Wednesday, August 23, 2006

Mr. Brad Skinner
Accounting Branch Chief
United States Securities and Exchange Commission
Division of Corporation Finance
Room 4561
100 F Street, N. E.
Washington, D.C.  20549


RE:    Immersion Corporation
       Form 10-K for the Fiscal Year Ended December 31, 2005
       Filed March 10, 2006
       Form 8-K filed May 4, 2006
       File No. 000-27969

Dear Mr. Skinner:

Thank you for your review of our above noted filings, and the comments you
provided in your letter to Immersion Corporation, a Delaware corporation (the
"Company"), dated August 2, 2006. We understand that the review and comment
process is designed to assist us in ensuring our compliance with applicable
disclosure requirements, and to achieve greater transparency in our filings. We
acknowledge that the Company is responsible for the adequacy and accuracy of the
disclosure in the Company's filings; staff comments or changes to disclosure in
response to staff comments do not foreclose the Commission from taking any
action with respect to the filing; and the Company may not assert staff comments
as a defense in any proceeding initiated by the Commission or any person under
the federal securities laws of the United States.

We are  supplementally  providing  the  requested  information  to your comments
below. For your convenience,  we have repeated and numbered the comments in your
letter.

Form 10-K for the Fiscal Year Ended December 31, 2005

Financial Statements

Note 1. Significant Accounting Policies, page 61

Revenue Recognition

Royalty and License Revenue

1.     We note the disclosure under this section indicating that, for time-based
       licenses of intellectual property portfolio with up-front payments and/or
       minimum royalty requirements with no services contracted, revenue is
       recognized based on straight-line amortization of the annual minimum or
       up-front payment over the contract period or annual minimum period.
       Supplementally, explain to us your basis for this revenue recognition
       pattern. As part of your response, identify the specific revenue
       recognition criteria you apply to these transactions. Also, tell us when,
       and under what conditions or circumstances, you believe each of the
       criteria have been met. Finally, explain how the absence of any remaining
       obligations impacts your revenue recognition.




           "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 2

       Response: Our business often involves licensing our intellectual property
       portfolio and/or licensing our technologies to customers in various
       industries. Some customers seek to internally develop, manufacture,
       and/or distribute products or services that incorporate our patents or
       technologies and do not require us to perform any services to do so. In
       those instances we have licensed our patents and/or technologies to them
       for either an up-front license fee and/or an annual minimum royalty
       requirement. If we have licensed to them based on an up-front license fee
       with no additional per unit royalties due we have recognized the revenue
       over the contractual term of the agreement in a straight-line manner.
       When we license to customers based on payments of annual minimum
       royalties we recognize the annual minimum royalties over the annual
       period in a straight-line manner and we recognize any amounts over the
       annual minimum royalties based on royalty reports received. This revenue
       recognition methodology is based on the revenue recognition criteria
       found in Paragraph 8 of Statement of Position 97-2, "Software Revenue
       Recognition" (SOP 97-2) and Topic 13 A.1. and A.3. of Staff Accounting
       Bulletin No.104, "Revenue Recognition" (SAB 104).

       Paragraph 8 of SOP 97-2 states:

       "If the arrangement does not require significant production,
       modification, or customization of software, revenue should be recognized
       when all the following criteria are met.

          o    Persuasive evidence of an arrangement exits.
          o    Delivery has occurred.
          o    The vendor's fee is fixed and determinable.
          o    Collectibility is probable."

       As we do not have to modify or customize our intellectual property or
       technologies when we have not also contracted to provide services to the
       customer, we believe we have met all the criteria necessary to commence
       recognizing revenue and completed the earnings process for such fees when
       the rights have been conveyed or technologies delivered. We believe we
       have satisfied the revenue recognition criteria as stated in SOP 97-2
       par. 8 as follows:

          1.)  Persuasive  evidence  of  an  arrangement  - we  rely  on  signed
               contracts to document our licensing arrangements.

          2.)  Delivery has occurred - revenue  recognition  initiates  once the
               license rights have been conveyed. As stated previously, in these
               situations we are not required to perform any additional services
               for the customers.

          3.)  The  vendor's  fee is fixed and  determinable  - the  license  or
               royalty rate is established in the written license agreement.

          4.)  Collectibility is probable - revenue recognition is not initiated
               unless we have  received  payment of the up-front  license fee or
               minimum  royalties  from the  customer  or we have  reviewed  the
               credit-worthiness   of  the   customer   and   found   it  to  be
               satisfactory.


          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 3


       We have chosen to recognize the revenue in a straight-line manner over
       the contractual period or the annual minimum period based on the
       following excerpts from SAB 104:

       Topic 13: Revenue Recognition

           A. Selected Revenue Recognition Issues

               1. Revenue recognition - general
                    Reference  to  Concepts  Statement  5,  paragraph  84(d) "If
                    services  are  rendered  or  rights  to  use  assets  extend
                    continuously  over time  (for  example,  interest  or rent),
                    reliable measures based on contractual prices established in
                    advance  are  commonly   available,   and  revenues  may  be
                    recognized as earned as time passes."

               3. Delivery and performance
                    f. Nonrefundable up-front fees
                    Question 1 Interpretive Response footnote 40
                    "A systematic method would be on a straight-line basis,
                    unless evidence suggests that revenue is earned or
                    obligations are fulfilled in a different pattern, in which
                    case the pattern should be followed."

     As we cannot  determine if, how, or when a given  customer will utilize our
     patents and/or technologies in their internal development,  manufacture, or
     distribution  of their  products and services we do not have  evidence of a
     more appropriate earning pattern.  Accordingly, we recognize the revenue in
     a straight-line  pattern as time passes in the contractual period or annual
     minimum period. The absence of any remaining obligations allows for revenue
     recognition in accordance with Topic 13 A.1. as "time passes" as opposed to
     recognizing revenue over a different service period.


Multiple Element Arrangements

2.   Disclosure  under this section  indicates,  in part, that the price charged
     when  the   element  is  sold   separately   generally   determines   VSOE.
     Supplementally,  clarify for us how you determine or establish the price at
     which  elements  are sold  separately.  As part of your  response,  tell us
     whether  separate sales of elements are always made at the same prices.  If
     not,  describe to us the extent to which prices for separate sales vary. In
     view of such  variation,  explain why you believe these  separate sales are
     sufficient to establish VSOE.



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 4

     Response:  Our revenue  transactions  can include a combination  of patent,
     technology,  and/or software  licenses,  products,  professional  services,
     maintenance  contracts and extended warranty contracts.  Alternatively,  we
     can sell  many of the above  items  individually  without  the need for any
     further sale to accommodate a customer's  intended  purpose for the product
     or service.  We have  established VSOE only on a limited number of software
     products/licenses,   hardware  products,   professional  services  such  as
     engineering services,  support contracts, or extended warranties if we have
     previously  sold these products  individually  or separately to a number of
     customers. Management, having the relevant authority, has established price
     lists for many of our  products  and  services.  From time to time,  we may
     discount those prices based on established  discount  criteria for customer
     level (end user versus  reseller)  and/or volume of business,  resulting in
     sales not always made at the same prices.  Although  variation may exist on
     these separate  sales,  we follow  established  and consistent  discounting
     practices,  we believe these sales still allow us to determine VSOE. If the
     discounting  pattern is discretionary,  we have not established VSOE and do
     not recognize revenue based on VSOE.




Note 7. Long-term Debt, page 66

3.   Explain to us, in reasonable  detail, how you have evaluated the conversion
     feature in the 5% senior subordinated convertible debenture for purposes of
     SFAS 133 and EITF 00-19.  Identify the specific terms of the debt agreement
     and related  accounting  literature  that you  considered in evaluating the
     conversion feature.

     Response:  The following is a more detailed  description  of the conversion
     feature as stated in our 5% senior subordinated  convertible  debenture (5%
     Convertible Debenture) agreement:

     Conversion  Rights - "Subject to and upon compliance with the provisions of
     this  Debenture,  prior to the Stated  Maturity Date, the Holder shall have
     the  right,  at its  option  at any  time,  to  convert  some or all of the
     Debenture into such number of fully paid and nonassessable shares of Common
     Stock as is  obtained  by:  (i)  adding  (A) the  principal  amount of this
     Debenture  to be  converted  and (B) the amount of any  accrued  but unpaid
     interest  with respect to such portion of this  Debenture to be  converted;
     and (ii) dividing the result  obtained  pursuant to clause (i) above by the
     Conversion  Price in effect."  The  conversion  price is set at $7.0265 per
     share.  The  conversion  price is reduced if the  Company is deemed to have
     issued or sold any  shares of common  stock for no  consideration  or for a
     consideration per share less than $7.0265.

     We determined that the conversion  feature in our 5% Convertible  Debenture
     was not an embedded  derivative and did not require separate  accounting in
     accordance with paragraph 12 of Statement of Financial  Accounting Standard
     No. 133,  "Accounting for Derivative  Instruments  and Hedging  Activities"
     (SFAS No. 133),  because we did not meet paragraph 12(c) of SFAS No. 133 as
     the conversion feature qualified for the paragraph 11(a) scope exception of
     SFAS No. 133.

     Under  Emerging  Issues  Task  Force  Issue  No.  00-19,   "Accounting  for
     Derivative Financial  Instruments Indexed to, and Potentially Settled in, a
     Company's Own Stock" (EITF No. 00-19),  the conversion feature qualifies to
     be classified as equity because the conversion  feature can only be settled
     by physical delivery of shares of the Company's common stock at a fixed and
     determinable conversion price. Additionally,  the conversion feature is not
     subject to the  provisions  in  paragraphs  12 through 32 of EITF  No.00-19
     because it is embedded in "conventional convertible debt."



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 5

     We also considered  Emerging Issues Task Force Issue No. 01-6, "The Meaning
     of Indexed to a Company's Own Stock" (EITF 01-6),  and  concluded  that the
     conversion  rights are  considered to be indexed to the Company's own stock
     within the meaning of EITF No.  00-19 and  paragraph  11(a) of SFAS No. 133
     because there are no contingency  provisions  and the  settlement  value is
     solely indexed to our stock price.

Note 9. Long-term Customer Advance from Microsoft, page 68

4.   We note that proceeds of the settlement  with Microsoft have been allocated
     to  common  stock  and   long-term   customer   advance   from   Microsoft.
     Supplementally,  explain to us your basis for this  allocation.  As part of
     your  response,  explain  how you  considered  allocating  a portion of the
     proceeds to any of the other elements  included in the  arrangement.  Also,
     identify the specific  accounting  literature  you relied on in determining
     your accounting for the Microsoft agreements.


     Response:  We disclosed in our Form 10-Q filed with the SEC on November 14,
     2003 in  Note 6 to our  condensed  consolidated  financial  statements  the
     following:


     "On July 25,  2003,  the  Company  contemporaneously  executed  a series of
     agreements with Microsoft  Corporation  ("Microsoft")  that (1) settled the
     Company's  lawsuit  against  Microsoft,  (2) granted  Microsoft a worldwide
     royalty-free,  irrevocable  license to the  Company's  portfolio of patents
     (the "License  Agreement") in exchange for a payment of $19.9 million,  (3)
     provided  Microsoft  with  sublicense  rights  to  pursue  certain  license
     arrangements   directly   with  third  parties   including   Sony  Computer
     Entertainment  which,  if  consummated,  would  result in  payments  to the
     Company (the "Sublicense  Rights") and conveyed to Microsoft the right to a
     payment of cash in the event of a successful  settlement  of the  Company's
     patent litigation against Sony Computer  Entertainment of America, Inc. and
     Sony   Computer    Entertainment,    Inc.(collectively,    "Sony   Computer
     Entertainment";  the  "Participation  Rights") in exchange for a payment of
     $0.1  million,  (4)  issued  Microsoft  shares  of the  Company's  Series A
     Redeemable  Convertible  Preferred Stock that includes  redemption features
     ("Series A Preferred  Stock") for a payment of $6.0  million and (5) allows
     the Company to sell debentures of $9.0 million to Microsoft under the terms
     and  conditions  established  in  newly  authorized  7%  Senior  Redeemable
     Convertible  Debentures ("7% Debentures") with annual draw down rights over
     a 48 month period.

     Under  these  agreements  the  Company is  required  to make  certain  cash
     payments to Microsoft based on a settlement of the Company's ongoing patent
     litigation  against  Sony  Computer  Entertainment.   In  the  event  of  a
     successful settlement of the Sony Computer  Entertainment  litigation,  the
     Company  will be required  to make a cash  payment to  Microsoft  of (i) an
     amount to be determined based on the settlement proceeds, (ii) a redemption
     of the Series A  Preferred  stock for a maximum of two and one half (2 1/2)
     times  the  original  purchase  price  plus  any  dividends  in the form of
     additional  shares of Series A Preferred  Stock that remain unpaid plus any
     accrued but unpaid cash  dividends per share,  (iii) any accrued but unpaid
     dividends on the Series A Preferred Stock, and (iv) any funds received from
     Microsoft under the 7% Debentures.



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 6


     In a settlement outcome of the Sony Computer  Entertainment  litigation the
     Company  will  realize  and retain  net cash  proceeds  received  from Sony
     Computer  Entertainment only to the extent that settlement  proceeds exceed
     the amounts due  Microsoft  for its  Participation  Rights and the payments
     required to redeem the Series A Preferred  Stock, 7% Debentures and accrued
     dividends  and interest as specified  above.  Under  certain  circumstances
     related to a Company initiated settlement with Sony Computer Entertainment,
     the Company would be obligated to pay Microsoft a minimum of $30.0 million.
     Such amount would be reduced to the extent that Microsoft elects to convert
     its shares of Series A Preferred Stock to Company common stock.

     In the  event of an  unfavorable  judicial  resolution  or a  dismissal  or
     withdrawal  by Immersion of the lawsuit  meeting  certain  conditions,  the
     Company  would not be required to make any  payments  to  Microsoft  except
     pursuant  to  the  redemption  and  dividend  provisions  of the  Series  A
     Preferred Stock and the payment provisions relating to the 7% Debentures.

     Under certain other specified  circumstances,  including the acquisition of
     the Company,  the redemption of the Series A Preferred Stock as well as the
     7% Debentures would become immediately due and payable."

     As these  agreements  were entered  into  contemporaneously  and  represent
     multiple elements,  we looked to the guidance of paragraphs 2 and 9 of EITF
     No. 00-21 "Revenue Arrangements with Multiple Deliverables."

     Paragraph 2 states "This Issue addresses  certain aspects of the accounting
     by  a  vendor  for  arrangements  under  which  it  will  perform  multiple
     revenue-generating  activities.  Specifically,  this Issue addresses how to
     determine whether an arrangement  involving multiple  deliverables contains
     more  than  one  unit of  accounting.  In  applying  this  Issue,  separate
     contracts with the same entity or related  parties that are entered into at
     or near the same time are presumed to have been negotiated as a package and
     should,  therefore  be  evaluated as a single  arrangement  in  considering
     whether there are one or more units of accounting..."

     Paragraph  9 states "In an  arrangement  with  multiple  deliverables,  the
     delivered item(s) should be considered a separate unit of accounting if all
     the following criteria are met:

     a.   The delivered item(s) has value to the customer on a standalone basis.
          That item(s) has value on a standalone  basis if it is sold separately
          by any vendor or the customer could resell the delivered  item(s) on a
          standalone basis. In the context of a customer's ability to resell the
          delivered  item(s),  the Task Force  observed that this criterion does
          not  require  the   existence  of  an   observable   market  for  that
          deliverable(s).

     b.   There is  objective  and  reliable  evidence  of the fair value of the
          undelivered item(s).

     c.   If the arrangement  includes a general right of return relative to the
          delivered item,  delivery or performance of the undelivered item(s) is
          considered probable and substantially in the control of the vendor."



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 7

     The Settlement agreement, License agreement, Sublicense agreement, Series A
     Redeemable  Convertible Preferred Stock Purchase agreement,  and the Senior
     Redeemable  Convertible  Debenture  Purchase  agreement  were  entered into
     contemporaneously  and  hence we  evaluated  them as a single  arrangement.
     Although  the  different  agreements  have  value  to  the  customer  on  a
     standalone  basis,  we did not have objective and reliable  evidence of the
     fair value to account for the items separately.  We accounted for the $26.0
     million received from Microsoft as a liability in our financial  statements
     as it was not  possible to separate and value the  contingent  payments due
     Microsoft pursuant to its Participation  Rights and the guaranteed payments
     due Microsoft  upon  redemption  of the Series A Preferred  Stock under all
     possible  litigation  settlement  outcomes.  The Series A Preferred  Stock,
     while  not  meeting  the  definition  of a  liability  under  SFAS No.  150
     "Accounting for Certain Financial  Instruments with Characteristics of both
     Liabilities and Equity," did not qualify as  stockholders'  equity pursuant
     to  SEC  regulations  regarding  the  form  and  content  requirements  for
     financial statements.

     Subsequent  to our  initial  accounting  for the  various  agreements  with
     Microsoft,  Microsoft  elected to convert their Series A Preferred Stock to
     common  stock.  We  disclosed in our Form 10-Q filed with the SEC on August
     13, 2004 in Note 6 to our condensed  consolidated  financial statements the
     following:

     "On April 2, 2004,  Microsoft  Corporation  elected  to  convert  2,185,792
     shares of Series A Preferred  Stock into  2,185,792  shares of common stock
     pursuant to Section 5 (c) of the  Certificate of Designation of the Powers,
     Preferences and Rights of Series A Redeemable  Convertible Preferred Stock.
     This  conversion  eliminated  certain  obligations,  such as the  mandatory
     redemption  buy-back  provision,  the obligation to make dividend payments,
     and certain operational limitations.

     In the event of a settlement of the Sony Computer Entertainment litigation,
     the Company will realize and retain net cash  proceeds  received  from Sony
     Computer  Entertainment only to the extent that settlement  proceeds exceed
     the amounts due Microsoft for its Participation  Rights and any outstanding
     7% Debentures and interest as specified above. Under certain  circumstances
     related to a Company initiated settlement with Sony Computer Entertainment,
     the Company would be obligated to pay Microsoft a minimum of $15.0 million.
     In the  event of an  unfavorable  judicial  resolution  or a  dismissal  or
     withdrawal  by Immersion of the lawsuit  meeting  certain  conditions,  the
     Company  would not be required to make any  payments  to  Microsoft  except
     pursuant  to  the  payment  provisions   relating  to  any  outstanding  7%
     Debentures.

     The $26.0 million  received from  Microsoft,  as described  above,  plus an
     additional $1.4 million  related to accretion and cumulative  dividends had
     been  reflected as a liability in the financial  statements as of March 31,
     2004.  Upon the  conversion of the Series A Preferred  Stock in April 2004,
     the Company  reduced the Long-Term  Customer  Advance from Microsoft to the
     minimum  obligation  the Company would be obligated to pay Microsoft upon a
     settlement with Sony Computer Entertainment. The remainder of consideration
     of $12.4 million was transferred to common stock when Microsoft  elected to
     convert the Series A Preferred Stock to common stock."



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 8

     The determination to transfer $12.4 million to common stock was as follows:

     Upon  issuance  of the  common  stock to  Microsoft  on  April 2,  2004 all
     remaining  obligations  to  Microsoft  were  extinguished  except  for  the
     contingent  liability  of $15  million,  the  minimum  amount  we  would be
     obligated  to  pay   Microsoft   upon  a  settlement   with  Sony  Computer
     Entertainment. We deemed this amount to be the most probable outcome of our
     litigation  with Sony Computer  Entertainment.  The remaining $12.4 million
     ($26.0 million + $1.4 million - $15.0 million) was no longer contingent.

     The  $15  million  was  recorded   utilizing  the  liability  approach  and
     represented  the remaining  minimum  obligation to Microsoft once the other
     obligations were  extinguished,  which occurred when the Series A Preferred
     Stock was converted to common stock.

     All cash  received  from  Microsoft  has been  recorded as a  liability  or
     transferred  to equity upon  conversion to common stock and no amounts have
     been recorded to income.

5.   Supplementally, tell us when, and under what circumstances, the $15 million
     advance will be resolved.  Explain the accounting that will result when the
     matter is  resolved.  As part of your  response,  explain  the terms of the
     participation rights agreement.

     Response: The circumstances that would allow for the $15 million advance to
     be resolved include the following (i) a Company  initiated  settlement with
     Sony  Computer  Entertainment  in  our  discretion,  (ii)  favorable  final
     judicial  resolution  in  our  patent  infringement  litigation  with  Sony
     Computer  Entertainment,  or (iii) an unfavorable  judicial resolution or a
     dismissal or withdrawal by us of the lawsuit meeting certain conditions.

     In our  Sublicense  agreement  with  Microsoft  (filed  with the SEC  under
     confidential   treatment  as  exhibit   10.5  to  Amendment   Number  2  to
     Registration Statement on Form S-3 on March 25, 2004), we granted Microsoft
     Participation Rights as follows:

       "PAYMENTS TO MICROSOFT IN THE EVENT IMMERSION [****] PRIOR TO MICROSOFT
       GRANTING [****] A GAME PLATFORM SUBLICENSE. In the event Immersion elects
       in its discretion to [****] prior to Microsoft's granting [****] the Game
       Platform Sublicense (and regardless of whether such [****] occurs during
       or after the twenty-four (24) month period following the Effective Date),
       then Immersion shall pay Microsoft an amount determined as follows:



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 9


          (i)  If Immersion [****] for an amount of [****] up to and including
               [****], then Immersion shall pay Microsoft the sum of [****].

          (ii) If Immersion [****] for an amount in excess of [****] up to and
               including [****], then Immersion shall pay Microsoft the sum of
               [****] plus an additional amount equal to 25% of the amount of
               the settlement in excess of [****] up to and including [****].

         (iii) If Immersion [****] for an amount in excess of [****], then
               Immersion shall pay Microsoft the sum specified in the preceding
               clause (3) plus an additional amount equal to [****] of the
               amount of the settlement in excess of [****].

       We would be obligated to pay Microsoft its Participation Rights only in
       the event of a Company initiated settlement with Sony Computer
       Entertainment in our discretion. In the event that we are required to pay
       Microsoft $15 million, we will reduce the liability to $0 and there will
       be no effect on our income statement. In the circumstance that a payment
       to Microsoft exceeds $15 million, the excess will be accounted for as an
       offset to income from the Sony Computer Entertainment proceeds. In the
       event that we were no longer obligated to pay Microsoft the $15 million,
       we will account for the $15 million as income. As these outcomes are
       still hypothetical we have not yet concluded on the final accounting
       treatment in this matter.

Note 12. Stockholders' Deficit, page 70

6.     We note that the assumed volatility for options issued in 2005 decreased
       significantly as compared to 2004 and 2003. Explain to us the reasons for
       this decrease. To the extent that this decrease results from a change in
       the way volatility has been determined, describe your methods both before
       and after the change. Explain why you believe both the prior and current
       methods are appropriate.

       Response: The volatility assumption disclosed represents our best
       estimate of expected future volatility in accordance with SFAS No. 123
       "Accounting for Stock-Based Compensation." These rates represent the
       weighted average volatility for options valued during the period
       presented. Our method of evaluating volatility in 2005 was the same as in
       2004 and 2003. We currently consider our historical stock price movement
       and future stock price trends as the best indicator of future volatility.
       We review our volatility assumptions quarterly. The significant decrease
       in 2005 as compared to 2004 and 2003 results from our historical stock
       price becoming less volatile. During 2005, we considered the following
       factors on a quarterly basis in determining our volatility assumption:



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 10

     o    Our historical volatility rate.
     o    Factors  that would cause a short term change in our stock  price.  We
          noted the price of our stock has remained  between $6 and $7 per share
          for a significant  period of time.  Additionally,  it appears that our
          significant  stockholders  have a trading  pattern that is keeping the
          stock in this price range.
     o    What  would  happen  if the Sony  Appeal  were to have an  unfavorable
          outcome.  We currently believe the likelihood of such an outcome to be
          remote.  In  addition,  we do not  expect a ruling on the Sony  Appeal
          until  the  first  quarter  of  2007 - some  considerable  time in the
          future.
     o    What would happen if the appeal were to be settled in our favor.
     o    Life of the option awards.


Form 8-K filed May 4, 2006

Exhibit 99.1

7.     We note your presentation of various costs and expenses which exclude the
       impact of stock-based compensation. Explain how you considered the
       requirements of Regulation G and Item 10(e)(1)(i) of Regulation S-K as
       they relate to these non-GAAP measures. Additionally, as your measures
       exclude material recurring charges, explain how you considered the answer
       to Question 8 of the Frequently Asked Questions Regarding the Use of
       Non-GAAP Financial Measures.

       Response: We addressed the applicable requirements of Regulation G and
       Item 10(e)(1)(i) of Regulation S-K as follows:

       Item 10(e)(1)(i) and to some extent differently worded Regulation G
       states:

       "Whenever one or more non-GAAP financial measures are included in a
       filing with the Commission: (i) the registrant must include the following
       in the filing: (A) A presentation, with equal or greater prominence, of
       the most directly comparable financial measure or measures calculated and
       presented in accordance with Generally Accepted Accounting Principles
       (GAAP)"

       - The press release announcement and discussion only referenced GAAP
       measures, additionally, we presented our Condensed Consolidated
       Statements of Operations prior to the table which included the non-GAAP
       measure. Our Condensed Consolidated Statements of Operations were
       prepared in accordance with GAAP.

       "(B) A reconciliation (by schedule or other clearly understandable
       method), which shall be quantitative for historical non-GAAP measures
       presented , and quantitative, to the extent available without
       unreasonable efforts, for forward-looking information, of the differences
       between the non-GAAP financial measure disclosed or released with the
       most directly comparable financial measure or measures calculated and
       presented in accordance with GAAP identified in paragraph (e)(1)(i)(A) of
       this section"



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 11


       - The Company respectfully submits that the table titled "Immersion
       Corporation Additional Financial Information Effect of Non Cash
       Stock-Based Compensation included within Condensed Consolidated Statement
       of Operations" serves as a reconciliation, showing quantitatively the
       non-GAAP financial measure in comparison to the amounts recorded under
       GAAP.

       "(C) A statement disclosing the reasons why the registrant's management
       believes that presentation of the non-GAAP financial measure provides
       useful information to the investors regarding the registrant's financial
       condition and results of operations"

       - We stated in the press release discussion the amount of stock-based
       compensation expense included in our net loss for the period as well as
       the fact that the comparable period did not include a non cash
       stock-based compensation expense. Additionally, the table includes a note
       stating "There was no Non Cash Stock-Based Compensation included within
       the financial results in the three months ended March 31, 2005." In
       response to the staff's comment, we will expand our future filings to
       include the following statement after the table to more clearly state why
       we are presenting the non-GAAP measure:

       "We adopted Statement of Financial Accounting Standards No. 123R
       "Share-Based Payment" effective January 1, 2006 and are required to
       recognize expense on our share-based payments from January 1, 2006. Our
       Statement of Operations prior to January 1, 2006 does not include expense
       associated with share-based payments. We have included the above
       information to assist in comparing our operating expenses to prior
       periods."

       The Answer to Question 8 of the Frequently Asked Questions Regarding the
       Use of Non-GAAP Financial Measures states that "[c]ompanies should never
       use a non-GAAP financial measure in an attempt to smooth earnings.
       Further, while there is no per se prohibition against removing a
       recurring item, companies must meet the burden of demonstrating the
       usefulness of any measure that excludes recurring items, especially if
       the non-GAAP financial measure is used to evaluate performance."

       Our presentation of costs and expenses eliminating the recurring
       stock-based compensation charge is intended to provide useful information
       to investors and potential investors to compare operating expenses for
       2006 to 2005 on a similar basis. The Company respectfully submits that it
       did not include these non-GAAP measures in an attempt to smooth earnings;
       for example, we did not recalculate our Net Loss to exclude the amounts
       for non cash stock-based compensation expense. The adoption of SFAS No.
       123R reflects a change in the application of GAAP. We applied the
       modified prospective method when we adopted SFAS No. 123R and hence, our
       costs and expenses for 2005 do not include any non cash stock-based
       compensation expense and cannot be compared to 2006 GAAP expenses. We
       believe that the presentation of the non-GAAP measures table will be
       useful information to the reader for calendar 2006 financial press
       releases as this provides a comparison on the same basis to prior period
       GAAP financials. We do not intend to furnish this information beyond 2006
       financial press releases, as all subsequent periods will be on the same
       basis of GAAP as 2006.



          "Confidential Treatment Requested By Immersion Corporation"


Mr. Brad Skinner
Securities and Exchange Commission
August 23, 2006
Page 12

We hope you find the above information responsive to your comments. Should you
have any questions regarding our responses above or require any additional
information, please do not hesitate to contact the undersigned at (408)
350-8767.

Sincerely,

/s/ Stephen Ambler

Stephen Ambler
Chief Financial Officer and Vice President, Finance


cc:               David Edgar, SEC
                  Mark Farley, Deloitte & Touche LLP
                  David A. Hubb, DLA Piper Rudnick Gray Cary US LLP
                  James Koshland, DLA Piper Rudnick Gray Cary US LLP











          "Confidential Treatment Requested By Immersion Corporation"