Acquisition Enables 3dfx to Bring High-Quality 3D Graphics to Emerging Platforms Including Set-top Boxes, Internet Appliances, Game Consoles and PDA's Through New Core Technologies and Licensing

NOTE: 3dfx and GigaPixel executives will host a teleconference to discuss the details of this agreement and answer questions today at 5:30 p.m. EST (2:30 p.m. PST). Press and analysts may join the teleconference by dialing 1-800-446-1949. Individual investors may listen to the teleconference by accessing www.vcall.com. A full recording of the briefing can be accessed by calling 1-888-843-8996, passcode 2188858. Additionally, the company will be holding a briefing in NYC on Tuesday, March 28th. For details of this briefing, please contact Doug Poretz at (703) 506-1778 x222.

SAN JOSE, Calif., - March 27, 2000 - 3dfx InteractiveŽ Inc. (NASDAQ: TDFX), a global leader in developing and marketing 3D technology for personal computers, today announced that it has entered into a definitive agreement to acquire privately-held GigaPixel Corporation of Santa Clara, CA for approximately $186 million, to be paid in approximately 15.6 million 3dfx common shares and options.

GigaPixel, founded in 1997, specializes in the design, development and licensing of 3D core technology. Designed to dramatically reduce the memory bandwidth and high gate count designs traditionally required for 3D acceleration, the GigaPixel technology for the first time enables high quality 3D display capabilities in low power, cost sensitive environments.

"We are on the verge of an exciting new era of 3D display capabilities, " said Dr. Alex Leupp, president and CEO of 3dfx Interactive. "The graphical displays on today's PDAs, cell phones, internet appliances, etc. are lackluster at best. With this transaction, we are now positioned to be the leader in providing advanced 3D technology to enable the era of true three-dimensional visual communication for all consumer electronics devices."

STRATEGIC BENEFITS OF ACQUISITION

"3dfx will benefit in three significant ways from this transaction," said Leupp.

• "First of all, we gain very broad and specialized intellectual property and design expertise relating to unique techniques for performing 3D rendering. When combined with our existing 3D technology, we believe we will have substantial performance, feature, and visual quality advantages for our future offerings."

"We view the GigaPixel technology as a disruptive capability in the 3D market," said Scott Sellers, founder and chief technology officer of 3dfx Interactive. "By reducing memory bandwidth requirements by up to a factor of 10, we can now perform true 32-bit full-scene anti-aliased rendering at previously unseen performance levels. This technology is not theoretical - it is real and exists in GigaPixel prototype silicon right now. Furthermore, we can now render in 3D at substantially reduced power requirements and cost points, thereby enabling a new class of 3D capable devices in the consumer electronics market."

• "The second key benefit of this transaction is an expansion of our target markets," Leupp said. "With the GigaPixel technology and existing business relationships, we expect to be the leader in providing 3D cores and intellectual property to our partners leading the market with 3D capable consumer devices. These 3D capable consumer devices will usher in the era of three dimensional visual communications."
  
  
• "The third key benefit of this transaction is access to a team of over 40 engineers skilled in 3D design and algorithm expertise," he said. "This will augment our existing engineering staff and allow us to produce highly innovative products on a rapid schedule. In many ways, this acquisition is about speed," Leupp continued. "We will increase the speed we bring products to market by being able to leverage the talented GigaPixel engineering team and their state of the art design methodology. We will also increase the speed at which we increase the performance levels of our products by utilizing the unique GigaPixel 3D technology. And we will increase the speed at which we provide solutions for new emerging consumer electronics markets to augment our existing PC 3D accelerator business."

NEW CORPORATE BUSINESS MODEL

"We have spent a considerable amount of time examining the market dynamics and requirements for the emerging consumer electronic devices," said Leupp. "What we have come to recognize is that there is a substantial opportunity to enable graphics differentiation by providing high quality 3D display capabilities in low-power and low cost form factors. This is a tremendous growth opportunity, and it is a market that is presently largely untapped."

"But we also recognize that we have to be realistic about our amount of engineering resources, and therefore it is not feasible to build specific chip-level products for the variety of consumer electronic 3D applications. We believe the successful long-term strategy for this emerging market includes the licensing of 3D core technology and intellectual property to our partners who will then integrate our technology into their application-specific designs."

"Therefore, moving forward we will continue to innovate and deliver compelling chip and board level solutions for our base business in the PC and Mac markets, but we will augment this business by an aggressive 3D core licensing program targeted at the emerging consumer electronic devices requiring advanced 3D acceleration. We believe this hybrid product/licensing strategy is unique to our market segment and will provide us with substantial growth opportunities in the future."

"The combined company will significantly change the competitive landscape of the graphics industry," said George Haber, president and CEO of GigaPixel Corporation. "Our unique business model of building products for existing PC and Mac markets, combined with licensing low-power, high-quality 3D graphics cores to address the new suite of emerging electronic devices, is one which we are uniquely qualified and positioned to successfully address."

FINANCIAL OVERVIEW OF THE TRANSACTION

Under the terms of the agreement, 3dfx will acquire all outstanding shares and options of GigaPixel for approximately $186 million, to be paid in approximately 15.6 million common shares and options of 3dfx. The acquisition will be a tax-free reorganization, and will be accounted for as a purchase. The transaction is expected to close in the third quarter of 3dfx's fiscal year 2001, subject to various conditions including customary regulatory approvals and approval by the shareholders of both companies. Furthermore, George Haber, president and CEO of GigaPixel, will join the 3dfx board of directors.

About GigaPixel Corporation

GigaPixel Corporation designs, develops and markets high performance 3D architectures for licensing. These hardware cores are targeted for different market segments including game consoles, set top boxes, Intel and non-Intel based personal computers. Visit the company on the Web at http://www.GigaPixel.com.

About 3dfx Interactive

3dfx Interactive is leading the 3D multimedia revolution in personal computers and consumer products. With its patented and award-winning graphics accelerator chips, boards and software, 3dfx provides the technology to create high-impact visual experiences. The Company is recognized worldwide for its ability to bring the world's finest games, educational content, interactive entertainment and media-rich business applications to life. 3dfx products are available in retail stores worldwide, and through leading PC makers including Compaq, Dell, and Gateway. 3dfx has headquarters in San Jose, Calif., with engineering and manufacturing facilities in Richardson, Texas, and Juarez, Mexico. The Company also operates www.3dfxgamers.com, the premier online community for Voodoo owners and enthusiasts. 3dfx Interactive is available on the Web at http://www.3dfx.com.

This document may contain forward-looking statements that are inherently subject to risks and uncertainties. The words ``estimate,'' ``project,'' ``intend,'' ``expect,'' ``believe,'' and similar expressions are intended to identify forward-looking statements. The Company's actual results could differ materially from those currently anticipated due to a number of factors, including, but not limited to, technical or manufacturing or distribution issues, the competitive environment for the Company's products, the timing of new orders, the degree of market penetration of the Company's new products, and other factors set forth in reports and other documents filed by Company with the Securities and Exchange Commission from time to time. - end - 3dfx Interactive is a registered trademark of 3dfx Interactive. All other names may be trademarks of their respective holders. Note to Editors: Visit the 3dfx Virtual Press Room at http://www.3dfx.com/comp/pressweb/index.html.