Once the novelty faded, it needed innovative marketing, spinoffs and aggressive positioning. After all Pringles pulled it off, so clearly not impossible to create enduring brands based on such things.

A technical problem may have been that the attractive market of mix 'n match home eating for kids was not addressable. From their site:

Can I Buy Dippin' Dots In Groceries Or Online?

In order to maintain the fun and unique qualities of Dippin' Dots products, we do not sell them at traditional ''take home'' outlets. Because of the sub-zero storage requirements, Dippin' Dots would begin to stick together in your home freezer. We hope you'll continue to enjoy Dippin' Dots at our Franchised stores and the hundreds of amusement facilities that sell our product. For bulk purchases, some of our Franchise stores offer "Party Packs" for parties and catering. You'll find a list of our stores on our website location guide. You can also buy Dippin' Dots online for delivery to your home or office. Click here for more info.

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In a way, Dippin Dots is an inconvenience version of ice-cream, unlike Pringles, which are a convenience version of chips (harder to crush).

Still, it had potential. Pity it didn't work out. Perhaps McDonalds will buy 'em and put 'em in all stores.