TSR Falls Under the Spell of Wizards of the Coast

In the wake of banishing founder Gary Gygax, TSR found itself in trouble. How did an upstart gaming company called Wizards of the Coast swoop in to rescue the proverbial damsel in distress?

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Episode Transcript

Speaker 1 (00:04):
Welcome to Business on the Brink, a production from I
Heart Radio and How Stuff Works. In the last episode
of our campaign on D and D t s R,
Howard struggles were waged and Gary Gygax was kicked out
of the adventure when he rolled a natural one on
his charisma saving throw. The new CEO thought she had

(00:24):
the intelligence modifier to save the company and raise it
to wealth and prosperity, not realizing she was dangling off
a precipice above the pit of financial despair. So let's
turn out to see how a group of friendly wizards
brought TSR into their fold and saved them from ruin
and the new dungeons and epic challenges along the company's
path to today. This is TSR Wizards of the Coast

(00:48):
on the Brink. Okay, So, Ariel, my name is Jonathan,
by the way, and I'm Ariel. I was about to say,
are we not? Are we were just assuming people have
listened to the first half of this, and so we're
not introducing ourselves. I mean to me, it's like no

(01:09):
time has passed at all, even though it has been
two weeks we talked about Yeah, so we have not
met for two weeks. But honestly, in D and D
terms for campaigns, that's normal, and it's not even that's
that's good. That is good, Like you're lucky if you
get once a month with a D and D campaign.
I had a friend recently who was like, I want
to do this, this streaming D and D campaign. Do

(01:31):
you want to join? We're doing it once a week,
and I'm like, I can give you once every other month,
my friend. Yeah, it is not an easy thing to do.
But if you have not listened to our last episode,
go ahead and do that. Will wait, but in case
you want a quick refresher. The first part of the
story was all about Gary guy GaX founding TSR with

(01:51):
a couple of his friends and how that quickly grew
out of a hobbyist curiosity into a fully ledged publishing company,
and then how there was this kind of crazy corporate
takeover and guy GaX was forced out of his own company.
So when we left off, Lorraine Williams had just become

(02:14):
the president and CEO. She had previously been a large
investor in TSR and effectively took over the shares of
a couple of other founding members of the company. Kind
of underhandedly, yeah, all without Guy GaX knowing, so that
they could kind of spring a surprise on him and
effectively remove him from the company. They saw Guy GaX

(02:37):
as being too conservative and they wanted to be able
to make more dramatic changes. Yeah, and when they got
rid of him, they got rid of a lot of
the projects he was working on. So it seems to
me that Lorraine really had this like, I know, how
to get this company thriving and and and soaring more
than it is attitude. Um. But in the early nineties,

(03:00):
Dungeons and Dragons and TSR started feeling a lot of
market pressure because a lot more RPGs we're coming out. Specifically,
there was one that was mentioned in a lot of
the research we did, which was called Vampire the Masquerade
by White Wolf Games local here to Atlanta, Georgia. They're
out of Stone Mountain. I know there were quite a
few people who used to work for them. Um. But

(03:22):
you know, that was a very popular RPG. It was
actually a big competitor for Dungeons and Dragons that became
a Lark and all these other things as well. Um.
But there was another role playing game company, Wizards of
the coast. Yep, so they that was a company that
was founded by Peter Atkinson in and uh it's also

(03:43):
started off as just sort of a small business, a
dream and a basement, um and a couple of tents
right right and again this this company also would publish
some role playing games, but these were sometime taking us
slight liberties by including information that wasn't always like you know,

(04:06):
there's yeah, they kind of had this idea that they
wanted games that could be called played across systems from
from what I remember sort of like the Generic Universal
role Playing System or girp's was from Steve Jackson Games.
But yeah, yeah, and and honestly was such of the
coast would spoiler would eventually get D and D there
kind of um. But you know, they mentioned some other

(04:29):
games intellectual property and it became a lawsuit and it
actually um took a few years to quite a few
years to sort out. Um. But despite that, they had
something in hand that would make them a major player
in the role playing game arena. Something in hand. Uh,

(04:50):
I see what you're doing there that was completely by accident,
just that what's the deal? Oh okay, I'll give it
to you. Um all right. So Wizards of the Coast
introduced a trading card game called Magic the Gathering Homeboy. Yes,
well they introduced it at gen Con, which was I
think we mentioned before Gaming convention started by Gary Guy GaX. Uh.

(05:13):
And it's still around and it is owned by Atkinson,
but he is no longer part of Wizard of the Coast.
Another spoiler alert. Um. But at the time they had
to release the card game under a shell company because
they were still dealing with this legal dispute, specifically with
Palladium Books. Um. And this card game was a very

(05:36):
new trend and it really picked up. Uh. Fun fact,
it was actually started as they wanted to make a
board game and wanted to make a robot kind of
board game, and it was too expensive, and so somebody said,
I have this idea for this trading card game. Baseball
cards are really popular. Why don't we make a game
like baseball cards because that way you constantly have content
that players want to go out and purchase. Same same

(05:58):
sort of concept for establishing a really successful role playing game,
I mean Dungeons and Dragons. The reason why it was
a success or one of the reasons why was that, well,
you had to convince people to keep buying stuff after
they got the basic rules set, and that's where you
would come out with expanded rules and modules. Trading game

(06:18):
card games they have that built in because you're never
going to have all the cards of the set when
you got to buy it, Yeah, and you can't tell
which cards you're gonna have, so you might buy three
of the same set just to get that one card
you really want, yeah, or three hundred sets and hope
that you can find it somewhere. I remember there are
YouTube videos by the way of people unpackaging Magic the

(06:39):
Gathering cards and they'll they'll wear you know, latex gloves
and everything so they don't get any oils and the cards.
And I've seen one where and I am not a
Magic the Gathering player, but I've seen one where the
guy who was unpackaging it, he's going through he's like,
all right, this is is such and such. It's not
terribly rare, this is such and such, and then like
the third or fourth card was this increase rereadibly rare,

(07:01):
incredibly valuable Magic the Gathering card. And you can see
his hands shaking when he realizes what he has in
front of him. Uh, it just it kind of drives home,
like this was an idea that struck a powerful chord
in gamers. Yeah, and you think it would have been
a lot cheaper to make than a board game, especially
when that has Robo in the title, But it wasn't.

(07:22):
It was actually still pretty expensive to make because we've
got to make all these different packs, you've got to
randomize them. Um. And so what they did was they
went to the internet, they went to friends, investors, they
begged for money, and they started selling stock in Garfield Games,
which was a shell company that Magic That Gathering was
released under. UM. This later on to cause issues because, uh,

(07:45):
they ended up with close to five hundred individual investors
and they were going to have to report publicly if
they hit five hundred. So they eventually had to do
a buyback once Wizards of the Coast absorbed Garfield Games.
I love it on the notes, you say they sold
too much stock, And at first I thought we were
talking about a producer's kind of experience where we've sold
more ownership than there is of this company. And I

(08:07):
was about to ask how that happened, But now I
understand what you mean by that. I was I was
trying to type quickly, my friend. So all of these
retailers and consumers were taking all this money they were
planning to spend on dungeons and drag dragons and starting
to plan to spend it on these collectible card games
or cc geez. They're also called trading card games. It's
it's interchangeable, yeah, because the idea of being sort of

(08:30):
like someone like Pokemon. The idea being that you could
buy these cards and then you would have friends and
maybe you happen to have duplicates of a card that
you don't need all the duplicates for they have duplicates
of a card you don't have, so you trade, And
that was the basis behind it. Now that being said,
I don't know many people who did a lot of trades.
I know a lot of people who did a lot
of hoarding. Yeah, so it really appealed not just to

(08:51):
the player psychology, but the collector psychology, like I've got
to have the full set. Yeah. Uly, during this time
in Wizards of the Coast bought a few other RPGs
from other companies to kind of publish and distribute um
and then they hit a brink moment. They had a

(09:12):
lot of demand for a new line in the Magic
the Gathering game, so Fallen empires. Yeah, this is where
we start seeing. Another way of making a lot of
money is that you can make sure that no one
ever has the complete full set, because you can keep
coming out with expansion sets for your game. And uh.
And so the idea was to produce this this sort

(09:36):
of expansion set, and they went a little little hog wild. Yeah,
they had had some issues producing previous card sets, and
so they offered to print order and then they got
a whole bunch of orders. So somewhere in there there
was a mix up between demand and supply, and they
ended up with too much supply once the demand. Yeah.

(09:58):
And and this is a common trend in game in
the gaming industry. You have peaks and valleys, almost like
the stock market. Yeah. And we talked about this in
the TSR episode two, about how the early eighties were
such a huge boom for TSR that they had they
essentially staked there what they thought their revenues were going
to be in the mid eighties based on how well

(10:19):
they were doing in the early eighties. But as it
turns out, reality does not always follow an upward trend.
Over year. Another part of the problem is they were
printing so much Fallen Empires to order that they had
to stop printing the core game. So then you had
people who maybe wanted Falling Empires but couldn't get the
core game, so they weren't going to buy Fallen Empires.
So it's it's a little bit secular as well. Circular, yeah, cyclical,

(10:43):
one of those you guys, Uh, it's been a long day.
It's been a long day. But no, no, you're absolutely right.
Is that it's it's like if you were to buy
a computer game and you go out and you want
to buy the base game, but all you can find
are the expansions to that game, and it tells you
on the box that the basic game is not included

(11:03):
in that. Uh, that's a problem. So it's the exact
same thing with Magic the Gathering. And around this time,
you know, everybody seeing that this collectible card game trying
just picking up. So now you're getting competitors. Now, Wizards
of the Coast did a pretty good job. They took
Vampire the Masquerade the White Wolf game and made a
deal to make it a card game. With White Wolf.
They had a good relationship due to some former White
Wolf employees moving over to Wizards of the Coast for

(11:26):
a good while, and they came out with a card
game called Jahad, which eventually got renamed Vampire the Internal
Struggle just because of the connotations. Yeah that was spelled
j y h A D but still yeah. And and
then you know, White Wolf couldn't make a Vampire the

(11:47):
Massquerade card game because which is the Coast had already
made it. So they were also kind of taking the
second most popular RPG out there since they didn't own
Dungeons and Dragons and capitalizing on it while they could
well before it was too late. Um, And it was successful,
it wasn't as successful as Magic the Gathering by far.
And eventually White Wolf I P Did revert back to

(12:08):
White Wolf in and eventually they picked up the card
game a little after that, and then White Wolf on
Away and then somebody's relaunching that card game now. But
we're getting off topic. Yeah, let's get back to Wizards
of the Coast. So they are able to leverage this
sort of relationship with White Wolf and order to market
a game for a while. I'm assuming that those acquired

(12:32):
titles that they got hold of that you kind of
alluded to earlier. I imagine they handled those perfectly. They
handled him as best as they could. Uh. They also
had the same over like overprinting issue they had with
their card game with these new RPGs, but too many
copies of a game that just weren't selling quite as

(12:53):
well as they expected. Yeah, one was one was a
very open rule system, similar to like the Amber Dice
List role playing game, which I'm sure unless you're you
haven't heard of, But basically it allowed a lot more
creativity and a lot less rules as a way of
role play, which is great if you have someone who's
very capable at at being game master, but if you don't,

(13:17):
it is an incredibly frustrating experience. So they had they
had bought a similar game called every Way and it
was a cool concept, but they miscalculated demand and closed
their role playing game line completely. Atkinson said they just
couldn't give the games the time and the support they
needed company structure to to support and sell them and

(13:40):
build them out, and just wasn't working out. So they
ended up selling off those properties to other companies and
they focused more on the Magic the Gathering line. Yes,
and you know listeners who have listened to the first
half of this episode, you might be going, I thought
this was a D and D. Where's D and D. Well,
we'll get there in just a moment, but first, let's
take a quick break. Okay, let's get back over to

(14:06):
TSR for a second, because we're gonna get into this
relationship between Wizards of the Coast and TSR. How was
TSR trying to beat their competitors during the same time
the Wizards of the Coast is operating, You know, TSR
was in this this sort of dull drums of seeing
the RPG market kind of hitting this this low spot
as the trading card game was going up. The same

(14:27):
problem though, that Wizards of the Coast was facing in
many ways as well. What were they doing? Okay, so
they decided to expand into more modern media instead of
just books, so things like c d s and vhs
is for their games that you could play along with
the game boy. I remember that era, and like putting
their rules on CD ROMs, which is a good idea.

(14:48):
You know, the CD takes a lot less space than Yeah,
it's not always the most convenient to refer to in
the middle of a gaming session, but I remember having uh,
electronic file versions of players manual and things like that
sort I could you know, not have to have an
entire shelf dedicated to the rule set. I mean, it

(15:09):
does assume you're playing near a computer, but if you
know the computer trying just picking up, then it's not
a horribly off base assumption. Um. But all these things
cost a lot more money than printing books do. And
money was already tight because of all of the mismanagement
up to this point of TSR and all of the infighting,

(15:29):
and then also this decline in the market. Um, so
they did something really risky. And what was that They
took their distributor, Random House, and they shipped them a
ton of product because Random House paid for product when
they received it, not when they sold it. Yeah. Now,
we talked about this being an issue with some of

(15:52):
the other companies we've covered in the past, like Borders,
where companies would have to try and and manage this
because you know, you would have stores paying for inventory
but being unable to move it, and that ended up
being a big issue. So, yeah, this is a bit
of a you know, as long as random House is
still paying us for whatever we're delivering, to them, let's

(16:13):
just keep delivering it and and and selling it becomes
their problem, not our problem. Yes, But then they had
to make a deal with their printer because of course
they're having money troubles, and so in order to help
pay with the debt that inevitably printing all the stock
would cause, they made a deal with the printer saying,
we won't use anybody else to print our materials other
than you, and so that the printer could take advantage

(16:35):
of that and did and started raising their prices. So
now they're kind of getting caught in a in a
clamp here. They're having to pay more to produce stuff,
and the only way they're making money is by sending
more stuff to the publisher or the distributor, I should say,
So they're really it's actually costing them more to do
the thing they need to do in order to generate

(16:56):
the revenue they're making. And honestly, I would think that
the printer would look at this and say they don't
have enough money, this is not a good deal to make,
But for some reason they did, and then everything went sours.
So it seemed to work for a bit. In six
Random Health sent a whole bunch of product they couldn't sell,
didn't sell back to TSR. And the deal was if

(17:18):
they sent it back they could get a refund. And
they were due after selling all of this, sending all
of this product back millions of dollars worth of refund.
So you've got a company where money was tight. They
have to pay more for their printing from their printer.
They have been generating revenue simply by sending stuff off
to a distributor. The distributor then says, all right, well,

(17:40):
need I need a rebate a refund on all this stuff.
Here's all the stuff that we couldn't sell. And I'm
assuming they didn't have a whole lot of cash on
hand to make good on that. No. No, So now
they're even more in debt. They had to lay off employees.
And then the printer, who got tired of all the
debt and not getting paid, said okay, we're gonna stop
printing books, and you're I don't how to go anywhere else. Yeah,

(18:01):
So you can't pay the printer, you can't pay the distributor,
you can't pay your debt, and you can't say your overstocked.
And where does this leave you? Um? I'm guessing hoping
for a miracle, which they would get, but not before
they were thirty million dollars in debt and on the
edge of bankruptcy. So at this point you probably have

(18:24):
Gary guy GaX off in some corner somewhere saying you
reap what you so, Yeah, because I mean Guy GaX. Like,
like I said earlier, Guy GaX one of the big
complaints that his partners leveled against him was that they
felt he was too conservative. And it's quite possible that
had guy Gas stayed a leader in the organization, that

(18:47):
they still would have faced these problems. We can't say
for sure that they wouldn't have, um, but you know,
it's it's I'm certain that he felt that this was
a case of karma in many ways. Probably probably all Right,
so now we're gonna go back to Wizards of the Coast.
I hate splitting the party. Okay, that's a that's a

(19:09):
role pointing term for people who don't do it. Yeah,
it's it's the thing where the dungeon master always says, yes,
this is always a good idea. Yeah, because split your
party up into into into half, so that your half
as capable as you were before and half your players
sit around waiting doing nothing. Yeah. Okay, so back Wizards
of the Coast are p division is gone. Yeah, but
they're still plugging away because they got Magic the Gathering

(19:31):
and that's a license to print money. Yes, um, and
their staff had grown up to two and fifty employees.
They were no longer in a basement, which is good
because I think it big crowded. Otherwise, as we said
in they dropped the Vampire card game and they were
trying to recover from the overprint to Fallen Empires. You know,
they had another supplement which is another line storyline that

(19:53):
they sold that was a flop, and then, uh, they
had a big break before they released a other supplement.
They had an eighth month eight month break. Yeah, so
they were just just selling the core game and the
available supplements at that point, Yes, for eight months, and
that does like you think, eight months, that's not that long,
But I mean that's eight months without a new product

(20:16):
to put on the market. It had been there the
longest span of time between releasing their supplements that they
had had up to that point. Something really good happened
for the company. For Wizards of the Coast and also
for TSR. But we'll get there. So the first thing
that happens is Wizards of the Coast gets the u
S patent for trading card games, which blows my mind

(20:38):
that you could patent a trading card game. It blows
my mind that it was a new enough concept all
the way in the nineties that they were able to
get the patent for it in the first place. Yeah,
So they turned that around and briefly tried to use
it to get other collectible card game companies to sign
licensing agreement saying, hey, this is our patent. You're copying it. Yeah,

(21:00):
you have to. You have to pay us a fee
if you want to be able to use this. Only
a few people did UM, And then they got to
deal with Nintendo because they've got this patent to manufacture
Pokemon trading card games. Creating manufacturer actually um for anywhere
outside of Asia, so Europe, North America, South America, and
I don't know if you know this, but Pokemon's is

(21:22):
a pretty popular I p yeah, if Magic the Gathering
is four geeks. Pokemon is for children, which is basically
everybody else children and people who are maybe three years
younger than I am. I do like Pokemon well and
ten years longer than I am then, and this made
them a lot of money. Um. At the same time,

(21:45):
there was a bidding warrant SR, because, as we said
there they hit the edge of bankruptcy. There were a
few bidders, but two of them were Five Rings Publishing
and Wizards of the Coast. Five Rings Publishing didn't have
enough money to buy TSR, so they went to Wizards
of the Coast and said, hey, will help you win
this bidding war if you promised to buy us when

(22:06):
you buy TSR. And so they did. Alright, So we
get Wizards of the Coast coming in and buying out tsruh.
It was for the princely sum of twenty five million dollars,
and then also buying Five Rings Publishing and now Wizards
of the Coast. Not only were they back in the
role playing game business, the one that they had tried

(22:28):
earlier in the early nineties, now they had the flagship
role playing game, the game that everyone thinks of when
you hear the phrase role playing game, Dungeons and Dragons,
being arguably the first RPG. Uh. It now is their property.
And so now that they own the granddaddy of all RPGs.

(22:51):
There was just the one small task ahead of them
turning it into a money making business again. But they
were on a good track. It only took them three
months to do that, according to an article in Geek
and Sundry, which I'm going to assume is pretty accurate. Yeah,
and it's really interesting also because with Wizards of the

(23:11):
Coast now you have a totally different party coming in
to take over the leadership of TSR. The previous leadership
obviously had alienated Gary guy GaX, and it is interesting
that Atkinson thought, I want to kind of mend some
fences here, maybe build a bridge back to Gary Guy GaX.

(23:33):
Clearly Atkinson had some some sort of fond associations with
Guy Gas and Dungeons and Dragons, so it is interesting
that he made some efforts to kind of patch things up. Yeah.
I think he gave some money and he just he
really smoothed over relations with the entire family. I think
it's good because there have been so many like lawsuits
and struggles over i P between TSR and Guy GaX

(23:55):
after he left. Yeah, because he didn't stop writing games. Yeah, No,
he was still and it was definitely there was a
lot of animosity there and a lot of disagreements over
who owned what concepts in in gamification in general, so
it was nice to see there being a little bit
of reconciliation. Yeah. Alright, So once Wizards of the Coast

(24:19):
bought TSRUH to try to make it more profitable, they
other than smoothing things over with Gary Uh, they offered
the TSR developers jobs at Wizards of the Coast, which
is pretty upstanding of them. They relocated those people to Seattle, UM,
and the company TSR to Seattle. They also rehired some
of the game designers who have been laid off to

(24:41):
the financial trouble. So that was nice, um, which is
smart too, because you've got all these games and development,
you want the people who are working on them otherwise. Yeah,
otherwise they might come out disjointed as you change creative hands,
might turn into that one module we talked about in
the first episode. Yeah. Yeah. And then they did sell
off D and D campaigns that weren't selling super well. Um,

(25:03):
but I heard some accounts that they were selling them
to fan groups, so people still loved them. They weren't
making them completely obsolete, but they were taking them off
of their plate. Gotcha. And this is about the time
when they start focusing on the next generation of the
rules set for Dudgeons Dungeons and Dragons. At this point,

(25:23):
it was a D and D second edition, um, and
I think it was at the third edition where they
just went right back to Dungeons and Dragons. They dropped
the Advanced from Advanced Dungeons and Dragons. But I might
be wrong about that. Uh. The reason why I say
I might be wrong about that is because full disclosure, folks,
I stopped playing after a D and D second edition,

(25:45):
So because I took a look at the rules set
for for addition three and said, no, thank you. See
that's when I started, And that's why I thought D
and D was such a complicated game. Yeah, no it.
We could do a full episode describing why the third
edition rules were such a huge departure and so like
mind bogglingly difficult. They would address this with a half

(26:07):
generation with three point five. So that already tells you
that things didn't go quite as planned if they have
to do an update halfway through the generation of the
rule set. But they had some great games in the
third edition. Again, we're getting off point. Jonathan and I
are horrible terrible geeks. No, we're awesome. Gigs were terrible,
terrible business storytellers. Oh, we're not terrible, We're wonderful business storytellers. Okay.

(26:29):
So Ryan Dancy, who had owned Five Ranks Publishing we
talked about earlier, went in with Wizards of the Coast
for TSRU became the head of Wizards of the Coast
role playing game department. And then Five Ranks Publishing, which
had been standing alone owned by Wizards of the Coast
but still its own company, got absorbed into Wizards of
the Coast, And then in the summer of nine, we

(26:51):
got one of the greatest computer games of all time,
Balder's Gate. It's an interplay title that had the licensed
uh permission to publish a game set in the Dungeons
and Dragons universe. And uh, that's a that's a company
that will probably have to cover in a future episode

(27:11):
because they have their own dramatic story. Um. Balter's Gate.
The balters Gate games, by the way, some of my
favorite D and D based computer games I've I've never
played them. They did go away for a while. Like
we said, we could do an entire entire episode and interplay,
and we'll briefly touch on them later. But they went

(27:32):
away for a while, and now Balter's get us back
in two thousand nineteen when we're recording this, there was
a new trailer out from E three. Looks super creepy. Yeah,
it's lacking my favorite entity from Balter's Gate, which is Boo,
the miniature giant space Hamster. It's a giant space hamster
that's the size of a regular hamster. I'll tell you

(27:53):
more about it while we go to break. So we've
got Wizards of the Coast now in charge of ts
are taking taking charge of the development of Dungeons and Dragons.
They are ready to really push into launching the third

(28:15):
edition rules set for D and D. That would be
the next big overhaul and hopefully the next big success
for the role playing game. But that was just before
something else that would really shake things up happened. Yeah,
so right before they released third Edition, Hasbro acquired Wizards

(28:36):
of the Coast. So now a bigger fish has chomped
up the big fish of Wizards of the Coast. Yes,
they had actually had interest in buying Wizards of the Coast,
but they didn't want to pay quite as much as
the company was worth. But once Wizards of the Coast
got the Pokemon deal, so it was it was even
harder for Hasbro to say yeah, yeah, so that's what

(29:00):
Hasbro bought Wizards of the Coast for three hundred and
twenty five million dollars, so ten times the amount that
Wizards of the Coast would have paid for TSR. Yeah.
I've readden some articles that they only had interest in
the collectible card games, not so much in D and D.
So this could have possibly been a true brink moment
for D and D. It might have been to a

(29:21):
point where, you know, the new corporate overlords say, don't
even bother making this game anymore. Yeah. Now, this means
that anybody who didn't sell back their Garfield Games stock
its shot through the roof. So people who held onto
that ended up making serious bank from the very beginning. Yes. Also,

(29:42):
when Hasbro acquired Wizards of the Coast, they agreed to
give a portion of their outstanding shares to private stockholders
in Wizards of who had stock in Wizards of the Coast.
It was a part of the the acquisition deal. Yeah.
So then we get to two thousand, This is when
the third edition Dudchess and Dragon's rule Set comes out
and introduced the D twenty system, which, uh, you would

(30:05):
think I'd be able to understand because a D and
D first edition was a crazy convoluted system, but after
trying to understand it a few times, I gave up.
But D twenty was largely meant to be a system
that also could span different types of role playing games.
The idea being that you create a basic framework of

(30:26):
rules that could then apply to lots of different genres
of games. So you could have D and D which
was a D twenty system, but you could also have
a different RPG that was also a D twenty system.
And once you had the understanding of how one worked,
you theoretically knew how they all work. Yes, and and
this was their goal with the system, because Wizards of
the Coast's idea was that the system makes money. The

(30:49):
campaigns don't. I mean, the campaigns make money, but not
as much as the system does. So they came out
with the open Gaming License and the D twenty system
trademark license, which meant that other people who wanted to
write adventures and supplements to fit the D twenty system
could But this also saturated the market with a lot
of Dungeons and Dragons supplements and also, um yeah, not

(31:11):
all of them were good. Yeah. This kind of makes
me think of the old days of the Atari game system,
where Atari also looked into making lots of money by
opening up that that kind of approach, and it ended
up flooding the market to the point where it completely
destroyed the home video game market. That's when we got
the video game Crash of three. So in a way,

(31:33):
they were kind of playing with fire here. There was
the possibility that they might do the same thing for
D and D that the video game industry did for
home video games back in the early eighties. Yeah. Now,
during this time, Wizards of the Coast also pushed along
their own RPG development, more materials for D and D
that they were making, uh, pushing existing campaigns like gray Hawk. Uh.

(31:54):
They even got worked with another company to make a
D twenty version of Call of Cthulhu, which was at
their game. But it's a fun game. Um yeah, if
you if you, if you're tired of playing games where
your character is either going to ascend into deity like
status or die, you can play Call of Cthulhu where
your character will either go crazy or die or go

(32:15):
crazy and then die. Yeah yeah yeah. And then of
course was this the Coast was working on their next
big thing, a completely new campaign to release. They sort
of used some some forms of crowdsourcing to develop it
to make sure that this campaign they were building to
release to the public to garner new excitement, would be
what the public wanted. Because TSR was releasing a bunch

(32:39):
of materials back in the day, but they didn't always
know what the market demand was, so they're kind of
developing an avoid Meanwhile, we started to see some tensions
develop due to the acquisition, which is not unusual. You
often will see there's corporate culture differences between the different
entities involved in mergers and acquisitions. In this case, uh,

(33:00):
it involved more than just that. It also involved the
timing where it was getting to the point where the
agreements for people to receive um essentially profit sharing from
the Pokemon game, those agreements were expiring. So a lot
of people were leaving because they're like, well, you know,
the whole thing that was an incentive for me to
stay is gone. I'm not super comfortable with the corporate

(33:22):
culture here. That even included Atkinson, the guy who the
guy who had created Wizards of the Coast in the
first place, who felt that because of this new corporate relationship,
he really didn't have the creative control over the company
that he once had. Yeah. Some of the personnel who
had worked for Wizards of the Coast went to work

(33:42):
for Nintendo, and Nintendo started developing their own Pokemon games,
and even to the even like to the point where
the Wizards of the Coast had developed a couple of
new Pokemon expansions and Nintendo said, no, you can't release those,
And it led to a lawsuit between Wizards of the
Coast and nintend two thousand three over breach of contract
because again Wizards of the Coast was supposed to be

(34:04):
doing all of that in America and Europe and such. Um.
They resolved the dispute later that year they said we
don't need to go into further arbitration. Yeah yeah, um.
But that wasn't the last of the turmoil after Hasbro's acquisition,
so they shut down their interactive unit, which is important
because this is where the computer games landed that um,

(34:29):
Wizards of the Coast and TSR had and those got
sold off to another company in two thousand one and
eventually landed with Atari or a company that had the
name of Attari. It wasn't the same Attari as Atari,
but we'll have to do an episode about Atari. That will.
That's a heartbreaker, it is. There's there's a lot of

(34:50):
breaking happening in the gaming industry in general. It's a
it's a tough market. Yeah. Hasbro also sold both conventions
that Wizards of the Coast owned Origins they had bought
a while back to basically have Magic the Gathering tournaments,
and then gen Con, which Atkinson had bought from Gary
Guy GaX. Origins actually occurred here in Atlanta one year.

(35:11):
It coincided with dragon Con and became one big convention
Dragon Con in Origins, and that was the first time
I ever encountered Magic the Gathering. Just a little insight
from Jonathan's past life. It's super interesting. So they sold
the conventions in two thousand two. Um Interplay ended up
having big financial troubles. As we said, they had their

(35:31):
own break moment because now that Atario on these the
video game licenses, Interplay couldn't afford to pay them the royalties.
So that was a whole big problem. Uh, it's an
issue for another episode. Now, there were problems with the

(35:53):
third generation rules set, as you said, so the company
tried to address this by releasing three point five rules
in two thousand three. But this this was a problem
that was there was no easy solution out of because
people were having legitimate complaints about the third generation rules set. Uh,

(36:15):
so fixing that was a priority. But then you have
the issue of coming out with a brand new subset
of rules shortly after you've released the previous set, and
people felt like, oh, well, now this is too close
together because now you're asking me to buy all these
basic campaign are basic rules books, and these are not cheap.

(36:37):
These can be like forty fifty dollars of a book.
So you could say, like I just spent two fifty
bucks a couple of years ago to buy this game.
Are you telling me you I have to spend another
two fifty dollars to make it playable? So this was
there's again just no good way out of that situation,
and retailers felt the same way. We just stalked up
on audition three, you want us to stock up on

(36:57):
audition three point five. So that was a problem. And
then in two thousand four, has Brow decided to close
all of the Wizards of the Coast's physical stores. These
were the actual brick and mortar locations where Wizards of
the Coast could sell their products. Yeah. And then also
in two thousand four, we got the release of World
of Warcraft, which once again kind of starts edging into

(37:18):
it's it's the next trend. Yeah, So like the trading
card game took a big bite out of RPG sales
as as gamer interests started to shift. And then you
get the massively multiplayer online role playing game m m
O RPG trend starting, and that starts to take a
bite out of traditional RPGs and uh and trading card games.

(37:40):
And there had been other m m O RPGs before
World of Warcraft, but it took it to a new level. Yeah. Yeah,
I mean there resultimal online and there was ever Quest,
ever Quest, which everyone called ever crack, yes and the time.
But then again everyone called magic Magic the gathering crack
for players too, because again, both of these new genres,
they were interesting, they were different, and they had enough

(38:02):
of the elements of the stuff that drew people to
fantasy role playing games to really hit Like all the
little pleasure centers in the brain and get people eager
to play them. Yes, so all of this, all of
this led to two thousand five when Hasbro started rounds
of layoffs during the holidays for their D and D division. Yeah,
that's there's never a good time to get a layoff notification,

(38:25):
but during the holidays. What's happened to me before? It
is not easy? No, no. Um. Despite all this, though,
in two thousand six, Wizards of the Coast hit a
billion dollars in sales, so you know, it's a tumultuous industry,
to be sure, but they were still charging ahead. Yeah.

(38:46):
And this is also another problem of being part of
a larger entity, right, is that your division might be
doing well, but if other divisions within that same entity
aren't doing well, you might still feel the effects of that.
So that's that's the other danger of joining forces with
an even larger company. Yeah. But D and D was

(39:06):
making plans to recover from that, Yeah with another edition, right, yeah,
fourth edition. This was announced in two thousand seven. Fourth editions. Okay,
it's not the worst, isn't that The one where you
had like sub abilities in various classes that made it

(39:26):
really you know, no, I don't like that set at all. Anyhow,
a lot of people did. Uh N, D and D
finally had value in Hasbro again. Yeah, they were able
to to get back in the good graces of the
powers that be. Yeah. Um. Also, along with fourth Edition,
they started saying you needed miniatures as a part of

(39:47):
your gameplay. I'm say you don't, but it's an awful
lot of fun to have them. It makes a little
hot easier to visualize what's happening. Um. And then we're
getting more to closer to today. In two thousand nine,
was this the Coast made a big push to stop
a bunch of online retailers from selling PDFs of their books,
which led to a bunch of fan outrage because fans

(40:08):
were like, I just bought this PDF of a book,
but I haven't downloaded it yet, and now the person
I bought it from can't give it to me. Yeah.
And you can understand the reason why they wanted to
go after that, because PDFs are easily copyable. So there
were a lot of uh, un lawful copies or maybe
chaotic evil copies. Chaotic chaotic evil, maybe chaotic neutral, maybe

(40:32):
chaotic neutral. If you're being super generous, but there were
a lot of copies that were not authorized that we're
starting to make their way onto file sharing sites, and
obviously that's a huge threat to a publishing business. If
people can get hold of the rule sets for free,
then they're not going to pay the money to get
them from the authorized source. Yeah. Um, despite this, they

(40:56):
had year of year profits into two thousand thirteen. Uh.
Some ursus cited Wizards of the Coast that acquisition being
the reason Hasbro remained profitable during those years because a
bunch of game companies were seeing declines. Um. But in
two thousand thirteen, Wizards of the Coast very quickly lost
eleven point one percent of its market value. I mean
like in one day. What what the heck happened in

(41:19):
that day? So they were having a Magic Online Championship
series and it crashed, and they were already known for
for having poor customer service for their online division. Uh,
because you could you could buy your cards in person
and play physically, or you could buy cards online and
play online. So if you're playing an online championship, and

(41:42):
so I had I have an acquaintance who I used
to game with who paid for a large portion if
not all of his college career playing Magic the Gathering,
so some of these had cash prizes. He probably didn't
pay for all of his college, but he won a
lot of cash prizes through these championships. So you could say,
not from the cash prizes part, but you could say

(42:03):
this would be sort of equivalent of of a network
losing all feed service during say a major sporting event
like the Super Bowl. Yeah, and that obviously that would, uh,
that would elicit a response from the audience, in this case,
a more than ten percent drop in market value. Well,

(42:26):
and that's that's rough because the reason why it was
such a large loss is because thirty of their revenue
at the time, according to Forbes, were related to their
online product. To the online First, if your online service
is suffering problems, that's a major threat to your revenue. Yeah,
and and in tournaments it's it's stacked, and there's their
brackets and things like that. So it's a whole big deal.

(42:49):
Um back to D and D a little bit. In
August of two fourteen, we got fifth edition. Yes, uh,
finally a correct apology for additions three, three point five four,
But at this point they aren't calling it for the
edition they're just calling it D and D. Yeah, it's uh,
it's it's in some ways it's a lot closer to
second edition rules, and that's why I think it's better.

(43:11):
So I like. I like how they keep like we
had advanced D and D until they realized it was
the best system, and then they just named it D
and D and then they had a bunch of failed
systems until they found another one fifth edition, which we're like, Okay,
now we're just gonna call it this D and D
and we're gonna pretend the rest never happened. I mean,
that's not true. You can still get those source books
and they still have problems too, I mean like Dragon Born,

(43:33):
come on, you know, don't like links. Okay, But in
two thousand and four two we also got Hearthstone, which
was Blizzard and World before Craft's answer to Magic the
Gathering Online. Yeah, because it's an online trading card game

(43:53):
and in incredibly popular online trading card game. Yeah one,
that one that still gets a lot of views on
things like twitch. Yes. Um since that time, Whichards the
Coast and Dungeons and Dragons have done crossovers between the games,
so you can have D and D campaigns in magic settings. Uh.
In two thousand eighteen, Magic made Magic. The Gathering made

(44:16):
a new like commitment to its e sports with a
a new program with a ten million dollar prize pools. Yeah. Um,
we started getting D and D live events where they
set up sound stages and celebrities and streamers and online
personalities would come and play D and D. Fans could
watch it because players, you could watch it online if

(44:37):
you couldn't get there personally. I would say that you
even saw podcasts like, well, first of all, you've had
critical role people there have critical role, but you also
have like my brother, my brother and me where for
a special episode they played Dungeons and Dragons. It was
such a huge hit. They launched a new show, the
Adventure Zone, and the first several seasons of the Adventure

(44:59):
well really, I guess could say the first arc of
The Adventure Zone was all Dungeons and Dragons, and I
think that also helped raise the profile of the game
among an audience that you know, probably was adjacent to
role playing games, but not necessarily players of it. And
I think it's really those sort of things we've seen
like this kind of uh new embrace of D and

(45:22):
D in general, enroll or D and D in particular,
and role playing games in general in uh, in popular culture,
and you see it then like Stranger Things is another example.
It's a show that has as uh demonstrated a D
and D campaign being run completely incorrectly. But other than that,
it was great. Yeah. Well, and and you know, even now,
like in two thousand nineteen, they announced that the Russo brothers,

(45:44):
who did have done a bunch of Marvel stuff, are
working on an animated series for Netflix for Magic the Gathering.
So there had been some like a few rumors I
saw that Hasbro might be looking to sell Wizards of
the Coast in one, but the comen of this animated
show bumped up Hasbro stock stock six, so probably reconsidering that. Maybe,

(46:06):
I don't know, it's too early to tell. Now. There
are a few things we did skip over in these
two parts that, you know, totally a whole lot. There's
just too much to talk about. We would have had
to have done a whole mini series. And honestly, it's
just it's you guys don't need to hear us geek
out about D n D that many times. But I
do want to take a moment to acknowledge that while

(46:27):
we did not covered Dungeons and Dragons the motion picture,
we know it existed. We just like to pretend it didn't.
And every so often there are rumors of a new
Dungeons and Dragons movie. I know Joe I cannot say
his name, Man Glanello, oh Pewee Herman's boyfriend from the

(46:47):
Pewee Herman Netflix special. He's a huge Dungeons and Dragons fan,
and he wants he wants to do a movie. That's that.
That's been a rumor for a while now. Between the
rumors of him being d C Films and a D
and D film, there's there's a lot of potential there. Yeah. Well,
this was a lot of fun to look into. It
was obviously a subject that's near and dear to our hearts.

(47:10):
Because we're both at least former gamers. You still play
some at least live action role playing games very occasionally. Yeah,
I I never get to play anything anymore, but I
do love the genre, and uh, it has been a
really interesting ride, a roller coaster really for both TSR
and Wizards of the Coast. I think the reason they're

(47:31):
both still around is because, as they saw the market
starting to shift, they assessed what wasn't working and what
was and tried to fix it other other than in
fighting and coups like you can't necessarily help that. I
think it's one of those things also that we've seen,
like with Disney, where when you get a new generation
that has reached the age where which I always think

(47:52):
of as being like in the tweens and early teens,
the the prime age to target people for escapism gaming. Uh,
that's the perfect time to release a new edition of
rules because that way you don't have to worry about
them just inheriting their older siblings or their parents rule sets,

(48:14):
and you make everybody go out and pay a whole
bunch of money. Again. You're right, Um, But that's it
for today. You know, we will have you know, we've
got a lot more episodes planned. We've got tons of
great suggestions from you listeners. Please keep sending them in. Well,
if they want to keep sending them man Aerial, how
would they do that, Well, they do that by emailing
us at feedback at the Brink Podcast dot Show. Yeah,

(48:36):
and you can always go to our website that's the
Brink Podcast dot Show. You'll find an archive of all
of our past episodes. You can listen to all of
them and if you see that we're missing one, then
email that address that Ariel was talking about. Also, you know,
if you like our show, tell your friends about it.
You know, maybe maybe leave us a positive review. If
you don't like our show, tell your enemies about it. Yeah,

(48:59):
I know it's a old and a bad joke. Or
you can always like even send us, you know things
like hey, I love your show, but have you ever
thought of doing such and such? You know, part of
this is all about hearing back from you guys, and
what you enjoy and what you want more of, and
we'll make sure that we do our best to meet
those expectations. And until next time, I have been Jonathan

(49:19):
Strickland and I've been aerial casting. Business on the Brink
is a production of I Heart Radio and How Stuff Works.
For more podcasts for my heart Radio, visit the I
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