I did a stint as a co-op for SGI back in the late 90s. What was clear at the time was that there was a flight of the smart people out to the early PC graphics card industry causing serious brain drain in the company. This was also the time the company was making astoundingly overpriced PCs that made the bad bet on RAMBUS.
The reality is the company suffered from the same fundamental market forces that killed off most of the Workstation market in the 90s. No niche company could spend what Intel was spending on R&D every year so their performance advantage was continually eroding, while the price points for the hardware were not. Trying to transition to being a PC manufacturer wasn't totally crazy, but it would mean competing a highly price competitive market which SGI was absolutely not equipped to do.
I had the impression that the smart people in the graphics department saw that management was never going to go along with their "lets build far cheaper and better versions of our existing products on a PCI card that you can stuff in a cheap off the shelf PC" that would massively undercut the core business. So they quit the company and started nVidia.