Telltale was reviiving a long dead game genre - the point and click adventure. A genre that last saw major popularity in the mid 1990's. Doing that Telltale did was doomed to failure eventually as they'd never get enough sales to work like an AAA studio. Onlystudios that makes games in the genre of the moment can do this. Telltale needed to take a lef from the indie scene. Make their games on lower budgets relative to the lower sales that these games would get. Work smarter, not just throw more cash at everything.
Also I do think the sales were there, but . . . yeah there's a but. I feel there was enough sales if they acted mote like an indie that used lower budgets, kickstarters and thnigs like that. 500k sales would easily cover that. But as they did work, they spent too much money for the sales they did get.
Thirdly, I do feel that Telltale in a way did not understand developing these kind of modern point and click games. It's well known that most games start with an ultra basic demo that demonstrates the base concept of the game. That's what the developers pitch to the execs to get approval. It works. Squares and cubes shooting dots or whatever is enough. Just a visual to go with the base concept. The one genre this does not work for is point and click adventure games. That's the one genre that Telltale specialised in. Point and click games are all about the story. They all play roughly the same so an early demo does not really pitch these games properly. The developers have to take a huge risk and hope the execs like the story being pitched to them. People saying that this or that Telltale game story fizzled out or was not that good is proof of this.
Some of the Telltale games had great stories. The BTTF and Monkey Island ones I thought were fantastic. Some of the others though, were quite hit and miss. This is devistating for Telltale because with these games you don't know the story is great or a dud till you're well into the game. So it's a risk to buy them. You can't fully explain this on the box like you can other games. So if you're burnt by this once, you're very unlikely to buy another Telltale game, even if it is a masterpiece. You'll never know as you can't shwo that on the box and you are once bitten twice shy.
This is why I feel an indie approach to point and click games is the best way to go. I feel the AAA set up can to make these games anymore. The AAA space is not set up for it.