DIAMOND MULTIMEDIA SHIPS "HOMEFREE WIRELESS" NETWORKING SOLUTION

Sub $200 Home Networking Product Links Two Computers for Shared Internet Access, Printing and Networked Gaming

VANCOUVER, Wash. - November 2, 1998 - Diamond Multimedia Systems, Inc. (Nasdaq: DIMD), a leader in interactive multimedia and PC entertainment, has begun shipping the HomeFree™ Wireless networking solution to its North American sales channel. With prices starting at less than $200 for two computers, the Diamond HomeFree Wireless product includes everything required for setting up and maintaining a local area network (LAN) in the home. The product is easy to use and offers consumers the full benefit of wireless technology for shared Internet access, printing and networked gaming. By the year 2000, there will be more than 17 million multiple-PC homes in the United States, according to Access Media International (AMI-USA). Additionally, AMI-USA states that at its current annual growth rate of 20 percent, the multiple-PC homes far outpace the growth of first time PC owning households, which are rising at four percent per year. "The explosive growth trend of multiple-PC homes provides an excellent market opportunity for Diamond's line of 'HomeFree' networking products," said Jim Cady, vice president and general manager of Diamond Multimedia's Communications Division. "The Diamond HomeFree Wireless solution avoids the complexities of installing dedicated wiring in the home. Since HomeFree Wireless works without cables, it provides consumers with a flexible, convenient and cost-effective solution."

Adds New Dimensions to Home Computing
The Diamond HomeFree Wireless product includes Internet-sharing software, at no additional charge, that enables consumers to share an Internet connection by using a single phone line and ISP (Internet Service Provider) account. "Our research indicates that the ability for multiple users to share Internet access is the driving force behind the adoption of computer networks in the home," said Michael Gartenberg, research director, GartnerGroup. In addition to shared Internet access, the Diamond HomeFree Wireless product is ideal for various home office and entertainment applications. The product can be used to transfer files and share various peripheral devices, including printers, modems and scanners. With HomeFree Wireless, consumers can also compete head-to-head in networked multi-player games. The Diamond HomeFree Wireless product provides a "flexible" network by enabling both desktop and notebook computers to be positioned both inside and outside the home at a range of up to 150 feet.

HomeFree Wireless Technology and System Requirements
The Diamond HomeFree Wireless product uses radio wave technology called HomeCast* Open Protocol (HOP) from Alation Systems. By using HOP technology, the HomeFree Wireless product can pass connections through walls, floors and ceilings. Operating at 2.4Ghz, the HomeFree Wireless delivers fast throughput speeds of up to 1 Mbps. In order to minimize interference and maintain a level of security, the product utilizes multiple channels and spread-spectrum frequency hopping. As an additional measure of protection, the HomeFree Wireless product features firewall support. "Alation is extremely pleased to have HOP technology delivered inside Diamond Multimedia's HomeFree Wireless solution," said Geoff Zawolkow, CEO of Alation Systems. "Diamond Multimedia understands how to promote and sell consumer communications products based on advanced technologies and they are an ideal partner for entering the home networking market." HomeFree Wireless uses standard Windows network settings and does not require the knowledge of any networking protocols. The product operates its file sharing capabilities via the networking software included in Windows 95/98 PC systems. System requirements include an IBM compatible computer (486 or higher) operating with Windows 95 or Windows 98, one free ISA or PCI slot per desktop PC (or PC card slot for notebooks), a CD-ROM drive and 10 MB of free hard drive space.

Product Configurations and Pricing
The Diamond HomeFree Wireless product is being offered in the versions listed below.

Desktop Pac Connects two desktop computers One ISA card; one PCI card $199.95
Combo Pac Connects a desktop and notebook computer together One ISA card; one PC card $229.95

If consumers are interested in networking more than two computers, the single-node cards listed below can be purchased from Diamond Multimedia's On-Line store at http://www.diamondmm.com/where-to-buy/online-store  

Product Price*
ISA card $99.95 per node
PCI card $99.95 per node
PC card $129.95 per node
*Price does not include a nominal shipping and handling charge

Diamond Multimedia's Home Networking Business Unit The Diamond HomeFree Wireless solution is the first product launched by the Home Networking Business Unit of Diamond Multimedia's Communications Division. Additional home networking products are planned for introduction in the future. For online information about the HomeFree brand, consumers can visit http://www.diamondmm.com/homefree . Diamond Multimedia is a member of the Home Radio Frequency Working Group (HRFWG).

About Alation Systems
Alation Systems, Inc. is a privately held company company formed to turn the vision of a networked home into reality. Through the company's open wireless networking technology, the HomeCast* Open Protocol (HOP*), and various HOP-powered products designed to meet real world consumer information needs, Alation is helping consumers realize the future of the networked home. Alation can be found on the Web at www.alation.com .

About Diamond Multimedia
Diamond Multimedia is driving the interactive multimedia market by providing advanced solutions for home, business and professional desktop computer users, enabling them to create, access and experience compelling new media content from their desktops and through the Internet. Diamond accelerates multimedia from the Internet to the user with products that include the Stealth and ViperŽ series of media accelerators, the Monster series of entertainment 3D and sound accelerators, the Fire series of professional 3D accelerators, the Micronics series of system boards, the SupraŽ series of modems, and the HomeFree line of home networking products. Diamond's common stock is traded on the Nasdaq Stock Market under the symbol DIMD, and its web site address is www.diamondmm.com .

How to Contact Diamond Multimedia
There are many ways to reach Diamond for sales support, technical assistance, driver updates and general information:
Internet Web Site: http://www.diamondmm.com 
Diamond Multimedia's Headquarters and Multimedia Division: 408-325-7000; Fax: 408-325-7070
Systems Business Unit (Micronics brand system boards) Main Phone Number: 510-651-2300
Communications Division (Supra brand modems) Main Phone Number: 360-604-1400; Fax: 360-604-1401
European Division (Germany): +49-8151-266-0; (UK): +44-1189-444400; (France) +33-1-55381600
Korean Office (Seoul): +82-2-551-2700; Fax: +82-2-551-2710
Japanese Office (Tokyo): +81-3-5695-8401; Fax: +81-3-5695-8403
ASEAN Office (Singapore): +65-353-9511; Fax: +65-353-9510
Hong Kong Office: +852-2375-9023; Fax: +852-2375-9021
Australian Office (Sydney): +61-2-9460-2355; Fax +61-2-9460-2360
Swedish Office: +46-417-40060; Fax +46-417-40054

Product Support (Voice), United States: 541-967-2450; Europe (Germany) +49-8151-266-330; Europe (UK) +44-1189-444444; Europe (France) +33-1-55381616; TDD/TTY Support 541-967-2451

Product Support (Fax), United States: 541-967-2401; Europe (Germany) +49-8151-266-331; Europe (UK): +44-1189-444445; (France) +33-1-55381601 Pre-sales Information: 1-800-468-5846 24-Hour

Fax-On-Demand Service: 1-800-380-0030 Investor Relations: 408-325-7476; 1-888-474-3463 (U.S. and Canada)

FTP site: ftp.diamondmm.com
BBS: 541-967-2444 (to 33.6 Kbps); Europe (Germany) BBS at +49-8151-266333 (to 28.8 Kbps) or +49-8151-266334 (ISDN); Europe (UK) at +44-1189-444415 (to 33.6 Kbps)

Monster 3D, Supra and HomeFree are either trademarks or registered trademarks of Diamond Multimedia Systems, Inc. Monster* is a registered trademark of Monster Cable. Viper* is a registered trademark of Directed Electronics, Inc., Used under License. All other trademarks referenced are the service mark, trademark or registered trademark of their respective manufacturers. This announcement relates to products whose introductions are in North America. The product name, contents, prices and availability may differ elsewhere in the world according to local factors and requirements.

Except for historical information contained herein, the matters set forth in this press release, such as statements relating to the Company's ability to successfully exploit technological and market developments, the timing and success of new product introductions by the Company and its competitors, and the Company's ability to invest in new technologies and to enhance its existing systems are forward-looking statements that are subject to risks and uncertainties, including the impact of competitive products and pricing and alternative technological advances, the timely and successful development and market acceptance of new products and upgrades to existing products, and other risks as detailed from time to time in Diamond Multimedia's SEC filings, including its most recent Forms 10-K and 10-Q.