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How Gygax Lost Control of TSR and D&D
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."
He lost a Will save.
After Gygax's treatment of Arneson and the way he attempted to attack other games in the roleplaying hobby, I find it hard to feel much sympathy for him.
I can surmise that immediately after being ousted from Dungeons & Dragons, he immediately got laid.
This should serve as a cautionary tail of what can happen when you go into business with friends and or relatives. As soon as big money starts being made...unfortunately the greedy side of human nature tends to rear it's ugly head.
The reason is spelled MBA.
Everyone has moved away from it to either Pathfinder or 13Th age. DnD is on it's way to becoming another savage worlds for lovers of crunchy dice rolling only.
Do not look at laser with remaining good eye.
Naturally Gary was heavily engrossed with play testing and had a hardcore group of gamers. Unfortunately over time the group developed tension and animosity. Specifically, the relationship between Gary and the game referee became very difficult...
The Demented Mofo that sat all day in his mom's basement and thought up new ways to kill Gygax's character. This is because Gary had really good rolls throughout his game-play that foiled the DM's plans and made his encounters look too easy.
Even when it came to treasure Gary's rolls were amazing and he got so many great magical items that he was practically invincible. He could escape easily or overcome any obstacle and was critically close to dual class level 20 with his arsenal of wands, rings, magic swords and powerful spell scrolls.
He was practically unstoppable and was prone to maniacal laughter when he was obviously spoiling the adventure the DM spent a lot of money on purchasing.
Just after work that day they all got together. The group were downing fizzy drinks and were already making plans to order in pizza. The DM hurridly rolled encounters behind the mystic DM screen and said things like "Oh that's bad" & "you guys are screwed" as he giggled and suggested the dice roll was somehow 3 on the D6, 5 on the D20 and 73 on the D100 (none of which was actually seen as the screen hid the results) which meant 17 angry red dragons with 9 magically dominated beholders of at least 18HD each came to take Gary's character to Tiamat on the 1st plane of hell to do battle until death.
Later that day it was announced that Gary's character was fatally wounded after failing a saving throw vs death with a -23 modifier (there were a lot of dragon breath weapons) and shortly after being incinerated, electrocuted, frozen and disintegrated he passed away.
Naturally Gary broke into tears and protested against the unfair odds and accused the DM of setting him up. The DM pulled out the Dungeon Master's Guide and quoted irrelevant bits of text and then laughed maniacally as he slammed the book down, ripped Gary's character sheet to shreds and threw it around like cheap confetti.
It all went downhill from there as Gary sank into depression, alcoholism and debauchery.
Can we observe 1 minute of rolling saving throws on the D20 for Gary? -TA
A 'singular oddity' is an event that cannot be explained and only happens when you are alone.
His perspective appeared in _The_Familiar_, a very small RPG magazine published in North Carolina (only lasted 4 issues).
The article says:
"This raised his total holdings to 1,371 shares, which fell just slightly below half (49.6%) of outstanding TSR shares, then numbering 2,761. But the 40 shares owned by Gygax’s son Ernie, when combined with his father’s holdings, secured controlling interest (51.1%) in TSR.
Then there is a bit about the Blume family wanting to sell their shares, Gygax not biting, and Williams et al. purchasing them instead. This suddenly gives them a greater controlling interest in the corporation.
But if Gygax already controlled 51.1%, it doesn't matter how many shares they buy; unless Gygax sold some of his own, they should never have more than 48.9% and thus never have been in a position to oust him.
So this article - and corporate finance - just makes me even more confused.
Firing a relative or friend has repercussions outside of your business relationship.
Yes it does. Which is why you need to exercise caution when hiring relatives or friends. Just as important you need any appropriate contract outlining the terms of their employment. If things go south (as they sometimes do) then you follow the contract to the letter. I've been business partners with friends and family and we took the time to agree how things would work up front. Some of the businesses didn't work out but they were dissolved amicably because we were clear up front about how things would happen. I'm still on good terms with them because we were honest with each other regarding what we wanted out of the arrangement and how it would work if things went well and if they didn't.
Do you really think that a nasty money fight between friends and relatives with contractual obligations in a business would not affect the personal relationships between them?
Of course it would but you can head most of those issues off by being VERY clear up front about how things will work. Say what you are going to do and then do exactly what you said you would do. If the other party can't deal with that then things were probably doomed from the start. I once had someone I respect a lot give me some very good advice. He said "Never get into a business deal you wouldn't be willing do as a handshake agreement but also never do a business deal where the details aren't spelled out on paper either." If you don't trust someone, don't go into business with them. If you do trust someone, protect yourself from being wrong by proper use of contracts.
13th Age is pretty great as a grab bag of awesome ideas to pull and slap onto your game of choice. I may never play a game of it, but it definitely inspired me. As for 5E, the best review I heard was: "The simplicity of OD&D, the quirkiness of AD&D, the versatility of 3.x, and the balance of 4E." That sells me, as those are my favorite aspects of those editions.
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.
Actually, that's a real problem for most of us.
Shouldn't be in general. When your children misbehave or under-perform in school do you have a problem disciplining them? You did set out expectations in advance right? If you didn't then shame on you. Same with going into business with family. Set out expectations right up front and then hold them to those expectations and communicate how they are doing in relation to those expectations. If you do that things usually work out ok.
A sociopath has no problem flipping the switch, to decide that they can ignore the family ties.
Very few people are sociopaths but also too few are good at keeping business and family separate. Business is completely unforgiving of family relationships. The mere fact that someone is family in no way enhances the profits of the company. You can solve a lot of problems by being very clear right up front about how the business relationship will work. This doesn't mean it will necessarily be all kittens and rainbows but if you have a contract up front and live up to that contract then things usually work out fine in the long run. Understand though that there is a non-trivial chance of some seriously ruffled feathers if a family member or friend is performing such that they have to be fired. They are unlikely to be happy about it. But they also usually will forgive if you are simply doing what you said would happen before they started.
You have to be very careful when hiring family. I'm married into a family where the family has had a successful business for three generations stretching over 100 years. It can work fine but it's hard and you have to be VERY clear about how it will work in advance. I haven't gotten involved with the business in part because I recognize the challenges of working closely with family.
Gygax, and TSR in general, got what they deserved in my opinion, following their "acquisition" of board wargame publisher SPI. Screwed thousands of longtime gamers such as myself (I played both RPGs and wargames extensively), who then like myself voted against them with our wallets, never spending another dime on that company. What goes around, comes around.
Perscriptio in manibus tabellariorum est.
The Blume family also exercised options -- which means creating new shares at a price agreed previously.
Not necessarily. The options may have been in the form of warrants which allowed them to purchase existing treasury stock. When a warrant is issued new stock is issued at the same time.
He tried to assign exclusive rights ownership of works he created under TSR to be his alone. He didn't re-negotiate a royalty, he was holding the company hostage. I love what the guy gave the world, but come on... in what world is that ok?
But if Gygax already controlled 51.1%, it doesn't matter how many shares they buy; unless Gygax sold some of his own, they should never have more than 48.9% and thus never have been in a position to oust him.
What you are overlooking is treasury stock and stock warrants. Treasury stock is stock owned by the company itself (often through buybacks) and most companies have some. I'm guessing the options held by the Blume family were in the form of warrants to buy treasury stock (or something very similar). A warrant is a form of an option. When a stock warrant is issued shares for that warrant are created but held by the company until the option is exercised. This means that the shares already existed and were owned by TSR but the Blumes had the right (but not the obligation ) to buy them at a fixed price. Warrants are dilutive so while Gygax held a majority of outstanding shares he did not own a majority of issued shares. Gygax's majority was contingent upon those share not getting exercised. When Gygax declined to buy the shares (he declined his first right of refusal) then they could be exercised and sold and at that point he was no longer a majority shareholder.
Why the hell didn't they hire a competent CFO???
It's a good question and more common than you might think. Part of the problem is that bringing in competent outsiders can be uncomfortable for company founders. Gygax clearly had a problem with involving anyone who was not a wargamer but the people who are competent at finance don't overlap heavily with people who are gamers. Plus when things are going well it is easy to think that you can handle it. After all, it's gone well this far right?
One of the big challenges in growing a company is that the skill sets for founding a company and the skill sets for running it when it gets larger overlap far less than most people think. For every Steve Jobs or Jeff Bezos there are thousands of people who simply cannot make the transition from small company founder to big company manager. The founders of Google were actually smart enough to bring in some outside management relatively early because they knew they didn't really have the skillset at the time to manage a company with a stratospheric growth rate. It would be like hiring a guy who has never managed a network larger than 10 computers to suddenly take charge of Amazon's data warehouses. The skills needed are just on a completely different level.
Company is make money, so some genius gets control and decide they can make more money by changing all the things their customers enjoyed.
The Kruger Dunning explains most post on
Ubiquitous, how did Gygax steal D&D from Dave Arneson by putting an A in the name? Calling Gygax the creator of D&D is like calling Stalin the creator of communism.
The only thing worse than a Democrat is a Republican.
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
oh, stop it. Do you know what not really DnD? Telling other people how they should enjoy their DnD.
Why are you reaping animosity among gamers? It's stupid and you need to grow up.
"Anything made by WoTC isn't D&D, you can be assured of that. "
well, that's just a stupid statement.
"Just because they have the rights to the name doesn't mean squat. "
It means everything. I would also add the Gary also approved of WOTCs D&D
.
"I play in a hybrid 1.5/2nd ed campaign that is a blast, easy to play, and doesn't have the "I'm going to run a half dragon Priest/Archer/Wild Mage with psionics" vibe that the WoTC "editions" have. It is old school D&D and fun as hell."
Great, good for you. I'm glad. That in no way means there is anything wrong with the other editions just because they aren't what you play.
So, unless you want to list opjective reasons why one is better ad the other is not, just enjoy your game and stop telling other people there version are 'wrong', or 'bad' or not really DnD.
And becasue wankers like you always bring this up as if it matters, I"m going to cut you off right now:
I've been doing RPG for 38 years
IT's logically fallacious to use that as a defense against my point.
The Kruger Dunning explains most post on
That certainly sounds interesting (at least), although D&D 3E was (at its core) really good too in the beginning. Yet it didn't take long at all for the warts to spread like wildfire.
I really can't see them ditching "feats" - even Paizo's Pathfinder suffers from being saddled with "Feats & Specialty Classes".
I think the key difference between (3E+ Style) Feats & Specialty Classes vs the 2nd-Edition class splat-books boils down to RolePlaying. The former (feats et al) try and cover all possible actions/RP opportunites, whereas the 2E splat books provided settings, optional rules, specialties and additional mechanics --- and since it was limited by "Proficiencies" the whole shebang was (somewhat) kept in check. Feats&SC proved to be popular and took on a life of it's own and added a whole 'nother meta-game with yet another obfuscating layer of min-maxing --- things that other gaming systems build in from the beginning with reasonable limits via Quirks/Talents/Curses/Advantages/Disadvantages.
On difference in 5E is the feats are sparser and bigger. Instead of a 5-level feat chain to make two-weapon fighting, you spend one of your rare feats to get the whole kit n' kaboodle. Feats are less incremental improvements, and more paradigm shifting.
Ah! verrrrrrry interesting :-)
For some reason makes me think of the classic Best of's iirc Dragon magazine prints, Blue, Silver, Gold, Platinum (?).
Perhaps that review's distillation evokes the in-between-time of AD&D and 2E.
Possibly, taking the freedom of feats (when you get them), with the Conceptually and Spiritually, of the classes portrayed within those Dragon magazine pages (useful *Abilities* at specific levels), along with the mechanics that were in place prior to the atrocious Unearthed Arcana and awesome Oriental Adventures.
On a recent Slashdot post I read that Dangerous Journeys failed because TSR sued GG's new company.
Has any one played the game?
Was it really good?