SGI was trying to diversify, and were even putting chips in game consoles like the PS/2, but nothing destroyed their core business like Linux did, as directly evidenced in Linux now being their primary product, but of course not leading to any financial stability.
They made several strategic mistakes, which resulted in reduced confidence in their commitment to their core products, MIPS workstations, servers and supercomputers. At the same time, other hardware (both CPU and GPU) became as fast as, or faster than, their MIPS lines.
Without MIPS hardware selling, IRIX became a white elephant for SGI. In the end, Linux helped save SGI by providing them with a low-cost, extensible OS.
but nothing destroyed their core business like Linux did, as directly evidenced in Linux now being their primary product,
How did Linux destroy them if they themselves leveraged Linux for profit? You are not making sense.