NEC Announces Investment in VideoLogic; Companies Sign Joint Development and License Agreement on Advanced 3D Games and Virtual Reality Technology

Business Wire, March 27, 1995

SAN BRUNO, CALIF.--(BUSINESS WIRE)--March 27, 1995--VideoLogic, a leading international supplier of PC multimedia, and NEC, one of the world's largest electronics companies, today announced they have signed an agreement for the joint development and license of advanced 3D games and virtual reality technology for the home, arcades and theme parks.

As part of the deal, NEC also has agreed to subscribe in cash for 3,200,000 new ordinary shares of 10p each in VideoLogic Group Plc, at a price of 49.5p per 10p share. This holding will represent 2.29% of the enlarged VideoLogic Group Plc share capital.

Under the terms of the agreement, which are similar to those set out in the initial framework agreement announced in December 1994, VideoLogic will license its new technology, called "PowerVR," to NEC. Using its sophisticated semiconductor expertise, NEC will deliver affordable high speed, high performance, 3D and virtual reality solutions for the consumer market. As sole distributor NEC will sell the "PowerVR" product world-wide supported, where appropriate, by VideoLogic. The agreement also provides for sharing of development costs and royalties to VideoLogic. The new 3D technology is planned for availability by the end of 1995.

Games machines and personal computers equipped with the new technology will take the user experience to an entirely new dimension of realism. "PowerVR" systems provide photographic quality pictures, realistic 3D animation and special effects, including lifelike shadows and sophisticated shading, as well as

"With its advanced semiconductor expertise and world-wide strengths in electronics, NEC is an ideal partner for VideoLogic," said Derek Maclaren, chairman of VideoLogic. "Together, the two companies have the technology, resources and skills to develop revolutionary new products for the games and virtual reality markets, which provide previously unattainable levels of realism and interactivity at very attractive prices."

"PowerVR," which has been under development for over three years, is an advanced 3D graphics and virtual reality system which offers considerably superior performance over conventional technologies and has the unique advantage of being scaleable - it will enable a range of systems at different price/performance levels. The result will be a technology that is equally applicable to home video games, coin-operated arcade games, interactive TV and personal computers.

Key markets for the technology include consumer and professional multimedia users and particularly the computer games industry, which is expected to be one of the fastest growing application areas. The world computer games market was worth in excess of $15 billion in 1993. (Source: PC Graphics Report 11/28/94).

VideoLogic, Inc. is a subsidiary of VideoLogic, Ltd., founded in 1985 and headquartered in the United Kingdom. A leading international supplier of PC multimedia, the company's market-leading range of multimedia boards is sold in more than 50 countries through computer retail and mass merchandising channels, value-added resellers and OEMS. VideoLogic Labs develop advanced, highly integrated multimedia semiconductors. The company is publicly traded on the London stock exchange (FOOTSY:VDL) and operates European offices in Paris and Frankfurt. The U.S. corporate headquarters is in San Bruno, Calif.

NEC Corporation is a world leader in communications, computers and electronic devices. In Japan, NEC operates 47 manufacturing plants and nearly 400 sales offices. NEC's international operations include 31 manufacturing affiliates, with 30 plants in 15 countries, 42 marketing, service and research firms in 22 countries, 24 liaison offices in 22 countries.

Global operations achieved consolidated net sales of $35,096 million for NEC in fiscal year 1993 (running from April 1993 to March 1994). The entire NEC group of companies has a total of 191,000 employees world-wide. NEC invests 9 percent of its consolidated sales revenues in R&D and engineering projects. This has created a huge development base of advanced technologies, which the company applies in manufacturing more than 15,000 products to meet diverse customer needs in 152 nations.

CONTACT: VideoLogic

Lili McGirr, 415/875-0606 (Ext. 224)

or

Strategic Communications

Jamie O'Donnell or Steve Sylvia, 415/552-1515