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TSR Ryan Dancey: Acquiring TSR

In the winter of 1997, I traveled to Lake Geneva Wisconsin on a secret mission. In the late fall, rumors of TSR's impending bankruptcy had created an opportunity to made a bold gamble that the business could be saved by an infusion of capital or an acquisition with a larger partner.

In the winter of 1997, I traveled to Lake Geneva Wisconsin on a secret mission. In the late fall, rumors of TSR's impending bankruptcy had created an opportunity to made a bold gamble that the business could be saved by an infusion of capital or an acquisition with a larger partner. After a hasty series of phone calls and late night strategy sessions, I found myself standing in the snow outside of 201 Sheridan Springs Road staring at a building bearing a sign that said "TSR, Incorporated".

Inside the building, I found a dead company.

In the halls that had produced the stuff of my childhood fantasies, and had fired my imagination and become unalterably intertwined with my own sense of self, I found echoes, empty desks, and the terrible depression of lost purpose.

The life story of a tree can be read by a careful examination of its rings. The life story of a corporation can be read by a careful examination of its financial records and corporate minutes.

I was granted unprecedented access to those records. I read the TSR corporate log book from the first page penned in haste by Gary Gygax to the most recent terse minutes dictated to a lawyer with no connection to hobby gaming. I was able to trace the meteoric rise of D&D as a business, the terrible failure to control costs that eventually allowed a total outsider to take control away from the founders, the slow and steady progress to rebuild the financial solvency of the company, and the sudden and dramatic failure of that business model. I read the euphoric copyright filings for the books of my lost summers: "Player's Handbook", "Fiend Folio", "Oriental Adventures". I read the contract between Gary and TSR where Gary was severed from contact with the company he had founded and the business he had nurtured and grown. I saw the clause where Gary, forced to the wall by ruthless legal tactics was reduced to insisting to the right to use his own name in future publishing endeavors, and to take and keep control of his personal D&D characters. I read the smudged photocopies produced by the original Dragonlance Team, a group of people who believed in a new idea for gaming that told a story across many different types of products. I saw concept artwork evolve from lizard men with armor to unmistakable draconians. I read Tracy Hickman's one page synopsis of the Dragonlance Story. I held the contract between Tracy and Margaret for the publication of the three Chronicles novels. I read the contract between Ed Greenwood and TSR to buy his own personal game world and transform it into the most developed game setting in history - the most detailed and explored fantasy world ever created.

And I read the details of the Random House distribution agreement; an agreement that TSR had used to support a failing business and hide the fact that TSR was rotten at the core. I read the entangling bank agreements that divided the copyright interests of the company as security against default, and realized that the desperate arrangements made to shore up the company's poor financial picture had so contaminated those rights that it might not be possible to extract Dungeons & Dragons from the clutches of lawyers and bankers and courts for years upon end. I read the severance agreements between the company and departed executives which paid them extraordinary sums for their silence. I noted the clauses, provisions, amendments and agreements that were piling up more debt by the hour in the form of interest charges, fees and penalties. I realized that the money paid in good faith by publishers and attendees for GenCon booths and entrance fees had been squandered and that the show itself could not be funded. I discovered that the cost of the products that company was making in many cases exceeded the price the company was receiving for selling those products. I toured a warehouse packed from floor to 50 foot ceiling with products valued as though they would soon be sold to a distributor with production stamps stretching back to the late 1980s. I was 10 pages in to a thick green bar report of inventory, calculating the true value of the material in that warehouse when I realized that my last 100 entries had all been "$0"'s.

I met staff members who were determined to continue to work, despite the knowledge that they might not get paid, might not even be able to get in to the building each day. I saw people who were working on the same manuscripts they'd been working on six months earlier, never knowing if they'd actually be able to produce the fruits of their labor. In the eyes of those people (many of whom I have come to know as friends and co workers), I saw defeat, desperation, and the certain knowledge that somehow, in some way, they had failed. The force of the human, personal pain in that building was nearly overwhelming - on several occasions I had to retreat to a bathroom to sit and compose myself so that my own tears would not further trouble those already tortured souls.

I ran hundreds of spreadsheets, determined to figure out what had to be done to save the company. I was convinced that if I could just move enough money from column A to column B, that everything would be ok. Surely, a company with such powerful brands and such a legacy of success could not simply cease to exist due to a few errors of judgment and a poor strategic plan?

I made several trips to TSR during the frenzied days of negotiation that resulted in the acquisition of the company by Wizards of the Coast. When I returned home from my first trip, I retreated to my home office; a place filled with bookshelves stacked with Dungeons & Dragons products. From the earliest games to the most recent campaign setting supplements - I owned, had read, and loved those products with a passion and intensity that I devoted to little else in my life. And I knew, despite my best efforts to tell myself otherwise, that the disaster I kept going back to in Wisconsin was the result of the products on those shelves.

When Peter put me in charge of the tabletop RPG business in 1998, he gave me one commission: Find out what went wrong, fix the business, save D&D. Vince also gave me a business condition that was easy to understand and quite direct. "God damnit, Dancey", he thundered at me from across the conference table: "Don't lose any more money!"

That became my core motivation. Save D&D. Don't lose money. Figure out what went wrong. Fix the problem.

Back into those financials I went. I walked again the long threads of decisions made by managers long gone; there are few roadmarks to tell us what was done and why in the years TSR did things like buy a needlepoint distributorship, or establish a west coast office at King Vedor's mansion. Why had a moderate success in collectable dice triggered a million unit order? Why did I still have stacks and stacks of 1st edition rulebooks in the warehouse? Why did TSR create not once, not twice, but nearly a dozen times a variation on the same, Tolkien inspired, eurocentric fantasy theme? Why had it constantly tried to create different games, poured money into marketing those games, only to realize that nobody was buying those games? Why, when it was so desperate for cash, had it invested in a million dollar license for content used by less than 10% of the marketplace? Why had a successful game line like Dragonlance been forcibly uprooted from its natural home in the D&D game and transplanted to a foreign and untested new game system? Why had the company funded the development of a science fiction game modeled on D&D - then not used the D&D game rules?

In all my research into TSR's business, across all the ledgers, notebooks, computer files, and other sources of data, there was one thing I never found - one gaping hole in the mass of data we had available.

No customer profiling information. No feedback. No surveys. No "voice of the customer". TSR, it seems, knew nothing about the people who kept it alive. The management of the company made decisions based on instinct and gut feelings; not data. They didn't know how to listen - as an institution, listening to customers was considered something that other companies had to do - TSR lead, everyone else followed.

In today's hypercompetitive market, that's an impossible mentality. At Wizards of the Coast, we pay close attention to the voice of the customer. We ask questions. We listen. We react. So, we spent a whole lot of time and money on a variety of surveys and studies to learn about the people who play role playing games. And, at every turn, we learned things that were not only surprising, they flew in the face of all the conventional wisdom we'd absorbed through years of professional game publishing.

We heard some things that are very, very hard for a company to hear. We heard that our customers felt like we didn't trust them. We heard that we produced material they felt was substandard, irrelevant, and broken. We heard that our stories were boring or out of date, or simply uninteresting. We heard the people felt that >we< were irrelevant.

I know now what killed TSR. It wasn't trading card games. It wasn't Dragon Dice. It wasn't the success of other companies. It was a near total inability to listen to its customers, hear what they were saying, and make changes to make those customers happy. TSR died because it was deaf.

Amazingly, despite all those problems, and despite years of neglect, the D&D game itself remained, at the core, a viable business. Damaged; certainly. Ailing; certainly. But savable? Absolutely.

Our customers were telling us that 2e was too restrictive, limited their creativity, and wasn't "fun to play'? We can fix that. We can update the core rules to enable the expression of that creativity. We can demonstrate a commitment to supporting >your< stories. >Your< worlds. And we can make the game fun again.

Our customers were telling us that we produced too many products, and that the stuff we produced was of inferior quality? We can fix that. We can cut back on the number of products we release, and work hard to make sure that each and every book we publish is useful, interesting, and of high quality.

Our customers were telling us that we spent too much time on our own worlds, and not enough time on theirs? Ok - we can fix that. We can re-orient the business towards tools, towards examples, towards universal systems and rules that aren't dependent on owning a thousand dollars of unnecessary materials first.

Our customers were telling us that they prefer playing D&D nearly 2:1 over the next most popular game option? That's an important point of distinction. We can leverage that desire to help get them more people to play >with< by reducing the barriers to compatibility between the material we produce, and the material created by other companies.

Our customers told us they wanted a better support organization? We can pour money and resources into the RPGA and get it growing and supporting players like never before in the club's history. (10,000 paid members and rising, nearly 50,000 unpaid members - numbers currently skyrocketing).

Our customers were telling us that they want to create and distribute content based on our game? Fine - we can accommodate that interest and desire in a way that keeps both our customers and our lawyers happy.

Are we still listening? Yes, we absolutely are. If we hear you asking us for something we're not delivering, we'll deliver it. But we're not going to cater to the specific and unique needs of a minority if doing so will cause hardship to the majority. We're going to try and be responsible shepards of the D&D business, and that means saying "no" to things that we have shown to be damaging to the business and that aren't wanted or needed by most of our customers.

We listened when the customers told us that Alternity wasn't what they wanted in a science fiction game. We listened when customers told us that they didn't want the confusing, jargon filled world of Planescape. We listened when people told us that the Ravenloft concept was overshadowed by the products of a competitor. We listened to customers who told us that they want core materials, not world materials. That they buy DUNGEON magazine every two months at a rate twice that of our best selling stand-alone adventures.

We're not telling anyone what game to play. We are telling the market that we're going to actively encourage our players to stand up and demand that they be listened to, and that they become the center of the gaming industry - rather than the current publisher-centric model. Through the RPGA, the Open Gaming movement, the pages of Dragon Magazine, and all other venues available, we want to empower our customers to do what >they< want, to force us and our competitors to bend to >their< will, to make the products >they< want made.

I want to be judged on results, not rhetoric. I want to look back at my time at the helm of this business and feel that things got better, not worse. I want to know that my team made certain that the mistakes of the past wouldn't be the mistakes of the future. I want to know that we figured out what went wrong. That we fixed it. That we saved D&D. And that god damnit, we didn't lose money.

Thank you for listening,
Sincerely,
Ryan S. Dancey
VP, Wizards of the Coast
Brand Manager, Dungeons & Dragons

 

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Ryan S. Dancey

Ryan S. Dancey

OGL Architect
You could, but that would risk sending the relativized message "all those editions needed extra time" - that is, they all share a common flaw.

When the takeaway discussed is "4E was especially unfinished to a detrimental degree not even comparable to any minor blemishes 3E or 5E might have"
The first message is true, however. And because all three WotC editions share that flaw, it's one that needs to be considered.

Your "detrimental" vs "minor blemishes" is editorialized and highly subjective, honestly. This absolutely is a relative issue - the same problem to different degrees. 3E had it least. 4E had it most, and 5E is in-between but it's got more issues that feel like they relate to being "rushed out" than 4E in some ways. 5E was the first version of D&D, where, on reading it, I felt like I could "see the joins". There's an awful lot in 5E which seems a case of "Good enough, just run with it!".
 

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CapnZapp

Legend
The first message is true, however. And because all three WotC editions share that flaw, it's one that needs to be considered.

Your "detrimental" vs "minor blemishes" is editorialized and highly subjective, honestly. This absolutely is a relative issue - the same problem to different degrees. 3E had it least. 4E had it most, and 5E is in-between but it's got more issues that feel like they relate to being "rushed out" than 4E in some ways. 5E was the first version of D&D, where, on reading it, I felt like I could "see the joins". There's an awful lot in 5E which seems a case of "Good enough, just run with it!".
You probably look at 4Es issues with rose-tinted glasses while not giving 5E enough credit.

I consider 5E solving several fundamental problems with 3E in highly intelligent and well-crafted ways. It might look simple, but there's nothing simple about writing simple rules...

4E on the other hand was an over-engineered disaster that tried to solve problems few were asking for.

Is 5E perfect?

No.

But it finally managed to bring casters in line with martials without throwing out the baby with the bathwater the way both 4E and PF2 did.

Yes it is dire need of additional "depth not breadth" crunch that WotC seems hellbent on not providing. It absolutely must support a proper gold economy.

But 5E represents a huge accomplishment no other edition comes close to.
 

Parmandur

Book-Friend
The first message is true, however. And because all three WotC editions share that flaw, it's one that needs to be considered.

Your "detrimental" vs "minor blemishes" is editorialized and highly subjective, honestly. This absolutely is a relative issue - the same problem to different degrees. 3E had it least. 4E had it most, and 5E is in-between but it's got more issues that feel like they relate to being "rushed out" than 4E in some ways. 5E was the first version of D&D, where, on reading it, I felt like I could "see the joins". There's an awful lot in 5E which seems a case of "Good enough, just run with it!".
I see what you are talking about with the 5E rulebooks, but...4E's errata was to fundamental math issues. 5E's math base has proven quite durable with no serious errata.
 

Committed Hero

Adventurer
I remember an awful lot of garbage that came out for d20/OGL. We got a lot of good games including Spycraft, Stargate, Cthulhu d20, and others but what I mostly remember is the plethora of crap that was published. And suddenly WotC had to compete with a ton of other companies for D&D material and they gave birth to Pathfinder which seriously ate into their customer base.

WotC launched the OGL expecting that they would always lead the market with hard copies of big, expensive core books, and could leave the smaller stuff to other publishers. I believe they were surprised that it became so easy and cheap for these other publishers to create material - especially pdf-only products that require absolutely no printing infrastructure. So not only was there a glut on the market, it was a market of stuff that WotC probably couldn't get a cut of affordably. At the same time, there were always publishers pushing the limits of the system, both in terms of adult content as well as ditching the d20 license entirely for the OGL (lines that took the latter route survived the boom: Pathfinder and Mutants & Masterminds).

Admittedly I haven't studied the 4th Edition OGL as much as the 3rd, but the former is a lot more limiting, and if there are any products being created under it these days I am unaware of them.
 

You could, but that would risk sending the relativized message "all those editions needed extra time" - that is, they all share a common flaw.
Every product should be released before a designer/creator/author feels the product is perfect. Doesn't matter if it is a RPG game system, an adventure, a car, computer, or house.

There is a point of diminishing returns and polishing a turd. Or now days the software concept of Minimal Viable Product. Properly run business require that products are sent to market when they are "good enough".

Sure, it sucks when your "good enough" car has a recall because the head unit doesn't work well with car play. Or your new house has some drywall blemishes. Or your RPG has some rules that don't cover some edge case or even might have two rules that conflict with one another. But spending another year or two refining a product is expensive, and often the difference between a product being financially viable or not, and a company that does that often enough fails.
 

Jaeger

That someone better
5E wildly overcompensated with it's obsessive surveys, and strange approach to playtesting, which caused it to "listen" well but only to a subsection of the audience, and they failed to do what companies who want to listen have to do, and think carefully about who they're hearing from and when to accept input, and when to question it

This is the multi million dollar question we will see answered as 5e moves forward.

The current wave of pop culture popularity D&D is currently riding high on will not last forever.

Are the subset of the buying audience that they are listening to now the ones that will become the hardcore fanbase of the future that will keep the game solvent when things calm down?

We will see.


Not to quibble, but 3.5 had little to do with development; it was planned out as part of the 3e release schedule and was set up before 3.0 even launched. Monte Cook wrote about it and there've been a few discussions on here about it.

It was planned - but if you look at what Monte said; they knew there were issues with the ruleset on release!

So corporate wanted an "official update". Monte and Tweet probably objected because normally such issues were something that traditionally have been handled through gradual errata.

But with a few years of extra input from the player base, the "errata" was such that it made as much of a mess as it fixed.


One - the reason he personally pushed OGL and the D20 license, that he didn't tell the WOTC lawyers, was the idea that D&D would disappear with a company that owned it, like what would have happened to D&D if TSR folded. So he made those to make sure D&D would never again be able to be closed up or lost.

Fake news and fear mongering.

Had TSR filed for bankruptcy they would have been bought out by someone, and D&D would have still had a 3e. There may have been an interregnum period of a few years when D&D was not on hobby shelves, but it would have come back.

The real question is that we know you cannot copyright mechanics.

So without a TSR to bury a company in lawfare during that interregnum period; would someone have done a Clone that could have captured big market share ?

The RPG landscape might be very different than it is now had TSR been forced to actually file for bankruptcy.
 

RealAlHazred

Frumious Flumph (Your Grace/Your Eminence)
I agree 100% here. Almost like the release version of 5e still contains a bunch of playtest material.

Or maybe it feels like "we can patch this up with supplements" - but the supplements themselves never arrived.
Arguably, with the class options in Tasha's Cauldron of Everything, the supplements have arrived.
 

You could, but that would risk sending the relativized message "all those editions needed extra time" - that is, they all share a common flaw.

When the takeaway discussed is "4E was especially unfinished to a detrimental degree not even comparable to any minor blemishes 3E or 5E might have"
As I understand it, 4th edition was a "blue sky thinking" RPG where, for whatever reason, the initial product was deemed unsatisfactory and discarded, meaning they had to start again but still meet the original publication date. So I agree with "especially unfinished to a detrimental degree". However it seems to have been playable from the start (although I've never played it myself) and by all* accounts "late" 4th edition was a great game that was cancelled in its prime.

*"All" being the comparatively small number of people who were still playing it, so a self-selecting sample
 

Staffan

Legend
Fake news and fear mongering.

Had TSR filed for bankruptcy they would have been bought out by someone, and D&D would have still had a 3e. There may have been an interregnum period of a few years when D&D was not on hobby shelves, but it would have come back.
From the OP: "I read the entangling bank agreements that divided the copyright interests of the company as security against default, and realized that the desperate arrangements made to shore up the company's poor financial picture had so contaminated those rights that it might not be possible to extract Dungeons & Dragons from the clutches of lawyers and bankers and courts for years upon end."

Had TSR been allowed to actually go bankrupt, those assets would have been spread among a number of creditors. Reading between the lines, you'd have the bank holding some copyrights, Random House others, maybe a distributor holding some, and so on. That would have been an incredible mess, and I'd have given better than a 50% chance that they would not have been able to assemble all the rights under one roof again. That's why Wizards had to actually buy all of TSR and negotiate a deal with the creditors to pay a certain percent of the debt instead of letting it go bankrupt and just pick up the juicy parts.

Not to mention what a world without D&D for several years would have done to the RPG business as a whole. I'd wager that a lot of game stores would be hurting in the wake of that.
 

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