The following forward-looking statements reflect GigaMedia's expectations as of May 27, 2010. Given potential changes in economic conditions and consumer spending, the evolving nature of gaming software, online games, and various other risk factors, including those discussed in the company's 2008 Annual Report or 20-F filing with the U.S. Securities and Exchange Commission, actual results may differ materially.

Gambling software business. As a result of the sale of this business unit to Mangas, GigaMedia will deconsolidate the gambling software business and report this unit's results under equity accounting, beginning in the second quarter. Management expects to record a substantial one-time gain of approximately US$60 million to US$70 million in the second quarter. Management also expects softer second and third-quarter results from the gambling software business reflecting weaker summer seasonality. However, the traditional summer seasonality may be partially offset by the opening of the French market.

Asian online games business. In the second quarter of 2010, GigaMedia expects revenues to decline in Taiwan and China due to seasonality. The company also expects to record write-offs estimated at around US$7 million to US$8 million in the second quarter related to certain legacy games, game intangibles, and underperforming games. Management expects the consolidation of IAHGames to be a significant source of revenue growth in 2H 2010.