TSR, Inc.

• 1. An Improbable Empire

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  In 1992, a game convention that TSR had been running for years broke every previous attendance record in the United States, drawing over 18,000 participants. The company behind that convention had started barely two decades earlier, unable to find a commercial publisher for its main product. TSR, Inc. published Dungeons and Dragons and defined an entirely new genre of gaming. It built a publishing operation that stretched from miniature rules books to paperback bestsellers. It was also a company that spent years borrowing against a future it could not fully see. The founders who built it did not stay in control. The company that rescued it retired the name. How does a small publisher invent a genre and still collapse under the weight of its own ambition?

• 2. Cavaliers, Roundheads, and Dragons

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  The first product Gary Gygax and Don Kaye put on sale was not Dungeons and Dragons. Cavaliers and Roundheads, a miniatures game, came first, intended to generate income while the partnership readied its main product. Cavaliers and Roundheads was a commercial failure.

  Brian Blume joined the partnership in December 1973, recruited specifically to fund further D&D publishing. In the original arrangement, Kaye served as president, Blume as vice-president, and Gygax as editor. The two founders had collected $2,400 for startup costs.

  In January 1974, TSR produced the first thousand copies of Dungeons and Dragons. Each was priced at $10, with required dice available for another $3.50. That first print sold out in ten months. A second batch of a thousand followed in January 1975 and sold out in five or six months.

  Also in 1974, TSR published Warriors of Mars, a miniatures rules book set in the fantasy world of Barsoom. Barsoom was the fictional Mars imagined by Edgar Rice Burroughs in his novels about John Carter. TSR published the book without permission from the Burroughs estate and without payment. When the unauthorized nature of the publication was recognized, Warriors of Mars was quietly dropped from the catalog and never reprinted.

  Don Kaye died of a heart attack on the 31st of January 1975. His wife Donna took over his accounting, shipping, and records duties through the summer. By summer's end, those responsibilities had grown complex enough that Gygax became a full-time employee to manage them. Dave Arneson, the co-creator of Dungeons and Dragons, also joined the partnership to coordinate research and design with his circle in the Twin Cities. Kaye's death set in motion a restructuring that would bring in outside investors and permanently change the balance of power at the company.

• 3. The Gen Con Decade

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  On the 26th of September 1975, the assets of the original TSR partnership were transferred to a new corporation, TSR Hobbies, Inc. The transfer was made possible by a $20,000 investment from Melvin Blume, Brian's father. That sum bought out Donna Kaye's share of the original partnership. Brian Blume became the largest shareholder, Melvin the second largest, and Gary Gygax the third. The Dungeon hobby shop in Lake Geneva served as the company's effective headquarters, with offices above the shop.

  Tim Kask was hired in the autumn of 1975 as Periodicals Editor, the first person TSR brought on for full-time work. TSR started hosting the Gen Con Game Fair in 1976. The first D&D open tournament was held at that convention the same year. The company took in $300,000 in revenues for fiscal year 1976.

  By 1977, TSR had divided the Dungeons and Dragons product into two lines. The D&D Basic Set was aimed at newcomers. Advanced Dungeons and Dragons launched with the Monster Manual, making TSR the first game company to publish a hardbound game book. TSR declined to pay Arneson royalties on AD&D products, arguing that his co-creation rights extended only to the base D&D name. In 1979, radio ads featuring a character called Morley the Wizard promoted D&D for a younger and more general audience. That same year, the D&D Basic Set sold over 100,000 copies.

  In 1979, TSR signed a distribution agreement with Random House on unusual terms. In a standard arrangement, a publisher is paid based on books sold through to retailers. TSR's deal worked differently: Random House loaned money to TSR on each shipment, at a rate equal to 27.3% of the suggested retail price. TSR received cash upfront to fund new projects. Returns were generally low and the arrangement worked well during the early years. Those conditions would change.

  Gygax granted Games Workshop exclusive rights to distribute TSR products in the United Kingdom after meeting with Ian Livingstone and Steve Jackson. When a merger between the two companies could not be arranged, TSR formed the subsidiary TSR Hobbies UK Ltd in 1980, hiring Don Turnbull to lead it. TSR UK published the original Fiend Folio and ran Imagine magazine for 31 issues. That same year, a note on TSR stationery describing a fictitious assassination plot, written as playtesting material for the espionage game Top Secret, prompted the FBI to visit the company's offices.

  In 1981, Inc. magazine listed TSR Hobbies among the hundred fastest-growing privately held companies in the United States. That year the company had revenues of $12.9 million and a payroll of 130 employees. By 1982, TSR had broken the 20 million sales mark. Kevin Blume, who had inherited his father Melvin's shares, joined Brian Blume and Gary Gygax in leadership. Contemporary reporting described the trio as operating only by unanimous consent.

• 4. The Costs of Ambition

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  TSR's 1982 acquisition of Simulations Publications Inc. began with what appeared to be a rescue. SPI was heavily in debt. TSR offered a promissory note worth several hundred thousand dollars, accepting SPI's assets as collateral. SPI paid off its debts with the money immediately. Less than two weeks later, TSR called in the note. SPI had no cash to repay it and handed over its entire operation.

  TSR believed the wargame market was a lucrative opportunity. That belief was wrong. The same market collapse that had driven SPI into debt also sank TSR's wargames. TSR halted all new wargame projects. Most SPI game designers resigned and moved to Avalon Hill, which formed a subsidiary called Victory Games specifically for them. TSR had one wargame hit, The Hunt for Red October, but abandoned the market entirely ten years after the SPI takeover.

  The SPI deal was one of several expansions that drew criticism. Greenfield Needlewomen, a needlecraft business owned by a cousin of the Blumes, generated negligible revenue from D&D-themed merchandise and was widely described as nepotism. The company used funds to raise a shipwreck from Geneva Lake with no identifiable financial rationale. TSR acquired the trademark and copyrights of Amazing Stories magazine, which at that time had only ten thousand subscribers.

  In 1983, financial strain led TSR to split into four companies. The game publisher TSR, Inc. was the primary successor. TSR Entertainment, Inc. was set up for Gygax to pursue film and television deals in Hollywood. That work eventually produced one license, for an animated Dungeons and Dragons series. The series led its time slot for two years. In 1984, TSR started the Dragonlance saga, a joint game campaign and novel series written by Margaret Weis and Tracy Hickman. Its first novel, Dragons of Autumn Twilight, reached the top of The New York Times Best Seller list. TSR's book division became one of the company's most profitable operations.

  Sales of core rule books peaked in 1983 and fell in 1984 and 1985, largely due to market saturation. Expenses had been planned around sales remaining strong. When they softened, TSR entered a cycle of layoffs and contractions. The Blumes negotiated a $4 million loan from American National Bank. TSR's bank then stopped the company's line of credit. Gygax, who had been in Hollywood, returned to Wisconsin. Soon after, the struggle for control of TSR came to a head.

• 5. The October Ouster

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  In the spring of 1985, Gary Gygax exercised an option to purchase 700 shares of TSR stock. Combined with shares held by his son Ernie, Gygax now controlled 51.1% of all stock, up from around 30% before. He used that majority to remove the Blume brothers from their executive positions. Gygax controlled TSR.

  A net loss of $1.5 million followed within a year of the Blumes' departure. TSR laid off approximately 75% of its staff. Some former employees went on to found Pacesetter Ltd and Mayfair Games; others joined Coleco's video game division.

  Gygax turned to a Hollywood contact named Flint Dille for financing help. Dille suggested his sister Lorraine Williams. Williams was given the position of general manager at TSR. Clashes between her and Gygax began quickly. Meanwhile, the Blumes, worried about TSR's financial future, wanted to sell their shares. They offered them to Gygax, who refused. The Blumes exercised their own options to buy 700 more shares, then sold their entire holdings to Williams. Williams also purchased 50 additional shares. Those transactions made her the majority shareholder.

  On the 22nd of October 1985, Williams used her voting power to remove Gygax as CEO and president. Gygax challenged the sale of the Blume shares in court and lost. He sold his remaining stock and used the proceeds to found New Infinities Productions. TSR directed legal threats at Gygax for years after his departure.

  Jeff Grubb, who worked at TSR under both management regimes, said Williams had "pretty much saved the company." He noted the company had been weeks away from total collapse when she arrived. John D. Rateliff, who interviewed many former TSR employees, reported a striking consistency. Every person he spoke to who had worked under both Gygax and Williams preferred Williams, without exception. AD&D 2nd edition, which a small design team had begun developing in 1987, would become one of the most significant products of the Williams era.

• 6. New Worlds, New Bestsellers

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  TSR released the Forgotten Realms campaign setting in 1987, and it would go on to become one of the most popular D&D settings ever produced. In 1989, Advanced Dungeons and Dragons 2nd edition arrived. It came with a new Dungeon Master's Guide, Player's Handbook, and the first three volumes of the Monstrous Compendium. TSR built extensively on 2nd edition with a series of new campaign settings. Spelljammer launched in 1989, set among space galleons in an Age of Sail-themed universe. Ravenloft followed in 1990, expanded from an acclaimed 1983 adventure module into a full horror setting. Dark Sun came in 1991, set on a post-apocalyptic desert world. Al-Qadim arrived in 1992, Planescape in 1994, and Birthright in 1995. In 1996, Dragonlance: Fifth Age departed from the roots of D&D with a diceless rules system.

  R. A. Salvatore's Drizzt series, beginning with The Crystal Shard in 1988, became the most commercially successful novel line of the Williams era. Many of Salvatore's books reached the paperback bestseller lists. TSR extended into hardcover novels with Salvatore's The Legacy in 1992. It reached the top of The New York Times Best Seller list within weeks of its release.

  The Dille Family Trust, of which Williams was a member, held the rights to the Buck Rogers license. Williams personally directed TSR to develop Buck Rogers material: board games, novels, a comic, and a role-playing game. All of those projects were commercial failures. TSR had a profitable arrangement with DC Comics to produce Advanced Dungeons and Dragons and Forgotten Realms comics; both titles sold well. When TSR tried to create competing comics of its own, DC canceled both of its titles immediately. Among the casualties was a planned Ravenloft series that author James Lowder had been scripting. TSR's West Coast division closed around 1991.

  Wizards of the Coast released Magic: The Gathering at Gen Con in 1993 and instantly established the collectible card game genre. TSR's Jim Ward led development of a D&D-themed competitor called Spellfire, released in April 1994. The game was produced on a minimal budget, reusing art TSR had already commissioned for other projects. Williams was not a supporter of the project. Whether Spellfire sold well is disputed among former TSR staff; it was discontinued in 1996. Dragon Dice, TSR's other collectible entry, released in 1995. The first sets sold well at game stores, but interest fell quickly. TSR's attempt to push Dragon Dice through the Random House book trade did not succeed. Shannon Appelcline, writing in Designers and Dragons: The 90s, later observed that TSR's many campaign settings competed with each other more than they expanded the audience. Rather than luring new players, they divided the existing ones.

• 7. The Banco de Random House

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  By 1996, TSR's financial structure had caved in. Ryan Dancey and Lisa Stevens examined TSR's finances for Wizards of the Coast and found that many campaign settings had never been profitable. The cost of producing each setting was simply too high relative to what it could sell for. Meanwhile, a financial arrangement called factoring had locked TSR into annual commitments it could not easily escape mid-year.

  Each January, TSR arranged contracts with retailers in the hobby trade at discounted rates, then sold those contracts to investment banks for immediate cash. TSR kept roughly 82 cents of every dollar of revenue. The tradeoff was inflexibility. One result of this inflexibility was a fiasco with TSR's AD&D CD-ROM Core Rules product: a preorder arrangement with retailer Babbage's continued even after Babbage's became financially insolvent.

  TSR's long-standing deal with Random House had worked in the 1980s, when returns were low and products sold reliably. In the 1990s, TSR began using the arrangement as emergency financing. Since Random House advanced money based on the assumption that shipped goods would eventually sell, TSR began shipping overstock to generate loans on demand. Insiders at TSR began calling Random House the "Banco de Random House." This practice distorted the company's sense of which products actually sold, leading to chronic overprinting. Ben Riggs cites DragonStrike as a case: it sold well but was printed in quantities far beyond what the market required. The excess copies were shipped to Random House anyway, generating more loans. Random House eventually demanded TSR reduce its outstanding debt, which stood at around $11.8 million in June 1995. Random House sued TSR for repayment in April 1996.

  Despite total sales of around $40 million in 1995, TSR ended 1996 nearly out of cash. Random House returned an unexpectedly large volume of unsold stock and charged a fee of several million dollars. The returned inventory included that year's unsold novels and Dragon Dice sets. Between 1995 and 1997, Random House returned around $14 million of product to TSR. J. B. Kenehan, the logistics company that handled TSR's printing, warehousing, and shipping, refused further work when bills went unpaid. Kenehan held the production plates for core D&D books. Without those plates, TSR could not print or ship its most important products. The company laid off thirty staff members in December 1996. By the start of 1997, TSR was more than $30 million in debt. Lorraine Williams sold TSR to Wizards of the Coast in 1997 in a deal brokered by Five Rings Publishing Group.

  Wizards of the Coast settled TSR's debts as part of the acquisition. This allowed products TSR had been working on in early 1997, including the space opera game Alternity, to be printed and distributed. Wizards eventually closed TSR's Lake Geneva offices. Some TSR employees transferred to Wizards' offices in Washington; others continued working remotely from Wisconsin. Wizards of the Coast continued to use the TSR name on D&D products for three years. In 1999, Wizards was purchased by Hasbro, Inc. The TSR name was retired in 2000, coinciding with the release of Dungeons and Dragons 3rd edition under the Wizards brand alone. In 2002, the Gen Con convention was sold to Peter Adkison, the founder and CEO of Wizards of the Coast. Wizards allowed the TSR trademark to lapse in the early 2000s.

• 8. The Name Lives On

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  Wizards of the Coast allowed the TSR trademark to expire, and in 2011 a podcaster named Jayson Elliot discovered it had lapsed. He registered it himself. Elliot then launched a new company with help from early TSR contributors. These included Luke and Ernie Gygax, sons of Gary Gygax, and Tim Kask, who had been the first full-time TSR employee. Their first product was Gygax Magazine, announced in December 2012. A Wired report quoted Elliot stressing that his company was a new one. Both Gygax brothers departed in 2016 when the magazine ended.

  In June 2021, a separate group including Ernie Gygax and Justin LaNasa launched another company under the TSR name. It was based in Lake Geneva, Wisconsin. They announced plans to publish games and operate the Dungeon Hobby Shop Museum in the original TSR office building. Elliot's TSR Games announced it had held the trademark since 2011 but had missed a filing deadline in 2020. Elliot then announced publicly that his company would have no working relationship with LaNasa's group. He cited troubling public comments by Ernie Gygax about race, gender identity, and gun violence. Elliot's TSR Games rebranded as Solarian Games in July 2021. The other principal, Stephen Dinehart, rebranded his entity as Wonderfilled Games.

  LaNasa's TSR Games launched a crowdfunding campaign in December 2021 to fund a lawsuit against Wizards of the Coast over trademark ownership. The company filed and then voluntarily dismissed its complaint that same month. Wizards of the Coast, also in December 2021, sued LaNasa's TSR for trademark fraud over use of the TSR logo. In July 2022, TechRaptor reported on a leaked playtest document for LaNasa's Star Frontiers: New Genesis. Wizards of the Coast described the document's content in court filings as "blatantly racist and transphobic." In September 2022, Wizards sued to stop LaNasa's group from publishing games under the TSR or Star Frontiers trademarks. A federal magistrate judge denied Wizards' request for a preliminary injunction in December 2022. The judge found Wizards had not yet demonstrated sufficient evidence of continuous trademark use. In June 2023, LaNasa's TSR declared Chapter 7 bankruptcy, triggering an automatic stay of the lawsuit. The Dungeon Hobby Shop Museum stands in the Lake Geneva building where Gygax and the Blumes once ran TSR. It is the most tangible physical connection to a name that has outlasted everyone who once owned it.