China Digital TV Enters Into Agreement to Invest in 3DiJoy

BEIJING, May 13 /PRNewswire-Asia/ -- China Digital TV Holding Co., Ltd. (NYSE: STV) ("China Digital TV"), the leading provider of conditional access systems to China's expanding digital television market, today announced that it has entered into a definitive agreement to invest in 3DiJoy Corporation ("3DiJoy"), a leading provider of motion-sensing video game solutions for cable set top boxes (STBs), PCs, and other consumer electronic (CE) devices in China.

Subject to the completion of customary due diligence and closing conditions, China Digital TV will invest US$6 million in cash to acquire a 24% equity interest in 3DiJoy post investment. The transaction is expected to close in the second quarter of 2010.

Led by a team of veterans with profound industry expertise and international experience, Shanghai-based 3DiJoy develops advanced motion-interactive software and wireless remote controls, which could turn STBs and PCs into motion-sensing gaming consoles. Running on Linux and Microsoft Windows operating systems, 3DiJoy's solutions deliver a cost-effective and powerful motion video gaming experience to consumers. 3DiJoy holds over 20 patents in motion gaming technology, and boasts a large portfolio of algorithms, software, and hardware designs. The company has also created more than a dozen 3-D motion video games using its proprietary 3-D motion game engine. 3DiJoy's current OEM customers include HP, Philips, Lenovo, Haier, and Singapore Telecom.

Mr. Jianhua Zhu, China Digital TV's chairman and CEO commented, "We are very excited to make this strategic investment in 3DiJoy, a leading player in software and hardware solutions for the motion gaming industry in China. 3DiJoy's management team has deep industry experience and we are confident that this investment will allow us to leverage our leading position in the digital TV industry and create integrated products for our wide customer base. Against the backdrop of TV digitalization and three network convergence, Chinese consumers are eager for high-quality interactive entertainment through their cable set top boxes and other terminal devices, while TV operators are keen to enhance ARPU by providing unique services to subscribers. 3DiJoy's products are ideally suited to benefit from this growing trend and fit closely with China Digital TV's strategy to expand our value-added service business."

Mr. Li Hsu, 3DiJoy's president and CEO said, "China Digital TV's investment is built on a significant level of synergy and strategic direction between our two companies. Together, we have a shared vision to bring the best motion-sensing interactive gaming experience into the living rooms of China. China Digital TV's strong network in the digital TV space, coupled with 3DiJoy's extensive portfolio of motion-sensing gaming technology, will result in a complete solution that will set new standards in advanced motion video gaming on open platforms."

Safe Harbor Statements

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "may," "should" and similar expressions. Such forward-looking statements include, without limitation and comments by management in this announcement about trends in the CA systems, digital television, cable television and related industries in the PRC and China Digital TV's strategic and operational plans and future market positions. China Digital TV may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about China Digital TV's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from projections contained or implied in any forward-looking statement, including but not limited to the following: competition in the CA systems, digital television, cable television and related industries in the PRC and the impact of such competition on prices, our ability to implement our business strategies, changes in technology, the structure of the cable television industry or television viewer preferences, changes in PRC laws, regulations or policies with respect to the CA systems, digital television, cable television and related industries, including the extent of non-PRC companies' participation in such industries, and changes in political, economic, legal and social conditions in the PRC, including the government's policies with respect to economic growth, foreign exchange and foreign investment.

Further information regarding these and other risks and uncertainties is included in our annual report on Form 20-F and other documents filed with the U.S. Securities and Exchange Commission. China Digital TV does not assume any obligation to update any forward-looking statements, which apply only as of the date of this press release.

About China Digital TV

Founded in 2004, China Digital TV is the leading provider of conditional access ("CA") systems to China's rapidly growing digital television market. CA systems enable television network operators to manage the delivery of customized content and services to their subscribers. China Digital TV conducts substantially all of its business through its subsidiaries, Beijing Super TV Co., Ltd. and Beijing Novel-Super Media Investment Co., Ltd, and its affiliate, Beijing Novel-Super Digital TV Technology Co., Ltd.

For investor and media inquiries, please contact:

In China:

Eric Yuan

China Digital TV

Tel: +86-10-8279-0021

Email: ir@chinadtv.cn

In the US:

Kate Tellier

Brunswick Group LLC

Tel: +1-212-706-7879

Email: ktellier@brunswickgroup.com