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Dolby Surrounds the Xbox 360

Dolby and Microsoft Team up to Bring Dolby Digital 5.1 Surround Sound to Both Movies and Games on the Xbox 360

SAN FRANCISCO – Dolby Laboratories (NYSE:DLB) announced today that the new Xbox 360™ video game and entertainment system from Microsoft will support Dolby Digital surround sound for both games and movies. This next-generation game console includes both interactive Dolby Digital 5.1 surround sound for game play, as well as Dolby Digital decoding for video playback.

The combination of these two Dolby technologies enables consumers to enjoy their games and movies in cinematic 5.1-channel surround sound on the tens of millions of home theater systems worldwide equipped with Dolby Digital technology.

For game play, the Xbox 360 features interactive Dolby Digital 5.1 surround sound, allowing next-generation games on this platform to deliver a highly realistic sound field that places gamers in the middle of the action. Dolby Digital 5.1 surround sound gives gamers a competitive advantage by allowing them to hear enemies that may not be visible on the screen.

Microsoft also included Dolby Digital decoding in the Xbox 360 for video playback, including playback of DVD movies. Dolby Digital decoding allows this platform to play the incredible number of DVD movies available today with Dolby Digital soundtracks. With Dolby Digital, DVD movies provide the same pristine sound found in movie theatres all over the world.

“Dolby Digital 5.1 allows me to create games with soundtracks that rival the best Hollywood movies,” said Marty O’Donnell, audio director on the top-selling Halo series of games. “Having this technology in the next-generation Xbox 360 allows me to add a level of realism and dramatic effect to my games that is not possible otherwise.”

“Gamers expect Dolby Digital 5.1 surround sound from the next-generation of games,” said Jack Buser, Director of Consumer Electronics, Dolby Laboratories. “An increasing number of consumers are connecting game consoles to their surround sound systems with Dolby Digital to get the ultimate game experience.”

Game publishers are rallying behind Dolby Digital, releasing new titles that support the technology. These publishers include: 2K Games (NBA 2K6), Activision (Call of Duty 2, Tony Hawk’s American Wasteland™), Electronic Arts (Need for Speed™ Most Wanted) and Microsoft (Perfect Dark Zero™, Project Gotham Racing 3).

For users without a digital connection, Xbox 360 supports Dolby Pro Logic II encoding, allowing gamers to experience full-range, five-channel surround sound from a stereo analog connection.

For more information, visit http://www.dolby.com/games.

About Dolby Laboratories
Dolby Laboratories (NYSE:DLB) develops and delivers products and technologies that make the entertainment experience more realistic and immersive. For four decades Dolby has been at the forefront of defining high-quality audio and surround sound in cinema, broadcast, home audio systems, cars, DVDs, headphones, games, televisions, and personal computers. Based in San Francisco with European headquarters in England, the company has entertainment industry liaison offices in New York and Los Angeles, and licensing liaison offices in London, Shanghai, Beijing, Hong Kong, and Tokyo. For more information about Dolby Laboratories or Dolby technologies, please visit http://www.dolby.com.

Certain statements in this press release, including statements regarding the capabilities and benefits of Dolby technologies, including Dolby Digital and Dolby Pro Logic technologies, relating to the video gaming experience, are “forward-looking statements” that are subject to risks and uncertainties. These risks and uncertainties, which could cause the forward-looking statements to differ materially from anticipated results, include, without limitation, risks associated with the market acceptance and adoption of surround sound technologies for video games and video game consoles; competition involving sound technologies in the video game market; rapid changes in surround sound technologies for the video game market; the development of industry standards for sound technologies in this market and the ability to have Dolby technologies adopted as industry standards therein; and other risks detailed in Dolby’s Securities and Exchange Commission filings and reports, including its quarterly report on Form 10-Q for the quarterly period ended July 1, 2005. Dolby disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

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Dolby, Pro Logic, and the double-D symbol are registered trademarks of Dolby Laboratories. All other trademarks remain the property of their respective owners. S05/16733 DLB-G

Xbox, Xbox 360, and Xbox Live are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

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