A system is provided for processing a compressed image stream of a stereoscopic image stream, the compressed image stream having a plurality of frames in a first format, each frame consisting of a merged image comprising pixels sampled from a left image and pixels sampled from a right image. A receiver receives the compressed image stream and a decompressing module in communication with the receiver decompresses the compressed image stream. The left and right images of the decompressed image stream are stored in a frame buffer. A serializing unit reads pixels of the frames stored in the frame buffer and outputs a pixel stream comprising pixels of a left frame and pixels of a right frame. A stereoscopic image processor receives the pixel stream, buffers the pixels, performs interpolation in order to reconstruct pixels of the left and right images and outputs a reconstructed left pixel stream and a reconstructed right pixel stream, the reconstructed streams having a format different from the first format. A display signal generator receives the stereoscopic pixel stream to provide an output display signal.