King's Quest VII was made in a new version of the SCI interpreter, called SCI 32. Programmed in a 32-bit environment it was more multimedia- and Windows-friendly than the previous versions of the interpreter. The graphics of the game was presented in double the resolution of King's Quest VI and used cel animation, just like a traditional animated movie. It took four animation houses to complete the graphics for the game and it was released directly on CD-ROM. The game was very light-hearted and Disney-like in its design, making it a fun game for children to play.
Phantasmagoria
on the other hand featured live actors captured in Full Motion Video, or
FMV for short. This was a new and popular technique in the mid-90's when
"interactive movies" was a buzz-word in the industry. By blending captures
of actors and props in front of blue screens with 3D-rendered backgrounds,
an epic horror-adventure set in a spooky old mansion was created. The project
was much bigger than anything Sierra had previously undertaken. The development
cost of this game reached the levels of Hollywood movies. A brand new video
studio, featuring a 16x16 meter blue screen, the latest in digital recording
equipment and the best Silicon Graphics computers available at the
time, was built for the game and over 20 professional actors were hired.
The game script was about 400 pages long, four times the size of a regular
movie script, and an additional 100 pages of storyboards set the style
for the over 800 scenes in the game. The game required four months of filming
alone and over 200 persons were involved in the production, not counting
the Gregorian choir of 135 persons that was used for parts of the music
in the game. This project had been in Roberta's mind for several years
and was something dramatically different from the family-friendly King's
Quest series. This was a gruesome horror story in the spirit of Edgar Allan
Poe and Stephen King and would be very unsuitable for children. The huge
amount of violence and gore in the game together with a few daring sex
scenes caught a lot of attention from the computer press, and the fact
that it was shipped on 7 full CDs, making it by far the biggest computer
game ever produced, made it even more famous. At the time of its release
in late 1995 the anticipation of the game was extremely high. However,
the game turned out to be a big disappointment to a lot of people, and
computer game reviewers complained about bad acting, boring video sequences
and a gameplay that was much too easy and linear. But this could not hurt
the sensational sales of the game. Almost a million copies were sold when
the game was first released, making it the best-selling Sierra adventure
game ever.
More successful in getting FMV and a good gameplay working together was Jane Jensen, with the release of Gabriel Knight 2: The Beast Within in 1995. The game, shipped on 6 CDs, took place in Bavaria, Germany and featured two parallel stories; one where Gabriel Knight, the hero from Jane's previous game, as a Shattenjäger has to solve the mystery of a series of suspected werewolf killings. The other one featured his assistant Grace Nakimura, as she went on a historical journey and solved the mystery of Mad King Ludwig II and the legend of a lost Wagner opera. With a superb mix of fiction and historical facts and tons of photographic material shot on location in Germany, the game provided an irresistible atmosphere that awarded it the 1996 Game of the Year award by Computer Gaming World.
The move to Bellevue brought great financial success to the company, and in 1995 focus was turned to new areas of home entertainment. A number of investments were made in 1995 in the home productivity area. In May, Sierra acquired the rights to use Print Artist, a desktop publishing program enabling the user to print high-quality documents at home. Green Thumb Software, a company creating gardening and landscape products, were also acquired by Sierra as well as Arion Software, producer of the MasterCook culinary series, acquired in September. A joint venture with P.F. Collier to jointly develop and publish a multimedia general reference encyclopedia was also made in November the same year.
But investments were also made in the gaming area. Sierra On-Line purchased the strategy games publisher Impressions Software, creators of games like the Caesar series and Lords of the Realm. Papyrus Design Group, designers of acclaimed racing simulations such as the NASCAR and IndyCar Racing series, and flight simulation software developer SubLogic, designers of Pro Pilot, were also purchased by Sierra On-Line in 1995.
1995 was a great financial 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. This cause the stock price to jump from the 1994 value of $18 to $26.
In
July 1996, CUC International, a huge membership-based consumer services
conglomerate with travel, shopping, auto, dining, home improvement and
financial services offered to more than 60 million customers worldwide,
aggressively sought to expand into interactive entertainment and offered
to buy Sierra at a roughly 90% higher price than it was trading. With such
an offer, the decision was in the hands of the shareholders and not the
management, and the company was sold to CUC. Other interactive entertainment
companies to be acquired by CUC were Blizzard Entertainment, Davidson
& Associates, Gryphon Software and Knowledge Adventure.
The transfer of control to CUC was a matter of much discussion as they
had no previous experience in the interactive entertainment business. At
the time though, Sierra thought that by consolidation with their new sister-companies
they would be able to grow even faster than before. Ken Williams decided
that this was the right time to leave his post as chairman of Sierra On-Line
and go on with other projects. Initially, control of the company was transferred
to three persons: Scott Lynch, Randy Dersham and Bill
Moore. Ken Williams stayed with the company for another year to help
the company settle in its new organization before he left it for good.
Signing a non-competitive clause with Sierra, he would be unable to create
or join another computer game company.
April 1997 saw two additional acquisitions: Berkeley Systems, publisher of the best-selling You Don't Know Jack series and the After Dark Screen Saver series and Books That Work, another home productivity software company creating software for design, 3D visualization and creation of home-related projects such as gardens, kitchens etc.
The sports area was also expanded in 1997 by the acquisition of Headgate, a developer of golf products.
Things unfortunately took a turn for the worse when CUC decided to transfer the control of the company to Davidson and shut down a number of groups within Sierra. But that was just the beginning.
On April 3, 1997, Sierra announced that the staff of the old company headquarters in Oakhurst would be reduced by almost 50%, relocating about 90 people to Torrance.
In
May of 1997, CUC decided to merge with HFS Incorporated, a leading
franchiser of brand name hotels, residential real estate and car operations.
In December the same year the merger was completed and they jointly formed
the Cendant Corporation with more than 40.000 employees and operations
in over 100 countries. While still remaining one of the most important
interactive entertainment companies in the world, Sierra now had to get
used to being only a part of Cendant Software, one of the divisions
within Cendant. The company also changed character into more of a publisher
than a developer of games. This was just one example of a trend in the
business, where most of the big computer game companies of old went in
the same direction.
After leaving the post as Sierra chairman, Ken Williams soon embarked on a new project. In November 1997, together with former Sierra Executive Vice President of Product Development Jerry Bowerman, he founded WorldStream Communications, an Internet-based company developing online communications software.
In 1998, Sierra split up its organization into five sub-brands:
In May 1998, Sierra Publishing, the Sierra division still working at the original company headquarters in Oakhurst, changed its name to Yosemite Entertainment. While now only one of many parts within Sierra, this core group of well over 100 employees were in most cases the very same people that had been responsible for Sierra's huge success throughout the 80's and early 90's. Sierra FX, a sixth sub-brand, was formed for this development studio to release their games under.
In March of 1998, Cendant had reported a 1997 net income of $55.4 million in March of 1998. However, the real 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 so the company could meet the earning expectations of Wall Street analysts. It was made clear that HFS had not played any part in this fraud scandal. The irregularities were in the area of several hundred million dollars and when the news was announced and the real numbers revealed in the end of September, the Cendant stock instantly plummeted to about one fourth of its former value. As a result, the company was sued by its shareholders and the former CUC management team was terminated. In March 2001, Forbes and Shelton were indicted by a federal grand jury and sued by the Securities and Exchange Commission, accused of directing the massive accounting fraud that ultimately cost the company and investors billions of dollars. Sierra and Davidson were among the many Cendant subsidiaries that had been used in the irregular bookings and Cendant had already announced its intention to sell off its entire computer entertainment division when the news of the accounting fraud came. Sierra was one of many companies that suffered great losses because of this affair even though it had been totally out of their hands. The following years would be filled with aggressive endeavors to restore the profitability of the company.
On June 3, 1998, WorldStream Communications announced the launch of TalkSpot, an online radio station featuring well-known talk show hosts and a wide range of quality programs on three live channels. One covered daily news and current events, one was for general issues affecting people's lives and one was for sports only. Offered as a free consumer service, TalkSpot radio could do much more than traditional radio by offering live chat, streaming pictures and many other things to the listeners on its website.
During the last few years, traditional adventure games had gone from one of the main genres to a relatively unprofitable business. Production costs were high and the sales couldn't match the ones of First Person Shooters and the increasingly popular RPGs. This caused fewer and fewer adventure games to be produced by Sierra. In 1998, Yosemite Entertainment released Quest for Glory V: Dragon Fire as the conclusion of the series, not planning any more sequels. The game was originally intended to feature an Internet multiplayer feature, but time limitations forced the game to be released without it. Sierra promised that a multiplayer edition of the game was to be released later.
After finishing Phantasmagoria, Roberta Williams, together with Mark Seibert, had worked on the next installment in the King's Quest series. The rising popularity of 3D graphics and action games resulted in a game design dramatically different than anything seen before in a King's Quest game. Taking place in a true 3D environment, King's Quest: Mask of Eternity featured action and RPG elements mixed with traditional adventure puzzles. The game took four years to complete, much longer than any previous game in the series, and was aimed at the average gamer rather than the die-hard adventure fan. Although many old fans of the series were disappointed by this approach, the strategy proved successful and the sales of the game were great when released for Christmas 1998. However, the success of the game still couldn't change the common opinion that adventure games was a dead genre and the new game design didn't revolutionize the genre as Roberta was hoping it would do.
In November 20, 1998, Cendant announced the sale of its entire consumer software division to Paris-based Havas S.A., France's largest media company. Havas, in turn, was a newly acquired business unit of Vivendi S.A., a huge water utility conglomerate with more than 220.000 employees, expanding into the media and telecommunications business. With this sale, Sierra became a part of Havas Interactive, the interactive entertainment division of the company.
