Creative Drives PC-DVD to the Consumer's Desktop

Award-Winning PC-DVD Encore Now Available to the Mass Market at $199.99 After Rebate

MILPITAS, Calif. -- July 8, 1998 -- Creative Technology Ltd. (NASDAQ: CREAF), the world's leading provider of multimedia products for the PC, today announced that it is now making its award-winning PC-DVD Encore™ Dxr2 available to the mass consumer market at a new low price of US$229.99 -- US$199.99 with an end-user rebate offer of $30.00, good through September 7, 1998. PC-DVD Encore Dxr2 provides the consumer with the hardware and software needed to watch DVD movies on their PC. PC-DVD Encore Dxr2 includes Creative's PC DVD-ROM drive which is fully compatible with all CD-ROM formats and the Dxr2 card which delivers cinema quality DVD video to the desktop.

Creative's PC-DVD Encore Dxr2 has received top honors worldwide including the prestigious Windows Magazine "Win100" award and the "World-Class" award from PC World. PC-DVD Encore Dxr2 also garnered the "Editors' Choice" award from Computer Reseller News -- which singled out Creative's PC-DVD solution as one of the easiest upgrades to install and use, and one of the fastest DVD-ROM drives tested. "The Encore's video performance is excellent," raves c/net Gamecenter. "When all is said and done, Creative Labs' Encore kit is an exceptional value."

"Creative is focused on bringing big-screen theater quality to the desktop PC and making its superior PC-DVD technology more accessible and affordable to consumers," said Sim Wong Hoo, chairman and chief executive officer of Creative Technology, Ltd. "There is growing consumer interest for PC-DVD technology and Creative is thrilled to be able to present an exceptional, low-cost solution to its customers."

Features and Benefits
An overview of the features and benefits that comprise Creative's PC-DVD Encore's sophisticated architecture include:

• Simultaneous viewing of video on a PC and TV with composite or S-Video outputs
• Line-doubling to 60 frames per second, including vertical and horizontal filtering and dynamic interpolation of up to 1280 X 1024 full-screen resolution
• Runs at twice the speed of first generation DVD drives
• Interfaces with Dolby Digital receivers for room-filling 5.1 channel Dolby Digital audio
• Fully supports all popular CD-ROM formats, including previously unsupported CD-Recordable media and CD-RW
• Blazing CD-ROM drive transfer rate of 20x and 100ms access time

Creative Labs was the first company to introduce a DVD-ROM upgrade kit when it launched PC-DVD in March, 1997. With the introduction of its second-generation PC-DVD Encore, Creative solidified its position in the retail channel.

Creative's PC-DVD Encore Dxr2 is available through its extensive distribution and retail network. The rebate offer is valid beginning July 1.

Creative Technology Ltd. develops, manufactures and markets a wide array of advanced multimedia solutions for the PC, entertainment, education, music and productivity tools markets. Creative's products are marketed through both the OEM and retail channels under a variety of trademarks, including the "Blaster" family name. Sound Blaster® has become the multimedia industry's de facto audio standard. Sound Blaster is an audio platform consisting of a sound card or chipset, software drivers and bundled software applications that enable PCs to produce high quality audio. Creative's corporate headquarters and primary manufacturing are based in Singapore, with sales, distribution and research and development being carried out through an extensive, global network of subsidiaries located in North America, Europe, Asia and Africa. Note to editor: Please visit our online press room at http://www.americas.creative.com/pressroom/ for news releases, screen shots, reviewers guides and white papers about Creative's entire line of multimedia products.

This announcement relates to products whose launch are in the United States of America. The product names, contents, prices and availability may differ elsewhere in the world according to local factors and requirements.

Sound Blaster is a registered trademark and PC-DVD Encore, Dynamic Xtended Resolution and DXR are trademarks of Creative Technology, Ltd. In the U.S and other countries. All other product names mentioned herein are trademarks of their respective owners and are hereby recognized as such.