Welcome to the GigaMedia Limited conference call to discuss third quarter 2008 financial results. (Operator Instructions) As a reminder this conference is being recorded today the 18th of November, 2008. I would now like to turn the conference over to Mr. Brad Miller.

Thank you this is Brad Miller, Investor Relations Director of GigaMedia. Welcome to our third quarter, 2008 results conference call for GigaMedia Limited. Here to speak with you and answer your questions today are Arthur Wang, our CEO, Thomas Hui, our President and COO and Quincy Tang our CFO. Before I turn it over to today’s speakers I would like to remind you that a number of forward-looking statements will be made during this conference call. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of GigaMedia and there can be no assurance that such expectations will prove to be correct. Because forward-looking statements involve risks and uncertainties, GigaMedia’s actual results could differ materially from these statements. Information about factors that could cause, and in some cases have caused, such differences can be found in GigaMedia’s Annual Report on Form 20-F filed with the US Securities and Exchange Commission in June 2008. This presentation is being made on November 18, 2008. The content of this presentation contains time-sensitive information that is accurate only as of the time hereof. If any portion of this presentation is rebroadcast, retransmitted, or redistributed at a later date, GigaMedia will not be revealing, or updating the material that is contained therein. The agenda for today’s call includes first a review by Arthur Wang of Q3 2008 business activities and financial performance. Thomas Hui, will then discuss some of our latest operational developments and results, and Quincy Tang will conclude with details on our financial results during the third quarter. After the speaker presentations, we will go into a question-and-answer session. Now, over to Arthur, our CEO.

Thanks Brad, and thank you all for joining us today. Thomas and Quincy will take us through the operational and financial highlights of the quarter, while I will focus on our overall business outlook and new initiatives. Before continuing a word on the stock market. As we are all aware, the crisis in the financial markets has created a tremendous loss of confidence throughout the entire capital markets. Along with so many others, GigaMedia stock has been hit hard by the turmoil. But I would like to emphasize that for GigaMedia, nothing fundamental has changed. We continue to operate a high growth business with outstanding prospects. We continue to generate very high free cash flow with every business unit profitable, and we continue to have a strong balance sheet, and report today a cash position of over US$100 million with no net debt. Let me turn now to the specific business units and highlight why we are so excited about our progress in building a leading online entertainment firm. First our Everest Poker and Casino business; first, to review the latest good news, we are very pleased that Everest Poker has been awarded the 'Poker Operation' of the year for the second straight year by the independent industry journal, "E-gaming Review". We believe this is further recognition of the strong Everest Poker offering, which in just three years has grown to be one of the most popular poker sites in the world. Currently ranked fourth in terms of player activity and this ranking includes sites that still operate in the large United States market illegally. We especially appreciate this recognition, now for the second consecutive year, because it validates and underscores the fundamental mission statement at GigaMedia to provide the highest quality software and services to our players. We look…

Thanks, Arthur and thank you all for joining us. Let me take you through our third quarter business and operational highlights now starting with our Gaming Software business and following with our Asian Online game business. Revenue from our Gaming Software business grew 18% year-on-year, as we continue to leverage our investment in the Everest brand. Poker revenues increased 7% year-on-year driven by expansion of the Everest Poker player base. Casino revenue grew 51% from last year fueled by strong cross selling to Everest Poker players, as we continue to integrate our Poker and Casino offerings. As expected revenues in the Gaming Software business in the third quarter were lower than that in the second quarter reflecting normal seasonality. Poker metrics also reflected this. During the third quarter, our Poker platform had approximately 176,000 active real-money customers down 8% from the previous quarter. During the quarter, we added approximately 38,000 new real-money poker players down 17% quarter-over-quarter. While seasonality negatively impacted user activities in both the Poker and Casino verticals, our efforts to drive Casino revenues through cross selling, we are able to overcome the impact of seasonality and resulted in quarterly sequential growth in our Casino vertical. Casino results were also boost by the launch of three new games during the quarter. During the quarter, we continued to make good progress in developing our common wallet initiative. Approximately half of our total new real-money casino players for the quarter were also our poker players. During the third quarter, we saw our cross selling conversion ratio continue to increase and expect it to continue to do so in the next few quarters. Most of the remaining work here is database programming oriented and we will not have player facing features. During the quarter, we also continued to develop our new…

Thanks, Thomas. Let me now take a few minutes to reveal our Q3 consolidated financial results. Following that, I will highlight some key factors affecting Q3 results in each of our core business unit. There will then be an opportunity for you to ask questions. One quick reminder, following the sale of our non-core legacy ISP business to allow for meaningful comparisons, operating results present on a continued operations basis, unless otherwise noted. Overall, third quarter results were inline with our expectations despite a challenging operating environment. Beginning with revenues: Year-over-year, we grew consolidated revenues from continuing operations 16% to $25.7 million. Growth was lead by our games software business, which increased 80% year-over-year and remains our largest business segment. Complementing this was continued growth in our Asian online games business, up 11% year-over-year. On a sequential basis, our revenues decreased by 7%. This was largely due to two factors; one, the traditional slow downturn in online gaming activities in Europe during the summer months, which impacted our gaming software business. Secondly, a significant decrease in online game activities in Asia during the Beijing Olympic Games which affected our Asian online gaming business. Our gross profit margin in Q3 was 81%, which remain steady year-over-year and quarter-over-quarter. Turning to consolidating operating income; as noted in our release today, operating results were affected as results from discontinued operations and several non-cash items relate to our Asian online gaming business. These items include the following. First, income from discontinued operations in the third quarter were up approximately $8 million. Second, a write-off of approximately $2.6 million relating to loan receivables from Flagship Studios, the developer of Hellgate: London. Thirdly, impairments totaling approximately US$1.3 million related to capitalize cost for certain games. The impact of which after minority interest was approximately US$1.1 million…

Thanks, Quincy.

(Operator Instructions) Your first question comes from the line of Alicia Yap from Citi. Please proceed.

Hi. Good evening and good morning. I have a couple of questions. First of all, can you actually tell us the trend in October and November for your online gambling business? Have you seen any slowdown in the user traffics given the external macro environment? And do you think that global recessions will have an impact to your poker and casino traffics and revenue?

Thank you, Alicia. This is Thomas Hui. Thank you very much for the question. In terms of user activity in Q4 for the month of October and about 20 days of November, we have been in now; we did see a seasonal rebound of both the poker and casino activities. So, at this stage, it is probably too early to tell whether or not the macro environment would have or the degree of the impact of the macro environment have on both our poker and casino products, but directionally we did see a rebound in activities. The degree of the rebound has not been as high as the previous seasonal rebound we have seen. But that we cannot be sure at this stage whether that is due to the macro environment or due to the change in competitive dynamics in the market. But we did see a smaller rebound than previous years but nonetheless there is a significant rebound.

I see. Thank you. And then the second question is regarding the Casino market. I mean, I understand that is actually is even more competitive in this market. So, what is, your strategies to actually differentiate yourself with other bigger competitors and do you think like by licensing some of the slot machine games from CryptoLogic’s will help to expand your user base?

Again, it’s Thomas Hui. The way we think about our business is really creating a online entertainment brand surrounding the Everest properties that we have starting obviously from the very successful Everest Poker product in the Continental European Markets, whereby is a recognized brand that is cater for Europeans, build for the Europeans in their local languages. So, the brand association and the brand value created around that give us a lot of comfort our ability to cross sell that both Casino product into the existing Poker customers as we have discussed in our prepared remarks that we have been seeing the conversional ratio to be increasing since the beginning of the year, when we brought out a common wallet initiatives. The ratio is still low comparing to what we believe it’s an achievable ratio. But nonetheless it is the direction is certainly moving in the right manner. And on top of that we believe as we broaden our product offering for the Everest brand, you actually increase the brand appeal in such a way that we can attract new customers onto our platform for both the Poker and the Casino products surrounding at Everest brand. Now, as Arthur mentioned, we also will be rolling out maybe I can ask Arthur to talk more about it the sports-betting product before year end, which were going to exert a complete the brand offering as a online gaming entertainment brand, which we believe would not only fertilize cross selling among the existing customer, but also provide more reasons, why new customers want to come on to our platform.

I see. Thank you. And then my third question is, can you actually tell us on the competitive environment for the poker business. I think previously you mentioned that it was five, but then, I think on this press release you actually mentioned that there were some increased competitive or intense, a little bit more intense over there?

Okay. I mean the competition we are referring to obviously are primarily the PokerStars in the hotels some of these used poker rooms that are to US facing. They remain accessed Their level of intensity has not increased, but we believe as we have mentioned in previous discussion, they will continue to be here and what we need to do as a company is continue to be competing against them effectively through various manners such as asset that we will have they don’t have. For example, utilizing the World Series of Poker sponsorship, which is going to give us the reach and association that PokerStars hotel or even some of our other competitors would not be able to have. So, we would need to be more nimble in some of the other online marketing campaigns instead of just for dollars on TV Commercial. We will probably need to be more creative, otherwise the return on investment for such initiative would not be as attractive as it used to be. So, you will have some impact. But again, we have been competing long before the time of PokerStars [virtual] coming to our market. We have been competing with some of the other competitors in our market. Now we just have to continue to do so effectively with all this newcomers.

I see and lastly can you give us some color in terms of the trend in October and November for your Asian online games business on your MahJong and the T2CN unit?

Yes, we expect the business to be flat. We have not launched any new patches or games for neither the FunTown platform in Taiwan or the Freestyle game in China Q4 year-to-date. So, there hasn't been any increase in user activity. Therefore, we expect Q4 revenue in that units to hold steady for Q4 until Q1, which is when we feel very excited about the new set of titles that we have in the pipeline, which includes Holic in January and as Warhammer towards the end of Q1, Q2. So, those were significantly proposed our revenue and profitability for that business unit in the next year.

I see, at that I actually saw some like new content upgrade for Freestyle recently?

Yes, there was a new patch of Freestyle 2008, right before; we did that right before the Olympics actually. So, that was, unfortunately the effect of that was negated, more than negated actually by the competition for viewers playtime if you will or watch time because of the Olympic Games. And in Q4, we haven't we currently do not have any major plan for game patches for the Freestyle game.

I see, but was that an increased marketing effort for Freestyle actually. It's kind of like, another promotion for the patch that you already launched?

Yes, we increased slightly a bit of the marketing, again towards the Olympic time, it was quite difficult for us to gain the viewerships mindshare therefore we do not increased the marketing activities then, but towards the beginning of Q3, we did increase the bit of the marketing activities there, but since we don’t have any -- the important thing is since we don’t have any big batches coming up in Q4, we may choose to continue to be quite inactive on the marketing side.

And then can you just tell us how was that, what are the some of the main reasons, why the games launches have been delayed? I mean understand that is always any delays happened at a time, but what are some of the main reasons?

Sure, sure. I think for Holic, it was -- basically it was almost like a conscious decision because we were to launch it to near -- because we could launch the game in Q4 this year. But we think that because of the way accountings and the potential market was, if we were to launch in January, our marketing dollar will be more effective in generating revenue for the financial reason. So, that the game is quite ready and we are just basically timing it for January launch. Warhammer has always been a ‘09 launch, and the game as you know the game is quite has been very well received in the US, we are just in the process of localizing the game and probably about 50% done in terms of localizing the game. We are just trying to time it into right timing now given that we are launching Holic in first quarter in January, and then end of January, Chinese New Year holiday, we think towards the end of Q1 is a better time for that game.

I see, okay. Thank you so much.

Thank you, Alicia.

Your next question comes from the line of Todd Eilers from Roth Capital Partners. Please proceed.

Hi guys. Thanks for taking my question. Arthur I think I heard you in your remarks mentioned that you might take an increased ownership or look to increase your ownership in Infocomm Asia Holdings. Would you guys look to take a majority stake there or just could you talk a little bit more about that and what the timing might be?

Sure. Yes, we would be interested in taking a 51% position at minimum. Basically we’ve worked very closely with IAH as an affiliate company, we are an essence partners and have looked at games together and evaluated market position opportunities together. We have always encouraged IAH to grow and to expand as well as they can and always held ourselves out as is one possible future for them and that looks like the way that we are, we are going. The timing is likely to be either, most likely to be the very beginning of 2009.

Okay.

We’re bringing a game such as FIFA Online into our stable of sport games. So, we’re excited about the potential there and when we have some final terms negotiated, we’ll make announcement to the marketplace.

Okay, that’s helpful. Thomas, with regards to sales and marketing in the fourth quarter, I think I heard you mentioned that the Japanese side was starting to ramp up and that you have got some new games that are going to launch, but thought I heard you say you might look to add some marketing there. Can you maybe just talk about sales and marketing in general in the fourth quarter, what your expectations are and then also how that’s impacted by I guess the success of the Japanese side?

I think overall sales and marketing will increase in absolute dollar terms. That is a combination of factors. Firstly, as you mentioned, there is the Japanese side, second is there will be the World Series of Poker part of the sales and marketing as some of these TV Commercials start to air in our target European markets. And also taking advantage of the seasonal upturn, we may choose to increase both online and offline marketing for that side of the business. However, on the Asian side as we have talked about, there aren’t any plans for new game launches. So, they'll probably remain at similar if not lower level, but on a overall basis, sales and marketing will increase on absolute dollar terms basis.

Okay. How about on I guess a percent of revenues? Should we still kind of expect the 35% to 40%, is that still the range?

On that I think we still go by our policy of looking at target of a 20% to 25% operating margin are in on the annualized basis, full year basis. There will be quarter and quarter variations as we have talked about, and so far, for the first three quarters, we have remained within the 20%, 25% guidelines we had talked about, and on a full year 2008 basis, we expect to be within that guideline too.

Okay. And then last question, with regards to the Casino/Poker integration, when exactly do you expect the bulk of the integration to be complete and you would obviously have some maybe some smaller things t complete. I know you would obviously have some, maybe some smaller things to complete. But when will the bulk of that be complete if it hasn’t already. And then also what’s the exact timing or date for the launch of the Crypto games on the Casino product?

In terms of the cost selling, the way we like to think about it is to follow. It is really an incremental asset as supposed to [build it] for six months or nine months and then flip on the switch. As we had talked about in the past few conference call, for we have different milestone where we gradually grow out the initiative to gradually increase the ease for our customer to cross register, to cross transfer their fund and eventually to basically play it almost as one wallet. But then the one wallet concept is composed of many features we have gradually rolled out. So at this stage I would tell you that we have rolled out most of the features we want as I have mentioned in my prepared remarks that the remaining assets or the modules are primarily databased and backend related. Or if you would also create some ease on the customer experience part, but most of the customer features are already rolled out. And what we have seen is actually a gradual increase in terms of cross selling ratio. So basically a percentage of our existing Poker, active Poker value base become our Casino players and that ratio has been gradually going up. Right now, its still single-digit, we think that the growth rate is a healthy one and we think you can go to a healthy double-digit.

Okay and then the timing on the Crypto games?

Arthur want to comment on that.

I am sorry I missed the question.

Just the exact date of when you are expecting the launch to CryptoLogic games on the Casino product?

I think the schedule is early 2009, if memory serves --

Okay, thanks guys.

Your next question comes from the line of Andrey Glukhov from Brean Murray. Please proceed.

Yeah, thanks for taking the question. A couple of things; Thomas, I guess to the extent that the new content both on the gambling side through the CryptoLogic, as well as on the Asian games side through some of the licensed MMO is probably coming at a lower margin, because it has either revenue share or royalty component to it. Maybe can you give us a little more color why do you think that you’re not going to see some pressure on the operating margin next year? What are some of the offsets that you have in the business model that sort of you can leverage next year?

On the Asian side, we are average, what we are doing, if you look at our run-rate basis we are doing US$45 million to US$50 million in revenue this year. And that is for the geography we cover doesn’t reach the critical scale yet, which is covering obviously a very big China market and a not too best Taiwan market, plus a smaller Hong Kong market. And that is primarily on Taiwan just on one platform. The whole suite of games, casual games, MahJong and others, and in China its primarily just one game, FreeStyle. The incremental revenue we are going to generate from the new games does not require that much more headcount and infrastructure cost in order for us to run. You’re absolutely right Andrey that we will have to incur higher licensing cost there for royalty and ongoing revenue share and royalty payment. But given that we are only on a, I think Quincy mentioned in his prepared remarks on Q3 running at a 14% on an adjusted basis operating margin. We think that is, not a number we are going to be looking to dilute, as we have increased the game offerings. In fact, fickle to the contrary the scale effect on the people and infrastructure and the platform maintenance and all that, we think they've some more room there. Now on the, European side, again, the license casino games, the Marvel product is just one of the many initiatives. First of all, basically inherent costs, if were to deal our own product. We have not obviously disclosed the licensing terms with CryptoLogic, but we believe, the incremental we get out of those products, given that the specific IP related product with obviously Marvel characters behind them, will give us very good margin. At this stage, we are not showing that's necessarily going to be dilutive in and out of itself. But even this becomes slightly dilutive in terms of our margin or the other initiatives cross-selling from the casino, other casino games through our existing poker player, which obviously is very high margin in a sense, that we do not need to invest our biggest variable cost, which is marketing expense to our widest customers, again which basically means that we should be able to maintain the 20%, 25% overall margin. So those are on a high level, how we think about it, Andrey.

Okay. And looking on the poker side, I guess cost to customer acquisition continues to go up fairly noticeably. Do you guys think that as we enter into next year, that number will start to flatten out as maybe some of the ankle bitters fall off? And do you think that World Series of Poker broadcast will help you moderate that number in anyway?

Yes, Andrey this is basically almost (inaudible) question about the competition world. I think the way we look at it is two fold right. First, in terms of directly acquiring new customers competing against some of these poker rooms, whether is the US facing one or not, we would basically continue have to use asset that we have, they don’t have such as the World Series of Poker and also being more local as a company because we have been operating longest in the Continental Europe and now being the more nimble instead of just throwing dollars and acquiring customers, so that’s point number one. Point number two is our cross sell, I mean that’s why we have been working very hard this year, whether is the Casino, Poker vertical cross selling or the introduction of the sports-betting all these will help us basically generate additional revenue dollar that we need to acquire that customers. Now even if we did the second thought as we need to prepare in the worst case situation that customer acquisition costs will continue to rise this year then we will have enough revenue to [adjust] for such acquisition. So, we are quite, we have been sanguine that with these two part strategy. We will continue how to compete, but we believe that our business model and profitability could be intact.

Okay. And last question on the Pachinko side of the business, when do you expect to sort of become profitable in that effort?

Andrey, this is Arthur. I think, we continue to ramp up the business and I think when our numbers become significant or meaningful, we will begin to release them as we did with Everest Poker. So my hope is that we begin to release some operating metrics or financial metrics in Q1.

Thank you.

And your next question comes from the line of Atul Bagga with ThinkEquity. Please proceed.

Hey guys. Thank you for taking my question. Can you talk a little bit about Q3, how the Poker business performed month-over-month was the weakness mostly in the month of July, August, September, can you talk a little bit on that.

Sorry Atul, you broke up in there. Can you repeat your question?

Sure. My question was can you talk a little bit on month-over-month performance of Poker in Q3, was the weakness mostly in July, August, September? When did you see the weakness, is that -- ?

Yeah. We don’t specifically provide months-over-months data. But I can tell you that August was the weakest of the three months in Q3. And weaker August was really the month that we see exceptional amount of weakness comparing to previous years. So August was definitely the weakest month.

And if you were to breakout this weakness in two parts, the seasonality and competition. Where do you think most of the weakness is coming from? Is it competition or is it more seasonality?

We believe it’s the combination of both probably with seasonality taking most of the blame for the seasonal downturn. The seasonal downturn is worse than previous years, but then, it was not out by a huge margin. So, we believe the seasonality is still the key reason for the Poker, the weaker August.

And is there any reason for us to believe that competition from the US facing side will not intense over the next quarter, next year?

They are certainly here. As we have mentioned in our prepared remarks and some of our responses, they are certainly here and would they have an impact? They definitely will have an impact. But as a company we believe we can even with the competition we can continue to deliver growth that is acceptable as by way of target for us and profitable by way of our financials.

And on the World Series of Poker broadcast, can you share some anecdotal evidence or maybe in terms of your expectation or what you might have seen with the previous sponsors in the past? What kind of uplift you can reasonably expect from the sponsorship?

PartyGaming became a US$10 billion company overnight when they list themselves in 2006 and if you talk to most industry participants, they would say, one of the key reasons why they become number one is because of their sponsorship of World Series of Poker. So, we certainly have a lot of confidence in the association with World Series of Poker because this is the premier event in the world and so far as physical poker goes. And the anecdotal evidence is abundant. But again this is our first year. We do not want to putout numerical guidance until we have empirical data. And then as we get there, as we collect more data, we can share more with you.

Thank you. And lastly, can you talk a little bit on your expectations from CryptoLogic games that you are launching next year?

It’s one of the many growth initiatives of ours and we think the Marvel IP certainly has appealed to those existing customers and more importantly, as we talked about, how best to run our brand in terms of product offerings to customers and how that would basically not only the way we look at it, it’s not just the incremental revenue we generate off of these games, but the increasing customer stickiness and satisfaction and association or understanding of our brand. And so, we think this is a very good at to our platform.

Thank you.

(Operator Instructions). Your next question comes from the line of [Alan Ruskin] from Edge Capital Partners. Please proceed.

Hi, thank you for taking my question. Most of the questions have been answered. I wanted to ask you about any thoughts on the stock buyback with the price of the stock where so low?

I take a step at it and I please Chairman if you wish. We as Management here continue to look at obviously the value of return back to shareholders, stock buyback, dividend payments all included and we evaluate all of this on a constant basis. And at this stage we think given the market we are in and opportunities we have seen they are probably higher returns way for us to utilize the cash we have on hand than a strict return back to the shareholders. So, at this stage we don’t have definitive plan for a share buyback or a dividend payment, but that is something that we constantly evaluate.

Okay. Thank you.

At this time there are no further questions in the queue. I would now like to turn the call back over to Mr. Brad Miller for closing remarks.

Thank you very much operator. That concludes today’s call. On behalf of GigaMedia thank you very much for joining us. For further information on GigaMedia or contact company, please visit our website at www.gigamedia.com.tw as in Taiwan. Thank you.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.