Slaying the Dragon: A Secret History of Dungeons & Dragons

Part I

THE RISE AND FALL OF GARY GYGAX

1

THE WARDEN’S TALE

Lately, I have been reading notes from Wizards of the Coast people about why TSR died away. I have to admit some of their notes are right on. I also want to say that not everything they claimed is true. Truth doesn’t matter if you are the winners in the end.

—JAMES M. WARD

JIM WARD QUIT TSR in 1996 after decades with the company.

At the time, he was vice president of production, and he resigned because he’d been ordered to fire over twenty employees, among them artists, writers, and game designers. In short, the women and men who made up the company’s sinews, muscles, and bones. Those firings would have taken an axe to the company he loved, and rather than do that, he quit.

That’s just the kind of guy he was.

TSR was the grand old dragon of role-playing game companies. It founded the industry and published the game that dominated the field, Dungeons & Dragons. At its height, it had gross sales of over $40 million. It ran the largest role-playing game convention in North America, Gen Con. At its offices in Lake Geneva, Wisconsin, dozens and dozens of genius geeks gathered to create games, novels, and art that flooded game stores and malls across the world. To fans, the company was a fixed piece of geography, a mountain where the dawn rose every morning and where you could watch the stars come out every night. It had always been there, and it always would be.

Yet from such heights, it fell so low that Jim Ward was ordered to fire all of those employees. How had it come to this pitiful state? What cataclysms befell it?

Jim Ward had a story.

WARD WAS NOT looking to change his life or find a new career when he went to the Lake Geneva News Agency in 1974. He just wanted to buy some books.

While browsing the fantasy and science fiction section, he picked seven books off the shelves before he noticed a bearded and bespectacled gentleman beside him, likewise carrying seven books.

The exact same seven books.

The bespectacled man asked, Do you really enjoy reading books like that?

Ward replied, Why, yes, I do! and then turned to escape the strange fellow so closely eyeing his book selection.

But the bespectacled man was undeterred. He said, We play games that are more enjoyable than sword-and-sorcery novels; why not stop by some time and try them out? In this game, you could play Conan the Barbarian and fight abominable serpentine gods. It was a fantasy novel done one better. Instead of merely seeing these wondrous worlds through the eyes of Frodo or Fafhrd, you could live in them.

Had Ward come to the bookstore an hour later or chosen a few different novels that day in 1974, the next four decades of his life may have been totally different. Because the man whose book selection matched his was Gary Gygax, cocreator of Dungeons & Dragons and cofounder of TSR, the company he’d created to publish the game.

A few weeks later, Ward went over to Gygax’s house and played. Gygax believed Ward waited a few weeks because, during the interim he was checking up to find out if we were merely eccentric or actually dangerous lunatics.

What Ward played there was a revelation, unlike anything else at the time. In most war games, you controlled an army or a unit of soldiers. But in this game, you controlled just one person. Only one! And you could choose whether they were a fighter, a wizard, or a thief, or if they took on an even more outrageous role. Since it was a fantasy world, you could be an elf or a dwarf if you wanted. And you had total control over this one person, called a character. If a band of evil knights stood in your way, your character could try sneaking past, fighting them, or talking the knights into letting you go. It was up to you. If you wanted your character to sing Love Potion No. 9 to distract a cyclops, you could do that too. Now you could fail, and your character could die. After all, if the cyclops didn’t like music, it might try to make toothpicks out of your femurs. But the existence of failure just made every choice more vitally important. This was a burst of total freedom bounded only by the imagination.

Gygax told Ward it was called Dungeons & Dragons.

As the years rolled on, Ward became a regular TSR freelancer, and Gygax’s trusted confidant. Ward read and commented on his work. He designed Metamorphosis Alpha, the first science fiction role-playing game. Modestly, he named the ship in the game after himself, calling it the Warden. In 1980, he was finally hired on at the company full-time.

Though fired in 1984, he was hired back again within eighteen months. The person hired to replace him quit within three months because the workload was so heavy, and Ward’s freelancing duties for the company were so extensive despite not being on the payroll that it was determined it would be cheaper to hire him back. He survived the ouster of Gary Gygax as CEO of the company in 1985 and rose to the position of vice president.

TSR was, for most of its existence, the indispensable gaming company. It had created the entire genre of role-playing and had sales in the millions of dollars supporting a staff of over a hundred people. By the early 1990s, it seemed as central and eternal as the sun.

Meanwhile, in Washington State, a small game company was created called Wizards of the Coast. Like TSR, its first offices were in its owner’s basement. After a few years producing role-playing games and their supplements, Wizards of the Coast published the game that would define their company and, like D&D, create an entire new genre of game: Magic: The Gathering. In Magic, players take on the role of dueling wizards. They gain power, or mana, from lands they control and use them to power spells against their opponent.

The game was a stunning success, a virtual license to print money for Wizards of the Coast. What made it one of the most profitable games of all time was its all-new collectible aspect. When you bought the game, you didn’t get all the cards for it. To get all the cards, you had to buy booster packs. And every time you bought a booster pack, you had no idea what cards you were going to get. Furthermore, some cards were rarer than others. Whole boxes might have to be purchased to find some of the rarest cards in the line. Better yet, having these incredibly rare cards did not just net bragging rights. You could actually use the cards in the game, making you a better player. The fusion of collectability and gameplay built Magic into a nigh-addictive phenomenon. Gamers spent and spent and spent on decks, packs, and cards, sending a river of money surging into the coffers of Wizards. The company burst out of its basement offices to become a titan of the gaming industry. It was even bigger than TSR!

According to Ward, TSR felt like oxygen was being pumped out of the room. Sales began to decline. Ward said this new game "was way easier to play than D&D, so people started going towards Magic: The Gathering." Typically, two to four hours was needed to play a single session of D&D, whereas Magic could be played in under an hour. And all of that money spent on Magic cards was money that wasn’t being spent on D&D products. Every hour spent playing Magic was an hour that gamers weren’t playing D&D.

The winter of 1997 was a season of darkness for the company. It had fired dozens of staff and was missing publication dates. Wizards of the Coast CEO Peter Adkison heard the company was in trouble. Working through an intermediary, he purchased the company. TSR, and Dungeons & Dragons, was now the property of its fiercest competitor.

This tale, as told by Jim Ward, is one of competition, market forces, and capitalism at work.

In 1997, I was a high school senior in Milwaukee, Wisconsin, and from the hobby shops and gaming tables I frequented, Ward’s story seemed about right. I heard game store owners talk about how they could buy RPG supplements that might sell over the course of a year, or they could take that money and buy cases of Magic: The Gathering that would fly out the door in a week.

My experience growing up as a nerd was that role-playing games were an outsider hobby played by dorks, dweebs, freak machines, poindexters, and every stripe of pencil-necked geeks. In other words, my tribe. Having been picked last for every game of dodgeball I’d ever been in, it came as no surprise to see the biggest and most important company in role-playing games fall and fail to a younger, sleeker, richer company from the West Coast. It was of a piece with everything else I’d seen of the place reserved for nerds in this world. Unwanted and unloved, it only made sense that even geek hobbies and the companies that supported them were being run down and left like roadkill on the motorway of capitalism.

So from where I stood in 1997, Jim Ward’s tale of TSR’s end seemed true. The company’s failure was a death in single combat. According to the rules of old, it had been felled fairly by the foe.

So when I was assigned to write an article titled "Did You Know that Wizards of the Coast DIDN’T Originally Make Dungeons & Dragons?" for Geek & Sundry, I felt like I knew the exact story I was going to tell about the company’s fall. I’d lived through it and read Shannon Appelcline’s excellent Designers & Dragons, which touched on the topic.

Then I started interviewing TSR alumni.

What they told me shocked me. Turned out, I didn’t know the story at all. One article became three, but even then, there were fascinating and important aspects of the story that had to be left out. Given how kind and generous all my interviewees were with their time, I felt I had to do right by them and get their stories under the bespectacled eye of the nerd public.

Maybe one day it would be a book?

I continued my interviews and research. I took a sabbatical from Geek & Sundry to write. I dropped my regular Sunday gaming group to write. My short book grew longer and larger, gobbling up time and word count, multiplying in size with age, until the damn thing seemed to have taken over my life. From the glint in its eye, it seemed to be gloating about it.

As I wrote and interviewed, I began to receive secrets. Scans of documents from various sources, one of whom insisted on remaining confidential. Court cases, contracts, notes, and prep binders. The story buried for decades in these hidden sources seized me and would not let me go until I had spoken their truths.

TSR’s failure is a tale of misfortune and mistakes kept secret for decades, here given up to the light. It is the story of an unemployed insurance underwriter, an heiress, a preacher’s son, and a game like no other.

Jim Ward’s story is not the whole truth of what happened. Not even half of it.

2

THE BIRTH OF TSR, AND THE D&D PHENOMENON

Advanced Dungeons & Dragons is a fantasy game of role-playing which relies upon the imagination of participants, for it is certainly make-believe, yet it is so interesting, so challenging, so mind-unleashing that it comes near reality.

—GARY GYGAX, ADVANCED DUNGEONS & DRAGONS PLAYERS HANDBOOK

WINTER IN THE American Midwest is merciless, dark, and unending.

The role-playing game, like the Russian novel, may be the consequence of such winters.

During Wisconsin winters, the sky is a cold and unbroken slate of gray. Snow cakes the trees and grass. The streets and sidewalks are chalky with salt, and ice crackles across the windows. Winters are so frigid that Lake Michigan steams, sending great gouts of silver billowing skyward, girding the horizon from north to south. During storms, the lake lashes the shoreline. Castles of ice sprout into fantastic shapes with the splash of every wave, and the falling snow and spraying froth fill the world with flecking white. You can’t go outside because it’s so damn cold, and even if you did, you might hit an icy patch and fall. Where would you be then?

In winter, the world recedes to the circle of warmth around a fire, a heater, or at the side of a loved one.

Or the basement. It’s always warm. The furnace is down there after all. There might be games too. Might as well play. What else are you going to do during the endless white-gloom nightmare that reigns between the fall of the last yellow leaf and the spring thaw?

Gamers in the ’50s and ’60s played war games, miniature games, and strategy games. Games like Diplomacy, where players controlled European powers during World War I, or Gettysburg, which allowed players to see if they could do better than the generals in re-creating the largest battle to ever take place in the Western Hemisphere. Gamers established hobby groups and published fanzines for each other with names like Panzerfaust and The Domesday Book.

In short, these men (almost exclusively men at the time) were escaping humdrum lives as insurance salesmen and cobblers by creating a life of the mind in which they were generals, warriors, and leaders of nations. They wanted to be heroes, if only for an afternoon in their own basements.

Gary Gygax was one of these gamers. He cofounded the International Federation of Wargaming and the Castle & Crusade Society. He started a gaming convention of his own called Gen Con. (It was held in Lake Geneva, Wisconsin, and was therefore the Geneva Convention or Gen Con.)

In Lake Geneva in the 1960s and early 1970s, all of that gaming and convention creation earned Gygax a reputation. He was known as one of the weird guys, said Skip Williams. Williams grew up in Lake Geneva and even went to grade school and high school with Gygax’s son Ernie. Williams would go on to have a long and storied career writing Dungeons & Dragons and even codesigned the third edition of the game. But before Gygax’s epic success cocreating an entirely new medium, Williams said, "he was one of those people. He was the sort of person you sort of look askance at. Every neighborhood has those, right?"

First off, he wasn’t from Lake Geneva. He was born in Chicago and didn’t move to Lake Geneva until he was eight. In Lake Geneva, that puts you in a weird strata, Williams said. He didn’t graduate from high school, and on top of that, he had all these kids. Sometimes he didn’t have a job, and sometimes he didn’t have a good job. At one point, he was the town cobbler. Then there was the fact that his wife was going around knocking on doors for the Jehovah’s Witnesses.

Religion was a serious matter in the Gygax household. Ernie went door-to-door for the Witnesses himself. It was not easy or pleasant. He said that when those doors opened, the faces revealed to him read, Ugh, you guys.

They took their religion so seriously that they didn’t celebrate Christmas, and the children were taught not to stand for the Pledge of Allegiance in school. According to the Jehovah’s Witnesses’ website, this is because Witnesses view the flag salute as an act of worship, and worship belongs to God.

This tenet did not go over well in 1960s Cold War Wisconsin.

Despite happening over fifty years ago, both Skip Williams and Ernie Gygax remember the day his second-grade teacher hit him in the face for not standing for the pledge. Everyone in class stood, hands on heart, eyes on the flag, just as every American should do. Except for Ernie. The teacher saw him just sitting there, as though he were too good to rise for the country’s colors. This was insult! Outrage! Shameless disdain! She rumbled over to him and said, Stand up and respect your flag!

He said, My mother says I don’t have to.

Stand up!

She forced him to his feet and swatted him across the face.

Ernie slapped her back.

He was removed to the principal’s office, and his parents were called. He was in hot water until his parents learned the whole story, with the pledge and the slap leading up to Ernie hitting his teacher.

In October of 1970, Gygax was fired from his position as an insurance underwriter at Fireman’s Fund in Chicago. His boss left the company, and Gygax and another employee named Bruno were up for the position. Bruno got the job, and one of his first moves was to remove his rival. Ernie said, Dad tended to make either friends or foes. There wasn’t anybody on the middle rail. But reasons for the firing may have gone beyond the personal. Gygax had been using company equipment to help publish a gaming periodical for the Castle & Crusade Society. Perhaps Bruno knew about his personal use of company resources?

In an effort to make ends meet, Gygax took up shoe repair. He continued with game design on the side, but until the success of D&D, these endeavors were not profitable enough to keep his growing family from sinking into poverty. Ernie remembered this period as bad times. His family received government assistance and cut corners wherever they could. For example, there was the problem with Ernie’s shoes. The children only got one pair of shoes per year, but Ernie wore holes in his using his feet to brake his bicycle, resulting in swiss cheese soles before a year was up. In a Wisconsin winter, you do not want to be walking around with holes in the bottom of your shoes. He said the solution was to put cardboard in my shoes before I went to school every day.

Ernie said of his father, He was stubborn. He had an ego, but he was a hard worker, and creativity just poured out of him into the typewriter.

That creativity would bear fruit. One of Gygax’s gaming projects was published in 1971 by Guidon Games. It was a set of medieval combat rules cowritten with Jeff Perren called Chainmail. Chainmail introduced a number of innovations to the game table. It provided rules for man-to-man combat (instead of combat with massed armies) and a fourteen-page supplement for fantasy that included rules for using elves, dwarves, trolls, and dragons at the table. The game sold well, but was not a hit.

Gygax’s game was discovered by Twin Cities native Dave Arneson. Arneson had met Gygax a few years earlier at Gen Con II and began using Chainmail to run games in a fantasy kingdom named Blackmoor. In addition to controlling armies, Blackmoor players could also choose to control just one character at a time. Arneson had these characters exploring a monster- and trap-filled dungeon. Players did not get new characters at the beginning of every game. Rather, the characters persisted from session to session, growing in power and ability as they gained experience. Arneson’s Blackmoor was inspired by David Wesely’s Braunstein, a game in which players took on the roles of characters in a Prussian town under threat of French invasion. The greatest feature of the game was that the characters had near-total freedom to act, unlike in war games, where players were given a defined set of actions they could take.

Arneson wrote about Blackmoor in The Domesday Book, the periodical of the Castle & Crusade Society. After Gygax expressed some interest, Arneson made a pilgrimage down to Lake Geneva to run Blackmoor for Gygax and his friends. The enthralling game ended in the wee hours of the morning.

Gygax was vastly impressed by what Arneson had done with Chainmail and asked for a set of his Blackmoor rules. About eighteen cribbed and cramped handwritten pages followed, which Gygax set about typing up, expanding, and revising. Soon, he had a much longer rule set, which he began playtesting with his children Elise and Ernie, as well as teenage gamer Rob Kuntz.

He gathered the children in his den for what was likely the first game of Dungeons & Dragons ever played. Gary would be the Dungeon Master (DM), the person who portrayed the world and everything in it, from bugbears to barkeeps, that the children would explore. Ernie remembered that first game took place on a weekday after school. The children’s characters confronted centipedes and burned their nest. When they did so, a spell scroll hidden in the nest discharged. Ernie remembered his father acting out the sound of the spell scroll’s detonation by shouting, Zing! Zing! Zing! Zing! Zing! and even admonishing the children afterward, saying, What a shame you used fire to destroy the nest. Ernie said his sister described the game as not too exciting, but for him, it was the start of a decades-long career with the game his father cocreated. (You’ll hear a few different versions of that first game session, but that’s how Ernie Gygax remembered it.)

Guidon Games, which had already published Chainmail, passed on publishing Dungeons & Dragons. Owner Don Lowry didn’t publish the world’s first role-playing game because he believed no gamer would ever want to create their own dungeon.

The story of Dungeons & Dragons could have ended right there. The game couldn’t find a publisher, and without one, what would become of it? Like so many other things in Gygax’s life, it looked like Dungeons & Dragons just wasn’t going to work out.

Unless he took matters into his own hands …

D&D TAKES FLIGHT!

Unable to find a publisher, Gygax would publish Dungeons & Dragons himself. On October 1, 1973, he formed a partnership with his childhood friend Don Kaye, creating Tactical Studies Rules, or TSR for short. Kaye took out a loan on his life insurance policy to fund the company’s start-up costs and the publication of its first game. Ironically, this first publication was not Dungeons & Dragons but rather Cavaliers and Roundheads, an English Civil War game. Publishing D&D would be expensive. It was hoped that Cavaliers and Roundheads would sell well and its profits could be used to then publish D&D.

It didn’t.

Now if the pair wanted to publish the world’s first role-playing game, they would need to find a new source of funds. They found them in tool and die maker Brian Blume. Blume was a gamer who believed that fantasy gaming had a future and bought into TSR. The company would now be a three-way partnership. His $2,000 investment allowed the publication of the first thousand copies of Dungeons & Dragons in 1974.

The game’s wood-grain box held three folded and stapled pamphlets promising, Rules for Fantastic Medieval Wargames Campaigns Playable with Paper and Pencil and Miniature Figures. It cost $10. That’s $54 in 2022 money, which is a hefty price for three short booklets and some reference sheets. The cost was so burdensome that photocopies of the rules were a common sight at gaming tables. Jim Ward, a father just starting a family, had to save for months to be able to buy the game.

Dungeons & Dragons represented a revolution in gaming, one that we are still grappling with decades later. It would be a smash hit, but first, there was tragedy.

Don Kaye, who believed enough in D&D to take out a loan on his life insurance policy, died suddenly of a heart attack on January 31, 1975. He was only thirty-six years old. He would not see TSR employ hundreds. He would not see the company warehouse brimming with product. He would not see the mansions, the cars, and the watches that were the fruits of his belief in a new kind of game.

With his death, the company reorganized, and Kaye’s shares were purchased from his widow. At the time, Gygax didn’t have the money to contribute to the purchase of the shares, and so he became a minority shareholder in the company he founded to publish the game he cocreated. Brian Blume and his father, Melvin, were the company’s other shareholders, though Melvin would eventually pass his shares on to another son, Kevin. The Blume brothers and Gary Gygax would be the management team that oversaw the company’s golden age.

But it would be impossible for Gygax to manage the company and write every product the company produced. He would need to find other creators to work on D&D.

Who would come to Lake Geneva to help grow the brand?

ONE MAN WHO would make an early impact on the game and the company was Tim Kask.

When interviewing subjects for this book, I always tried to find a way to ease them into a conversation. Interviewing can be awkward. I was a strange voice on the phone asking questions about matters from decades past, so I often started with an unrelated topic. What are you going to have for dinner? Read any good books lately? How are you handling the pandemic?

Kask mentioned in other interviews that he was a veteran, so I asked him about his time in the service. He unwound a tale that made the hair on the back of my neck stand up. Stationed on the USS Ranger during the Vietnam War, it was his job to search for downed navy aircraft. The planes flying missions off the aircraft carrier contained top secret technology that could not be left to the enemy. His task was to find crashed planes and remove or destroy the tech.

One night, he was searching for a plane and discovered he wasn’t in Vietnam. He knew he wasn’t in Vietnam anymore because of the signage. Vietnamese was written using the Latin alphabet with accent marks, and here the signs were all arcs, arrows, and round curves. Was it Khmer? Lao?

He didn’t know. All he knew for sure was that wherever he was, it was night and it was not Vietnam.

At last, the downed plane was located in the treetops. Inside, he found the crew, all dead in their G suits, stinking and foul from sweltering for three days in their plane. Kask took six thermite grenades and wired them together. Then he climbed down the tree, scrambled away, and ignited them. The grenades generated temperatures in excess of four thousand degrees Fahrenheit.

We gave the crew a Viking funeral, he said of it later.

After leaving the navy, Kask enrolled at Southern Illinois University. There he discovered Chainmail. One day, he had a question about the rules, and since this was before the dawn of the internet, there was no quick and easy way to get an answer. But Kask was intrepid and intelligent. He figured out that one of the game’s creators lived in Lake Geneva. One night, he called Lake Geneva directory assistance after 9:00 p.m., when the long distance rates would be discounted, and asked to be connected with Gary Gygax. Moments later, he was speaking with Gygax, who did not seem at all upset that some strange gamer was calling him at home at night with a rules question.

The pair hit it off. Kask would call Gygax again to chat, sometimes about war games, sometimes about his service in Vietnam. Gygax talked him into going up to Lake Geneva for Gen Con. Kask attended and played his first game of Dungeons & Dragons. He purchased a copy and a set of dice. Gygax also told him that after he graduated, there might be a job for him as an editor at TSR. In the fall of 1975, Kask became the company’s first full-time employee outside the owners.

At TSR, he found the birth of an entirely new medium, the bleeding edge of culture, a thing so new it didn’t even have a name yet. (The original D&D rules didn’t use the term role-playing game because it hadn’t been created!) Was there a smell in the air? A glow from beneath the wind-licked waves of Geneva Lake? Were there portents? Signs? Divine