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As we get started with our new series on Dungeons and Dragons, a quick note to listeners that this episode includes brief references to suicide. Please be advised. It's September 1979 in East Lansing, Michigan. William Dear walks into a bar near Michigan State University. It's a typical college watering hole, badly lit, with a pinball machine, jukebox, and nothing but beer on tap. He claims a table in the far corner and orders a drink. Deer is 42 years old. He's over 6ft tall with a mustache and big gold rings adorning several of his fingers. He's a private eye and he's meeting an informant today. They often ask to meet in dives just like this. Maybe they want the courage alcohol brings. Or maybe they've just watched too many movies. Deer's working his highest profile case yet, the disappearance of James Dallas Egbert iii. Dallas to his friends, if he had any. Dallas is a loner, a 16 year old brainiac studying computers at Michigan State. Or at least he was. He vanished without a trace 19 days ago. Dallas parents have hired Deer to find their son. So far he's struggled for leads, but this morning he got a call from someone who's willing to talk. A tanned college student enters the bar. He joins Dear at his table, orders a pitcher of beer, then speaks. I don't want my name out there or my description. I'm a senior this semester. I can't get into trouble. Okay, kid. I don't reveal my sources. If I did, I'd be out of business tomorrow. All right, so what can you tell me? The student looks around to make sure no one's paying attention, then leans forward. Well, I play Dungeons and Dragons with Dallas in the steam tunnels. Deer straightens up. He hadn't heard of Dungeons and Dragons before this case. Few have yet. It's still very much a cult game, but everything in this case seems to lead back to this strange game of dice, demons and sorcery. Dallas played it obsessively, but until now no one would admit to playing it with him. Rumor is students have been sneaking down into the maze of steam tunnels beneath the university and playing Dungeons and Dragons by flashlight. Dear's hunch is that Dallas suffered a psychotic break while playing the game and is now lost in the miles of tunnels, convinced that he's in the game for real. Either that or something terrible happened down there. Maybe Dallas got killed accidentally, or maybe someone wanted it to look that way. Dear locks eyes with the college student. Tell me everything from the top. Later that evening, Dear arrives at his motel and finds the reporters following the Dallas case waiting for him there. Usually he finds this kind of attention annoying, but tonight the reporters might be useful. The student's information has convinced Dear that Dallas is lost somewhere in the steam tunnels, but the university refuses to authorize a search. So Dear is going to use the press to force their hand. I have just received new information. The university insists students cannot access the steam tunnels, but they can and do. Dallas Egbert played Dungeons and Dragons in those tunnels. The school needs to let me down there. A boy's life is at stake. Dear steps into his motel room, confident the university will have to let him into the tunnels now. But the university's not the only one feeling the pressure. Tsr, the company behind Dungeons and Dragons, will soon find itself at the center of a moral firestorm. It spent years building a cult following for its revolutionary game. Now it's about to become embroiled in a satanic panic that threatens to both make and break its business. And this won't be the last time Dungeons and Dragons is tested on its quest to become a brand worth hundreds of millions of dollars. It will have to find ways to keep its rabid fan base happy without alienating newcomers. A journey that will see it failing forward. Time after time.
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Word year after year.
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Experience. Let's say hypothetically, or maybe not so much. I'm developing a new podcast that needs an assistant producer, someone who knows how to brainstorm subjects to talk about finding, find guests to bring in. That's a tall order. In other words, it's a job for indeed sponsored jobs. Spend more time interviewing candidates who check all your boxes and you know listeners of this show will get a $75 sponsored job credit to help you get your job the premium status it deserves@inn Indeed.com businesswars just go to indeed.com businesswars right now and support our show by saying you heard about Indeed on this podcast. Indeed.combusinesswars terms and conditions App Hiring do it the Right Way with Indeed. From wondery I'm david brown and this is business wars. Dungeons and Dragons it's the pen and paper game that rewrote the rulebook and generated enough treasure to make a dragon jealous. Since its debut in 1974, that game, known to its fans as D and D, has gone from nerd niche to geek chic. Once dismissed as a pastime for basement dwellers, it's now a celebrity endorsed cultural icon with a starring role in Netflix's Stranger Things. It didn't just invent the role playing game, its game design also had a massive influence on video games of all kinds. From World of Warcraft to Fortnite to NBA 2K. The game's mix of fantasy, storytelling, math and play acting has endured for generations now, and with an estimated 13 million active play players plus hit video game spin offs, it's a major Moneymaker too. In 2023, D&D earned its owner Hasbro an estimated $267 million in revenue. So how did this game survive moral panic, corporate turnover, and decades of changing tastes to become bigger than ever 50 years on and how is a pen and paper role playing game managing to stay relevant in a digital age? This is Episode one Wizards and Witch Hunts. It's fall 1972 and Dave Arneson has just arrived at a small white clapbered house in Lake Geneva, Wisconsin. Arneson is a 25 year old war game fan and he's here to see his friend Gary Gygax. Gygax is a local character, a Jehovah's Witness, a father of five, and a big deal in the world of wargaming. He designs war games and runs a convention called Gen Con. Running a convention sounds grand, but it barely attracts enough people to fill a New York City subway car. War games are basically make believe battles fought on tabletops. Think tiny metal soldiers, rulers for measuring movement, and intimidating rule books that cover everything from marching speeds to the weather. They grew out of real military training tools designed to simulate historic conflict. Everything in a war game is governed by numbers and dice charts in the rule books determine, say, the odds that a rifle can hit a target from 200 yards away. The player rolls the dice to see if the shot lands if for example, the chance is 1 in 20, the player has to roll a 1 on a 20 sided die. The complexity and calculations are off putting for many, but for wargamers, it's all part of the fun. And since there's so few of them, they're a tight knit community who like sharing ideas. Arneson is one of these die hard wargamers. But lately he's been experimenting with a new kind of game back home in Minnesota. Something more open ended, more about imagination than simulation. And that's why he's driven 300 miles to see Gygax. He wants to show his new prototype to his friend. They head down to the basement, Gygax's games room and workplace. By day, Gygax is a cobbler. Repairing shoes pays better than designing war games, but not by much. His family relies on government assistance to get by. Arneson introduces Gygax to the game he created for his pals back in the Twin Cities. It uses the optional fantasy rules from one of Gygax's own games, a medieval war game called Chainmail. The rules added dragons and magic to medieval combat. Traditionalist wargamers sneered at these additions, but not Arneson. He used those rules to create something revolutionary. A game where players control characters instead of armies. A group of heroes exploring catacombs full of monsters, treasure and danger. Arneson walks Gygax through a game. First, Gygax creates his hero, maybe a fighter or a magic user. Then he rolls the game's polyhedral dice to determine his hero's strength, intelligence and other traits. The quest begins. Arneson plays Dungeon Master, the creator, director and referee of the game. He describes the world, tracks what's happening and applies the rules. Gygax can try anything he imagines. But like a war game, success depends on probabilities and dice rolls. For example, Gygax might try to befriend rather than fight a monster. The chances of success are low. But Gygax's hero is charming, increasing the odds. Now a roll of the die will determine if he's made a new monster pal. Arneson uses tabletop miniatures to help Gygax visualize the scene, but they aren't required. This is a game played mostly in the imagination, and it's even better with a group. The player's characters continue from one quest to the next, gaining experience as they go and leveling up with new abilities. Gax is spellbound compared to traditional war games. This is far more Absorbing. It's unpredictable, personal and fun. So before Arneson leaves, Gygax asks him to mail him the rules. I know it may be heresy in some boardrooms, but here goes. A live demo beats a perfect deck. When a prospect plays the thing, they co author the vision and become a champion ship a scrappy prototype that creates an undeniable first win, then refine around what users actually do with it. Treat objections as a design brief, not rejections. You know early believers are your cheapest distribution channels. Give them something contagious to show others, not something polished to admire. A few weeks after Arneson's visit, 18 handwritten pages land in Gygax's mailbox. They're from Arneson and contain the rules to the new game. So with Arneson's approval, Gygax polishes and improves the game. His daughter Cindy names it Dungeons and Dragons. He tests it with his buddies and fellow wargamers, who all want to know when he's going to publish it. Gygax thinks this could be big. 50,000 copies big. A huge number for a war game. Most sell less than 10,000 copies. But Dungeons and Dragons isn't a war game. It's. Well, he's not sure. There's no name for this brand new type of game, and war game publishers won't touch it. They can't imagine people choosing dragons over generals. But Gygax and Arneson can't afford to publish it themselves. Gygax is on the poverty line and Arneson is working a low paying security job. So Gygax's childhood friend Don Kid steps in. He borrows $1,000 against his life insurance and goes into business with Gygax in October 1973. They form a business called Tactical Studies Rules, TSR for short. Arneson doesn't buy into tsr, but will get a cut of the royalties from the game. K's kitchen table serves as TSR's headquarters. But $1,000 isn't enough to publish the game. So they bring in local war gamer Brian Bloom and his father as investors. A few weeks later, in January 1974, Dungeons & Dragons debuts. It takes almost all of TSR's funds to print 1,000 copies. The game is sold by mail order and comes in a brown box with three rule books inside. The production value is low. The rule books are badly printed and are full of amateurish illustrations. Still, Gygax is optimistic, but by summer only 600 copies have sold. Part of the Problem is price. A small print run means a high production cost per unit, so TSR charges $10. It's about $65 today. It's cheaper for people to photocopy the rulebooks rather than buy them. TSR estimates that for every box sold, 10 more are copied. The company is struggling. And then tragedy strikes. K dies suddenly from a heart attack at age 36. The Bloom family buys his stake and gains control of TSR by spring 1975. Sales are still slow. TSR is selling a few hundred games a month and barely breaking even. But price isn't the only thing holding Dungeons and Dragons back. The bigger problem is people just don't get it. It's a novel product, and when your customers have no reference point, your sales pitch can get met with blank expressions. Even people who bought the game struggle. Many just play the example quest over and over until they get bored and stop playing. Here's the thing. When you invent something nobody's ever seen before, you're not just in the process product business. You're also in the education business. Confusion kills faster than competition. You need to show customers what good looks like. You know, simple examples, quick wins, clear steps. Don't assume they'll figure it out. Even the smartest product needs instructions. Dungeons and Dragons is confusing because it's the opposite of how games usually work. In most games, the rules restrict from what players can do. But in D and D, the rules enable possibilities. They're not commandments. They're a springboard for creativity and imagination. So TSR improves its messaging. It starts calling D and D a role playing game so at least people know what to call it. They publish a newsletter and later a magazine for fans of the game. These publications bring the fan base together, answer their questions, and provide additional revenue. Then come the expansions. TSR releases supplements to the game that offer new adventures and new monsters, like the Demogorgon, the Demon Prince, later made famous by Stranger Things. These supplements give TSR a way to earn money from existing fans, including those who pirated the game. It also encourages Dungeon Masters to create their own adventures, increasing the game's appeal. Next, TSR relaunches the game. In 1977, it releases the Basic Set, a simpler, more action driven version aimed at newcomers. It's packaged like a board game to encourage toy stores to stock it. Then TSR publishes Advanced Dungeons & Dragons 3, sold separately Hardcover rulebooks aimed at players who want a deeper experience. There's another lesson here. Segment by readiness, not just by features. An entry bundle for newcomers and A deep track for power users turns one funnel into two on ramps. Packaging has to fit the channel, too. A board game. Look for toy shelves. Premium hardcovers for hobby shops keep progression obvious so customers see where to go next. The new additions spur sales. The game catches on among geekier college students, who see it as a superior alternative to poker night. It's also on trend. Fantasy is hot stuff in the late 70s. In 1977, Terry Brooks's the Sword of Shannara became the first fantasy novel to make it onto the New York Times bestseller list. By early 1979, the basic set is selling 4,000 copies a month, and the advanced books are on track to sell more than 100,000 copies. And this all from Word of Mouth. TSR's best salespeople are its fans. And as the fan base grows, so do the company's opportunities. It's 1979, and at TSR headquarters in Lake Geneva, Wisconsin, Gary Gygax is on the phone with Mildred Marmor. She works for Random House, one of America's leading book distributors, and she wants to put Dungeons and Dragons into bookstores across the country. But this wasn't her idea. Her kids turned her on to the game's potential. Once again, Dungeons and Dragons fans are doubling as TSR's sales force. Gygax is excited by the opportunity to get his game into thousands of bookstores. Okay, how many copies should we send.
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To your warehouse? Well, I suggest tens of thousands if you get traction. You don't want stores to run out of stock and miss.
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Out on sales. Oh, that's a lot. How soon would we be paid.
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For the sales? Depends how fast the books sell in store. Once they've sold, the bookstores pay us, and then we pay you. Minus the cost of any returns, of course. You're probably looking at six.
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Months or more. Gygax's excitement fades. Getting into bookstores could really boost sales. But TSR can't afford to wait months to get paid. The company is still small. It brings in around $900,000 in annual sales. But profits are under 60,000, and there's barely 30 grand in the bank. Printing tens of thousands of rule books would leave TSR unable to make payroll. We can't wait months to recoup our costs. We just don't have that.
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Sort of cash. What if every time you shipped your products to our warehouse, we paid you.
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For the inventory? You'd pay.
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Cash up front. Well, technically, it's a loan. As books sell, we'll recoup our money. From your cut of the sales. If you don't sell enough for us to make our money back, you'll have to cover the difference. But as long as your return rate is below 20%, you should.
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Still make money. Gygax grins. With this deal, TSR can now print all the Dungeons and Dragons books it believes it can sell without going broke in the process. He once dreamed that D and d would sell 50,000 copies. Now he's thinking a million. The game has major distribution, a vibrant fan base on college campuses, and a community that's around 300,000 players strong. Everything is finally going right. Right up until James Dallas Egbert.
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III goes missing. At Raising Cane's. We're hyper focused on being the best at what we do and getting it right every time. Cook to order chicken fingers, cane sauce, crinkle cut fries, coleslaw, Texas toast, iced tea and lemonade. It's our one love. But is the hype real? Yeah, it's real good. Raising Cane's chicken fingers one love. Next time, order with our.
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App or online in just a few years, Ozempic has gone from a diabetes drug to a global phenomenon. But behind the miracle claims, another battle is raging. Demand is exploding. Supply can't keep up, and as drug maker Novo Nordisk scrambles to produce more, its rival, Eli Lilly is racing to take the crown. Meanwhile, a darker market is emerging. Shady online sellers are offering cheap, unregulated knockoffs. Now millions are injecting mystery vials with no FDA oversight. I'm David Brown, host of Business Wars. In our latest season, we're diving into the race to Ozempic and the billion dollar showdown between Big Pharma's biggest players. Can they close the supply gap before one bad vial destroys everything? Make sure to follow Business wars on the Wondery app or wherever you get your podcasts. You can binge all episodes of Business wars early and ad free right now on Wondery plus. Foreign. 79. Private investigator William Deer clicks on his flashlight. The beam cuts through the dark, eliminating the long, cramped steam tunnel beneath Michigan State University. Slime glistens on the walls. Steam pipes stretch into the black void beyond the flashlight's reach. Dear glances back at the maintenance engineer who's joined him for this search, then steps towards the darkness. James Dallas Egbert III has been missing for 20 days. The media circus is in full swing. The nation wants to know if Dungeons and Dragons twisted the boy's mind and lured him to his death. Somewhere in this underground maze, there are more than eight miles of tunnels to search and conditions are harsh. The air is swampy. Trip hazards are everywhere. Rats scuttle in the dark. The steam pipes are hot enough to burn your skin, and pressure vents blast out scalding steam. Without warning, Deer and the engineer reach an intersection and turn left. It's easy to see why students play Dungeons and Dragons down here. It's a real life dungeon, full of death traps. Deer chats with the engineer as he edges forward. Do you think Dallas could have come down here, Kedif? Could he still be here? Maybe. Do you think we'll find him alive? Not a chance. No chance that we find him, or no chance we'll find him alive? Both. Deer's foot hits something metallic and it clatters down the tunnel. He hunts for the object with his flashlight beam. A beer can. Proof that someone's been here before. They press on. A blast of boiling steam narrowly misses Dear's face. Salty sweat stings his eyes. The heat turns, suffocating. The engineer marks the walls with chalk so they can find their way back out. It seems unlikely anyone could survive down here for long. Deer spots something scrawled on a wall. A list of 13 names. The number for a witch's coven. Deer jots down the names and keeps moving. They find more signs of life. Graffiti, beer bottles, cigarette butts, condoms. And then something that's not on their map. A tiny room. Inside there are empty milk cartons, a blanket and a table with a creepy paper mache figure sitting on top. Deer tries to make sense of what he's found. Is this a place for occult rituals? Somewhere college kids smoke weed? Or the place where Dallas has been hiding? Dallas? Dallas Dear listens, but there's no reply. He returns to the surface without any evidence that Dallas is in the tunnels. Even so, his search makes national news. The media's fallen hard for the story of the child prodigy who played a strange game about magic, then vanished in the tunnels. These news reports start spreading fear among anxious parents who now worry that Dungeons and Dragons isn't some harmless game, but a tool of Satan. And it's coming for their kids. A week later, Dallas turns up alive in Morgan City, Louisiana. The troubled teen ran away after a failed suicide attempt driven by depression and loneliness. Not Dungeons and Dragons. Dear's theory is a dud, but it doesn't make any difference. The idea that the game is in league with Satan has already taken root. In the years that follows, schools and colleges start banning DND clubs. A novel inspired by Deer's theory, Mazes and Monsters, becomes a best seller. It then gets turned into a TV movie that gives Tom Hanks his first leading role. Tom Hanks and his friends get caught up in a deadly game of fantasy. I am the maze controller. Until they take it too far. I propose we play maze control and monsters in a real setting. In churches across America, congregations are warned about their children falling under D D's spell. In Minnesota, one church gathers up the copies of the game owned by its congregation's children and destroys them. Teenage suicides and murders are blamed on it. And wild stories spread on TV and radio, like this clip from a Christian radio show. So you're laying it out on the line. These are not fun games. They, in fact, are an indoctrination.
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Into the occult. Yes, definitely. It's teaching demonology, witchcraft, voodoo and murder. Rape is very violent and just keeps on going. I could give you.
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A whole list. At TSR's headquarters in Lake Geneva, Greg Gygax gets death threats and hires a bodyguard. The company worries that the panic will destroy sales of Dungeons and Dragons. But instead it does the opposite. The controversy alerts teenagers and college students to the game's existence. It also gives D and D a whiff of danger, like listening to Ozzy Osbourne records. And this heightens its appeal. Soon, TSR's Riding the Wave of bad publicity to sales success. Dungeons and Dragons becomes a household name. In 1982, TSR's annual revenues hit $22 million. That's up tenfold from 1979. The company also strikes lucrative licensing deals, from beach towels to a Saturday morning.
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TV cartoon series. Hey, look, a Dungeons.
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And Dragons ride. I am Dungeon Master, your guide in the realm of Dungeons and Dragons. Inc. Magazine hails TSR as one of America's fastest growing companies and gushes about how none of its management team has a background in business. Flush with success, TSR spends big headcount swells. Gygax spends a fortune trying to get a Dungeons and Dragons movie into production. The company even buys a needlecraft business so it can produce Dungeons and Dragons needlepro point kits. It projects that its 1983 sales will more than double to $75 million. And that's when the growth stops. You know, when the money's rolling in. Nobody wants to check the math, but fast growth can make bad habits look smart. Costs creep teams bloat, and forecasts turn into fantasies. And in this case, on multiple levels. When demand cools, all the waste shows up at once. Smart founders plan for the slow season while they're still in the fast lane. In four years, Dungeons and Dragons went from cult game to household name. But by 1983, most people who wanted to try it already have, causing sales to plateau. And since no role playing game has ever broken Big Boat before, TSR doesn't have a playbook to follow or foresee when demand will max out. Revenue in 1983 reaches nearly $27 million, only slightly up from the year before. But TSR is spending like a $75 million business. So when sales disappoint, the company finds that its income and spending are completely out of sync. By early 1985, TSR is bleeding cash and drowning in debt. So the Blum family, which controls the business, puts it up for sale. Gygax is horrified that his game could end up owned by non gamers, so he stages a coup. In March, he exercises his stock options to buy a controlling stake in the business and appoints himself CEO. He also brings in a new general manager, Lorraine Williams. She's a businesswoman whose family owns the Buck Rogers franchise. Gygax wanted her to invest in tsr. She said no, but offered to help fix the business. She doesn't get Dungeons and Dragons, but she knows its loyal fan base is a good foundation to build on. Gygax tells the Blooms that TSR will buy them out so he can run the business freely. But then Gygax discovers TSR doesn't have enough money to do this. And when he offers to use his own money instead, the Blooms ask for just over half a million dollars. Gygax balks. Then he and Williams fall out. She wants more cutbacks. Gygax thinks she doesn't respect Dungeons and Dragons players. She thinks he's in denial about how bad the financial situation really is. And by then, it's no longer just softening sales that are dragging TSR down. The ongoing satanic panic around the game has gone from sales booster to sales killer. In 1983, a new campaign group called Bothered About Dungeons and Dragons Bad For Short forms. Its founder is a mother named Patricia Pulling, who blames the game for her son's suicide. Its aim is to warn parents about the game, get it banned from schools, and to get TSR to stick warning labels on it. Her campaign convinces TV news show 60 Minutes to air a segment questioning the game's influence on kids. Then a letter writing campaign by several mothers convinces major retailers like Sears and J.C. penney to pull the game from their shelves. Almost overnight, TSR loses retail orders worth more than a million dollars. Williams urges Gygax to cut the devils and demons from the game. But he refuses to censor his creation. And with a company now just two months away from collapse, the Blums strike. Back in October 1985, they use a TSR board meeting to stage a counter coup. They tell Gygax they've exercised their stock options to regain control of the company. But that's not all. They've also sold all their stock to Williams. The woman Gygax hired to save TSR has double crossed him. She convinced the Blooms to buy back control and then bought them out herself for just under $600,000. TSR is now controlled by a non gamer. Gygax goes to court to reverse the deal, but the judge sides. With Williams. Defeated, he sells his stake to her and walks away. TSR belongs to Lorraine Williams now, and she is about to take it in.
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G
A new direction. Okay, Carrie, you ready? Quick, quick, quick. List three gifts you'd never.
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Give a cowboy. Uh, lacy bobby socks, a diamond bracelet, and a gift.
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G
Certificate to Sephora. Oh, my.
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A
God.
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G
That'S outrageous. Carrie. Oh, wait, we're recording a commercial right now. We gotta tell them why.
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We'Re doing this. Oh, yeah, sorry, POD listeners. Okay, so we're five besties who've been friends for million years. And we love games, so of course we.
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G
Made our own. It's called Quick, quick, quick. You just pick a card and have your partner give three answers to an outrageous question. It's fast, fun, fantastic, and a bunch of.
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F
Other funny adjectives. Anyone can play. Your mom, your dad, your kitten, your kids, your Auntie Edna, and.
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G
Even your butcher. And you know what's incredible? There are no wrong answers. Just open your brain and say what's in.
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It. Just quickly. And you're not going to believe this. Well, you might once you start playing. It's as much fun to watch as it is.
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To play seriously. So get up and go. Grab your copy now at.
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Target and Amazon.
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Quick, quick, quick. It's the fastest way.
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I
To have fun. I'm Indra Varma, and in the latest season of the Spy who. We open the file on Oleg Gordievsky, the spy who outran the kgb. A rising star in the heart of Soviet power, Gordievsky is secretly feeding MI6 the Kremlin's deadliest secrets. For 11 years, he walked a razor's edge, exposing KGB threats that hastened the Cold War's end and helped prevent nuclear annihilation. But the KGB have a mole of their own. When they discover the truth, Gordievsky's world collapses. MI6 hatch a desperate, high stakes plan to smuggle him out of Moscow, an escape that could rewrite history. Follow the Spy who on the Wondery app or wherever you listen to podcasts. Or you can binge the full season of the Spy who Outran the KGB early and ad free.
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With Wondery plus. Foreign. It's 1987, and at TSR headquarters in Lake Geneva, three game designers are huddled around a table. They've just been handed a daunting task updating Dungeons and Dragons. It's been two years since Lorraine Williams took control of tsr, and the company is now out of the danger zone. Her business experience reassured lenders, allowing TSR to restructure its debt. She also cut the business down to a manageable size. But while she's delivered stability, money's still tight and sales of D and D are slipping. These days, TSR actually makes more money from publishing Dungeons and Dragons novels than from its flagship game. So Williams has asked these designers to create a new edition of Advanced Dungeons and Dragons. The hope is the update will reignite interest in the game. Lead designer David Cook relays Williams instructions to his colleagues. So yeah, we gotta remove the devils and demons. We're giving in. Gary Gygax would never have bowed to that nonsense. I know, but they're costing us retailers and sales. Are they really worth it? Fine, consider the Demons and Devils exercise. But fans will be upset. Any more upset than they'll be when they find out we're changing the rules. Well, fair point. Is there any guidance on how the rules are supposed to change? We need to make the new edition different enough to convince existing players to upgrade. But it can't be too different because we still need to sell supplements to anyone who sticks with the first edition. Okay, so make it different while keeping it the same. That's great. The team can already feel the pressure. And not just from the top. This will be the first revision of the rules since Gary Gygax left. Williams may have saved TSR financially, but many players don't trust her. To them, Gygax is the unfairly exiled hero, the creative soul pushed out by the suits. To survive, Dungeons and Dragons needs to bring in new players. But if a new addition alienates existing players, it could split the fan base TSR depends on. In 1989, TSR publishes the second edition of Advanced Dungeons and Dragons. It sells fast. More than 400,000 copies are sold in the first year. And removing the devils and Demons finally silences the accusations of Satanism. But after year one Sales tumble, the initial rush of players upgrading to the new rules ends. And many decide it's too expensive or too much work to relearn the rules so they stick with the old edition. This creates a schism. The game's fan base is now divided between those loyal to the Gygax era rules and those embracing the new edition. The second edition also fails to attract a rush of new players. Dungeons and Dragons used to dominate the role playing game market, but now there's increasing competition, and not just from games with fantasy settings. There are sci fi games like Mega Traveler and Shadowrun, and gothic horror games like the Masquerade. Individually, none of these games threaten D D's position as the best selling role playing game. But together they're chipping away at the game's audience, luring away potential newcomers to the hobby. So TSR fights back with what it calls the fish bait strategy. The idea is to release supplements that broaden the appeal of the game. These supplements are the bait, the customers, the fish. The strategy kicks off in 1990 with an expansion of Ravenloft D&D's Gothic horror setting. More supplements follow in an attempt to show that Dungeons and Dragons can be more than just Tolkien inspired fantasy. But the result isn't what TSR hoped for. Instead of keeping competition at bay, the fish bait strategy just further fractures the D and D community. Each new supplement creates a new subset of players who are only interested in their preferred flavor of the game. In short, TSR started with a large consumer base and turned it into a collection of much smaller consumer bases. The result is lower sales per product because each supplement only appeals to a fraction of the audience. Too many choices, too little focus. Every new version steals time, money and customers from the original. Expanding the product line sometimes feels like growth, but it often just slices your audience thinner before adding another flavor. Maybe you should ask, who's this really for? Sometimes the best thing a business can offer a customer is a little restraint. Now, businesses make mistakes. You try something, it doesn't work, you change direction. Except TSR doesn't change direction. Instead, it doubles down on the fish bait strategy. Not because it worked, but because by the mid-90s, TSR's survival depends on producing as many products as possible. Remember that sweet distribution deal TSR signed with Random House? The one where TSR got paid whenever it shipped product to the warehouse? Well, TSR has been making the most of this. What began as a way for a young company to get wide distribution is now TSR's cash cow. When its sales softened TSR realized the best way to keep cash coming in was to deliver more product to Random House. It doesn't matter if stores or players want this product. What matters is getting cash to keep the business solvent. Sure, this cash is a loan that needs to be paid off from actual sales in stores. But as long as TSR keeps shipping new products, it can keep getting the cash it needs to pay its debts. It's financial magic. Make more products, make more money. And this isn't TSR's only magic trick either. It's also relying on something called factoring, which is basically borrowing against future income. Lots of companies do this to get the cash they need to fund their operations. But tsr? They're using it to the max. Here's how it works. Every January, TSR unveils its product line for the year. Then it encourages retailers to pre order products by offering them a discount. And stores don't have to pay anything until the products are delivered. TSR sells these pre orders to banks, which then pay TSR 82% of the value of the orders in cash. When the product reaches stores, the banks collect the money from the retailers and keep the difference. It works for everyone. The retailers get a big discount, the banks get 18% of the revenue, and TSR gets cash for product it hasn't even made. Between factoring and the loans From Random House, TSR's business looks healthy to the outside world. Every year it reports strong revenue growth and its balance sheet shows peace. Plenty of cash in the bank. But underneath, it's a house of cards. TSR is actually sacrificing profit margin and piling up debt so it can keep the cash coming in. It's a financial trick that only works if TSR's products keep selling. And by 1995, the spell is broken. Thanks.
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To one game. They supple like ordinary cards. But if you've never played Magic the Gathering, then the deck is definitely stacked against you. Players say this fantasy game of sorcerers, creatures and spells is gaining in popularity. They say it's kind of a snappier version of.
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Dungeons and Dragons. In August 1993, a tiny startup from Renton, Washington, called Wizards of the coast releases Magic the Gathering. Magic is a new kind of tabletop game built around collectible co cards. Players buy packs of cards and use them to build custom decks for battles with other players. It's fast, it's fun, and has a genius business model. Fans buy pack after pack after pack of magic cards as they try to assemble superior decks. It's way more profitable than Dungeons and Dragons, where players can buy three rule books and be set for life within 18 months. Magic is eating into D D's sales. It wins over existing fans, along with many newcomers who previously might have turned to Dungeons and Dragons for their fantasy gaming kicks. And as magic accelerates TSR's decline, Random House's patience runs out. In June 1995, Random House demands repayment from TSR. Nearly 12 million. TSR promises to pay back roughly 3.6 million by the end of the year and the rest by the end of 1996. If they miss either deadline, Random House will seek all the money immediately, even if it bankrupts tsr. But there's no easy way to cut costs. Unlike its rivals who use freelancers, TSR's game designers are full time employees, and laying them off means expensive severance payments. So TSR boss Lorraine Williams calls Random House's rival McMillan and talks with him about taking over TSR's distribution. She makes sure to let Random House know she's flirting with the opposition. The hope is that the threat of losing TSR's business will make Random House ease off. But she's overplayed her hand. Random house isn't sure TSR's business is worth keeping. Then talks with McMillan. Stall, and TSR runs out of time to find another solution. On December 31, 1995, TSR fails to repay the 3.66 million it promised. Now Random House faces a choice. Follow through on its threat to bankrupt TSR or give TSR one more chance. As 1996 begins, TSR braces for whatever will happen next. From Wondery this is episode one of the many deaths of Dungeons and Dragons for business Wars. A quick note about recreations you've been hearing. In most cases, we can't know exactly what was said. These scenes are dramatizations, but they're based on historical research and we have used many sources for this season, including Slaying the Dragon by Ben Riggs and Of Dice and Men by David M. Ewold. David I'm your host, David Brown. This story was written and produced by Tristan Donovan of Yellow Ant. Sound designed by Josh Morales. Kyle Randall is our lead sound designer. Fact checking by Gabrielle Drollet. Voice acting by Chloe Elmore. Our managing producer is Desi Blaylock. Our senior producers are Jenny Bloom and Emily Frost. Karen Lowe is our producer emeritus. Our executive producers are Jenny Lauer Beckman and Marshall.
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Louie. For Wondery, In the fall of 1620, a battered merchant ship called the Mayflower set sail across the Atlantic, it carried 102 men, women, and children, risking it all to start again in the New World. Hi, I'm Lindsey Graham, the host of American Historytellers. Every week, we take you through the moments that shaped America. And in our latest season, we explore the untold story of the Pilgrims, one that goes far beyond the familiar tale of the first Thanksgiving. After landing at Cape Cod, the Pilgrims forged an unlikely alliance with the Wampanoag people, who helped the Pilgrims survive the most brutal winter they'd ever known, laying the foundation for a powerful national myth. But behind that story lies another one of conflict, betrayal, and brutal violence against the very people who helped the Pilgrim survive. Follow American Historytellers on the Wondery app or wherever you get your podcasts. You can binge all episodes of American Historytellers the Mayflower early and ad free right now on Wondery Plus.