(re: When did the ‘demise’ start?) Kings Quest was less of an adventure game because it was less of a Roberta game. KQ8 was in development at the same time the company was sold. The new owners made the decision to NOT give Roberta the same unwavering support that I had – and, other people were able to get their ideas into the game. Some of these ideas were great ideas, but they weren’t Robertas. Ultimately, KQ8 was a bust, and I suspect Sierra blames Roberta, although I have no way of knowing. In hers and my opinion, her track record speaks for itself; 15 (or so) hits done when she had control of a project, and one disaster, which just happened to be the one where she didn’t have control. The whole thing was a mess, and was settled amongst threats of litigation.
With respect to when adventure games stopped selling, I don’t know. Great games have always sold, and mediocre games have always bombed. I’m confident that if Al Lowe did a Larry 8 today, it would sell as well as it ever would have. By this I do not mean that it should look exactly like prior games. Every game has a responsibility to move the state of the art forward. Resting on status quo is a formula for disaster. In other words, a new adventure game would sell – if it were innovative, AND a good game. You need both.