Colossal Cave Adventure swept through colleges across country via the ARPAnet (the precursor to the Internet). By May, 1977, the game had been solved at MIT by a group called the Dynamic Modeling Group who believed that they could improve upon Colossal Cave. Working on a PDP-10 in MUDDLE (MDL), Dave Lebling wrote a command parser; Marc Blank, Bruce Daniels, and Tim Anderson worked on the design; and Blank and Anderson did the bulk of the coding. More sections of the map and puzzles were added over 1977-1979.

Infocom was incorporated in 1979 to be a commercial venture but with no fixed idea about what products would be developed. Selling Zork seemed like a good way to finance their future products. Joel Berez and Marc Blanc developed a virtual machine called the Z-machine Interpreter (ZIP) and the Zork Implementation Language (ZIL) that allowed Zork to run on a personal computer. The scaled down Zork was released for the TRS-80 Model I in 1980.

Infocom dominated the adventure genre for many years. Noted for rich language, imaginative plots and engaging characters, Infocom boasted that it relied on the world's best graphics processor - your brain. The graphics of the time were poor contenders. The demographics of computer owners (well educated and well-to-do) eliminated barriers to games that demanded a lot of reading. After an unsuccessful start with marketing by Personal Software, Inc., Infocom took over themselves, and they packaged the games with amusing extras that were sometimes essential to solving the game. Swamped by requests for help, they invented InvisiClues, booklets with invisible hints that were made visible by a special marker.

In 1982, work began on a relational database later named Cornerstone. A Business Division was formed, and the number of Infocom employees went from 32 to 100 to staff it. Game sales had slowed and the high-tech sector suffered a slowdown in 1985. Tensions developed between the game and business divisions, partly because the financial demands of Cornerstone left the game developers wihtout resources to innovate. Instead of the growth increase that had been expected to fund Cornerstone, revenues were stagnant. Competition from graphical games also impacted Infocom sales. In September, 1985, layoffs began; by the end of 1985, there were 40 employees left.