SIERRA ON-LINE, INC. ANNOUNCES REORGANIZATION AND ENHANCED FOCUS ON MARKET SUCCESS

Bellevue, WA (September 21, 1999) - Sierra On-Line, Inc., a leading developer and worldwide publisher of interactive entertainment and productivity software, today announced a reorganization into three business units; Core Games, Casual Entertainment and Home Productivity. This new structure enhances Sierra's focus on developing and publishing leading products for these three distinct marketplaces and is effective immediately.

Each business unit, led by veteran Sierra talent, is outlined below:

• Core Games, led by Sr. VP Business Unit Manager, Mark Hood and VP of Marketing Jim Veevaert, is recognized by the award-winning Sierra Studios™ label, publisher of Valve's mega-hit Half-Life®, and features several of the world's most renowned development teams including Impressions Games™, Papyrus™, Sierra's Northwest studio, and the Tribes™ team. In addition to Valve, other third party relationships include Relic (Homeworld™), Troika Games, and Massive Entertainment (Ground Control™). This Core Games group is the market leader in the core gaming genres, which include strategy, action, RPG and adventure games.
• Casual Entertainment, led by Sr. VP Business Unit Manager, Steve Van Horn and VP of Marketing Barbara Schwabe, includes the HoyleŽ line, the Trophy Bass™ Fishing series, Professional Bull Rider, the Field and Stream® Hunting series, the 3D Ultra™ series, YOU DON'T KNOW JACK®, and Austin Powers™: Operation Trivia™. This group has a 26% share of the casual entertainment market, one of the fastest growing genres in entertainment software.
• Home/Productivity, led by Sr. VP Business Unit Manager, Dianna Amorde and VP of Marketing Anne Boswell, will continue phenomenal growth in the market with titles for cooking, gardening, home design, home publishing, family heritage, digital imaging and web page design.

This reorganization comes at a time when Sierra is enjoying spectacular success. Its overall year-to-date net revenue is up 33% versus last year. Several of its titles are among the top 10 best selling titles in the US. For example, Half-Life is the number one selling game in its category and has won more than 45 "Game of the Year" awards from a variety of publications. Complete LandDesigner® and MasterCook® dominate their categories, each owning 60% of the market. Hoyle® Casino has been the number one selling casual entertainment title in recent months, while the critically acclaimed YOU DON'T KNOW JACK® series recently released for the PlayStation® platform, has led the market in the trivia category. Many new and highly anticipated titles will be released later this year including Homeworld, Pharoah™, Gabriel Knight™ 3, Tribes Extreme™, NASCAR® 3, iStyle® MakeOver, Professional Bull Rider, SWAT® 3D and more.

"Over the past year, Sierra has made huge strides in our growth and profitability," said Dave Grenewetzki, president of Sierra. "These changes will create an even better environment for the development of great titles and, as a result, increase our growth pace."

This success illustrates the effectiveness of a strategy focused on publishing products that provide a superior experience and value to the customer. As a result, Sierra has elected to cancel several titles that did not meet its success criteria. Cancelled titles include Desert Fighters and Pro Pilot Paradise at the company's Dynamix studio in Eugene, Oregon. In addition, Babylon® 5, a project of Sierra Studios, and Orcs: Revenge of the Ancient™, a Berkeley Systems™ title, will be cancelled. The product cancellations will result in the loss of 105 jobs.

This new structure clearly defines the organization in a way that streamlines processes, adds leadership and increases the momentum of Sierra's market success.

Sierra On-Line, Inc is one of the original developers and largest worldwide publishers of interactive entertainment and productivity software. Sierra is a division of Havas Interactive, a global leader in interactive content. It is one of the world's largest publishers of education, entertainment and home productivity software. Its divisions, Blizzard®, Coktel, Knowledge Adventure®, Sierra™ and WON.net™ are famous for releasing critically acclaimed and award winning titles. Havas has operations in the US and in Europe and is a subsidiary of the French publishing house Havas, part of Vivendi Communications.

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