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Press Release

Apr 24, 2000

Immersion Corporation Reports Record Net Revenues of $2.5 Million for First Quarter

Immersion Corporation Reports Record Net Revenues of $2.5 Million for First Quarter SAN JOSE, Calif. April 24, 2000--Immersion Corporation, (Nasdaq:IMMR), the pioneering developer of sensory interaction technology, announced today that first quarter 2000 total revenues were $2.5 million, as compared with $1.9 million in the first quarter of 1999, an increase of 31%. The first quarter 2000 revenue was comprised of $884,000 in royalty revenue, which was $403,000 or 84% higher than the first quarter of 1999; product sales of $1.2 million, which was $135,000 or 12% higher than the first quarter of 1999 and development contract revenue of $358,000, which was $48,000 or 16% higher than the first quarter of 1999. Gross margin increased from 74% in the first quarter of 1999 to 75% in the first quarter of 2000. The net loss for the quarter was $2.6 million compared to a net loss of $1.3 million recorded in the same period in the prior year. Basic and diluted net loss per share for the quarter was $0.16 compared with a net loss per share of $0.29 for the first quarter of 1999.

"We're very pleased with our first quarter results," said Victor Viegas, CFO at Immersion. "All three revenue groups showed solid growth, in particular, the royalty revenue increased significantly. In addition, we are making great progress with our Accessibility market initiatives and with our patent filing efforts. Our first quarter was important to us for a number of reasons including, the completion of the Company's acquisition of Haptech, the signing of a Middleware partnership agreement with Sony, the announcement of a new hand-held gamepad product by Kensington/Gravis and the expanded partnership with Logitech (NASDAQ:LOGIY) related to TouchSense(TM) mouse products."

About Immersion Corporation (

Founded in 1993, Immersion Corporation develops advanced hardware and software technologies that enable users to interact with computers using their sense of touch. Immersion's patented TouchSense(TM) technologies, enable computer peripheral devices to deliver tactile sensations that correspond to on-screen events. Immersion licenses its hardware and software technology, on which it holds 50 issued patents worldwide, to industry-leaders in order to integrate and implement its sensory feedback into professional simulation and modeling, consumer devices, and enabling technologies.

All statements contained herein, as well as oral statements that may be made by Immersion or by officers, directors or employees of Immersion acting on Immersion's behalf, that are not statements of historical fact, constitute "forward-looking statements" and are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Immersion to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties are outlined in Immersion's 1999 Annual Report as filed on Form 10K and its Prospectus dated November 12, 1999 included in its Registration Statement on Form S-1 filed with the Securities and Exchange Commission. These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. The Company is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

Note to Editors: Additional background information on Immersion Corporation is available through our Web Site at -0-

                         Immersion Corporation
            Condensed Consolidated Statements of Operations
               (In thousands, except per share amounts)

                                             Three Months
                                             Ended March 31,
                                           2000        1999

 Royalty Revenue                       $    884   $     481
 Product sales                            1,220       1,085
 Development contracts and other            358         310
  Total revenues                          2,462       1,876

Costs and expenses:
 Cost of product sales                      623         494
 Sales and marketing                      1,528         187
 Research and development                   676         458
 General and administrative               1,400         752
 Amortization of intangibles
  and deferred stock compensation           672         118
 In-process research and development        887       1,190

  Total costs and expenses                5,786       3,199

Loss from operations                     (3,324)     (1,323)
Other income                                760          40

Net loss                                $(2,564)   $ (1,283)

Basic and diluted net loss per share    $ (0.16)   $  (0.29)

Shares used in calculating basic
 and diluted Net loss per share          15,766       4,459

                         Immersion Corporation
                 Condensed Consolidated Balance Sheets
                            (In thousands)

                                      March 31,   December 31,
                                         2000         1999
                                     (Unaudited)   (Audited)

 Cash and cash equivalents              $28,714     $46,527
 Short-term investments                  20,212       4,781
 Accounts receivable, net                 1,271       1,064
 Inventories                                683         660
 Prepaid expenses and other assets        1,447       1,057

  Total current assets                   52,327      54,089

 Property and equipment, net                899         591
 Patents and technology, net              4,620       4,687
 Purchased intangibles                    5,330          --
 Other assets                                --          71

  TOTAL ASSETS                          $63,176     $59,438

 Accounts payable                       $   960     $   750
 Accrued compensation                       503         180
 Other accrued liabilities                1,089         503
 Deferred revenue                           729       1,316
 Customer advances                           39          39
 Income taxes payable                         2           2

  Total current liabilities               3,322       2,790

STOCKHOLDERS' EQUITY                     59,854      56,648

STOCKHOLDERS' EQUITY                    $63,176     $59,438

    CONTACT: Immersion Corporation
             Victor Viegas/Kimberly Firehammer, 408/467-1900