Sigma Designs Announces REALmagic DVD/MPEG-2 Playback Card

Low Cost DVD/MPEG-2 Playback Card Provides Uncompromising Features, Performance, and Ease of Use for Explosive PC-DVD Market

FREMONT, Calif., (May 28, 1997) -- Sigma Designs, Inc. (Nasdaq: SIGM), a recognized leader in digital video solutions for personal computers, today announces its REALmagic Hollywood DVD MPEG-2 playback card. The new PCI-bus DVD/MPEG-2 card turns a PC into a full-featured DVD player that fully exploits all of the spectacular digital video and digital surround sound capabilities of the DVD format, as well as upcoming MPEG-2 interactive titles.

"DVD means more than just a dramatic increase in the home entertainment experience," commented Prem Talreja, Sigma Designs' Vice President of Marketing. "Putting DVD technology into the PC provides not just DVD movie playback on the computer or the TV, but also opens up capabilities for the 4.7 Gbyte DVD-ROMs with MPEG-2 video. Because DVD is backward compatible with CD-audio, CD-ROM and MPEG-1, this technology will soon replace CD-ROM drives."

Sigma's REALmagic Hollywood is a no-compromise, cost-effective, PC-based DVD solution that fully complies with DVD specifications. Sigma's unique, hybrid hardware/software solution off-loads the system CPU while minimizing cost. It works with any standard 133 MHz system, without requiring specialized hardware or graphic cards. Video may be viewed on the computer's monitor and simultaneously displayed on a television.

A key element of the DVD specification is the use of MPEG-2 for digital video compression, a technology in which Sigma has exceptional expertise. "Sigma has been a driving force behind the advancement of the MPEG technology used in most of the multimedia products on the market today," added Talreja. "REALmagic Hollywood is a natural extension of our MPEG expertise and provides an industry-leading solution for the PC-DVD market."

"We're very impressed by the high quality of Sigma's REALmagic DVD," said Andy Fischer, vice president of Jon Peddie Associates, a Tiburon, Calif.-based computer graphics market research and consulting firm. "Sigma has delivered a set of features well suited for consumers and for system OEM adoption. We think Sigma could capture a significant share of the emerging DVD market which is generating such enthusiasm among OEMs."

Major features of the REALmagic Hollywood card include:

• Plays DVD-video, CD-audio, Video CD, CD-ROM and DVD-ROM
• Full, uncompromising DVD performance without over-taxing the Pentium CPU * Compatibility with all VGA graphics cards
• Supports MCI command set for compatibility with interactive MPEG-1 & 2 entertainment and education titles
• Dolby Digital AC-3 five channel surround-sound playback * Simultaneous display on VGA monitor and TV
• Real-time, hardware image scaling from thumbnail size up to 1280 x 1024 resolution
• Adjustable color, contrast, and brightness independent of monitor settings * Supports Regional Copy Protection
• Select from up to 8 language sound tracks and 32 subtitle channels
• Lets user select any of up to 9 viewing angles on-the-fly
• Plays wide-screen, letter box and pan-scan aspect ratios

Since the introduction of consumer DVD Players just two months ago, sales have exceeded all expectations, and have been described by one retailer as "extreme." All the major movie houses, including Time Warner, Sony, Paramount Pictures, and Disney, have scheduled DVD movies for release through 1997.

The REALmagic DVD card includes Sigma Designs' DVD-Station, an easy-to-use program for DVD navigation and control. With DVD-Station, PC users can take full advantage of every interactive DVD feature, using simple VCR-like controls to choose the sound track and subtitle language, select viewing aspect ratios and change viewing angles. The user interface is intuitive and easy to navigate. Users can also use DVD-Station menus to exercise parental control and perform search commands.

REALmagic Hollywood is currently being shipped in volume to several system integrators who are expected to announce products in Q2 1997. Details of these and other designs using Sigma's REALmagic DVD technology will be announced throughout 1997.

About Sigma Designs:

Sigma Designs entered the multimedia market in 1993 with products based on the MPEG (Moving Picture Experts Group) standard for compressing and decompressing digital audio and video signals. Since then, Sigma has been a driving force behind advancement of the MPEG technology used in most of the multimedia products on the market today. Sigma Design's products include affordable MPEG video and audio encoding and decoding hardware and the industry's richest line of MPEG software titles. All Sigma Designs' products are sold worldwide through a network of dealers, distributors, and original equipment manufacturers (OEMs). For additional information, call 800/845-8086, 510/770-0100, fax:510/770-2640, or visit Sigma's web site at http://www.sigmadesigns.com.

Editors and Analysts: For further information, photographs and interviews, contact S&S Public Relations.

# # # #

Except for the historical information contained herein, the matters discussed in this release are forward-looking statements that are subject to risks and uncertainties, including the timely introduction and market acceptance of Sigma's video-conferencing and other related products, the impacts of competitive products and pricing, and other risk factors detailed from time to time in the company's SEC reports, including the report on Form10-K for the year ended January 31, 1997 and on Form 10-Q for the quarter ended October 31, 1996.