Actually, I'm pretty sure that Hackmaster was the end result of a legal scuffle between TSR/WOTC (not sure which it was at the time) due to the release of the Dragon CD archive, which contained KotDT comic strips....which hadn't been cleared for reprint rights. Dave Kenzer got Hackmaster out of the bargain, years prior to the OGL/d20 license.
My memory is fuzzy, so I hope someone better informed corrects any errors I've made....
Cheers,
Colin
Yes HM was a parody on the surface. Yes WotC made that a requirement of the license (and enforced it -- the approval process was quite strigent in fact).
The Knights of the Dinner Table comics that were originally published in the print Dragon Magazine, WotC republished them in the electronic archive of the magazine, without permission. Not a malicious act, WotC thought they had the rights, as the electronic archive was an exact reproduction (albeit some crappy scanning) of the print magazines, but turns out they did not have the rights they thought they had. (there were other publishers and artists affected, but it's KenzerCo that is relevant to the discussion)
Not sure if KenzerCo sued or if simply a settlement was reached, but WotC couldn't undo what they had done . . . so KenzerCo got some sweet licensing deals in exchange. They got to publish a d20 version of their Kalamar setting with the D&D logo nice and pretty on the front covers, and they got the license to create a retroclone of AD&D (not that we used the word "retroclone" back then, I think HackMaster might have been the first!)
As Mr. Blackburn points out above, the AD&D license was allowed as a parody game, which fit well with what HackMaster was in the comics, a parody of AD&D (mostly, also a parody of fantasy RPGs in general, but mostly AD&D). On the outside, it seemed KenzerCo made a very smart move with the two licenses, although only someone on the inside could tell us if the move was ultimately profitable and worthwhile for them. But they were not "required" to take the license, they could have designed a standalone HackMaster instead of creating the AD&D parody we got. But, in taking the license, it was agreed that the game would be a parody.
And again, I'm glad they did. I never got to play the "original" HackMaster, but friends did and loved it, and I read through some of the books and was impressed, and I thought the parody modules were hilarious (yet, again, completely playable).
I assume that the license was not to infinity, and has expired. I imagine that KenzerCo could have revamped HackMaster, leaving it a parody retroclone of AD&D, as there are so many other retroclones out there. But perhaps not, as the game was so closely tied to the license and the AD&D IP.
They choose to keep the brand, but with a completely new game system that stands apart from D&D, and apparently it's a very good game and has some very pleased and loyal fans. It's no longer a complete parody, but apparently still has some parody/humor elements in the "fluff" (I'm thinking the Gary Jackson stuff mentioned upthread).
Personally, I find it an odd choice to drastically rework a brand rather than starting fresh . . . but perhaps the resulting confusion amongst some gamers is worth it to keep the capital of the brand, of HackMaster. But still, I don't think that anyone, designers or fans, should be all that surprised if the game retains the perception of parody long after leaving the "old" game rules behind.
EDIT: I'll add that I assume that, as most jokes, the parody element had gone a bit stale after a time (not due to poor design, just simply the humor becoming an "old joke"), and that many fans played the game quite seriously as a retroclone of AD&D and jettisoning the parody.
And thousands did. I don't mind the 'joke game' stigma of HM4e -- it certainly didn't adversely impact sales.
