Although this thread is focusing on the 40th anniversary of the release of King's Quest and GAL/AGI, I think it might be relevant to also mention what was going on with the Sierra/Disney contract with regards to the Disney Educational games (i.e. Donald Duck's Playground, Mickey's Space Adventure, Winnie the Pooh..., and Goofy's Word Factory). There are two reasons that they are relevant: One is obviously that the Donald Duck's Playground game was ported over to an AGI game in later years, but perhaps more relevant within the context of 1984 and the success of King's Quest and AGI as a whole is that the Disney contracts were one of maybe three different ingredients that helped keep Sierra On-Line afloat long enough for King's Quest to become a success.
Ken had put all his eggs in the IBM PC JR basket and had all his hopes in IBM's new machine being a success. This isn't quite true though, because at the same 1984 Winter CES show that King's Quest was first demoed at, Sierra had reached an agreement with Disney to take over a contract that Texas Instruments had had to create educational games based on Disney characters. Here are a few references to support his:
"Texas Instruments had an agreement with Walt Disney Products to create educational software for the TI/99 over a two-year period. When it became obvious that the Texas Instruments system was dying in the market, Texas Instruments helped Disney search for a well known software company that would "assume" their obligation and produce Disney-quality material. Our company fit that bill. The actual contract was signed at the 1984 Winter CES Show in Las Vegas." - (John Williams - Commodore Magazine - March 1987- Page 73)
And the Fortworth Star Telegram, in their 18th January 1984 edition, mentions that Texas Instruments had reached agreements with Walt Disney and Sierra On-Line to assume TI's market responsibilities. This date is only a week after the Winter CES and therefore confirms John Williams' 1987 comment.
So Sierra was already preparing for the Disney Educational games in early 1984, before King's Quest was released. I'll pick up on the Disney contract later in the year, when we reach the 40th anniversary of certain events. The point to highlight now is that it helped Sierra to stay afloat to a certain degree, since by mid 1984 (after the PC JR market flop), they were struggling big time and focusing mainly on AGI games and the Disney contract, in the belief that these were most likely to succeed in the future. Almost everything else had been shut down, with big lay offs happening roughly around June of that year. The Radio Shack agreement to sell the Tandy versions of the AGI games helped them start to grow again in 1985, but they had to get through 1984 first.