Press Release December 4, 2006

HandHeld Entertainment’s Pre-Loaded ZVUE MP3 Player Will be on Store Shelves Tuesday

Just in time for the holidays, the ZVUE MP3 Player comes pre-loaded with 30 of the top 100 songs of 2006, including hits from such recording artists as Beyoncé, Christina Aguilera, Dixie Chicks, Five for Fighting, Jessica Simpson, John Mayer, Natasha Bedingfield, Nick Lachey, Outkast, Shakira, The Fray, Three 6 Mafia and more

SAN FRANCISCO – Dec. 4, 2006 – HandHeld Entertainment™ (NASDAQ: ZVUE, ZVUEW) today announced its ZVUE™ MP3 Player – the company’s first MP3 player – will be in selected Wal-Mart stores and selected InMotion Entertainment stores throughout the United States starting Tuesday, December 5.

At a suggested retail price of $69.95, the ZVUE MP3 player is an MP3 player with a bonus as it comes pre-loaded with 30 of the top hits of 2006, including two No. 1 singles from Beyoncé: “déjà vu” and “Check on it,” as well as eight other Top 10 songs (as tracked by Billboard magazine in its various Billboard charts). Other recording artists included on the ZVUE MP3 Player range from Nick Lachey to Jessica Simpson and from the Dixie Chicks to Five for Fighting. (A complete list is found below.)

“As promised, the ZVUE MP3 Player is going to be on retail shelves throughout the U.S. in time for the holidays,” said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. “And since it comes pre-loaded with 30 of the top hits of 2006, the ZVUE MP3 makes a great gift choice. And in addition to the player and the songs, ZVUE MP3 Player owners will also be able to purchase and download the corresponding music videos for each song from our download store at ZVUE.com™.

“The ZVUE MP3 validates the strategy that we discussed during our investor conference call last month. We are going to continue to produce high-value hardware coupled with great content from ZVUE.com that will drive customers to our digital download site. Great products, combined with content, create great value.”

The 30 hit songs that come pre-loaded on the ZVUE MP3 Player, and the corresponding recording artist(s), are

• Anna Nalick: “Breathe (2 a.m.)”
• Audioslave: “Original Fire”
• Beyonce: “déjà vu”
• Beyonce: “Check On It”
• Bow Wow: “Fresh AZIMIZ”
• Cartel: “Honestly”
• Cheyenne Kimball: “Hanging On”
• Christina Aguilera: “Ain’t No Other Man”
• Dixie Chicks: “Not Ready To Make Nice”
• Five For Fighting: “The Riddle”
• Heather Headley: “In My Mind”
• Howie Day: “Collide”
• Jessica Simpson: “A Public Affair”
• John Legend: “Ordinary People”
• John Mayer: “Waiting on the World to Change”
• Los Lonely Boys: “Diamonds”
• Luther Vandross: “Shine”
• Matisyahu: “King Without A Crown”
• Natasha Bedingfield: “Unwritten”
• Nick Lachey: “What’s Left of Me”
• Omarion: “Entourage”
• Outkast: “Morris Brown”
• Shakira: “Hips Don't Lie”
• Shakira: “La Tortura”
• Teddy Geider: “For You I Will”
• The Afters: “The Beautiful”
• The Fray: “How to Save a Life”
• The Fray: “Over My Head”
• Three 6 Mafia: “Stay Fly”
• T-Pain: “I'm N Luv (Wit A Stripper)”

ZVUE MP3 Player Specifications

The thumbdrive-sized ZVUE MP3 Player features 512 Megabytes of built-in Flash memory capable of holding approximately eight hours of recordings in MP3 format (roughly 125 songs) or approximately 16 hours of recordings in Windows Media Audio (WMA) format (roughly 250 songs). The ZVUE MP3 Player also supports WAV files. Users can add new recordings to the ZVUE MP3 Player through its direct USB port, as well as use the ZVUE MP3 Player as a voice recorder. The ZVUE MP3 Player operates for approximately eight hours on a single AAA battery.

Each product package contains the pre-loaded ZVUE MP3 Player, a Quick Start Guide, ear buds, a USB cable for transferring music and a single AAA battery.

About HandHeld Entertainment, Inc.

HandHeld Entertainment is a digital-media-to-go company with a family of mass-market portable media players priced at mass-market prices as well as its own online video content store. Its ZVUE portable media players are available for purchase online and in retail locations across the U.S., while portable video lovers can visit HandHeld Entertainment’s video content store at www.zvue.com to buy pay-per-download videos. Customers can also download free user-generated videos and other media from Dorks.com and FunMansion.com, wholly owned subsidiaries of HandHeld Entertainment. Handheld Entertainment’s common stock and warrants are traded on the NASDAQ Capital Market (ZVUE, ZVUEW) and Boston Stock Market (HDE, HDEW). For more information, visit www.hheld.com/ir or call 415-495-6470.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995

This release contains forward-looking statements. To the extent that any statements made in this release contain information that is not historical, these statements are forward-looking. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, without limitation: HandHeld Entertainment’s dependence on contract manufacturing of its products; its reliance on a single major mass-market retailer; its ability to develop and market successfully and in a timely manner new products and services; its ability to predict market demand for, and gain market acceptance of, its products and services; the impact of competitive products and services and of alternative technological advances; its ability to raise additional capital to finance its activities; its limited and unprofitable operating history; its ability to operate as a public company; its ability to reduce product return rates; the affect of inventory and price protections required by major retailers; the availability and affordability of digital media content; its ability to protect its proprietary information and to avoid infringement of others’ proprietary rights; its ability to attract and retain qualified senior management and research and development personnel; the reliability and security of its information systems and networks; and other factors described in HandHeld Entertainment’s filings with the Securities and Exchange Commission, including Current Reports on Form 8-K. These forward-looking statements are made as of the date hereof. HandHeld Entertainment does not undertake any obligation to publicly update any forward-looking statements. As a result, investors should not place undue reliance on these forward-looking statements.

MEDIA CONTACTS:

David Politis, Politis Communications, 801-523-3730 (wk), 801-556-8184 (cell), dpolitis@politis.com or
Jonathan Bacon, Politis Communications, 801-523-3730 (wk), 801-660-7820 (cell), 801-523-3750 (fax), jbacon@politis.com.

INVESTOR CONTACT:

Robert Prag, The Del Mar Consulting Group, Inc., 858-794-9500, bprag@delmarconsulting.com

HandHeld Entertainment, YourDailyMedia.com, Dorks.com, FunMansion.com, ZVUE.com and ZVUE are trademarks of HandHeld Entertainment. All other trademarks are property of their respective owners.