Editing Sierra Entertainment (section)

=== 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 {{US$|1.5 billion|long=no}}.<ref name="vice fall"/> [[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 {{USD|158 million|long=no}} 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.<ref name="vice fall"/> 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 {{USD|1.06 billion|long=no}} and {{USD|1.14 billion|long=no}} in CUC stock, respectively. The deal to obtain LucasArts and Broderbund failed.<ref name="vice fall"/>

Sierra's acquisition closed on July 24, 1996.<ref name="vice fall"/> 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.<ref>{{Cite web| title=Form S-4 - Registration statement under the securities act of 1933 - CUC International Inc. | format=TXT | date=1996-06-21 | url=https://www.sec.gov/Archives/edgar/data/723612/0000950112-96-002113.txt | archive-url=https://web.archive.org/web/20180903215537/https://www.sec.gov/Archives/edgar/data/723612/0000950112-96-002113.txt | archive-date=2018-09-03}}</ref> 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! (video game)|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 Corporation|Valve]] and negotiated Sierra's exclusive rights to publish [[Half-Life (video game)|''Half-Life'']],<ref>{{cite web |url=https://www.gamespot.com/features/halflife_final/part24.html/ |title=GameSpot |date=December 11, 2004 |archive-url=https://web.archive.org/web/20041211055313/https://www.gamespot.com/features/halflife_final/part24.html/ |archive-date=December 11, 2004 }}</ref> which Ken Williams debuted at [[E3]] in May 1997. In December 1996, Sierra released ''[[The Realm Online]]'', an online fantasy role-playing game.

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 (video game)|Phantasmagoria]]'' and ''[[Leisure Suit Larry]]''.<ref>{{cite web |url=https://www.sierragamers.com/ken-williams/ |title=Ken Williams |website=www.sierragamers.com}}</ref>

In January 1997, Davidson stepped down as CEO of CUC Software, and CUC Executive Chris MacLeod was named as his replacement.<ref>{{cite web |url=https://ir.avisbudgetgroup.com/node/16171/html |title=Avis Budget Group :: SEC Filing |website=ir.avisbudgetgroup.com}}</ref> 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 their 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.<ref name="articles.latimes.com">{{cite news |url=https://www.latimes.com/archives/la-xpm-1997-04-10-fi-47219-story.html |title=CUC Agrees to Acquire Berkeley Systems Inc. |first=GREG |last=MILLER |date=April 10, 1997 |newspaper=Los Angeles Times |url-access=subscription}}</ref> 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.<ref>{{cite web |url=https://www.gamespot.com/articles/sierra-on-line-reorg/1100-2468023/ |title=Sierra On-line Reorg |author=Gamespot Staff |date=April 26, 2000 |website=gamespot.com}}</ref>

In 1998, Sierra divided into 5 sub-brands and corporate divisions:<ref>{{cite web |url=https://www.gamespot.com/articles/sierra-plans-for-the-future/1100-2463775/ |title=Sierra Plans for the Future |first=Alan |last=Dunkin |date=April 28, 2000 |website=gamespot.com}}</ref>
* 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<ref>{{cite web |url=https://www.gamespot.com/articles/sierra-studios-formed/1100-2463544/ |title=Sierra Studios Formed |first=Harley |last=Jebens |date=April 28, 2000 |website=gamespot.com}}</ref>
* 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 (video game)|Diablo]]'' developed by [[Synergistic Software]], a division of Sierra.

On November 19, 1998, Sierra published [[Half-Life (video game)|''Half-Life'']] for the PC, developed by [[Valve Corporation|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.<ref name="vice fall"/> 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 [[Cendant#Accounting Scandal|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.<ref name="vice fall"/> 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|Havas S.A]]. Sierra became a part of Havas Interactive, the interactive entertainment division of the company.