Press Release December 1, 2006

HandHeld Entertainment Increases Position in the User-Generated Humorous Videos Marketplace by Acquiring FunMansion.com for $1.1 Million

FunMansion.com adds approximately 1.5 million monthly unique visitors/potential customers to HandHeld Entertainment’s growing network of Web sites; combined monthly traffic of FunMansion.com, Dorks.com and ZVUE.com now provide a growing collection of user-generated comedy videos (along with commercially produced music videos, television programming and feature length movies) to potentially 2.5 million unique visitors per month

SAN FRANCISCO and PORT ST. LUCIE, Fla. – Dec. 1, 2006 – HandHeld Entertainment™ (NASDAQ: ZVUE, ZVUEW) today announced it has acquired FunMansion.com™ for $1.1 million ($350,000 in cash at closing, $150,000 in cash payable over 12 months and a five-year $600,000 note convertible into common stock).

FunMansion.com has averaged approximately 1.5 million unique visitors per month and more than 3.5 million page views per month during the past two months.

“In a little more than two weeks, we have begun assembling a significant collection of user-generated video content by acquiring Dorks.com™ and FunMansion.com,” said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. “The FunMansion.com acquisition takes us to potentially 2.5 million unique visitors per month, with a combined total of more than 5.4 million page views per month, all tied to the comedy/extreme marketplace. We believe that these funny user-generated and user-submitted videos, photos, jokes and more tend to attract demographics that will be attractive to advertisers and sponsors. We also believe that the combination of ZVUE.com’s commercial content, coupled with our rapidly growing library of user generated content from Dorks.com, FunMansion.com and ZVUE.com’s own FREE Stuff! site, will be a powerful combination for our company.”

HandHeld Entertainment’s user-generated Web properties – Dorks.com, FunMansion.com and FREE Stuff! – now attract nearly 2.5 million unique visitors each month, particularly in the comedy/extreme space. In addition, HandHeld Entertainment announced earlier in November a content agreement with Comedy Time Network to make hundreds of hours of stand-up comedy routines and sketches available for purchase at ZVUE.com. Taken in combination, these two acquisitions and the Comedy Time agreement have helped transform HandHeld Entertainment into a leading provider of comedic/humorous videos for both portable video players and PCs.

Representative of the humorous user-generated and user-submitted videos posted recently on FunMansion.com are the following:

• Nutty Paintball Prank at http://funmansion.com/html/Nutty-Paintball-Prank.html;
• Finger Scratching DJ at http://funmansion.com/html/Finger-Scratching-DJ.html;
• Idiots Playing with Fire at http://funmansion.com/html/Idiots-Playing-With-Fire.html; and
• Female Reporter Loses Her Cool at http://funmansion.com/html/Female-Reporter-Loses-Her-Cool.html.

“FunMansion.com has been around for more than five years, and we’ve seen a strong increase in visitors and page views during the past 18 months,” said Mary Dunne, founder and owner of FunMansion.com. “I’m really excited to be joining the ZVUE.com network of Web sites. Now I can continue to build the site that I love and can do so with greater resources and scale. Those resources should accelerate FunMansion’s growth and bring FunMansion’s user-generated videos to a larger audience.”

HandHeld Entertainment also has more than 4,400 videos available for purchase on ZVUE.com today out of more than 11,000 video selections it has under contract. These selections include music videos, anime features, television shows, movies, cartoons, independent films, documentaries, news, entertainment and sports programs from companies ranging from Sony BMG to IMG Media and from Canadian Broadcast Corp. to Fun Little Movies.

Launched in February 2001, FunMansion.com hosts free user-generated videos, photo slideshows and Flash-based games and movies.

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