The A1000 was released in 1985, the same year as the NES was released in America. It was a huge leap in capabilities over it's contemporaries.
But their massive lead was slowly whittled away by technology improvements. In 1992 they released AGA, which was barely twice as good as the original A1000 chip-set, while the IBM PC had innovated all the way from 4 color CGA, though EGA to VGA/SVGA with CPUs which were fast enough to any 2d (and increasingly 3d) effects in software.
Commodore really needed to get AAA out the door by 91 to hold onto their lead.
Doom was probably the final nail in the coffin, you simply couldn't implement it on the Amiga chipset due to it's planar graphics.
It's interesting how John Carmack's technical vision decided the winners in the computer industry at the time.
We were usually playing Pirates!, Carmen Sandiego, Cauldron I & II, Ultimate Wizard & the Bard's Tale games and dialing into BBS on the C64. The usual way of dialing with leaked calling card numbers.
Eye of the Beholder on the 386SX machines was cool and all, but once he 'liberated' a 486DX from work and we started playing Doom and using his job's dialup service, the C64 was done.
AAA was started in 88 if I remember right, and abandoned when the rest of the world had pretty much reached it.
Microsoft were pretty well established and very successful by 1985 (when the Amiga was launched). The following year they IPO'd for $61 million dollars - not a lot these days, but back then it was a reasonable chunk of cash for a company of its size in the day.
For Commodore, the edge of the pan was well in sight by 1985/86 because their management and overall strategy was a mess.
PCs were still a mix of MS-DOS, Windows 3.x or Novell Netware when the downfall begun around 1994, Windows 95 was still around the corner.