Its struggles began in 1986, when it entered an ill-advised merger with Infocom, a software firm founded to develop interactive-fiction game. The relation-ship was rocky from the first, and Activision closed down Infocom operations in 1989, after three years of mismanagement and escalating losses. Meanwhile, Activision had also begun to branch out from videogames into other types of software and, in order to underscore its new commitment to a broader product line, changed its name to Mediagenic. By this time, however, competition in the video-game market had increased substantially, and the decision to expand into arcas beyond its distinctive competence turned out to be a major strategic blunder. By 1991, Media-genic was bankrupt.