoding technology has been oriented to Hollywood producers. But corporate training departments do not need the features required for releasing "Titanic" on DVD.

Sigma's REALmagic DVR provides a simple, low-cost solution that leverages the well-known REALmagic brand name and its high-quality reputation. As companies with high-end solutions are scrambling to bring their $50,000-$100,000 DVD production solutions to an affordable price for the corporate and education markets, Sigma has announced a complete DVD video production system for less than $1,000.

With Sigma's all-in-one encoder/decoder, in-house video producers, graphic designers, and educators have an affordable solution for recording, editing, authoring, and archiving amazingly high-quality video and audio. Over one million satisfied customers in corporations, schools, and homes around the world have been dazzled by the high-quality playback of REALmagic DVD/MPEG cards in their PCs. Now, with REALmagic DVR, PC users can play and record their own digital video for entertainment, training, education, and website development.

The demand for these capabilities is growing at a rapid pace as businesses and educators realize how easy it is to bring their ideas to life. INSIGHT RESEARCH predicts that global sales of devices that utilize MPEG-2 encoders and decoders will reach $23.9 billion this year and top $125 billion in 2003.

"Corporate trainers and educators immediately realized that high-end systems are too difficult to use and offer high-end features not needed in their environments," said William K. Wong, Sigma Designs' vice president of marketing. "We understand what our customers want -- they want a professional-quality, reliable hardware encoder that will get the job done.

"We feel that REALmagic DVR has the functionality and price point that will enable us to capture a large market share with this audience. Today's corporate environment requires that projects be completed in a day or two, not in the three-month timeframe that Hollywood studios enjoy. By offering the relevant features of the higher-priced DVD encoders for a fraction of the cost, Sigma is well positioned to accelerate the convergence of media technologies."

REALmagic DVR delivers consistently perfect quality by performing all video recording and playback in hardware. It simultaneously encodes and decodes MPEG video, enabling the user to see the results of various encoder settings in real time, without laborious trial and error. Since MPEG encoding is so processor-intensive, some encoding products on the market today take shortcuts to compress and decompress MPEG video -- not REALmagic DVR.

Its pure hardware approach uses the latest advances in comb filtering, Adaptive Motion Estimation, Field/Frame Motion Estimation, and Adaptive Motion Compensation to consistently deliver 30 razor-sharp frames of video every second. With a 200 MHz Pentium(R) or equivalent CPU, the add-in card can run concurrent applications and deliver smooth video capture and playback without taxing the system.

Complete Video Production System -- From Capture to Playback

A fully integrated suite of video applications is included with REALmagic DVR, including MPEG encoding with real-time preview, MPEG editing, and VCD, SVCD, and DVD authoring as well as DVD and MPEG file playback. To author a video, users simply drag-and-drop their compressed video and audio clips, graphics, backgrounds, and buttons into the REALmagic Authoring application to build their interactive DVD with a single mouse click.

Price, Availability

Sigma has enhanced the value of REALmagic DVR by adding full-featured application software: REALmagic DVD Station, REALmagic Authoring, and REALmagic Editing software. Connectors are included for composite and S-Video in and out, stereo audio in and out, and S/P DIF audio output. The versatile codec includes drivers for Windows(R) 95, 98, and NT with DirectShow filters.

REALmagic DVR will be available during the third quarter of this year and will be sold through OEMs and system integrators. A number of end user upgrade kit producers are planning to release retail kits incorporating REALmagic DVR in time for the holidays. The kits will enable customers to upgrade their Windows 98/NT PCs to video and DVD production systems. The suggested retail price for the codec card is $999.

About Sigma Designs

Sigma Designs is an acknowledged leader in the fast-growing digital video market. The company focuses on meeting the growing demand for Internet-based digital video delivery and hardware video encoding/playback solutions for business, home, and education markets. Sigma specializes in digital video decoding for the PC DVD market, for video streaming over corporate Intranets and extranets, and for the emerging set-top box/information appliance market.

Sigma is a driving force in advancement of the digital video technology used in high-speed, high-bandwidth transmission. Sigma Designs' products, marketed under the REALmagic trade name, are sold worldwide through a direct sales force, distributors, and original equipment manufacturers (OEMs). For more information, visit the Company's web site at http://www.sigmadesigns.com.

Editors and Analysts: For additional information, photographs, and interviews, please contact Andy Marken, [e-mail] or 408/986-0100.

Note to Editors: DVR and Hollywood Plus are trademarks, and Sigma Designs and REALmagic are registered trademarks of Sigma Designs. Other products and companies referred to herein are trademarks or registered trademarks of their respective companies.