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SIERRA ON-LINE REVENUES UP

 BELLEVUE, Wash., Nov. 2 /PRNewswire/ -- Sierra On-Line Inc. (NASDAQ: SIER) today announced preliminary results for its fiscal second quarter and six-month period ended Sept. 30, 1993, for the two major components of its business: its long-standing core software publishing business and the newer ImagiNation(TM) Network (INN), a unique interactive computer gaming network.
 The company is announcing the preliminary results for these two business components separately because technical issues regarding the appropriate method of combining the two components for financial reporting purposes have yet to be resolved. The company expects to announce its final combined results on or before Nov. 12.
 For the second quarter of fiscal 1994, revenue from Sierra's core software publishing business was $13.4 million, compared to $9.4 million of revenue from this business component for the same quarter in fiscal 1993. The core software publishing business registered pre-tax income of $47,000 for the quarter vs. a pre-tax loss of ($532,500) for the same quarter a year ago.
 Six-month revenue for the core software publishing business increased to $22.1 million, up from $18.6 million for the comparable period a year earlier. For this six-month period, the core business had a pre-tax loss of approximately ($3.2) million, compared to pre-tax income for this business component of approximately $482,000 for the same period in fiscal 1993.
 Ken Williams, president and chief executive officer of Sierra On-Line Inc., said, "Revenues for our core software publishing business increased by almost 43 percent over revenues for the same quarter in fiscal 1993, largely as a result of strong sales of existing titles on CDs. In fact, sales of CDs represented 14 percent of revenues for this quarter, vs. only about 4 percent for the same period last year. In addition, we experienced excellent re-orders of titles we have released over the past year, including `King's Quest VI,' `Aces Over the Pacific,' `Betrayal at Krondor' and `Freddy Pharkus.' Also contributing to our growth were increased sales of our educational products, such as the popular `Alphabet Blocks' and `Ready Set Read,' among others."
 He added, "I am particularly pleased with our results because they were driven by broad-based product line strength, not new titles. In fact, we had expected a major portion of revenue in the quarter to come from `Aces Over Europe,' which did not ship in the quarter but which has a material backlog."
 Second-quarter revenue for The ImagiNation(TM) Network (INN) quadrupled to nearly $2 million, compared with revenue of $485,000 for the second quarter of fiscal 1993. Pre-tax loss for the quarter was ($2.3) million, vs. a pre-tax loss of ($923,000) for the same period last year.
 INN revenue for the first six months of fiscal 1994 was $3.9 million, compared to revenues of $862,000 reported for the same period in fiscal 1993. Pre-tax loss for the period was ($4.1) million, compared with a pre-tax loss for ($1.8) million for the same period last year. The results for the network include a one-time, non-recurring charge for legal and accounting services related to the recent AT&T and General Atlantic equity investment in INN.
 During the quarter, James W. Thomas joined the company as president of Sierra Publishing reporting to Williams. Thomas will be responsible for developing, publishing and marketing products under the Sierra label.
 After the quarter closed, the company announced that it has signed a licensing agreement with Berlitz Publishing Co. Bright Star Technology Inc., a wholly owned subsidiary of Sierra, will develop, manufacture and market a new CD-ROM-based foreign language and culture series called "Berlitz Alive!"
 In addition, the company recently acquired the French software publisher, Coktel Vision S.A., which is best known for its ADI educational series of software products. Coktel Vision had revenues of approximately $4.2 million for the year ended Dec. 31, 1992. The acquisition is expected to give Sierra a stronger European presence and the critical mass necessary to open additional sales/support offices on the continent.
 Sierra On-Line Inc., which includes its wholly owned subsidiaries Dynamix Inc., Bright Star Technology, Coktel Vision S.A., together with its ownership interest in The ImagiNation(TM) Network, develops and publishes entertainment and educational software for IBM PCs and PC-compatibles, Apple Macintosh computers and Sega-CD systems.
 -0- 11/2/93
 /CONTACT: Richard Gelhaus, executive VP-Finance & Operations, of Sierra On-Line, 206-637-4941; or Eugene G. Heller of Silverman Heller Associates, 310-208-2550/
 (SIER)


CO: Sierra On-Line Inc. ST: Washington IN: CPR SU: ERP PER

MF-JL -- LA002 -- 9507 11/02/93 09:01 EST
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Date:Nov 2, 1993
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