The story
Founded by Ken Williams and Roberta Williams in 1979.1
Founding as On-Line Systems (1979–1982)
Sierra Entertainment was founded in 1979 as On-Line Systems in Simi Valley, California, by the husband-and-wife duo Ken and Roberta Williams. Ken, a programmer for IBM, had planned to use the company to create business software for the TRS-80 and Apple II. Ken had brought a teletype terminal home one day in 1979 and, while looking through the host system's software catalog, discovered the text adventure Colossal Cave Adventure. He encouraged Roberta to join him in playing it, and she was enthralled by the game. After Ken had brought an Apple II to their home, she played through other text adventures such as those by Scott Adams and Softape to study them. Dissatisfied with the text-only format, she realized that the graphics display capability of the Apple II could enhance the adventure gaming experience. With Ken's programming help, Roberta designed Mystery House, inspired by the novel And Then There Were None and the board game Clue, using text commands and printout combined with rudimentary graphics depicting the current setting.
Mystery House was released through mail-order in May 1980. It was an instant hit with about 15,000 copies sold, earning US$167,000 (equivalent to $653,000 in 2025). It is the first computer adventure game to have graphics, although made with crude, static, monochrome, line drawings. The two shifted the focus to developing more graphical adventure games. Mystery House became the first in the Hi-Res Adventure series. The Hi-Res Adventure series continued with Mission Asteroid, which was released as Hi-Res Adventure #0 though being the second release. The next release, Wizard and the Princess, also known as Adventure in Serenia, is considered a prelude to the later King's Quest series in both story and concept. Through 1981 and 1982, more games were released in the series including Cranston Manor, Ulysses and the Golden Fleece, Time Zone, and The Dark Crystal. A simplified version of The Dark Crystal, intended for a younger audience, was written by Al Lowe and released as Gelfling Adventure.
Rebranding to Sierra On-Line (1982–1988)
On-Line Systems was renamed Sierra On-Line in 1982, and moved to Oakhurst, California. The "Sierra" name was taken from the Sierra Nevada mountain range that Oakhurst was near, and its new logo incorporated the imagery of Half Dome mountain. By early 1984, InfoWorld estimated that Sierra was the world's 12th-largest microcomputer software company, with $12.5 million in 1983 sales. It produced some non-game software, such as an Applesoft BASIC compiler.
The company weathered the video game crash of 1983 with only a 20% increase in sales, after analysts in 1982 had predicted a doubling in 1983 of the entire software market. The company had spent much of 1983 developing for the VIC-20 and the TI-99/4A which were both obsolete by the end of the year. Ken Williams was reportedly described as "bewildered by the pace at which computers come into and fall out of favor", and Williams said, "I've learned my lesson. I'm not moving until I understand the market better."
Many of Sierra's best known series began in the 1980s. In 1983, Sierra On-Line was contacted by IBM to create a game for the new PCjr. IBM offered to fund the entire development and marketing of the game, paying royalties. Ken and Roberta Williams accepted and started on the project. Roberta Williams created a story featuring classic fairy-tale elements. Her game concept includes animated color graphics, a pseudo 3D-perspective where the main character is visible on the screen, a more competent text parser that understands advanced commands from the player, and music playing in the background through the PCjr sound hardware. For the game, a complete development system called Adventure Game Interpreter (AGI) was developed. In mid-1984, King's Quest: Quest for the Crown was released to much acclaim, beginning the King's Quest series.
While finishing The Black Cauldron, programmers Mark Crowe and Scott Murphy began to plan for an adventure game of their own. After a simple demonstration to Ken Williams, he allowed them to start working on the full game, which was named Space Quest: The Sarien Encounter. The game was released in October 1986 as an instant success, spawning many sequels in the Space Quest series in the following years.
Al Lowe, who had been working at Sierra On-Line for many years, was asked by Ken Williams to write a modern version of Chuck Benton's Softporn Adventure from 1981, the only pure text adventure that the company had ever released. Leisure Suit Larry in the Land of the Lounge Lizards was a great hit and won the Software Publishers Association's Best Adventure Game award of 1987. It can be deduced that the game first became famous as an early example of software piracy, as Sierra sold many more hintbooks than actual copies of the game. A series of Leisure Suit Larry games followed.
Ken Williams befriended a retired highway patrol officer named Jim Walls and asked him to produce an adventure series based on a police theme. Walls proceeded to create Police Quest: In Pursuit of the Death Angel, which was released in 1987. Several sequels followed, and the series was touted for adherence to police protocol (relevant parts of which were explained in the games' manuals), and presenting some real-life situations encountered by Walls during his career as an officer.
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Quest for Glory is a series of hybrid adventure/role-playing video games designed by Corey and Lori Ann Cole. The first game in the series, Quest for Glory: So You Want to Be a Hero, was released in 1989. The series combines humor, puzzle elements, themes and characters borrowed from various legends, puns, and memorable characters, creating a five-part series of the Sierra stable. Although the series was originally titled Hero's Quest, Sierra failed to trademark the name. Milton Bradley successfully trademarked an electronic version of their unrelated joint Games Workshop board game, HeroQuest, which forced Sierra to change the series' title to Quest for Glory. This decision caused all future games in the series, including newer releases of Hero's Quest I, to switch to the new name.
In 1987, Sierra On-Line started to publish its own gaming magazine, about its upcoming games and interviews with the developers. The magazine was initially named The Sierra Newsletter, The Sierra News Magazine, and The Sierra/Dynamix Newsmagazine. However, since Sierra Club already published a magazine called Sierra Magazine, the name of the magazine published by Sierra On-Line was changed to InterAction in 1991. It was discontinued in 1999.
Sierra's Adventure Game Interpreter engine, introduced with King's Quest, was replaced in 1988 with Sierra Creative Interpreter in King's Quest IV. The game was released under both engines, so those who had newer computers could use the new engine and better rendering technology.
Going public (1989–1995)
Sierra became a public company in 1989, trading on the NASDAQ under the stock ticker "SIER". Additional public investment allowed the company to engage in further acquisitions over the next several years.
In 1990, Sierra released King's Quest V, the first Sierra On-Line game ever to have more than 500,000 copies sold and the highest selling game for five years. It won several awards, such as the Best Adventure Game of the Year from both the Software Publishers Association and Computer Gaming World magazine.
The Sierra Network was launched on May 6, 1991, as the first game-only online environment. Development of the network began in 1989, as Ken Williams was inspired by the launch of the Prodigy service in 1988 to create something similar for Sierra's games. As a free service other than access use charges, the network provided a "land-based" precursor to MMORPGs and internet chat rooms, each land theme for the type of content provided multi-player gaming and category based bulletin boards and chat rooms throughout the continental United States. By July 1993, having reached about 40,000 subscribers, AT&T announced a plan to invest $5 million into the network and add more games, gaining partial control as part of its expansion into the growing online services. AT&T later took sole possession of the network on November 15, 1994, so the name was changed to the ImagiNation Network. The network failed to find a mass audience, and was sold to America On-Line in 1996.
In 1991, Sierra released the first game in the Dr. Brain series, Castle of Dr. Brain, a hybrid puzzle adventure education game, which has several sequels. In 1993, Gabriel Knight: Sins of the Fathers was released, beginning the Gabriel Knight series. The game and subsequent sequels were critically acclaimed in the mainstream press at the time.
Sierra and Broderbund started merger discussions in March 1991, but the idea was discontinued later that month.
Sierra needed a new building due to growth, and moved its headquarters and much of its key staff to Bellevue, Washington. Sierra's original location in Oakhurst was later renamed Yosemite Entertainment, and continued under that name until closing in early 1999.
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.
1995 was a successful year for the company. Sierra was the market-share leader in PC games for the year. With $83.4 million in sales from software-publishing, earnings improved by 19 percent, and a net income of $11.9 million. In June, 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. 1995 also saw Sierra acquiring a number of development companies, both small home developers and larger companies.
Phantasmagoria was by far the largest project ever undertaken by Sierra. The anticipation for the game was high at release in late 1995. Although nearly one million copies were sold when the game was first released in August 1995, Sierra's bestselling adventure game created, the game received mixed reviews from industry critics.
Sale to CUC International (1996–1998)
In February 1996, early e-commerce pioneer CUC International, seeking to expand into interactive entertainment, offered to buy Sierra at a price of about $1.5 billion. Walter Forbes, the CEO of CUC International, and a member of Sierra's own Board of Directors since 1991, surprised Ken Williams with the deal after a board meeting. At this time, Sierra had modest revenues of about $158 million in the current fiscal year, so the sum surprised Ken. Forbes had posited the idea to Ken that this would be the start of a large company eventually to bring in LucasArts Entertainment, Broderbund, and Davidson & Associates (which at the time owned Blizzard Entertainment) under one entity and be a major publisher in the video game industry, as a great boon to the Williams and to Sierra's shareholders. Roberta had expressed her concerns about the offer to Ken and to executive officers, but he remained interested in the potential that Forbes offered. Ken accepted the offer, believing it was in the best interest for Sierra's future and stockholders, and CUC announced by the end of February 1996 the beginning of closing the acquisition of both Sierra and Davidson for $1.06 billion and $1.14 billion in CUC stock, respectively. The deal to obtain LucasArts and Broderbund failed.
Sierra's acquisition closed on July 24, 1996. The terms included naming Ken Williams a vice-chairman of CUC International, a Member of the Office of the President of CUC, and that he would remain responsible for Sierra's R&D and remain Sierra's CEO. He also requested creation of a "software board" consisting of him, Michael Brochu (Sierra's President and COO), Bob Davidson (founder and CEO of Davidson & Associates), and Forbes. It functioned as a governing body of what would become CUC Software, regulating major decisions and product lines.
In September 1996, CUC announced consolidation of some functions of its game companies into a single company called CUC Software Inc., headquartered in Torrance, California. Bob Davidson, founder and CEO of Davidson & Associates became the CEO for the publishing body. CUC Software consolidated manufacturing, distribution, and sales resources of all of divisions including what was to become Sierra, Davidson, Blizzard, Knowledge Adventure, and Gryphon Software.
CUC Software utilized its various labels' market specialties. For example, in October 1996, Sierra published Stay Tooned!, an adventure game developed by Funnybone Interactive (a subsidiary of Davidson & Associates) as Sierra was more known as an adventure game publisher than Davidson.
In November 1996, Ken Williams met with the founders of Valve and negotiated Sierra's exclusive rights to publish Half-Life, which Ken Williams debuted at E3 in May 1997. In December 1996, Sierra released The Realm Online, an online fantasy role-playing game. In December 1997, Sierra rebranded its Sierra Internet Gaming System (SIGS) as the World Opponent Network (WON), an online multiplayer gaming service providing matchmaking and authentication. WON officially launched in April 1998 and was used by games such as Half-Life, Counter-Strike, Homeworld, and other Sierra-published titles. The service reached 1.5 million users by March 1999.
After the sale, Ken Williams remained within the software division so that he could provide strategic guidance to Sierra, although he began to grow disillusioned as he soon found that his new titles at CUC meant very little and the software board met only once. He began disputes with Davidson over Davidson's conservative management style and his disdain for Sierra's more risque product lines such as Phantasmagoria and Leisure Suit Larry.
In January 1997, Davidson stepped down as CEO of CUC Software, and CUC Executive Chris MacLeod was named as his replacement. After this, Ken Williams shifted his focus work on CUC's online product distributor, NetMarket while remaining as CEO of Sierra in name only. In November, Ken Williams departed from CUC International, while Roberta Williams remained with Sierra until the release of King's Quest: Mask of Eternity in December 1998. Brochu, who had been hired in 1995 by Ken Williams, to handle the daily business affairs of Sierra, replaced Ken Williams and remained as President of Sierra until October 1997, when he too departed the company.
In April 1997, to further expand upon its role in the edutainment business, Sierra purchased Books That Work and CUC International purchased Berkeley Systems and transferred management of the studio to Sierra as an internal developer. In December 1997, in order to secure the rights to Return to Krondor, Sierra purchased PyroTechnix, who were developing the game.
On November 5, 1997, after the departure of Brochu in October, Sierra was split into three business units, all of which reported directly to MacLeod.
In 1998, Sierra divided into 5 sub-brands and corporate divisions:
Sierra Attractions (for casual games such as poker) – composed of Berkeley Systems
Sierra Home (for home/lifestyle software) – composed of Sierra's gardening, home design, and cooking software divisions
Sierra Sports (for sports games) – composed of Dynamix's Sports Titles, Synergistic Software, and Papyrus
Sierra Studios (general publishing division) – Composed of Sierra Northwest/Bellevue, Pyrotechnix, and Impressions Software
Sierra FX (adventure games and online multiplayer games) – Based at Sierra's old headquarters in Oakhurst, which was publicly referred to as Yosemite Entertainment.
On November 24, 1997, Sierra published Diablo: Hellfire, the official expansion pack for the widely popular game Diablo developed by Synergistic Software, a division of Sierra.
On November 19, 1998, Sierra published Half-Life for the PC, developed by Valve, which became a huge success.
During these events, CUC merged with Henry Silverman's HFS Incorporated in December 1997 and became the Cendant Corporation. The merger did not immediately affect operations of Sierra. However, Silverman, who served as CEO of Cendant, had become more involved with the bookkeeping of the merged companies and noticed irregularities from CUC's past bookkeeping, leading to the discovery of massive accounting fraud at CUC in March 1998. Forbes was later convicted on three charges related to fraud by the Security and Exchange Commission in 2007. With the news, Cendant announced intention to sell the computer entertainment division, and on November 20, 1998, announced the sale of the consumer software division to Paris-based Havas S.A. Sierra became a part of Havas Interactive, the interactive entertainment division of the company.
Fallout from CUC's acquisition (1999–2003)
On Monday, 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. This event came to be known by fans and employees of Sierra as "Chainsaw Monday"—a nickname coined by Scott Murphy, who had been laid off over a month prior. 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, or 15 percent of its workforce.
Despite the layoffs, Sierra continued to publish games for smaller development houses. In September 1999, it 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.
UK-based game developer and publisher Codemasters, in an effort to establish themselves in the United States, announced the launch of 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 plans to take over management and maintenance of the online RPG The Realm and acquiring the complete yet previously canceled Navy SEALs. The company also reported it obtained the rights to continue using the name Yosemite Entertainment for the development house.
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.
From Wikipedia’s article on Sierra Entertainment, shared under CC BY-SA 4.0.4