The History of TSR, Inc. Part 1: Gary Gygax, Dave Arneson and the Birth of Dungeons & Dragons
The story of TSR is therefore also the story of how two hobbyists created something neither of them could have fully imagined, and how the success of that creation eventually placed questions of authorship, ownership and money between them.
Two Gamers, Two Campaigns
In the early 1970s, Gary Gygax was one of the central figures in the Lake Geneva wargaming community. He helped establish the Lake Geneva Tactical Studies Association, a group whose members experimented with miniature battles and new forms of play.
Dave Arneson was pursuing similar experiments from a different direction. In Minnesota, he had begun developing a campaign called Blackmoor. Instead of treating miniatures simply as pieces in a conventional battlefield game, Arneson increasingly used them to represent individual characters moving through dangerous environments, fighting monsters, finding treasure and developing over time.
The importance of Blackmoor was not simply that it was a fantasy campaign. It demonstrated a different way of playing a wargame: the players were no longer merely commanding armies. They were becoming the characters.
Blackmoor Meets Greyhawk
Arneson's experiments eventually reached Gygax and his circle. Gygax was already developing his own fantasy campaign, Greyhawk, and had been working on ways to expand the fantasy possibilities of miniature wargaming.
The exchange of ideas between the two groups became one of the foundations of Dungeons & Dragons. Gygax's work brought together rules, editing and publication; Arneson's work demonstrated what a persistent fantasy campaign could actually look like in play.
This distinction would become important many years later. The creation of Dungeons & Dragons was not the work of one person working in isolation. It emerged from a growing community of wargamers, campaign groups and rules experiments, with Gygax and Arneson at the centre of the process that turned those ideas into a new game.
Creating Dungeons & Dragons
The project that became Dungeons & Dragons grew out of this meeting of ideas. Gygax and Arneson corresponded extensively during 1973 and 1974 while the game was being developed. A later court record confirms that they collaborated on the authorship of Dungeons & Dragons during this period and that the game was first marketed in January 1974.
The resulting game was unlike anything that had come before it. The rules did not simply describe a battle between armies. They described a framework in which players could create characters, enter a dungeon, make decisions, fight monsters, collect treasure and continue playing those same characters through successive adventures.
Gygax's contribution was particularly important in turning the rapidly developing ideas into a coherent set of rules that could be printed and sold. Arneson's contribution was equally important in demonstrating the campaign style of play that gave the rules their distinctive character.
The game was not published by an established games company. That was the next problem.
Why TSR Was Created
Gygax had already discovered that established publishers were not eager to take a chance on the strange new game. Rather than abandon it, he and his friend Don Kaye decided to publish it themselves.
In October 1973 they founded Tactical Studies Rules, usually shortened to TSR. The company was created specifically to publish games and rules emerging from the wargaming community. Gygax and Kaye each invested $1,000 in the new venture.
Even that was not enough to finance the first printing of Dungeons & Dragons. Brian Blume subsequently invested $2,000 and became an equal partner. His investment provided the money needed to get the new game into production.
It is an important distinction in the history of TSR: Dave Arneson was a co-creator of the game, but he was not one of the founders of the company that published it. TSR was founded by Gygax and Kaye, with Blume joining shortly afterwards.
The First Dungeons & Dragons
The first commercial version of Dungeons & Dragons appeared in January 1974. The initial run consisted of only 1,000 copies, assembled largely by hand. The young company had no reason to expect what would happen next.
The first printing sold out in less than a year. Demand continued to rise, and the tiny publisher suddenly found itself responsible for a product that was creating an entirely new hobby.
What made the success especially remarkable was the way the game spread. Players did not simply buy it and put it on a shelf. They played it, modified it, wrote their own adventures and shared their discoveries with other groups.
In that sense, TSR was publishing more than a set of rules. It was publishing a framework that other people would continually expand.
The Company Begins to Grow
TSR's early growth was closely connected to the expanding D&D community. Supplements provided additional rules and material, while The Strategic Review and later The Dragon gave players a place to discuss the game and its developing culture.
Tim Kask became TSR's first full-time employee in 1975. He edited and developed supplements, worked on the company's periodicals and helped shape the editorial direction of the growing publisher.
The supplements also demonstrated something fundamental about the early history of D&D: the game continued to evolve after the three original rulebooks appeared. Greyhawk added new character options and rules. Blackmoor brought Dave Arneson's ideas into print, including the Monk, Assassin and The Temple of the Frog.
The published game was becoming a record of a living hobby.
The Death of Don Kaye
Just as TSR was beginning to find its footing, tragedy struck. Don Kaye died suddenly of a heart attack in January 1975, aged only 36.
Kaye's death created an immediate corporate problem. His share of the partnership passed to his wife, Donna. The company subsequently reorganised, and in July 1975 the business became TSR Hobbies.
The restructuring changed the balance of power inside the company. Brian Blume and his father, Melvin Blume, became increasingly important shareholders, while Gygax's position as the company's creative force did not translate into permanent majority control of the corporation.
This would become one of the most important facts in the later history of TSR. The man whose name would become inseparable from Dungeons & Dragons did not ultimately control the company that published it.
Two Creators, One Company
While TSR grew, Gygax and Arneson's relationship became increasingly complicated.
Arneson had helped establish the style of play that made D&D different from traditional wargaming. Gygax had transformed those ideas into a publishable rules system and became increasingly involved in TSR's day-to-day operation. Their roles were different, but the game depended on the combination.
Arneson was also not simply a distant source of ideas. His name appeared on the original game, and his relationship with Gygax was formally recognised in a written agreement. A 1979 federal court decision records an April 1975 agreement identifying Gygax and Arneson as co-authors of Dungeons & Dragons, with TSR receiving publication, sales and distribution rights.
But commercial success creates pressures that a small gaming group does not have to consider. Once D&D became a successful commercial property, questions that might once have been settled informally became questions of contracts, royalties and corporate rights.
From D&D to Advanced Dungeons & Dragons
By the late 1970s, Gygax was developing a new and more systematic version of the game. Advanced Dungeons & Dragons was presented as a distinct rules system, with the Player's Handbook appearing in 1978 and the Monster Manual having appeared the previous year.
For Gygax and TSR, AD&D represented a major development of the game and a product that required enormous amounts of new writing, editing and development. For Arneson, however, the relationship between AD&D and the original D&D rules raised a fundamental question: if the new works were derived from the game he had co-created, should they generate royalties under their existing agreement?
The disagreement eventually became a legal dispute.
The Royalty Dispute
In 1979 Arneson sued Gygax and TSR Hobbies. The federal court record describes the case as a dispute over authorship and royalty rights involving Dungeons & Dragons and later works including Advanced Dungeons & Dragons, the Player's Handbook and the Monster Manual.
The lawsuit is often reduced to a simple story in which one creator claimed credit against the other. The reality was more complicated. Gygax had devoted enormous amounts of time to developing, editing and expanding the rules, while Arneson had a legitimate claim to his role in creating the original game and to the contractual rights associated with that authorship.
The dispute therefore reflected a much larger transformation. D&D had begun as a collaboration between hobbyists. It had become a valuable commercial property owned and administered through a growing corporation.
The 1981 Settlement
The legal dispute was eventually settled in 1981. The settlement did not erase the history that had led to it, nor did it end every disagreement between the two men.
What it did establish was a workable commercial relationship in which Arneson retained recognition for his role in the creation of D&D and continued to receive royalties under the settlement arrangements.
The two men would never again occupy the same position they had held in the early days of the hobby. Yet the story did not end with the lawsuit.
Blackmoor Returns
Years later, Dave Arneson would return to TSR to work on Blackmoor material. The result was a series of products beginning with Adventures in Blackmoor in 1986, followed by Temple of the Frog and City of the Gods.
That return has a remarkable symmetry to it. In 1975, Blackmoor had been TSR's second D&D supplement and one of the earliest published records of Arneson's contribution to the game. More than a decade later, TSR was once again publishing Arneson's Blackmoor material.
The professional relationship had therefore come full circle, even if the personal relationship between the two creators remained complicated.
Two Creators, One Extraordinary Legacy
The early history of TSR cannot be understood simply as the story of Gary Gygax. Nor can it be understood simply as the story of Dave Arneson.
Arneson demonstrated a new way of playing fantasy games. Gygax helped transform those ideas into a coherent published rules system. Don Kaye helped create the company that could publish it. Brian Blume provided crucial early financing. Tim Kask and many others helped turn the growing game into an expanding publishing operation.
And behind all of them was a growing community of players who tested rules, invented classes, created adventures and circulated ideas that would continually feed back into the hobby.
That is one of the most important lessons in the history of TSR. The company was built around a game that was itself being built by a community.
But the company was about to become much larger than the handful of enthusiasts who had assembled the first thousand copies of Dungeons & Dragons.
And as TSR grew, control of the company would become just as important as control of the game.
That is where the next chapter of TSR's history begins.
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