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How Gygax Lost Control of TSR and D&D 183

Posted by Unknown Lamer
from the cast-hostile-takeover dept.
An anonymous reader writes "Sunday was the birthday of the late great Gary Gygax, co-creator of Dungeons & Dragons and Futurama guest star. With the fifth edition of D&D soon to come out at Gen Con this year, Jon Peterson, author of Playing at the World, has released a new piece to answer a historical question: how was it, back in 1985, that Gary was ousted from TSR and control of D&D was taken away from him? Drawn from board meeting minutes, stock certificates, letters, and other first-hand sources, it's not a quick read or a very cheery one, but it shows how the greatest success of hobby games of the 1980s fell apart and marginalized its most famous designer."
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How Gygax Lost Control of TSR and D&D

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  • Re:Easy (Score:5, Informative)

    by dreamchaser (49529) on Tuesday July 29, 2014 @08:17AM (#47556229) Homepage Journal

    Will saves didn't exist under any of the editions he wrote.

  • by JosKarith (757063) on Tuesday July 29, 2014 @08:38AM (#47556329)
    IIRC Williams went on to sink as much of TSR's money as possible into buying up the rights for the Buck Rogers RPG ... which flopped and sunk without a trace, crippling TSR's finances. Rather than invest in it to turn its declining fortunes around as she was supposed to she effectively asset stripped it - her family owned the Buck Rogers franchise rights...
    All in all a classic carpetbagger move by Williams that everyone except Gygax fell for.
  • by Anonymous Coward on Tuesday July 29, 2014 @08:47AM (#47556361)

    His perspective appeared in _The_Familiar_, a very small RPG magazine published in North Carolina (only lasted 4 issues).

  • Re:Easy (Score:4, Informative)

    by kelemvor4 (1980226) on Tuesday July 29, 2014 @09:33AM (#47556661)

    He lost a Will save.

    The only real saving throw types are

    1. Paralyzation, Poison, or Death Magic
    2. Rod, Staff, or Wand
    3. Petrification or Polymorph
    4. Breath Weapon
    5. Spell

    All the rest are bullshit.

  • by leonem (700464) on Tuesday July 29, 2014 @09:47AM (#47556773) Homepage

    The Blume family also exercised options -- which means creating new shares at a price agreed previously.

    They needed money to do this, and conveniently Williams' downpayment for their other shares was exactly the same amount.

    This is pretty standard: a company will often reserve X amount of notional 'shares' to be issued as options, and the existing investors are aware that their own holding will be diluted when these options are exercised. Until the options are exercised, however, they do not actually exist as shares. *

    * There are various caveats on all of this, as shares may be held in treasury by the company, converted from one type to another and various other things in order to avoid tax / split control differently to the profits.

  • by geekoid (135745) <> on Tuesday July 29, 2014 @10:46AM (#47557401) Homepage Journal

    TSR loaned SPI money. SPI defaulted n the loan. TSR got SPI.

    SPI would have died completely had they not gotten the loan in the first place. TSR was the only group that would lend them money to even try.
    TSR could have refused to give them the loan, and then just bought all there stuff during bankruptcy. They would have gotten it cheap because no one else wanted it.
    Yeah, you're not the only old person here.

  • TLDR Version (Score:4, Informative)

    by wienerschnizzel (1409447) on Tuesday July 29, 2014 @10:54AM (#47557493)

    TSR, a small company dealing in the fringe hobby of "war gaming" got hugely popular at the beginning of 1980's thanks to an unexpected publicity from a hoax that got propagated by the national media.

    The company owners and executives, Gygax and the Bloom brothers were no skilled businessmen and they projected this sudden jump in the company's revenue into the next years, expecting it to grow tenfold in a year. They went on a hiring and acquisition spree accordingly.

    As the miraculous growth didn't come, TSR ran into financial problems, running on a $750k deficit by the mid 80's

    The Bloom brothers tried to get a big outside investment to get the company out of the red numbers but Gygax opposed - he didn't want non-gamers to control the company. To this effect he executed an ancient option he got when the company was formed, gained a (very narrow) majority of the company's shares and thus the power to strip the Bloom brothers of their executive positions and void the investment by the outsiders.

    In response the Blooms wanted to execute the option of selling all their shares back to the company for a large (but not outlandish) sum of some $500K but TSR could not afford it.

    Half a year later the Blooms executed the same option Gygax did before to gain a slight majority in the company and sold all of their shares to Lorraine Williams for a third of the price per share, making her the largest and a majority shareholder.

    One day later Gygax was stripped of all his executive positions in the company

    He fought the decision in court, but really had no case and eventually sold off his shares in order to finance his new business.

    How Gygax lost his copyright to D&D and Grayhawk the article does not say

    All in all a really boring story

  • by DerekLyons (302214) <fairwater AT gmail DOT com> on Tuesday July 29, 2014 @01:01PM (#47558715) Homepage

    IIRC Williams went on to sink as much of TSR's money as possible into buying up the rights for the Buck Rogers RPG ... which flopped and sunk without a trace, crippling TSR's finances.

    TSR's finances were in perpetual disarray from about '83 forward... when the D&D bubble popped.* TSR had built itself around the assumption that growth would occur at the same rate as it had during the bubble, and was screwed when it didn't. It never fully recovered. Even though Williams' mismanagement didn't help, by the mid 80's significant percentage of gamers had moved onto computer gaming and their purchases of hardcopy games dropped precipitously. They stumbled on long enough to be around when WOTC came into bucketloads of cash, but they were anything but a healthy company.

    Not to mention the Buck Rodgers RPG is far from only "flopped and sunk without a trace", whether from TSR or elsewhere in the industry. (Even games that were huge successes (by the standards of the day) are by-and-large completely forgotten today.) At the height of the bubble ('82-'83) it seemed a new RPG was coming out every week, and the premises of the games were increasingly specialized and/or outlandish. By 1983, the market for tulip bulbs was beyond saturated**. By 1984 it was busted. By 1993, when the Buck Rodgers RPG was released, it would have taken a miracle for any RPG to be a breakout hit.

    *The largest problems that hardcopy gaming (board, pen-and-paper, etc...) companies face are the replayability factor and the scaling factor. For the first, you can buy a set of rulebooks and literally play for years without further purchase. For the second, one guy can purchase a set and then ten or more others can play using that set for years. Once a significant proportion of your userbase has a set of your products, you're screwed. There's a reason why every gaming company of the era got into supplements and expansions and ancillary products and media as fast and deep as possible - it's the only way to survive. WOTC didn't create the idea of endless supplements and expansions (as many seem to think), they merely perfected the implementation by convincing players they were vital to continued gameplay rather than being optional.

    ** I remember a meeting of our gaming group in 1983 where we were deciding which GM/game would be added to our rotation to replace one that was moving away... we literally had twenty or thirty different RPG's in hardcopy physically sitting on the table. When I attended Dracon I (or was it Hexacon I, can't remember as there were so many start-up gaming cons back in the day) in 1984 I took something like ten different games from my personal collection to the con. (Met Tracy Hickman there, out stumping the then newly released Dragonlance.)

"Pull the wool over your own eyes!" -- J.R. "Bob" Dobbs