This article is the first in a series that attempts to describe a history of RPG games one publisher at a time. It’s initially intended as a semi-monthly column, with a big company and a related small company presented each month, though I may skip that second article some months. For the most part this column will be presented in no specific order, but for the introductory column, I’ve decided to start with the biggest company out there.

This article was originally published as A Brief History of Game #1 on RPGnet. Its publication preceded the publication of the original Designers & Dragons (2011). A more up to date version of this history can be found in Designers & Dragons: The 90s while updates can be found in “Wizards of the Coast Next: 2011-Present”.

Wizards of the Coast is, without a doubt, now the big dog in the world of roleplaying. However, they were very much a small fish back in 1990 when Peter Adkison founded the company.

The Primal Order & Palladium: 1990-1993

Wizard’s first project was The Primal Order. It was meant to be part of a “capsystem” which each would provide rules for a general class of gameplay that could be used in any RPG, thanks to conversions for many different systems. The Primal Order covered religions & deities.

This type of multisystem book is a very sticky situation vis-à-vis Intellectual Property laws. By most peoples’ reading of laws, game companies can protect the actual text of the games via copyright, and they can protect the use of their system names for marketing via trademark. However, they can’t actually protect the game systems themselves unless they file patents for them as inventions … and very, very few game companies do. By that reading, a book like The Primal Order can be produced without permission from the original publisher, as long as care is taken in the use of the trademarks.

Peter Adkison clearly knew the dangers of producing a multisystem book, because he consulted with an intellectual property attorney pretty early on. Nonetheless, when Peter posted on the Internet in 1991 looking for system experts to help out Steffan O’Sullivan would warn him that he’d better get publishers’ permissions. It would be a prescient statement.

The Primal Order was released early in 1992. It was a dense, technical book that was nonetheless one of the best examples of a multisystem book since, perhaps, Chaosium’s nine-system Thieves’ World back in 1981. According to Peter it’d sold 2500 copies within six months, not great for a core rulebook in 1990, but not bad for a newcomer’s first product. The Primal Order would be followed by three supplements and meanwhile a second game in the capsystem had been announced, The Military Order. Heady on the idea of tying various game systems together, Wizards also began work on a generic stat system called Envoy that could be used throughout the industry.

At the same time Wizards of the Coast expanded their own RPG line by licensing the rights to the Talislanta game, previously held by Bard Games, from designer Steve Secchi. Talislanta would be revised for Wizards by Jonathan Tweet, the designer of Ars Magica, and one of the leaders of the storytelling branch of roleplaying games.

However, not all was rosy, and as predicted IP issues proved a problem for Wizards of the Coast. By the end of 1992 Wizards of the Coast was being sued by Palladium for use of their game system in The Primal Order.

Thus Wizards of the Coast learned a hard lesson, of relevance to any publisher. Whether your lawyers say you’re in the right or not on a legal issue, the other side will often have lawyers offering the exact opposite opinion, and the result will usually be a lawsuit that will be won by whoever has the most money (and thus, in an industry our size, will be lost by everyone).

The Palladium lawsuit almost put Wizards of the Coast out of business. Palladium’s Kevin Siembieda consistently demanded an “acknowledgement of guilt” which Wizards was unwilling to sign. (If they had, they might have been liable to every other publisher who’s game had been featured in The Primal Order.) Fortunately Mike Pondsmith of R. Talsorian, and then GAMA President, was able arbitrate and in March of 1993 an agreement came about. Wizards’ official statement on the issue was this:

The lawsuit between Kevin Siembieda, Palladium Books, Inc. and Wizards of the Coast, Inc. has been settled. All three of them want to put the suit behind them, and hope that their fans will do the same. In the spirit of industry harmony, Wizards requests that there be no boycotts or other action against Palladium. Thanks to all who have shown concern and support to both sides.

Later reports suggested that calling off boycotts (as this statement did) was part of that settlement agreement, along with payment by Wizards of an unspecified amount of cash, and promises for Wizards not to mention Palladium ever again in their games.

This was pretty much the end of Wizard’s multisystem experiment. Ideas like The Military Order and Envoy ended up derailed due to some combination of the Palladium lawsuit, the IP pall that fell upon the industry as a result, and the fact that Wizards of the Coast would soon become much, much more interested in … something else.

The Coming CCG Storm: 1993-1995

That something else had begun easily enough. Wizards of the Coast had been talking to Mike Davis and through him Richard Garfield about an interesting new board game. It was called RoboRally, but it looked too expensive for such a struggling new company to produce. So Peter asked Richard to develop something cheaper to produce, something that might be more portable, even easy to carry around to conventions. Richard suggested that he did have this interesting idea about combining baseball cards and a card game …

This was, of course, the genesis of the first collectible card game, originally called Manaclash and later Magic. It would eventually become Magic: The Gathering, White Wolf style, so that the name could be trademarked. Magic was the first of its type, a unique concept that offered players the ability to purchase small, randomized packs of cards that could be used to form play decks. During the Palladium lawsuit Garfield & Adkison worked on Magic and protected the IP by setting up a shell company called Garfield Games, which licensed the game to Wizards. (Setting up the shell company would also protect WotC’s RPG division in case this new-fangled Magic idea didn’t work out.)

The game that would become Magic: The Gathering was very nearly not released. The original request for a “cheaper” game ended up being hugely ironic once Wizards realized the huge scale required to produce a collectible card game. Add that on to the financial woes caused by the Palladium lawsuit and Wizards was practically begging for money. Requests went throughout the industry and across the Internet. Shares were sold in Garfield Games, then (after the lawsuit) merged into Wizards of the Coast at a 8:5 premium. So much stock was sold that it would cause problems for Wizards a few years later when they began approaching 500 individual shareholders, which would have forced them to begin reporting publicly. (A stock buyback at the time reduced the shareholder number and resolved the problem.) However, it got the job done, and Wizards stayed in business and got the printing money they needed.

Magic was demoed in July 1993 at Origins ’93, then the 2.6 million alpha card print run was released on August 5, 1993. As they say, the rest is history. 7.3 million beta cards soon followed, then in December the 35 million card Unlimited edition came out. The supplements starting rolling out too: Arabian Nights in December 1993, Antiquities in March 1994, Legends in June 1994, The Dark in August 1994, and Fallen Empires in November 1994.

There is no way to overstate how much CCGs changed the RPG industry back in 1993 and 1994. Gamers were lining up at stores on release day, purchasing the new sets by the $100 case. There was so much money in the fad that new game stores popped up just to get in on the booming industry. Print runs kept increasing, but pre-orders were locked in months ahead of each release, and Wizards couldn’t afford to print much above them, so retailers and distributors were constantly limited in their purchases, as their desires typically had grown by release date.

This upward spiral kept going until late 1994 and the release of Fallen Empires. Wizards had promised to print their games to order at Origins ’94, after some disagreements with distributors over The Dark, and so they felt compelled to match all the orders for Fallen Empires even though they were very, very high. So much production was required that printing stopped on the core Magic game. By January 1, 1995, it was obvious that there was way too much Fallen Empires, and Wizards was able to stop the presses on the rest of the print run. However, the damage had been done, and the result was one of the periodic crunches that hits the gaming industry.

Meanwhile, the CCG storm was having an effect on the core RPG industry as well. Money that retailers would have used for RPG purchases was being set aside for the next CCG release, starving manufacturers, but at the same time those RPG manufacturers were leaping on the bandwagon, each ready to produce their own CCG. TSR’s Spellfire, Atlas’ On the Edge, Decipher’s Star Trek, and Steve Jackson’s Illuminati: New World Order were some of the games released in 1994; 1995 would see many, many more (and may have been the peak year of the fad, though recent years are close) despite the post-Fallen Empires contraction already beginning.

Wizards of the Coast itself tried to replicate their success with their Vampire-based Jyhad, a complex but strategic system by Richard Garfield. Not only did it provide them with a second DeckMaster game, but it also cleverly kept White Wolf from using one of the best IPs in the industry to create a competing CCG. Jyhad sold well for Wizards, but it never have the same level of success as Magic. However it is one of the very, very few surviving CCGs from this early era of CCG publishing. Jyhad is now supported by White Wolf as Vampire: The Eternal Struggle with a third edition planned for late 2006.

Magic‘s success would result in huge growth for Wizards of the Coast. A handful of employees in 1993 who were working out of Peter’s house became fifty in 1994 working out of a real office and two-hundred and fifty in 1995.

Roleplaying Expansion & Contraction: 1993-1995

Some of Magic‘s profit would be rolled back into roleplaying games, as Wizards sought to increase the size of their gaming portfolio. Wizards had been talking with Nightfall Games about becoming a UK Wizards office as far back as 1993; in 1994 they outright purchased Nightfall’s SLA Industries. They also purchased Ars Magica from White Wolf in January, 1994.

Then in 1995 Wizards released Jonathan Tweet’s Everway, an entirely innovative RPG design. It introduced a visual randomizer, the Tarot-like Vision cards, which were used to determine the results of character actions. They meant that the gamemaster had a tremendous free hand, and the result was nearly as freeform as 1991’s Amber Diceless Roleplaying, by Phage Press. It was another step in the branch of storytelling games, which placed story first, before game or character. However, the freeform system required a very good gamemaster, and not everyone was a Jonathan Tweet or a John Tynes (who had been running playtests for the Wizards crew).

Unfortunately, Everway was dramatically overprinted, with pre-orders numbering 17,000. Wizards staff figured that sales of 5,000-10,000 were much more likely (and indeed, much more inline for a new RPG line), but couldn’t really allocate an RPG game, so they printed to the demand. The result was much the same as Fallen Empire‘s demand-driven overprinting. The game didn’t go anywhere.

In December 1995 Peter announced that Wizards was dropping their entire roleplaying line:

We are pretty much saying good bye to the roleplaying genre, at least for now. This is very hard for us, particularly for me specifically. I founded Wizards of the Coast with the dream of building a great roleplaying game company that would discover the RPG that would break out of the RPG industry and bring more gamers to roleplaying. The company’s first book was The Primal Order, a book that I authored and am immensely proud of. But I have come to the conclusion that if anyone is going to do something great and innovative with RPGs, it’ll probably be someone else. I bow from the field.

He further explained:

Note that I do not look at this as a disservice to RPGs. I think we WERE doing a disservice to RPGs by not giving them adequate support. We simply do not seem to be able to do a great job in the RPG business. We have never admit[t]ed this before, but we have lost money on every single RPG product we’ve published, from The Primal Order and Talislanta all the way up until now with Ars Magica and Everway. But no matter how much you love an industry, if you can’t make money at it eventually you have to walk away from it and let others carry the torch.

Wizard’s failure as a roleplaying producer wasn’t really a surprise given their economics. Roleplaying lines tend to be small-business, while Wizard’s CCG business was working at a totally different level. The same economics of salary and office cost couldn’t possibly be shared across both of these product lines, and when they were, it was no surprise that the roleplaying lines showed losses. (In order for this sort of thing to work, Wizards would have to be a top-level RPG producer, producing something like D&D rather than niche games like Ars Magica and Talislanta, but that, of course, wouldn’t be possible for a few years.)

Wizards actively sought new publishers for their RPG lines. Ars Magica had good luck, and went straight to Atlas Games, who continues to publish it in 2006. Talislanta languished for years before fans formed Shooting Iron to republish it in 2001; it’s now held by Morrigan Press. Everway went on to Rubicon Games, then Gaslight. SLA went back to Nightfall Games, and was briefly distributed by Hogshead.

Wizards of the Coast was no longer a roleplaying company. And thus they largely exit our history of roleplaying.

For a year and a half.

CCGs and Cons: 1995-1997

Throughout the next couple of years Wizards kept publishing expansions for MagicChroniclesIce AgeHomelands, and Alliances were the next several supplements, published in 1995 and 1996. However, the CCG business wasn’t as trouble-free for Wizards as it had been in its first couple of years.

There was still some lingering issues due to the overproduction of Fallen EmpiresChronicles reprinted many out-of-print cards to the horror and derision of collectors (though to the enjoyment of players).Homelands was generally unappreciated by fans due to its low power level and lack of new systems, to the point that many people call it the nadir of Magic design. Then there was an eight-month gap before the release of Alliances, the longest in Magic‘s history.

On the other hand, Wizards of the Coast was granted a patent on August 2, 1997 for many basic CCG techniques. They briefly tried to wield it to better control the CCG industry by sending out threatening letters to other CCG manufactuers. It was an entirely ironic move for a company almost put out of business by an equally questionable use of IP law just five years before. A few people signed on to their patent licensing agreement, but not many. However, it may have given Wizards the leverage they needed to become Nintendo’s manufacturer of the Pokemon card game for North America, Europe, and the Middle East. This deal, signed in 1998, would ultimately make them more money than Magic had (and the patent would turn up again in Wizard’s 2003 lawsuit against Nintendo, following their falling-out).

In 1996, in the middle of this CCG-oriented time period, Wizards also purchased Andon Unlimited, which gave them control of the Origins convention. The intent was to have a location to run major Magic tournaments, but it also kept Wizards in touch with the RPG world which they would very soon be returning to.

TSR, Five Rings, and Hasbro: 1997-1999

While Wizards was building their CCG business back up, TSR, the former big dog of the RPG industry was facing financial insolvency. By the end of 1996 they were over $30 million in debt. There’s no doubt that the CCG explosion hadn’t helped. Their Spellfire was never a success, and Wizards would later ship trailer-truckloads of Dragon Dice out of the TSR warehouse. TSR was selling books at loss, overpaying for licenses, and otherwise engaging in all manner of poor business practice. However according to Ryan Dancey, TSR’s core problem was simply that they didn’t listen to their customers. They did no surveys and got no feedback of any sort. They published material into a void, and hoped that it was what players really wanted.

In the face of TSR’s oncoming bankruptcy, bidding developed for the firm, with some of the bidders including film maker Sweetpea Entertainment, Ryan Dancey’s Five Ring Publishing Group … and Wizards of the Coast. It was Five Ring Publishing Group who actually brought the TSR deal to Wizards of the Coast. On April 10, 1997, Wizards of the Coast announced their purchase of all of the assets of TSR, including D&D and the other major gaming convention, GenCon. They ended up purchasing Five Rings Publishing Group too, and thus Legend of the Five Rings.

Wizards immediately jumped back into the roleplaying game. They continued production of TSR’s Advanced Dungeons & Dragons line, and even staged a return to Greyhawk, the classic AD&D campaign world, which had been abandoned by TSR for five years. Another roleplaying push starting in 1998 was the SF roleplaying system, Alternity. Five Rings Publishing Group stayed on as its own entity until 1998, then was dissolved into Wizards proper. Ryan Dancey would end up the head of Wizard’s tabletop roleplaying division, and thus would have a tremendous effect on the entire industry.

Then in 1999 Hasbro arrived. Ironically they’d expressed some interest in Wizards of the Coast way back in 1994, at the Nurnberg Toy Fair, but they hadn’t been interested in paying the couple of million dollars that Wizards would have cost them at the time. Now, with Pokemon off to a high-flying start, Hasbro was impressed. They closed a deal to buy Wizards for an announced $325 million dollars. Shares of Garfield Games purchased in 1993 for $5 were worth well more than $1000, which is what they call in the investing world “a damned fine IRR.”

D&D3E and D20: 1999-2002

Here’s a sucky truism of roleplaying publishing: adventures don’t sell nearly as well as most other types of supplements, however adventures are also entirely necessary to get people interested in and playing your game. Ryan Dancey, now the D&D brand manager, had a great solution to this problem: let other people do the adventure publishing. Thus, the idea of d20 was born.

The third edition of Dungeons & Dragons was released in 2000. It was a pretty massive revision of the old, well-respected Advanced Dungeons & Dragons game. With it came the d20 System which introduced: the idea of a “System Reference Document”, which defined the D&D system; an Open Gaming License, which allowed other companies to make use of those systems; and a d20 System Trademark License, which allowed them to use the d20 trademark, but only if they didn’t include character creation or other systems that might impact the sales of Wizard’s core books.

The d20 system caused a huge boom in the RPG industry, as everyone and their brother jumped on this new Wizards of the Coast bandwagon by producing their own d20 supplements. Some far-looking companies used the d20 system to try and boost the sales of their own proprietary systems. Atlas Games released a line of “Coriolis” products which each supported d20 and one of their core lines, while Chaosium Games produced a d20 game for their Stormbringer setting and allowed Wizards of the Coast to produce a d20 game for their Call of Cthulhu setting. But many more people were exclusively producing d20 material intended as add-ons to D&D. Countless new companies sprung up, and very shortly the entire market was glutted with OGL and d20 material. Some of it was good. A lot of it was crap. And this was a disaster just waiting to happen.

Meanwhile, Wizards itself continued to publish their own Dungeons & Dragons material, and lots of it. The reexpansion of Greyhawk really hadn’t struck a spark, and it began to taper off. Thus Wizards was looking for a new world.

Wizard’s first push toward a new campaign world was actually a return to an old one. In 2001 they published a new edition of their Oriental Adventures setting book, but now it was based in the Legend of the Five Rings world of Rokugan. Shortly therafter the Legend of the Five Rings rights reverted to Alderac Entertainment Group, who would support the d20 version of the game for a few years.

Then in 2002 Wizards began looking for an entirely original campaign world, and they did so by going out to their fans, sponsoring a design contest which allowed designers to submit their campaign worlds to Wizards. They received 11,000 submissions, and eventually selected “Eberron”, which has since joined the Forgotten Realms and Greyhawk as a major campaign setting. If it proves successful (and it’s been quite well supported through supplements and novels since the first hardcover book came out in June 2004), it’ll be the first really big expansion of a D&D campaign world since 1987’s Forgotten Realms release. (Other settings like Dark SunSpelljammerRavenloft, and Hollow Earth has risen and fallen in that interim.)

Corporate Influence: 2001-2004

Though Hasbro was giving Wizards a considerable free hand, they were also exerting some corporate influence, which began to create an exodus of personnel. The first left in Spring of 2000, after receiving their 1999 profit-sharing from the Pokemon phenomenon. (The inclusion of a guarantee for this final year’s profit sharing, itself a Wizards tradition, had been a bullet point in the Hasbro merger.)

Ultimately Peter Adkison himself resigned from the company he created, as he announced in another letter to the Internet, this one posted on December 14, 2000:

As of January 1st 2001 I will no longer be an employee of Wizards of the Coast/HasbroNo, I’m not getting fired or layed off. I’m leaving voluntarily. I’m sure many of you will want to know why.

Well, I don’t think that the core of my reasoning is any more complicated than this. When you start a company and run it as CEO for many years you think of it as your own. Yes there are other shareholders and a board of directors you answer to, but your vote is always the biggest vote. Then you sell the company and you go along trying to make the best of the situation, telling yourself that you still have the same responsibilities as before, plus a vote in something even bigger. That works for awhile until something happens that you object to and in spite of your best efforts you find yourself powerless to stop it. At that point you are forced to accept the fact that the company is no longer yours, that you no longer carry the biggest vote, and that can be difficult to take.

I’m not naive. I always knew intellectually this was the case, but to think you understand something and then actually experience it are two different things.

Another Hasbro move resulted in Wizards losing its rights to computer game licenses for its products. Those rights had been rolled up into Hasbro Interactive, which was then shut down in 2001 and all the assets sold off to Infogrammes, who is now called Atari.

Overall, Hasbro was looking to make Wizards meaner and leaner, and thus a better profit making machine. In 2001 and 2002 Habro also divested themselves of their conventions. Origins went to GAMA and GenCon to Peter Adkison. Around the same time they also outsourced their magazines by licensing DungeonDragonPolyhedron, and Amazing Stories to Paizo Publishing, who continues to publish the RPG magazines today.

Two years later another pruning would come. Wizards had also been running 85 “Game Keeper” and “Wizards of the Coast” retail stores, but in early 2004, Hasbro shut them all down. Together with selling the conventions, this relieved any concerns that Wizards might be developing a vertical monopoly, like that controlled by Games Workshop in the UK—and really such a monopoly wouldn’t have made sense given the d20 strategy.

The d20 Crash: 2003-2004

Dungeons & Dragons 3.5e Player's Handbook

We’ve seen a pattern of growth and crash several times in our niche genre markets. In fact, you can count off three major occurrences: in the 1980s, black & white comics became cheap to publish and distribute, and the market became glutted with crap, and when that bubble burst, it took down piles of comic publishers, comic stores, and even some associated businesses like RPGs; in the 1990s CCGs followed the same pattern; and from 2000-2003 it was d20 games.

In 2003 Wizards of the Coast released version 3.5 of their Dungeons & Dragons (and thus d20) system. It was a large enough change that many consumers panicked, figuring that their old 3.0 material was no longer good, and thus they stopped buying 3.0 d20 books, including books just published by licensees not ready for the change. This caused a cascade effect, and probably contributed to the downfall of companies like Wizard’s Attic, who in turn took more gaming companies with them when they went down.

Today there’s still a pile of d20 materials on the market, but retailers are a little pickier about what they purchase. I’d say that perhaps licensees are a little more careful now, and understand the danger they face by putting their livelihood in the hands of another company, but I’m not sure they’ll do any better once the next edition of Dungeons & Dragons comes out. Most speculators place that at 2007 or 2008, and some even suggest that Wizards may decide not to renew the OGL/d20 license at that time. Whether they do or not, it’ll likely cause a big shakeup in the industry.

Wizards Today: 2003-2006

Wizards of the Coast today continues work on a number of different types of games.

On the RPG front, Wizards maintains a solid focus on Dungeons & Dragons, with most of their attention on core rulebooks. Recent titles like Monster Manual IV and Player’s Handbook II suggest that they’re really pushing this envelope. Novels and anthologies based on the various D&D worlds seem to greatly outnumber the game books, and may well be Wizard’s secondary business (after Magic) at this point.

Other RPG lines from Wizards include d20 Modern and Star Wars, while miniature games are another important, related interest at Wizards.

On the CCG front Wizards of the Coast continues to push out Magic: The Gathering. Upcoming are the tenth edition and the Time Spiral block of supplements, scheduled for late 2006 and 2007.

In 2003 Wizards was given Avalon Hill by Hasbro. Now, besides their CCGs and RPGs, they’re also producing board games for gamers. Most of their board games are pretty light and random, but 2005’s Vegas Showdown got some attention as a thoughtful game in the European style.

As long as Wizards is allowed their autonomy by corporate overlord Hasbro, it looks like they’re going to remain a surprisingly spry and innovative force in gaming. RPGs surely aren’t their only focus, and most of their actual innovation seems directed toward board games and miniatures, but the potential for innovative RPGs remains. However, as a part of a huge corporate hegemony, Wizards is also just a heartbeat away from bureaucratic control at any moment.

For now though, Wizards offers a great opportunity to help keep the industry afloat amidst the increasingly dangerous world of MMORPGs, which have been making definite inroads into the industry in recent years.

Continue this history in Designers & Dragons: The 90s and “Wizards of the Coast Next: 2011-Present”.

Thanks to Peter Adkison, Carol Monahan, Chris Page, and Lisa Stevens for comments, additions, and corrections. Other info drawn from Internet postings by Peter Adkison, Ryan Dancey, and others.

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