Sierra Entertainment

Sierra Entertainment's logo.

Sierra Entertainment Inc. (formerly Sierra On-Line) was an American video-game developer and publisher founded in 1979 as On-Line Systems by Ken and Roberta Williams. Based in Oakhurst, California, the company was last owned by Activision, a subsidiary of Activision Blizzard.

Sierra is best known today for its multiple lines of seminal graphic adventure games started in the 1980s, many of which proved influential in the history of video games. The Sierra label was absorbed by its parent company. Some franchises (such as Crash Bandicoot and Spyro the Dragon) that were published by Sierra will be published by Activision, which also announced in 2008 that it may sell the Sierra brand.

History

Founding

Sierra Entertainment was founded in 1979 as On-Line Systems in Simi Valley, California, by Ken and Roberta Williams. Ken Williams, a programmer for IBM, bought an Apple II microcomputer with which he planned to use to develop a FORTRAN compiler for the Apple II. At the time, his wife Roberta Williams was playing text adventure games on the Apple II. Dissatisfied with the text-only format, she realized that the graphics display capability of the Apple II could enhance the adventure gaming experience. After initial success, On-Line Systems was renamed Sierra On-Line in 1982, and the company moved to Oakhurst, California.

Move to Bellevue, Washington

Sierra had grown enormously since its first years. New buildings were needed to hold new resources needed to continue making games. A decision was made to move the headquarters north, to Bellevue, Washington. Sierra's original location in Oakhurst continued as an internal development studio for the company and was renamed Yosemite Entertainment in 1998.

The company was now made up of five separate and largely autonomous development divisions: Sierra Publishing, Sierra Northwest, Dynamix, Bright Star Technology, and Coktel Vision, with each group working separately on product development but sharing manufacturing, distribution, and sales resources.

The year 1995 would prove to be an extremely successful year for the company. With $83.4 million in sales from its software-publishing business, earnings were improved by 19 percent, bringing a net income of $11.9 million to the company.

In June 1995, Sierra and Pioneer Electric Corp. signed an agreement to create a joint venture that would develop, publish, manufacture, and market entertainment software for the Japanese software market. This joint venture created a new company called Sierra Venture. With Sierra and Pioneer investing over $12 million, the new company immediately manufactured and shipped over twenty of Sierra’s most popular products to Japan and created new titles for the Japanese market.

December 1996 saw the release of The Realm Online, a massively multiplayer online game. At its peak, it had over 25,000 players. Ken Williams acted as Executive Producer of the Realm from its release until late 1998.

Sold to CUC

In 1996, CUC International, a membership-based consumer services conglomerate, aggressively sought to expand into interactive entertainment and, in February 1996, offered to buy Sierra at a price of approximately $1.5 billion. The deal with CUC closed on July 24, 1996. Immediately after the sale, Ken Williams stepped down as CEO of Sierra. He stayed with the software division as a Vice President of CUC so that he could provide strategic guidance to Sierra and began to work on CUC's online product distributor, NetMarket. One year later, Ken and Roberta left CUC.

In September 1996, CUC announced plans to consolidate some of the functions of its game companies into a single company called CUC Software Inc., headquartered in Torrance, California. Davidson & Associates became the publisher for the studio. CUC Software would consolidate the manufacturing, distribution, and sales resources of all of its divisions that would come to include Sierra, Davidson, Blizzard, Knowledge Adventure, and Gryphon Software.

On November 5, 1996, Sierra was restructured into three units.

Cendant Corporation

In December 1997, CUC merged with HFS Incorporated. The two companies jointly formed the Cendant Corporation with more than 40,000 employees and operations in over 100 countries.

In 1998, Sierra split up its organization into six sub-brands and corporate divisions:

• Sierra Attractions (For lifestyle related products)
• Sierra Home (For home products)
• Sierra Sports (For sports products)
• Sierra Studios (For movie games. Folded into Sierra Movies in 2005)
• Sierra Movies (For movie games. Their first and only game was Robots)

On November 19, 1998, Half-Life was released for the PC. Sierra On-Line published the game while it was developed by Valve Corporation.

The Cendant scandal

In March 1998, Cendant had reported a 1997 net income of $55.4 million. However, the true 1997 result was a net loss of $217.2 million. As irregularities in the books of Cendant were discovered in early 1998, an audit committee set up by Cendant's Board of Directors launched an investigation and discovered that the former management team of CUC, including its top executives Walter Forbes and Kirk Shelton, had been fraudulently preparing false business statements for several years.

In March 2001, Forbes and Shelton were indicted by a federal grand jury and sued by the Securities and Exchange Commission, which accused the company of directing the massive accounting fraud that ultimately cost the company and its investors billions of dollars. With the news of the accounting fraud, Cendant announced its intention to sell off its entire computer entertainment division.

On November 20, 1998, Cendant announced the sale of its entire consumer software division to Paris-based Havas S.A. With this sale, Sierra became a part of Havas Interactive, the interactive entertainment division of the company.

Major layoffs

On February 22, 1999, Sierra announced a major reorganization of the company, resulting in the shutdown of several of their development studios, cutbacks on others and the relocation of key projects, and employees from those studios to Bellevue. About 250 people in total lost their jobs. Development groups within Sierra such as PyroTechnix were shut down. Others such as Books That Work were relocated to Bellevue. Also shut down was Yosemite Entertainment, the division occupying the original headquarters of Sierra On-Line. The company sold the rights of Headgate Studios back to the original owner. With the exception of the warehouse and distribution department, the entire studio was shut down. Game designers Al Lowe and Scott Murphy were laid off. Lowe had just started work on Leisure Suit Larry 8. Murphy was involved in a Space Quest 7 project at the time. Layoffs continued on March 1, when Sierra terminated 30 employees at the previously unaffected Dynamix, 15 percent of its workforce.

Despite the layoffs, Sierra continued to publish games for smaller development houses. In September 1999, they released Homeworld, a real-time space-combat strategy game developed by Relic Entertainment. The game design was revolutionary for the genre, and the game received great critical acclaim and many awards.

Gabriel Knight 3 was released on November 3, 1999. It was announced this would be the last game of the series.

Yosemite Entertainment legacy

UK-based games developer and publisher Codemasters, in an effort to establish themselves in the United States, announced that it would launch a new development studio in Oakhurst, using the abandoned Sierra facilities and hiring much of the Yosemite Entertainment's laid-off staff in mid-September 1999. In early October the company announced that it would take over management and maintenance of the online RPG The Realm and that it would pick up and complete the previously canceled Navy SEALs. The company also reported that it had obtained the rights to continue using the name Yosemite Entertainment for the development house.

Reorganization

Meanwhile, Sierra announced another reorganization, this time into three business units: Core Games, Casual Entertainment, and Home Productivity. This reorganization resulted in even more layoffs, eliminating 105 additional jobs and a number of games in production. After 1999, Sierra almost entirely ceased to be a developer of games and, as time went on, instead became a publisher of games by independent developers.

2000s

At the end of June 2000, a strategic business alliance between Vivendi, Seagram, and Canal+ was announced, and Vivendi Universal, a leading global media and communications company, was formed after the merger with Seagram (the parent company of Universal Studios). Havas S.A. was renamed Vivendi Universal Publishing and became the publishing division of the new group, divided into five groups: games, education, literature, health, and information. The merger was followed by many more layoffs of Sierra employees

On February 19, 2002, Sierra On-Line officially announced the change of its name to Sierra Entertainment Inc.

In 2002, Sierra, working with High Voltage Software, announced the development of a new chapter in the Leisure Suit Larry franchise, titled Leisure Suit Larry: Magna Cum Laude. It was released to mostly negative reviews; Larry's creator, Al Lowe, was not involved with the project.

The newly rechristened Sierra Entertainment continued to develop mostly unsuccessful interactive entertainment products. However, its hit Homeworld 2 once again cemented Sierra’s reputation as a respectable publisher.

In 2003, Sierra Entertainment released the second videogame adaptation of The Hobbit.

Cost-cutting measures were taken because of parent company Vivendi Universal Games's financial troubles and because of Sierra’s lack of profitability as a working developer. Impressions Games and the Papyrus Design Group were shut down in the spring of 2004, and about 50 people lost their jobs in those cuts; 180 Sierra-related positions were eliminated at Vivendi’s Los Angeles offices; and finally in June 2004, VU Games shut down Sierra's Bellevue location, which cost over 100 people their jobs, and dispersed Sierra’s work to other VU Games divisions. Other titles, such as Print Artist, were permanently discontinued. The Hoyle franchise was sold to an independent developer. In total, 350 people lost their jobs.

Several studios including Massive Entertainment, High Moon Studios, Radical Entertainment, and Swordfish Studios were acquired and integrated into Sierra throughout 2005 and 2006. Creative licenses from other Vivendi divisions and from companies partnered with Vivendi Universal Games were granted to Sierra, and copyright of several notable intellectual properties such as Crash Bandicoot, Spyro the Dragon, 50 Cent: Bulletproof and Scarface went to Sierra.

In September 2007, Sierra released the real-time tactical video game World in Conflict.

In October 2007, Sierra released Timeshift.

In 2008, Sierra parent company Vivendi Universal Games, which had since been renamed Vivendi Games in 2006, merged with video game publisher Activision to form the Activision Blizzard holding company. Vivendi Games ceased to exist and ownership of Sierra was transferred over to Activision. Later that year, Sierra was closed down for possible future sale.

F.E.A.R. series

Sierra Entertainment was responsible for publishing the game F.E.A.R. First Encounter Assault Recon, as well as its two non-canon expansions, F.E.A.R. Perseus Mandate and F.E.A.R. Extraction Point.