Activision Blizzard (NASDAQ:ATVI) recently announced that it will resurrect Sierra Games, the publisher best known for PC classics like King's Quest and Leisure Suit Larry.
Activision has confirmed two new Sierra games -- a new King's Quest game and Geometry Wars 3. Older gamers likely have fond memories of King's Quest, a groundbreaking adventure series that lasted from 1984 to 1998, over a course of eight main games. Geometry Wars is a newer series that debuted as a minigame in Bizarre Creations' Project Gotham Racing 2 for the original Xbox in 2003. The game became popular as a stand-alone title in Xbox Live Arcade, and it was later released for Nintendo's DS and Wii.
Looking ahead, the new Sierra will be a mini-publisher within Activision, helping indie developers launch new versions of its classic IPs. Let's take a closer look at what this strategy could mean for fans of classic games.
A short history of Sierra Games
Any PC gamer who grew up in the 1980s and 1990s will remember Sierra for popularizing point-and-click graphic adventures, a genre that died out as graphics and gameplay improved over the years.
Sierra, formerly known as On-Line Systems, was founded in 1979 by Ken and Roberta Williams. Their goal was to use the newfound graphical capabilities of the Apple II to turn text adventure games into graphical ones. Sierra released the first-ever computer game to have graphics, Mystery House, in 1980. The game sold about 15,000 copies and generated $167,000 in revenue -- $445,500 today -- for the fledgling start-up.
Noticing the success of Mystery House and its other Apple II games, IBM paid Sierra to develop a game for its PCjr, a competitor to the Apple II and Commodore 64, in 1983. The result was King's Quest, which was released in 1984 to critical acclaim.
Rising to fame on King's Quest, Sierra launched classics like Leisure Suit Larry, Police Quest, Quest for Glory, Gabriel Knight, and Lode Runner Returns. In 1995, the company reported $83.4 million in sales and $11.9 million in net income. In 1996, tCUC International, a consumer services conglomerate, acquired Sierra for $1.5 billion. That was effectively the end of the original company -- the founders left shortly afterwards, the brand would be split up, and most of its employees would be laid off.
The remnants of Sierra were eventually scooped up by Vivendi Games, which merged with Activision in 2007 to form Activision Blizzard. After Vivendi divested its stake in the company over the past two years, Sierra ended up fully under Activision's control.
Getting the band back together
According to the Entertainment Software Association, the average gamer today is now 31 years old, which means that most of them will still recall Sierra's top titles.
That means there's a huge, untapped market for these new takes on classic franchises. Nintendo, for example, has proven repeatedly that gamers are still willing to buy the latest chapters in series like Mario and Zelda, which both rose to fame in the mid-1980s.
Sierra's new King's Quest game, which will be released in 2015 by developer The Odd Gentlemen, will be the fifth attempt to make the ninth title in the series. The rights were passed along between Sierra, Vivendi, Silicon Knights, and Telltale Games before Activision, but none of the prior attempts advanced beyond character and concept designs.
It will be interesting to see which path Sierra takes with the new King's Quest. Will it be a modern point-and-click adventure like Telltale's The Walking Dead games, or an ambitious open-world RPG like Zenimax/Bethesda's Skyrim?
While King's Quest will definitely be the new Sierra's biggest upcoming title, it will also open the door for other classic titles to return. Sierra could reboot ambitious projects like Phantasmagoria, a horror game that was ahead of its time back in 1995. Or, it could revisit cult classics like Quest for Glory.
However, some of the most popular Sierra IPs are still held by other developers. Codemasters holds the rights to Leisure Suit Larry, while Tozai retains the rights to Lode Runner. Securing the IP rights for those franchises shouldn't be a huge challenge, considering that Activision has deep pockets filled with $4.2 billion in cash and equivalents.
The nostalgic takeaway
While most gamers and investors are focused on Activision's newer games like Call of Duty, World of Warcraft, and Destiny, it's easy to forget that the company has been around for nearly 35 years and entertained generations of PC and console gamers.
With Sierra Games and King's Quest, Activision is building up a catalog of nostalgia to complement its own classic series, like Pitfall and River Raid. With that foundation of old IPs, Activision can launch new games for aging gamers who never forgot the simpler, more lighthearted days of adventure games.
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Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.