When Gary Gygax could not find a publisher for D&D, a new type of game he and Dave Arneson were co-developing, Gygax and Don Kaye founded Tactical Studies Rules in October, 1973, to self-publish their products. However, needing immediate financing to bring their new game to market before several similar competing products were released, Gygax and Kaye brought in Brian Blume in December as an equal partner. When Kaye died suddenly in 1975, the Tactical Studies Rules partnership restructured into TSR Hobbies, Inc. and accepted investment from Blume's father Melvin. With the now popular D&D as its main product, TSR Hobbies became a major force in the games industry by the late 1970s. Melvin Blume eventually transferred his shares to his other son Kevin, making the two Blume brothers the largest shareholders in TSR Hobbies.
TSR Hobbies ran into financial difficulties in the spring of 1983, prompting the company to split into four independent businesses, with game publishing and development continuing as TSR, Inc. (TSR) After losing their executive positions due to the company's underperformance, the Blume brothers subsequently sold their shares to TSR Vice President Lorraine Williams, who in turn engineered Gygax's ouster from the company in October 1985. TSR saw prosperity under Williams, but by 1995, had fallen behind their competitors in overall sales. TSR was left unable to cover its publishing costs due to a variety of factors, so facing insolvency, TSR was purchased in 1997 by Wizards of the Coast (WotC). WotC initially retained use of the TSR name for their D&D products, but by 2000, the TSR moniker was dropped, coinciding with the release of the 3rd edition of D&D.
Original logo of Tactical Studies Rules: the entwined initials of founders Gary Gygax and Don Kaye.
|Industry||Role-playing game publisher|
|Successor||TSR Hobbies, Inc.|
|Headquarters||Lake Geneva, Wisconsin, USA|
|Gary Gygax, Don Kaye, Brian Blume|
|Products||Dungeons & Dragons|
Tactical Studies Rules (TSR) was formed in 1973 as a partnership between Gary Gygax and Don Kaye, who collected together $2,400 for startup costs, to formally publish and sell the rules of D&D, one of the first modern role-playing games (RPG). They first published Cavaliers and Roundheads, a miniature game, to start generating income for TSR. The partnership was subsequently joined by Brian Blume and (temporarily) by Dave Arneson. Blume was admitted to the partnership to fund publishing of D&D instead of waiting for Cavaliers and Roundheads to bring in enough revenue. In the original configuration of the partnership, Kaye served as President, Blume as Vice-President and Gygax as Editor.
In 1974, TSR (with Kaye's basement as a headquarters) produced 1,000 copies of D&D, selling them for $10 each and the extra dice needed for another $3.50. In January 1975, TSR printed a second 1,000 copies of D&D, which took only another five or six months to sell out. Also in 1974, TSR published Warriors of Mars, a miniatures rules book set in the fantasy world of Barsoom, originally imagined by Edgar Rice Burroughs in his series of novels about John Carter of Mars, to which Gygax paid homage in the "Preface" of the first edition of D&D. However, Gygax and TSR published the Mars book without permission from (or payment to) the Burroughs estate, and soon after a cease and desist order was issued and Warriors was pulled from distribution. In 1975, TSR published Blume's Panzer Warfare, a World War II based miniature wargaming set of rules for use with 1:285 scale micro armour.
At its inception, TSR sold its products directly to customers, shipped to game shops and hobby stores and wholesaled only to three distributors that were manufacturers of miniatures figurines. In 1975, TSR picked up one or two regular distributors. The next year, TSR joined the Hobby Industry Association of America and began exhibiting at their annual trade show, and began to establish a regular network of distributors.
When Don Kaye died of a heart attack on January 31, 1975, his role was taken over by his wife Donna Kaye, who remained responsible for accounting, shipping and the records of the partnership through the summer. By the summer of 1975, those duties became complex enough that Gygax himself became a full-time employee of the partnership in order to take them over from Donna Kaye. Arneson also entered the partnership in order to coordinate research and design with his circle in the Twin Cities.
|Industry||Role-playing game publisher|
|Successor||TSR, Inc., TSR Ventures, TSR International and TSR Entertainment Corporation|
|Headquarters||Lake Geneva, Wisconsin, USA|
|Gary Gygax, Brian Blume, Kevin Blume|
|Products||Dungeons & Dragons|
Blume and Gygax, the remaining owners, incorporated a new company called TSR Hobbies, Inc, with Blume and his father, Melvin Blume, owning the larger share. From the start, Gygax served as President of TSR Hobbies, and Blume as Vice President and Secretary. Originally, TSR Hobbies was created as a separate division to market miniatures and games from several companies, an enterprise which was also connected to the opening of the Dungeon hobby shop in Lake Geneva. The Dungeon would become the effective headquarters of the company, including the offices of Blume and Gygax. On September 26, 1975, the former assets of the partnership were transferred to TSR Hobbies, Inc. TSR Hobbies subcontracted the printing and assembly work in October 1975, and the third printing of 2,000 copies of D&D sold out in five months. Tim Kask was hired in the autumn of 1975 as Periodicals Editor, and the company's first full-time employee.
Empire of the Petal Throne became the first game product published by TSR Hobbies, followed by two supplements to D&D, Greyhawk and Blackmoor. Also released in 1975 were the board game Dungeon! and the Wild West RPG Boot Hill. The company took $300,000 in revenues for the fiscal year of 1976. TSR began hosting the Gen Con Game Fair in 1976, and featured the first-ever D&D open tournament that year. D&D supplements Eldritch Wizardry and Gods, Demi-gods & Heroes were released in 1976, and the original D&D Basic Set was released in 1977. Also in 1977, TSR Hobbies published the original Monster Manual, the first hardbound book ever published by a game company, and the first product in the Advanced Dungeons & Dragons (AD&D) line. The next year, the Player's Handbook, followed by a series of six adventure modules that had previously only been used in tournaments. Also in 1978, TSR Hobbies moved out of Gygax's home and into downtown Lake Geneva, above the Dungeon Hobby Shop. In 1979, the Dungeon Master's Guide was published, and radio ads featuring "Morley the Wizard" were broadcast.
During this era, there were a number of competitors and unofficial supplements to D&D published, arguably in violation of TSR's copyright, which many D&D players used alongside the TSR books. Among these were the Arduin Grimoire, the Manual of Aurenia, and variants such as Warlock and Tunnels & Trolls. TSR regarded these very warily, and in cases where they felt their trademarks were being misused, they issued cease-and-desist letters. More often than not, this legal posturing resulted in only slight changes to competitors' works, but caused significant animosity in the community.
Gygax granted exclusive rights to Games Workshop to distribute TSR products in the United Kingdom, after meeting with Ian Livingstone and Steve Jackson. Games Workshop printed some original material and also printed their own versions of various D&D and AD&D titles in order to avoid high import costs. When TSR could not reach an agreement with Games Workshop regarding a possible merger, TSR created a subsidiary operation in the UK, TSR Hobbies UK, Ltd. in 1980. Gygax hired Don Turnbull to head up the operation, which would expand into continental Europe during the 1980s. The British branch of the operation, TSR UK published a series of modules and the original Fiend Folio. TSR UK also produced Imagine magazine for 31 issues.
The first campaign setting for AD&D, the World of Greyhawk, was introduced in 1980. The espionage role-playing game Top Secret came out in 1980; reportedly, a note written on TSR stationery about a fictitious assassination plot, part of the playtesting of the new game, brought the FBI to TSR's offices. That same year, the Role Playing Game Association was formed to promote quality roleplaying and unite gamers around the country. In 1981, Inc. (magazine) listed TSR Hobbies as one of the hundred fastest-growing privately held companies in the US. That same year, TSR Hobbies moved its offices again, this time to a former medical supply building with an attached warehouse. In 1982, TSR Hobbies broke the 20 million mark in sales.
In 1982, TSR Hobbies decided to terminate Grenadier Miniatures's license and started producing its own AD&D miniatures line, followed by a line of toys. Part of the licensing of the AD&D toy line went to LJN. Also that year, TSR introduced two new roleplaying games, Gangbusters and Star Frontiers. Exclusive distribution of the D&D game was established in 22 countries, with the game being translated first into French, followed by many other languages including Danish, Finnish, German, Hebrew, Italian, Japanese, Korean, Norwegian, and Swedish. In 1982, an educational department was established to develop curriculum programs for reading, math, history, and problem solving, with the most successful program being the Endless Quest book series.
Melvin Blume's shares were later transferred to Kevin Blume. With the board of directors consisting of Kevin and Brian Blume plus Gygax, Gygax in later interviews described his position as primarily a figurehead president and CEO of the corporation, with Brian Blume as president of creative affairs and Kevin Blume as president of operations, as of 1981. In that year, TSR Hobbies had revenues of $12.9 million and a payroll of 130.
TSR Hobbies sought diversification, acquiring or starting several new business ventures; these include a needle craft business, miniatures manufacturing, toy and gift ventures, and an entertainment division to pursue motion picture and television opportunities. The company also acquired the trademarks and copyrights of SPI and Amazing Stories magazine.
In 1983, the company was split into four companies, TSR, Inc. (the primary successor), TSR International, TSR Ventures and TSR Entertainment, Inc.
Gygax left for Hollywood to found TSR Entertainment, Inc. (later Dungeons & Dragons Entertainment Corp.), which attempted to license D&D products to movie and television executives. His work would eventually lead to only a single license for what later became the Dungeons & Dragons cartoon. However, the series spawned more than 100 different licenses, and led its time slot for two years.
TSR, Inc. released the Dragonlance saga in 1984 after two years of development, making TSR the number one publisher of fantasy and science fiction novels in the USA. Dragonlance consisted of an entirely new game world promoted both by a series of game supplements and a trilogy of novels written by Margaret Weis and Tracy Hickman. The Dragons of Autumn Twilight, the first novel in the series, reached the top of The New York Times Best Seller list, encouraging TSR to a launch a long series of paperback novels based on the various official settings for D&D.
In 1984, TSR signed a license to publish the Marvel Super Heroes, Indiana Jones, and Conan role-playing games. In 1985, the Gen Con game fair moved to Milwaukee, Wisconsin, due to a need for additional space. The Oriental Adventures hardback for AD&D was released that same year, becoming the biggest seller for 1985. TSR introduced the All My Children game, based on the ABC daytime drama, with more than 150,000 copies sold. In 1986, TSR introduced the Dungeon Adventures magazine, a bi-monthly magazine featuring only adventure scenarios for D&D.
Hearing rumors that the Blumes were trying to sell TSR, Gygax returned from Hollywood and discovered the company was in bad financial shape despite healthy sales. Gygax, who at that time owned only about 30% of the stock, requested that the board of directors remove the Blumes as a way of restoring financial health to the company. The Blumes were forced to leave the company after being accused of misusing corporate funds and accumulating large debts in the pursuit of acquisitions such as latchhook rug kits that were thought to be too broadly targeted.:4 Within a year of the departure of the Blumes, the company was forced to post a net loss of USD $1.5 million, resulting in layoffs of approximately 75% of the staff. Some of these staff members went on to form other prominent game companies, such as Pacesetter Ltd and Mayfair Games, or to work with Coleco's video game division.
However, in an act many saw as retaliation, the Blumes sold their stock to Lorraine Williams.:5 Gygax tried to have the sale declared illegal; after that failed, Gygax sold his remaining stock to Williams and used the capital to form New Infinity Productions.
Williams was a financial planner who saw potential for rebuilding the debt-plagued company into a highly profitable one. However, she was disdainful of the gaming field, viewing herself as superior to gamers.
TSR released the Forgotten Realms campaign setting in 1987. That year, a small team of designers began work on the second edition of the AD&D game. In 1988, TSR released a Bullwinkle & Rocky RPG, complete with a spinner and hand puppets. That same year, TSR released a wargame based on Tom Clancy's novel The Hunt for Red October, which became one of the biggest selling wargames of all time. In 1989, the AD&D 2nd edition was released, with a new Dungeon Master's Guide, Player's Handbook, the first three volumes of the new Monstrous Compendium, The Complete Fighter's Handbook, The Complete Thief's Handbook, and a new campaign setting, Spelljammer, all released in the same year.
Under Williams' direction, TSR solidified its expansion into other fields, such as magazines, paperback fiction, and comic books. Through her family, she personally held the rights to the Buck Rogers license and encouraged TSR to produce Buck Rogers games and novels. TSR would end up publishing a board game and a role-playing game, the latter based on the AD&D 2nd Edition rules.
In 1990, the Ravenloft setting was released, and Count Strahd von Zarovich soon became one of the most popular and enduring villains. The West Coast division of TSR was opened to develop various entertainment projects, including a series of science fiction, horror, and action/adventure comic books. In 1991, TSR released the Dark Sun campaign setting. TSR also released the first of three annual sets of collector cards in 1991. In 1992, TSR released the Al-Qadim setting. TSR's first hardcover novel, Legacy by R. A. Salvatore, was published that year, and climbed to the top of the New York Times bestseller list within weeks. In 1992, the Gen Con Game Fair broke all previous attendance records for any U.S gaming convention, with more than 18,000 people. In 1993, the DragonStrike Entertainment product was released as a new approach to recruiting new players, including a 30-minute video which explained the concepts of role-playing. 1994 saw the release of the Planescape campaign setting.
By 1995, TSR had fallen behind both Games Workshop and Wizards of the Coast in sales volume. Seeing the profits being generated by Wizards of the Coast with their collectible card game (CCG) Magic: The Gathering, TSR attempted to enter this market in 1995 in a novel way with Dragon Dice. Similar to collectible card games, each player started with a random assortment of basic dice, and could improve their assortment by purchasing booster packs of more powerful dice. In addition to this initiative, TSR also decided to publish twelve hardcover novels in 1996, despite a previous history of publishing only one or two hardcover novels each year.
Sales of Dragon Dice through the games trade started strongly, so TSR quickly produced several expansion packs. In addition, TSR tried to aggressively market Dragon Dice in mass-market book stores through Random House. However, the game did not catch on through the book trade, and sales of the expansion sets through traditional games stores were poor. In addition, the twelve hardcover novels did not sell as well as expected.
By 1996, TSR was experiencing numerous problems, as outlined by Shannon Appelcline: "CCGs were continuing to shrink the RPG industry. Distributors were going out of business. TSR had unbalanced their AD&D game through a series of lucrative supplements that ultimately hurt the long-time viability of the game. Meanwhile they had developed so many settings – many of them popular and well-received – that they were both cannibalising their only sales and discouraging players from picking up settings that might be gone in a few years. They may have been cannibalising their own sales through excessive production of books or supplements too.":30 David M. Ewalt, in his book Of Dice and Men, adds that Spellfire and Dragon Dice "were both expensive to produce, and neither sold very well".:174
Despite total sales of $40 million, TSR ended 1996 with few cash reserves. When Random House returned an unexpectedly high percentage of unsold stock, including the year's inventory of unsold novels and sets of Dragon Dice, and charged a fee of several million dollars, TSR found itself in a cash crunch. With no cash, TSR was unable to pay their printing and shipping bills, and the logistics company that handled TSR's pre-press, printing, warehousing and shipping refused to do any more work. Since the logistics company had the production plates for key products such as core D&D books, there was no means of printing or shipping core products to generate income or secure short-term financing. Despite high sales, the company was deep in debt and not profitable in large part due to returns.:30 Thirty staff members were laid off in December 1996, and other staff left over disagreements about how the crisis was handled, including James M. Ward.:30 In large part due to the need to refund Random House, TSR entered 1997 over $30 million in debt.:174 TSR was threatened by lawsuits due to unpaid freelancers and missing royalties, but TSR made enough money from products already on the shelves to pay remaining staff through the first half of 1997.:30 With no viable financial plan for TSR's survival, Lorraine Williams sold the company to Wizards of the Coast in 1997. Before the corporate offices in Lake Geneva were closed, some TSR employees accepted the offer of transferring to Wizards of the Coast's offices in Washington. Wizards of the Coast continued to use the TSR name for D&D products for three years, until the third edition of D&D was released in 2000 under the Wizards of the Coast logo only. In 1999, Wizards of the Coast was itself purchased by Hasbro, Inc.
From 1987–1991 (and one title in 1996), TSR published a number of comic book series, some of them based on their role playing games. See also Dungeons & Dragons (comics).
In 1984, TSR started publishing novels based on their games. Most D&D campaign settings had their own novel line, the most successful of which were the Dragonlance and Forgotten Realms lines, with dozens of novels each.
TSR published quite a number of fantasy and science fiction novels unconnected with their gaming products, such as L. Dean James' "Red Kings of Wynnamyr" novels, Sorcerer's Stone (1991) and Kingslayer (1992); Mary H. Herbert's five "Gabria" novels (Valorian, Dark Horse, Lightning's Daughter, City of the Sorcerers and Winged Magic), and humorous fantasy fiction, including Roy V. Young's "Count Yor" novels Captains Outrageous (1994) and Yor's Revenge(1995). However, such projects never represented more than a fraction of the company's fiction output, which retained a strong emphasis on game-derived works.
After its initial success faded, the company turned to legal defenses of what it regarded as its intellectual property. In addition, there were several legal cases brought regarding who had invented what within the company and the division of royalties, including several lawsuits against Gygax. This included the company threatening to sue individuals supplying game material on websites. In the mid-1990s, this led to frequent use of the nickname "T$R" in discussions on RPG-related Internet mailing lists and Usenet, as the company was widely perceived as attacking its customers. Increasing product proliferation did not help matters; many of the product lines overlapped and were separated by what seemed like minor points (even the classic troika of Greyhawk, the Forgotten Realms and Dragonlance suffered in this regard).
The company was the subject of an urban myth stating that it tried to trademark the term "Nazi". This was based on a supplement for the Indiana Jones RPG, in which some figures were marked with "Nazi™". This notation was because of compliance with the list of trademarked character names supplied by Lucasfilm's legal department; all such figures were marked with a trademark symbol, and the Nazi figures were likewise marked accidentally. Later references to the error would forget its origin and slowly morph into the urban myth.
MATT FORBECK: ... the last copy of the Indiana Jones roleplaying games. ... It actually has one of the legendary counters in it that reads 'NaziTM.' Which apparently was not TSR's idea, but Lucasfilm insisted that everything that appeared in the game have a "TM" next to it.