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Glad to see my observation sparked a lot of comments from your side. It is indeed a point on which I thought a lot too. Here is my thinking.

Before all, your words on “deeper”, on “money spent on the game” are not only right, but a truth I do fully subscribe. As I wrote previously, also your first AGI games has more depth and every time you switched to a new technology, the first of your games suffered (I assume from the more time spent on tech vs depth in fact).
I would still buy with pleasure a good old text game and indeed I recently finished my collection of all Infocom games, thanks to eBay and Yois.

However, on Infocom, I do have a slightly different opinion. Please do take it as an openly expressed opinion, from a fan and not a technical person as I am.

First of all, I believe we can all agree when you say that Infocom failed due to the shift to Business products.
Actually I even tend to say more than that, that they in the end did fail because they lacked complete convincement in what they were doing best (adventures). Where Sierra was focused, Infocom, even while happy for the good results of adventures, thought at adventure games as a source of cash for their real products to come: business products (maybe seing companies started by co-students prosper…).
In this way, they did fail in one of the basic in business: they tried to finance the new Cornerstone project by taking resources out of their then core and cash producing business rather than finance it and see it as something separate, a second division maybe.

This said though, Ken, I must say that I am fully convinced that in the end, Infocom would have failed nonetheles, and here is why.

The evolution on computers to my eyes was towards the end of 80s making the situation more and more similar to Movies vs Books (I admit it, both much better, since interactive, but really a sort of).
Practically, more and more people were attracted by the increasing potentiality of technology, rendering the text side more and more a niche. On the other side, more and more the aficionados were getting stronger in defending their belief, but still more and more niche.

In reality, the truth is that Movies and Books are not mutually excluding, a good Movie is good as well as a good Book, but if a Book is good it is much better than the Movie because, as you correctly said, it has more depth, and this is even more true if you consider computers, due to interaction capabilities.

So, why text adv aficionados were becoming more and more niche ? Less time to spend in front of a computer and easy catching graphics, plus the effect of new things and potentialities to see did the most I think. Computers were becoming more like movie theaters and people don’t go to movie theaters to see text of mute movies. That medium became suitable for something different…

… so what could have saved text adventures and Infocom (besides the core fans, like you and me of course) ?

Using the same paragon of Movies and Books, my guess is as portability played strongly in favour of books (you can read on a beach, on a sofa,… if a book is good it can spellbing you anywhere, in bed,…), only that same atout could have given to Infocom the new life it would have needed to survive: unfortunately it was not ready yet. Nowadays (more 2/3 years ago indeed) Palms and Handheld (even more than portable PCs) represent what in my opinion would be the right medium again for text adventures: I myself started again to play for example on the plane when travelling to Asia for work, or in bed,… a more suitable medium !

Unfortunately for Infocom, between the end 80s and the advent and real spreading of handhelds there were years in between, and for this I say that they could not have survived in their decision to stick to text.
Maybe they could have survived the interreign by moving more towards similar mix as Magnetic Scrolls (Infocom text and not many reinforcing high level still life pics), but it’s really hard to say.

I repeat, this is my own and maybe elaborate opinion, and it may as well be completely wrong, but I feel it and I wanted to share it with you.

I close with a thank you for still caring so much about adventure games since passion transpires from your words.
The someone might in the end be you, never thoguht about it ?