Apr. 21, 1999 - 10:30am
DC Zip Drive

ROY, Utah--April 20, 1999--Iomega Corporation today announced that Iomega and Sega have signed a non-binding letter of intent to include Iomega's popular Zip(R) 100MB drive in a new collaborative product that will be designed to attach to Sega's Dreamcast system.

The new product will also be designed to dramatically increase the capabilities of not only game playing, but Web-based activities such as content saving of e-mail and Web searches. In addition, Sega intends to sell private label Dreamcast Zip 100MB disks, offering both the device and disks in game-oriented channels.

The collaborative product is expected to be offered as an option to Sega Dreamcast customers in the third quarter of 1999. Dreamcast began shipping November 27, 1998 in Japan and is expected to begin shipping in the U.S. and in Europe during the third quarter of 1999.

Dreamcast is one of the most powerful game systems on the market today. Through a 128-bit architecture, offering high-speed processing capability, 26MB of RAM, 64 channels of sound, breakthrough graphics, superb 3D rendering, a 1 Gigabyte GD-ROM, and a modem for Internet gaming, Web access, and e-mail, Dreamcast has distinguished itself as a benchmark gaming system.

Via Zip(R) Built-In(TM), this new product will be designed to make Dreamcast the first gaming system versatile enough to bring world-class game playing, Web browsing and e-mail together in an integrated system. It will also be designed to allow users to download game updates from the Web to Zip(R) disks. The system will be designed to work independently or in conjunction with Dreamcast games.

"We are seeing a major revolution in consumer electronics from analog to digital," said Sean Kaldor, vice president, Emerging Market & Technology Research, International Data Corporation. "As consumers demand lower cost and easier-to-use solutions, digital technologies will open the door to a much wider range of new functions. One of the fastest developing areas is gaming consoles, in which interchangeable storage has a pivotal role."

"Iomega is changing the home game system market with this new device," said Mike Lynch, director of Beyond PC, Iomega Corporation. "The broad familiarity of Zip drives with consumers, and our large installed base make Zip drives the perfect removable solution for beyond-PC products, such as Sega's Dreamcast game console."

"Dreamcast represents a whole new way of thinking at Sega," said Corporate Senior Vice President of Sega Enterprises, Ltd., Hideki Sato. "We will be able to enhance the potential of Dreamcast further due to the architectural partnership between Iomega and Sega."

Special note: Statements contained in this release relating to the pricing, appearance, specifications, functionality and availability of Sega's Dreamcast game machine and Zip(R) Built-In (TM) are forward-looking statements. There are a number of important factors that could cause actual events to differ materially from those indicated by such forward-looking statements including the market acceptance of Dreamcast and market acceptance of, and demand for, Zip Built-In and removable disk products, performance, manufacturing, development and distribution issues, product pricing, competition and other factors identified in Iomega's Annual Report to stockholders for 1998 on form 10-K, filed March 26, 1999 and its most recent form 10-Q as filed with the SEC.

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