Editing Sierra Entertainment (section)

=== Fallout from CUC's acquisition (1999–2003) ===
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.<ref>{{cite web |url=https://www.headgatestudios.com/company.html |title=Headgate Studios: About |archive-url=https://web.archive.org/web/20070915034531/http://www.headgatestudios.com/company.html |archive-date=September 15, 2007 |publisher=Headgate Studios |access-date=August 25, 2009}}</ref> With the exception of the warehouse and distribution department, the entire studio was shut down. Game designers [[Al Lowe]] and [[Scott Murphy (video game designer)|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 their 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,{{citation needed|date=November 2022}} 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 Online|''The Realm'']] and acquiring the complete yet previously canceled ''Navy SEALs''. The company also reported they 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 [[video game publisher|developer]] of games and, as time went on, instead became a [[video game publisher|publisher]] of games by independent developers.

At the end of June 2000, a strategic business alliance between [[Vivendi]], [[Seagram]], and [[Canal+ (French TV channel)|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 Pictures|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.

In August 2001, Sierra announced a major reorganization, which included the closure of [[Dynamix]] as well as the layoffs of 148 employees located at the company headquarters in Bellevue.<ref>{{cite web |url=http://www.stomped.com/published/redwood997819940_1_1.html |title=STOMPED - True Gaming |date=December 15, 2001 |archive-url=https://web.archive.org/web/20011215113350/http://www.stomped.com/published/redwood997819940_1_1.html |archive-date=December 15, 2001 }}</ref>

On February 19, 2002, Sierra On-Line officially announced the name change 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]]''. Released to mostly mixed to negative reviews; Larry's creator, Lowe, was not involved with the project.

The newly renamed Sierra Entertainment continued to develop mostly unsuccessful interactive entertainment products. However, hit ''[[Homeworld 2]]'' once again cemented Sierra's reputation as a respectable publisher.

In 2003, Sierra Entertainment released the second video game adaptation of ''[[The Hobbit (2003 video game)|The Hobbit]]'', as well as ''[[NASCAR Racing 2003 Season]]''.