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Sierra Online consolidates
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February 22, 1999: 5:57 p.m. ET
Computer gaming software company to close four divisions, focus on Internet
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NEW YORK (CNNfn) - The computer gaming industry's largest player sounded a battle cry for control of Internet gamers Monday. Sierra announced a widespread reorganization that will result in the consolidation of four divisions and, quite likely, more than 150 lost jobs.
"As we evolve into a mass market industry ... we feel that a more focused software strategy and a stronger commitment to the Internet and online gaming are key factors to our continued success," said David Grenewetzki, president of Sierra.
Four development studios are being closed as part of the consolidation, affecting 250 employees. Grenewetzki said he expected roughly one-third of those workers to accept relocation offers to the company's headquarters in Bellevue, Wash.
As it completes these moves, Sierra is turning its attentions to its World Opponent Network (WON.net) unit, an online hub for the gamers that allows them to play free games and mingle with other game enthusiasts. WON.net logged 16.5 million unique users last year, according to Sierra.
"We've had a pretty decent stake in the online side of things for a while," said Grenewetzki. "We think this is going to be an area that there's going to be a lot of growth in."
While online gaming certainly has been a hit with players, it has yet to live up to any promises of profitability. What money has been made has come either from "pay to play" sites, where gamers pay a monthly or hourly fee for the rights to join the game, or advertising sponsored sites.
Sierra runs both types of sites. The Realm, a two-year old online role playing game similar to Electronic Arts' successful Ultima Online, charges gamers $49.95 per year for unlimited playtime. WON.net, meanwhile, features ads on the site, and even has commercials in some of the games. The appeal for gamers is the unpredictable techniques of human players, as opposed to the often predictable built-in challenges of a solo game.
"I've seen this industry go from developing artificial intelligence to the old fashioned kind," said Grenewetzki.
Sierra said the plan to focus more intensely on online gaming has been in the planning stages for several months, but had to be set aside when former owner Cendant sold the company to French media group Havas in November.
Sierra's decision was, in fact, foreshadowed somewhat with the release of Starsiege: Tribes early this year. The game has no single-player mode, meaning that in order for the player to enjoy it, he or she must log onto the Internet. This was the first Sierra game to abandon single players.
Consolidated divisions
The restructuring will mean the end of Yosemite Entertainment, Pyrotechnix, Synergistic and Books That Work. Each unit previously focused on different areas of software. Sierra is also ceasing publication of InterAction Magazine, a quarterly gaming magazine it has run since the fall of 1991.
Yosemite, the company's founding division, was responsible for Quest for Glory V, King's Quest VIII and an upcoming game based on the sci-fi series Babylon 5.
Pyrontechnix, a recent acquisition, produced the recent Return to Krondor, but Grenewetzki said, "We're not looking for that series to go on."
Books That Work was part of the company's productivity software unit, focusing on land design. ("That's one we really like," said Grenewetzki. "We just want to move them into the home office.")
Synergistic has had the most spotted past of late. The developer of sports related titles gave Sierra a public relations black eye when it was forced to recall Football Pro 99 in January, following widespread consumer complaints that the game was rife with programming errors.
Synergistic, in fact, might be the division most at risk of layoffs after that fiasco. Said Grenewetzki: "We're taking a new look at the world of sports."
The folding of these development studios will certainly mean the cancellation of some future titles, but Sierra isn't ready to announce which at this point. Grenewetzki says all games that have already been announced for 1999 will be developed, but some titles that were forecast for 2000 and 2001 will fall by the wayside.
A lot of that, he said, will depend on which developers accept relocation offers.
"These people aren't 100 percent interchangable," he said. "Oftentimes the game comes down to a small team of people -- or even just one person." 
-- by staff writer Chris Morris
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