More than likely, it was more trouble than it was worth.
That is absolutely true, I think, but I still think it was very profitable. Inferring from sales data that I have on AI War at various places on their charts, plus what I know of the size of their staff, I feel safe in saying they were probably making an excellent profit. Not that I can speak about details, or have for-sure numbers, but I'm closer to it than most.
That said, "more trouble than it is worth" is a funny concept. In movies, when some guy's dad leaves him the family business, and the family business is profitable but the guy doesn't want it, we all understand that, right? Who wants to run the family store when your passion lies elsewhere? Running the family store is a drag and Not What I Want To Do With My Life. So there are many conflicts between the son and the dad, because the dad doesn't get it, but the audience thinks the dad is really dense about it -- the son should follow his passion!
But when it comes to companies, people always think that companies should behave like they are Microsoft or something: becoming enormous is apparently the goal of every company. But I think that's bunk -- good companies often get ruined by getting too large. And the larger the company gets, the more you as a manager have to step back from the smaller things and focus on the big picture. Sure you can hire an underling to manage X subunit, but then you still have all sorts of problems. Maybe suddenly you need two offices, or to move offices, because of lack of space? Now you can't hold certain company functions because there are too many people to do them. Maybe now certain benefits packages don't make sense, because you have too many staff that are non-core that would be eligible but who, again, are not part of what you consider the core business.
Maybe Wardell was thinking about General Electric. GE is an awesome company, and in general has done really well. However, they branched out into financial services as a market in a major way, because that sector was really hot. Then when that whole market when to pot, the entirety of GE was suddenly put at risk. Having your eggs all in one basket is not a good idea either, but straying from the business areas that the staff and management really understand is also not that smart.
It's only publicly-traded companies that have the implicit mandate of Increase Stockholder Value for management. For privately held companies like Stardock (or Arcen, for that matter), there are frequently other mandates that are a lot more important. For instance, if I had ten billion dollars, I wouldn't start buying other companies and growing as large as possible. I'd probably start some sort of external indie fund, and transfer some of the money over to there, and let that live or die on its own. But I'd keep the core staff at 10 or less, ideally, because that's just the sort of company I want to run and work for.
At the end of the day, I think that Wardell and/or others looked at their business and realized that this was not what they really wanted it to look like. Somehow they wound up running dad's store without ever meaning to. When they saw that, they severed ties with the store, gaining a chunk of cash and the freedom to pursue their real passions more directly.
That's my take, anyway.