3DsoundSurge Press Release: SRS Labs Debuts Circle Surround Interactive for Video Game Market at E3

SRS Labs Debuts Circle Surround Interactive for Video Game Market at E3

Alliance with Sunsoft Expedites Circle Surround Interactive Availability to Consumers and Game Developers Worldwide

SANTA ANA, Calif., May 11 /PRNewswire/ -- SRS Labs, Inc. (Nasdaq: SRSL), a world-renowned leader in audio and voice technologies, and Sunsoft Company, a division of Sun Corporation, a leading developer of home video game software products, multimedia PC products, and coin operated arcade game machines, have announced a strategic alliance to market SRS Labs' Circle Surround Interactive (CS-I) technology. Through the alliance, Sunsoft will have marketing and distribution rights for the Circle Surround Interactive products and game encoding middleware. Circle Surround Interactive will deliver real time, interactive multi-channel sound capability, when used in conjunction with existing and future game consoles such as Sony PlayStation2, Sega Dreamcast, Nintendo Dolphin or Microsoft X-box. Game developers can use the middleware from Sunsoft to encode real-time movement of sound locations; front, back, left and right, in accordance with the movement of game objects relative to the user. The first Circle Surround Interactive hardware product will be marketed under the product name of Sound Circle and is being demonstrated at the Entertainment Electronics Expo (E3) from May 11-13 in Los Angeles. Product launch is scheduled in September 2000 in anticipation of the roll out of the Sony PlayStation2 in the United States.

``Developing this relationship with Sunsoft should give our Circle Surround Interactive technology the boost it needs for quick market penetration,'' stated Thomas Yuen, CEO of SRS Labs, Inc. ``With the sound enhancement developed by SRS Labs and the hardware implementation manufactured by ValanceTech Limited, Circle Surround Interactive is proving to be an excellent example of SRS Labs' technology-linked strategy, aimed at high growth, high value market segments. We're anxious to deliver Sound Circle into the hands of gamers worldwide, and see the impact of Circle Surround Interactive technology on the booming video game market.''

Sunsoft's Sound Circle hardware product will consist of a custom Circle Surround Interactive decoder and two rear-surround speakers, which in conjunction with the stereo speakers of a TV or a separate stereo system can play back the Circle Surround Interactive encoded game audio signals in five channels. The center speaker is simulated as a phantom source using the front left and right speakers. Designed by SRS Labs, the hardware decoder will be manufactured by its wholly owned subsidiary ValenceTech Limited and marketed by Sunsoft.

Circle Surround Interactive was developed by SRS Labs and is based on SRS Labs' patented multi-channel Circle Surround 5.1 technology. Based on a combination of software and hardware developments consisting of real-time 5.1 channel encoding technology that can be incorporated into console game software, and a small hardware decoder, Circle Surround Interactive creates a new dimension in sound for console games. Circle Surround Interactive can also be used to playback encoded sound source from DVD, video, and satellite broadcasts. When connected to the stereo output of a media player, it provides a dramatic five-channel surround sound field comparable or superior to other 5.1 channel transmission and decoding methods. For conventional non-encoded stereo sources, a special mode of Circle Surround Interactive can create a five-channel sound field allowing the user to enjoy any existing library of non-encoded source material.

About SRS Labs, Inc.

SRS Labs is the world's leading provider of audio and voice enhancement technology solutions. SRS Labs' business consists of licensing audio and voice enhancement technologies to manufacturers of consumer electronics, computer, gaming and telecommunications equipment; the design of custom ASICs (application specific integrated circuits) for consumer electronics, game, telecommunications and personal computer manufacturers; the distribution of components, chips and assembly systems; and the manufacturing and marketing of home theater and game products for the consumer marketplace.

For more information on SRS Labs' technologies, the company's worldwide licensing program or its design and manufacturing capabilities, visit the SRS Labs website at http://www.srslabs.com .

Except for historical information contained herein, Company statements and each of the statements of Mr. Yuen in paragraph two of this release includes forward-looking statements and projections (including statements concerning plans and objectives of management for future operations) that are based on management's belief, as well as assumptions made by, and information currently available to, management.

While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that the Company's goals will be realized. Numerous factors (including risks and uncertainties) may affect the Company's actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the Company. Some of these factors include the acceptance of new SRS Labs' products and technologies, the impact of competitive products and pricing, the timely development and release of media content by the Company, general business and economic conditions, especially in Asia, and other risks detailed in the Company's Form 10-K and Form 10-Q statements filed with the SEC.

SRS, Circle Surround, and the SRS symbol are registered trademarks of SRS Labs, Inc. in the United States and selected foreign countries. Circle Surround Interactive is a trademark of SRS Labs, Inc. in the United States and selected foreign countries. All other brand names mentioned are trademarks or registered trademarks of their respective holders.

SOURCE: SRS Labs, Inc.