You know, this is honestly probably the most interesting project Blizzard ever worked on.
Much like Diablo, the idea of a WarCraft adventure game was pitched to Blizzard by an outside party (at the time Diablo was first being developed, Blizzard didn't own Condor aka Blizzard North). That outside party was Capitol Multimedia, who was affiliated with Blizzard's then parent company, Davidson & Associates. Capitol specialized largely in 2D kids' adventure games. Blizzard at the time were bored of RTS games, had a lot of staff who were big adventure game fans, and jumped at the prospect.
Blizzard worked out the design, writing, sketches, and general look of the game and then partnered with Animation Magic to develop the code and art of the game, much as Condor had developed Diablo for Blizzard. Animation Magic is sadly infamous due to the Zelda CDi games, but Capitol Multimedia had used them to create really beautiful fantasy adventure games that had pretty great animation which is how they caught Blizzard's eye. Animation Magic had also done some of the animation for King's Quest VII by Sierra (and at the time, Sierra and Blizzard were sister-companies).
The real problem with WarCraft Adventures wasn't the art, or the animation, or the puzzles - it was the fact that Blizzard purposely set out to create a very 'conservative' adventure game. They wanted to relive the genre's glory days by purposefully rehashing old moments and old puzzles from games they loved. Hardcore adventure gamers say this makes it average, but if you think about it, it would've - back in 97 or 98 - helped it appeal to non-adventure gamers, and maybe widened the audience of adventure gamers.
What's really interesting is you can see just how much in some ways Lord of the Clans was a re-skin of Capitol and Animation Magic's earlier efforts. It's a truly interesting game that might've made an impact back in the 90s and maybe helped give the adventure genre a few more years of life.
Darby the Dragon (1996), co-produced by Capitol MultiMedia and Animation Magic
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Darby
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Warcraft Adventures