Press Release



QSound Launches Next Generation 3D Audio Enhancement Software, iQfx3, For RealOne Player



Greatly Enhanced, Third Generation Audio Software Offers Improved Feature Set for RealOne Player Users and Furthers QSound’s Relationship with RealNetworks



CALGARY, CANADA - December 5, 2001 - QSound Labs, Inc. (NASDAQ: QSND), a leading supplier of audio software solutions, today announced the launch of its next generation audio enhancement software, iQfx®3, for RealNetworks® (Nasdaq: RNWK) new RealOne™ Player, the all-in-one digital media player that lets users find everything and play anything. As the latest addition to QSound’s iQ™ product line, iQfx3 makes streaming Internet audio and MP3s come alive with QSound’s remarkable 3D audio effects.

With iQfx3, users can now save their personal music preferences, choose from additional environmental settings, and have increased control over bass and treble ranges. iQfx3 offers a 30-day evaluation period, and is available for download from both and for $19.95 USD.

“RealOne Player is the perfect showcase for QSound’s audio technology,” said David Gallagher, President and CEO, QSound Labs. “Our long-standing, successful partnership with RealNetworks has been an important factor in establishing QSound as the standard in 3D audio software products for the Internet. iQfx3 raises that standard to yet another level.”

“Great audio quality is something all digital media consumers demand,” said Tom Romary, Vice President, Consumer Marketing, RealNetworks, Inc. “With the release of iQfx3, QSound continues to deliver great software that easily enhances a user’s listening experience within the RealOne Player environment.”

iQfx3 integrates seamlessly with RealOne Player and supports RealNetworks’ RealSystem® Media Commerce Suite, a set of products and services for the secure licensing and delivery of digital media. iQfx3 gives greater flexibility in adjusting bass and treble levels to create rich 3D stereo sound and improved audio quality on any streaming Internet broadcast or MP3 file. It features a new look-and-feel and three new preprogrammed environmental settings, as well as the ability for users to save iQfx3 settings for different types of music.

RealOne is the single source for consumers to discover, play and manage the best in brand-name digital programming — music, entertainment, sports, news, and more. An all-in-one service and technology platform, RealOne is the streamlined integration of the playback, download and management functions of RealPlayer® and RealJukebox® combined with a media browser and content discovery window, and united with a significantly enhanced subscription service. RealOne Platform empowers content providers and technology partners to create a new generation of digital media experiences and businesses that transform their consumers’ media experience, enrich their offerings, and enable commerce opportunities. More information about RealNetworks’ RealOne is located on the Internet at

* iQ™, IQfx®3, QSound® and the QSound Logo are trademarks of QSound Labs, Inc. RealNetworks®, RealOne™, RealSystem®, RealPlayer® and RealJukebox® are trademarks or registered trademarks of RealNetworks, Inc.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, future financial results. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which could cause actual results, performance or achievements of the Company, or industry results to differ materially from those reflected in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with the Company's ability to carry out its business strategy and marketing plans, including availability of sufficient resources for the Company to do so timely and cost effectively, the Company's ability to maintain its listing on the Nasdaq SmallCap Market, commercialization of the Company's technologies, consumer acceptance of the Company's products and services, dependence on the performance of third parties who have licensed the Company's technologies, dependence on intellectual property, uncertainties relating to product development and commercial introduction, manufacturing uncertainties, rapid technological change and competition, continued growth of the Internet and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements are based on the current expectations, projections and opinions of the Company's management, and the Company undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made, for example to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events





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