Editing TSR, Inc. (section)

==History==
===Tactical Studies Rules (1973–1975)===
{{Infobox company
| name = Tactical Studies Rules
| logo = Tsr logo GK.png
| logo_caption = Original logo of Tactical Studies Rules: the entwined initials of founders Gary Gygax and Don Kaye
| fate = dissolved
| successor = TSR Hobbies, Inc.
| foundation = 1973
| defunct = 1975
| location = [[Lake Geneva, Wisconsin]], United States
| industry = [[Role-playing game]] publisher
| key_people = [[Gary Gygax]], [[Don Kaye]], [[Brian Blume]]
| products = ''[[Dungeons & Dragons]]''
| num_employees = 
| parent = 
| subsid = 
}}

Tactical Studies Rules (TSR) was formed in [[1973 in games|1973]] as a partnership between [[Gary Gygax]] and [[Don Kaye]], who collected together $2,400 for costs related to startup, to formally publish and sell the rules of ''Dungeons & Dragons'', the creation of Gygax and [[Dave Arneson]] and the first modern [[role-playing game]] (RPG).<ref name="Wired">{{cite news | last = Kushner | first = David | title = Dungeon Master: The Life and Legacy of Gary Gygax | work = Wired.com | url = https://www.wired.com/gaming/virtualworlds/news/2008/03/ff_gygax | access-date = 2008-10-16 | date=2008-03-10 |archiveurl=https://web.archive.org/web/20081226233225/https://www.wired.com/gaming/virtualworlds/news/2008/03/ff_gygax|archivedate=December 26, 2008}}</ref> The first TSR release, however, was ''[[Cavaliers and Roundheads]]'', a [[miniature wargaming|miniature game]], to start generating income for TSR. The partnership was subsequently joined by [[Brian Blume]] in December 1973. Blume was admitted to the partnership to fund further publishing of ''D&D'', as ''Cavaliers and Roundheads'' was not a commercial success.<ref>{{harvnb|Witwer|2015|loc=+21: The Art of Making Art}}</ref><ref name="ODD009">{{cite web |url =http://www.dragonsfoot.org/files/pdf/ODD09.pdf |title = An Interview with Gary Gygax, Part I |access-date =2007-11-09 |last = Sacco |first = Ciro Alessandro |date=February 2007 |work = OD&Dities issue 9 |publisher = Richard Tongue |pages =7 }}</ref> In the original configuration of the partnership, Kaye served as president, Blume as vice-president, and Gygax as editor.<ref name="peterson78">{{harvnb|Peterson|2012|pp=78–79}}</ref>

In January 1974, TSR—with Gygax using his basement as a headquarters—produced 1,000 copies of ''D&D'', selling them for $10 each (and the required extra dice for another $3.50). This first print sold out in 10 months.<ref name="Wired"/> In January 1975, TSR printed a second batch of 1,000 copies of ''D&D'', which took only another five or six months to sell out.<ref name="peterson496">{{harvnb|Peterson|2012|p=496}}</ref> Also in 1974, TSR published ''[[Warriors of Mars (game)|Warriors of Mars]]'', a miniatures rules book set in the fantasy world of [[Barsoom]], originally imagined by [[Edgar Rice Burroughs]] in his series of novels about [[John Carter of Mars]], to which Gygax paid homage in the preface of the first edition of ''D&D''. However, Gygax and TSR published the ''Mars'' book without permission from (or payment to) the Burroughs [[estate (law)#Inheritance|estate]].  ''Warriors of Mars'' was quietly dropped from the catalog and never reprinted.<ref name="peterson477">{{harvnb|Peterson|2012|pp=477-479}} Peterson notes that TSR never gave a reason for the lack of a reprint and thus did not directly corroborate this, but the claim from later sources that TSR never had a license to make such a Barsoom spinoff work is credible enough.</ref>
<!--
At its inception, TSR sold its products directly to customers, shipped to game shops and hobby stores, and wholesaled only to three distributors that were manufacturers of [[miniature figure (gaming)|miniature figurines]]. In 1975, TSR picked up one or two regular distributors.  The next year, TSR joined the Hobby Industry Association of America and began exhibiting at their annual trade show, and began to establish a regular network of distributors.{{citation needed|date=September 2018}}-->

When Don Kaye died of a heart attack on January 31, 1975, his role was taken over by his wife Donna Kaye, who remained responsible for accounting, shipping, and the records of the partnership through the summer.<ref name="peterson522">{{harvnb|Peterson|2012|pp=522–523}}</ref> By the summer of 1975, those duties became complex enough that Gygax himself became a full-time employee of the partnership in order to take them over from Donna Kaye. Arneson also entered the partnership in order to coordinate research and design with his circle in the Twin Cities.<ref name="peterson522"/>

===TSR Hobbies, Inc. (1975–1983)===
{{Infobox company
| name          = TSR Hobbies, Inc.
| logo          = Tsr logo game wizards.png
| fate          = Split up
| successor     = TSR, Inc., TSR Ventures, TSR International and TSR Entertainment Corporation
| foundation    = 1975
| defunct       = 1983
| location      = [[Lake Geneva, Wisconsin]], United States
| industry      = [[Role-playing game]] publisher
| key_people    = [[Gary Gygax]], [[Brian Blume]], [[Kevin Blume]]
| products      = ''[[Dungeons & Dragons]]''
| num_employees = 
| parent        = 
| subsid        = Greenfield Needlewomen
}}

Brian Blume and Gary Gygax reorganized the business from a partnership to a corporation called TSR Hobbies, Inc. At first, it was a separate company to market miniatures and games from other companies, an enterprise which was also connected to the opening of the Dungeon hobby shop in Lake Geneva.<ref name="peterson522"/> TSR Hobbies then moved to buy out the old TSR partnership's assets. Brian's father, Melvin Blume, invested $20,000 in the nascent company which enabled it to buy out Donna Kaye's share of the original TSR partnership. On September 26, 1975, the assets of the former partnership were transferred to TSR Hobbies.<ref name="peterson535">{{harvnb|Peterson|2012|p=535}}</ref> Brian Blume became the largest shareholder, Melvin Blume the second largest, and Gary Gygax the third largest.<ref name="witwer23">{{harvnb|Witwer|2015|loc=+23: A Makeshift Solution}}</ref><ref name="history">{{cite web| url=http://www.wizards.com/dnd/DnDArchives_History.asp| title=The History of TSR| publisher=[[Wizards of the Coast]]| access-date=2005-08-20| archive-url=https://web.archive.org/web/20000818164322/http://www.wizards.com/dnd/DnDArchives_History.asp| url-status=dead| archive-date=2000-08-18}}</ref> Gygax served as president of TSR Hobbies, and Blume as vice president and secretary. The Dungeon hobby shop would become the effective headquarters of the company, including the offices of Blume and Gygax. TSR Hobbies subcontracted the printing and assembly work in October 1975, and the third printing of 2,000 copies of ''D&D'' sold out in five months.<ref name="peterson496"/> [[Tim Kask]] was hired in the autumn of 1975 as Periodicals Editor, and the first employee that TSR hired for full-time work.<ref name="witwer23"/>

''[[Empire of the Petal Throne]]'' was the first game product released by TSR Hobbies, followed by two ''D&D'' supplements, ''[[Greyhawk (supplement)|Greyhawk]]'' and ''[[Blackmoor (supplement)|Blackmoor]]''.<ref name="history"/> Also released in 1975 were the board game ''[[Dungeon!]]'' and the Wild West RPG ''[[Boot Hill (role-playing game)|Boot Hill]]''.<ref name="history"/> The company took $300,000 in revenues for the fiscal year of 1976.<ref name="inc"/> TSR started hosting the [[Gen Con]] Game Fair in 1976, and the first ''D&D'' open tournament was held at the convention that year.<ref name="history"/><ref name="D&Dfaq">{{cite web| url = https://www.wizards.com/dnd/DnDArchives_FAQ.asp| title = ''Dungeons & Dragons'' FAQ| access-date = 2021-06-30| publisher = [[Wizards of the Coast]]| archive-url = https://web.archive.org/web/20081002132129/http://www.wizards.com/dnd/DnDArchives_FAQ.asp| url-status = dead| archive-date = 2008-10-02}}</ref> ''D&D'' supplements ''[[Eldritch Wizardry]]'' and ''[[Gods, Demi-Gods & Heroes]]'' were released in 1976.<ref name="history"/> Also in 1976, the company opened The Dungeon Hobby Shop at 723 Williams Street and TSR Hobbies moved out of Gygax's home and into the building, with its offices upstairs from the hobby shop.<ref>Dungeon Hobby Shop Advertisement. "Discover the Dungeon". The Strategic Review, vol. II, no. 2, April 1976, pp. 12-13</ref>

TSR also began to branch the ''Dungeons & Dragons'' product into two: ''Dungeons & Dragons'' as a general audience product intended for novices, and ''[[Advanced Dungeons & Dragons]]'' (''AD&D'') for a more complicated product aimed at hardcore fans. In 1977, the ''[[Dungeons & Dragons Basic Set]]'' was released for ''D&D'', and the ''[[Monster Manual]]'' was released as the initial product for ''AD&D'', making TSR the first game company to publish a hardbound book. The next year, the ''AD&D'' ''[[Players Handbook]]''<!-- Not a typo--> was published, followed by a series of six [[Adventure (Dungeons & Dragons)|adventure modules]].<ref name="history"/> Due to the inclusion of the word "Advanced" in the title, TSR did not pay Dave Arneson any royalties on ''AD&D'' products, saying his co-creation rights extended to the base ''D&D'' name only.<ref name="riggs19">{{harvnb|Riggs|2022|pp=19–22; 99}}</ref> In late 1978, TSR Hobbies and the Dungeon Hobby Shop moved from 723 Williams Street into downtown [[Lake Geneva, Wisconsin|Lake Geneva]], to 772 West Main Street, with its offices once again located above the hobby shop.<ref name="history"/><ref>{{cite web|url=https://www.gygaxmemorialfund.org/lgam-24|title=24 - Hotel Clair|author=Gygax Memorial Fund}} Retrieved 2024-02-22.</ref> In 1979, the ''AD&D'' ''[[Dungeon Masters Guide]]''<!-- Not a typo--> was published, and radio ads featuring "Morley the Wizard" were broadcast,<ref name="history"/> a figure created "as the poster child for the softer, child-friendly image" promoted at that time.<ref name="arts-arcana">{{cite book |last1=Witwer |first1=Michael |title=[[Art & Arcana: A Visual History|Dungeons & Dragons Art & Arcana: a visual history]] |last2=Newman |first2=Kyle |last3=Peterson |first3=Jonathan |last4=Witwer |first4=Sam |last5=Manganiello |first5=Joe |date=October 2018 |publisher=[[Ten Speed Press]] |isbn=9780399580949 |pages=105, 107, 124, 277 |oclc=1033548473}}</ref> All of these core books would go on to be major hits; the ''D&D Basic Set'' sold well in 1977 and 1978, would sell over 100,000 copies in 1979, and would continue to be updated and re-released for years.<ref name="riggs19"/>

During this era, there were a number of competitors and unofficial supplements to ''D&D'' published, arguably in violation of TSR's copyright, which many ''D&D'' players used alongside the TSR books. Among these were the ''[[Arduin#The Arduin Trilogy|Arduin Grimoire]]'', the ''Manual of Aurenia'', and variants such as ''Warlock'' and ''[[Tunnels & Trolls]]''. TSR regarded these very warily, and in cases where they felt their trademarks were being misused, they issued cease-and-desist letters. More often than not, this legal posturing resulted in only slight changes to competitors' works, but caused significant animosity in the community.<ref name="peterson555">{{harvnb|Peterson|2012|p=555}}</ref>

In 1979, TSR signed a contract with [[Random House]] with unusual terms. In most deals between publishers and distributors, publishers are paid directly based on books sold downstream by the distributor to bookstores. In TSR's contract, however, Random House would loan money to TSR as an advance upon shipment of product from TSR to Random House, a loan equivalent to 27.3% of the suggested retail price. The arrangement was mutually beneficial at first: TSR could acquire money up front to fund their work, and not have to worry about immediate sales. Many of TSR's products had consistent sales over time, and the loans allowed the company to recoup the investment immediately and use the funds to make more books. Returns were generally low, leading to Random House's confidence in TSR. However, the arrangement would cause trouble later in the 1990s.<ref name="riggs164">{{harvnb|Riggs|2022|pp=164–170}}</ref>

Gygax granted exclusive rights to [[Games Workshop]] to distribute TSR products in the United Kingdom, after meeting with [[Ian Livingstone]] and [[Steve Jackson (UK game designer)|Steve Jackson]]. Games Workshop printed some original material and also printed their own versions of various ''D&D'' and ''AD&D'' titles in order to avoid high import costs. TSR was unable to reach an agreement with Games Workshop regarding a possible merger, so the company created the subsidiary TSR Hobbies UK Ltd, in 1980.<ref name="history"/> Gygax hired [[Don Turnbull (game designer)|Don Turnbull]] to lead the subsidiary, which would expand into continental Europe during the 1980s. TSR UK published a series of modules and the original ''[[Fiend Folio]]''. TSR UK also produced ''[[Imagine (game magazine)|Imagine]]'' magazine for 31 issues.

The first-published [[campaign setting]] for ''AD&D'', the [[Greyhawk|World of Greyhawk]], was introduced in 1980. The espionage role-playing game ''[[Top Secret (role-playing game)|Top Secret]]'' came out in 1980; reportedly, a note regarding a fictitious assassination plot on TSR stationery, as part of the playtesting of the new game, prompted the [[FBI]] to visit TSR's offices.<ref name="history"/> That same year, the [[D&D Adventurers League|Role Playing Game Association]] was founded to promote skillful roleplaying and unite players around the country.<ref name="history"/> In 1981, ''[[Inc. (magazine)|Inc.]]'' magazine listed TSR Hobbies among the hundred fastest-growing privately held U.S. companies.<ref name="inc">{{cite web|url=http://www.inc.com/magazine/19820201/3601.html|title=TSR Hobbies Mixes Fact and Fantasy|date=1982-02-01|author=Stewart Alsop II|archiveurl=https://web.archive.org/web/20130921025734/http://www.inc.com/magazine/19820201/3601.html|archivedate=September 21, 2013}}</ref> That same year, TSR Hobbies moved its offices again, into a former medical supply building with a warehouse attached. In 1982, TSR Hobbies broke the 20&nbsp;million sales mark.<ref name="history"/>

TSR Hobbies terminated [[Grenadier Miniatures]]'s license in 1982 and began to directly manufacture an [[Advanced Dungeons & Dragons Miniatures|''AD&D'' miniatures line]], followed by a toy line. Part of the licensing of the ''AD&D'' toy line went to [[LJN]]. Also that year, TSR introduced the ''[[Gangbusters (role-playing game)|Gangbusters]]'' and ''[[Star Frontiers]]'' role-playing games.<ref name="history"/> TSR established exclusive distribution for the ''D&D'' game in 1982 in 22 countries, with the game being translated first into French, followed by many other languages. In 1982, TSR established an educational department with the intention of developing curriculum programs for reading, math, history, and problem solving, with the most successful program among these the ''[[Endless Quest]]'' series of game books.<ref name="history"/>

Melvin Blume's shares were later transferred to his son Kevin Blume. After this, the leadership of TSR consisted of Kevin Blume, Brian Blume, and Gary Gygax. In contemporary articles from the early 1980s, Gygax said that the three worked as a team, and only proceeded with unanimous consent and buy-in. In interviews years later, Gygax downplayed his role, and described his position as primarily a powerless figurehead CEO, with Brian Blume as president of creative affairs and Kevin Blume as president of operations.<ref name="inc"/><ref name="riggs36">{{harvnb|Riggs|2022|pp=36–37}}</ref><ref name="Kyngdoms">{{cite web | last = Sacco | first = Ciro Alessandro | title = The Ultimate Interview with Gary Gygax | work = thekyngdoms.com | url = http://www.thekyngdoms.com/forums/viewtopic.php?t=37 | access-date = 2008-10-24}}</ref> In 1981, TSR Hobbies had revenues of $12.9&nbsp;million and a payroll of 130.<ref name="inc"/>

TSR Hobbies diversified by purchasing or starting new commercial ventures such as producing miniatures, expanding into toys and gifts, and adding an entertainment division to explore getting into films and television.<ref name="history"/> Many parts of this expansion were later criticized as bad investments and over-extension. Greenfield Needlewomen, a [[needle craft]] business, was one particularly criticized acquisition; it was owned by a cousin of the Blumes. Sales of D&D-themed needlecraft were abysmal, and the acquisition was criticized as [[nepotism]]. The company was similarly accused of favoring friends and relatives of the Blumes and Gygax in hiring. The management also used company funds to raise a shipwreck from [[Geneva Lake]] for no clear financial benefit. The company acquired the trademark and copyrights of the  magazine ''[[Amazing Stories]]'', although it had only ten thousand subscribers.<ref name="history"/><ref name="riggs45"/>

====Wargames====
Another acquisition was the 1982 takeover of [[Simulations Publications Inc.]] (SPI), one of the major publishers of wargames and wargaming magazines in North America. SPI was heavily in debt, and TSR agreed to give them a promissory note for several hundred thousand dollars, using SPI's assets as collateral. SPI immediately used the money to pay off its debts, leaving it cash-poor but debt-free. Less than two weeks later, TSR called in the note;<ref name="Grognard">{{cite web | url=https://grognard.com/zines/so/so43.txt | title=Why Did SPI Die? | author=Simonsen, Redmond | authorlink=Redmond A. Simonsen}}</ref> with no cash on hand, SPI was forced to hand over their operation to TSR.<ref name="history" /> Believing the wargame market to be a lucrative opportunity, TSR immediately released several SPI titles that were ready for publication but had been stranded by a lack of money for printing, such as ''[[Battle Over Britain]]'' and ''[[A Gleam of Bayonets: The Battle of Antietam|A Gleam of Bayonets]]''. TSR also reboxed and republished several popular SPI titles from the mid-1970s under the TSR logo, including ''[[Air War (game)|Air War]]'', ''[[Blue & Gray: Four American Civil War Battles|Blue & Gray]]'', and ''[[Napoleon's Last Battles]]''. But TSR soon learned that the main reason for SPI's large debt was that the wargame market had collapsed. When their wargames failed to sell, TSR halted all new game projects; in reaction, most SPI game designers resigned and moved to rival company [[Avalon Hill]], lured by the formation of a subsidiary specifically for them called [[Victory Games (Avalon Hill)|Victory Games]].<ref name=zoc>{{cite book | last =Lowood | first =Henry | title =Zones of Control: Perspectives on Wargaming | editor-last1 =Harrigan | editor-first1=Pat | editor-last2=Kirschenbaum | editor-first2=Matthew G. | contribution = War Engines | publisher =MIT Press | date =2016 | pages =90 | isbn =9780262033992}}</ref> TSR published a few wargames created by their own in-house designers, and had a hit with ''[[The Hunt for Red October (board game)|The Hunt for Red October]]'', but ten years after the SPI takeover, TSR abandoned the wargame market.

===TSR (1983–1985)===
In 1983, the company was split into four companies: TSR, Inc. (the primary successor), TSR International, TSR Ventures, and TSR Entertainment, Inc.<ref name="ODD009"/>

Gygax left for Hollywood to found TSR Entertainment, Inc., later Dungeons & Dragons Entertainment Corp., which attempted to license ''D&D'' products to movie and television executives. His work would eventually lead to only a single license for what later became the [[Dungeons & Dragons (TV series)|''Dungeons & Dragons'' cartoon]].<ref name="Gamespy-GaryGygax">{{cite web | url=http://pc.gamespy.com/articles/538/538820p1.html | title=Gary Gygax Interview - Part 2 | last=Rausch | first=Allen | work=[[GameSpy]] |publisher=[[IGN]] | date=2004-08-16 | access-date=2006-07-05}}</ref> This series was the lead program in its time slot for two years.<ref name="history"/>

TSR, Inc. started publication of the ''[[Dragonlance]]'' saga in 1984 after being in development for two years. The series was both a set of modules and supplements designed for running campaigns in an entirely new game world, starting with ''[[Dragons of Despair]]'', as well as a novel series. The novel series was written by [[Margaret Weis]] and [[Tracy Hickman]]. The ''Dragonlance'' trilogy of novels was a colossal hit; ''[[Dragons of Autumn Twilight]]'', the first novel in the series, reached the top of [[The New York Times Best Seller list|''The New York Times'' Best Seller list]], encouraging TSR to a launch a long series of paperback novels. TSR's Books Department would go on to launch novels on its other ''D&D'' settings as well, and be one of TSR's most profitable divisions.<ref name="history"/><ref name="riggs48">{{harvnb|Riggs|2022|pp=48–52}}</ref>

In 1984, TSR was able to make licensing agreements that allowed the company to publish the ''[[Marvel Super Heroes (role-playing game)|Marvel Super Heroes]]'', ''[[The Adventures of Indiana Jones Role-Playing Game|Indiana Jones]]'', and ''[[Conan Role-Playing Game|Conan]]'' role-playing games. In 1985, Gen Con moved out of Lake Geneva which had given it its name, and relocated to [[Milwaukee]], Wisconsin where the game convention would have more badly needed additional space. The ''[[Oriental Adventures]]'' hardback for ''AD&D'' was released that same year, becoming the biggest seller for 1985. TSR published a game based on the ''[[All My Children]]'' daytime drama on [[American Broadcasting Company|ABC]], with over 150,000 copies sold. In 1986, TSR began publishing the bi-monthly ''[[Dungeon (magazine)|Dungeon Adventures]]'' magazine, featuring only adventure scenarios for ''D&D''.<ref name="history"/>

====Management turmoil====
Sales of the core rule books and boxed sets crested in 1983 and fell in 1984 and 1985, largely due to [[market saturation]]; customers who wanted rulebooks largely already had them. There were bright spots in 1983–1985 such as ''Dragonlance'' novel sales, ''Unearthed Arcana'', and ''Oriental Adventures'', but TSR's finances were in bad shape due to high expenses and costs that had assumed rule book sales would remain strong. The result was a cycle of layoffs and contractions in 1983–1985, as well as the Blumes negotiating a $4 million loan from [[American National Bank]].<ref name="riggs45">{{harvnb|Riggs|2022|pp=45–48}}</ref>

The struggle for financing led to board room shake-ups at the top level. TSR's line of credit was stopped by its bank, and the company was in debt to over {{USD|1.5 million}}. Gygax would later say that he was in the dark as to the extent of the financial difficulties due to being in Hollywood; Ben Riggs, an author who studied TSR's history, is skeptical Gygax was truly unaware, however.<ref name="riggs56"/> Gygax returned to Wisconsin from Hollywood. In the spring of 1985, Gygax exercised an option to buy seven hundred shares of TSR stock, which combined with shares given to his son Ernie gave him 51.1% of all stock, up from around 30% before.<ref name="riggs56"/> Gygax also says he had a confrontation with the board of directors, and had the Blumes removed.<ref>Gygax: "I was alerted to a problem: Kevin Blume was shopping TSR on the street in New York City. I flew back from the West Coast, and discovered the corporation was in debt to the bank the tune of circa {{USD|1.5 million}}." {{cite web | title = Gary Gygax: Q & A (Part XII, Page 28) | work = EN World | date = 2007-01-21 | url = http://www.enworld.org/forum/archive-threads/171753-gary-gygax-q-part-xii-28.html | access-date = 2009-03-15 | archive-date = 2011-06-14 | archive-url = https://web.archive.org/web/20110614223453/http://www.enworld.org/forum/archive-threads/171753-gary-gygax-q-part-xii-28.html | url-status = dead }}</ref><ref name="magicnmemories2">{{cite web |url=http://pc.gamespy.com/articles/539/539197p1.html |title=Magic & Memories: The Complete History of ''Dungeons & Dragons'' - Part II |last=Rausch |first=Allen |work=[[GameSpy]] |publisher=[[IGN]] |date=16 August 2004 |access-date=2008-12-20}}</ref>{{Rp|4}} Gygax now controlled TSR. Financial difficulties continued, however.<ref name="riggs56"/> Within a year of the departure of the Blumes, the company posted a net loss of US$1.5&nbsp;million, resulting in layoffs of approximately 75% of the staff. Some of these staff members went on to form other prominent game companies, such as [[Pacesetter Ltd]] and [[Mayfair Games]], or to work with [[Coleco]]'s video game division.

Gygax searched for financing. [[Flint Dille]], one of his contacts he made in his time in Hollywood, suggested his sister [[Lorraine Williams]] might be interested in investing money into TSR. Williams was given a position of general manager at TSR and attempted to fix TSR's precarious financial situation. This led to clashes between Williams and Gygax, who resisted some of Williams' suggestions. Meanwhile, the Blumes, out of power at the company and worried about its financial strength in the long-term, sought to cash out their shares. They offered to sell their shares to Gygax, but he refused. They exercised their own options to buy seven hundred more shares, then sold their entire holdings to Lorraine Williams instead. Williams herself bought fifty shares. With these purchases, Williams became the majority shareholder of TSR, and used her voting power to depose Gygax as CEO and president on October 22, 1985. Gygax unsuccessfully challenged the sale in court; Gygax's supporters considered the Blumes' sale an act of retaliation.<ref name="magicnmemories2"/> Gygax eventually sold his remaining stock to Williams and used the capital to form [[New Infinities Productions]]. On TSR's side, they would pepper Gygax with legal threats long after he left in an attempt to deter him from competing with his old company in the area of role-playing games.<ref name="riggs56">{{harvnb|Riggs|2022|pp=56–61}}</ref><ref name="witwer171">{{harvnb|Witwer|2015|pp=171–197}}</ref>

===Lorraine Williams era (1985–1997)===
Williams saw potential for rebuilding the debt-plagued company into a highly profitable one. However, she also acquired a reputation as a non-gamer who played the "villain" in retrospectives of TSR. Gary Gygax grew particularly disdainful of her; Williams' habit of threatening lawsuits and legal action against perceived foes was criticized as unwise and turning potential allies into enemies.<ref name="witwer171"/><ref name="Gygax-GygaxFAQ">{{cite web | url=http://www.gygax.com/gygaxfaq.html#What%20Happened%20to%20Gygax%20-%20TSR?| title=What Happened to Gygax – TSR? | publisher=gygax.com | access-date=2006-07-04| archive-url=https://web.archive.org/web/19990128161605/http://www.gygax.com/gygaxfaq.html#What%20Happened%20to%20Gygax%20-%20TSR? | archive-date=1999-01-28}}</ref><ref name="Gamespy-MagicMemories3">{{cite web| url=http://pc.gamespy.com/articles/539/539628p1.html| title=Magic & Memories: The Complete History of Dungeons & Dragons – Part III: Tyrants & Wizards| pages=1| publisher=Gamespy| date=2004-08-17| access-date=2006-07-04}}</ref><ref name="riggs61">{{harvnb|Riggs|2022|pp=61; 65–70}}</ref> However, her tenure has also been defended. [[John D. Rateliff]] said that "Every single person I talked to who worked under Gary [Gygax] and the Blumes and then worked under Lorraine preferred working under Lorraine... I never met a single person who was under both who didn't prefer being under her."<ref name="riggs61"/> [[Jeff Grubb]] said that she "pretty much saved the company," as the company was weeks away from total collapse when she took over.<ref name="riggs61"/>

====Tabletop and board gaming in the Williams era====
TSR released the ''[[Forgotten Realms]]'' campaign setting in 1987, which would go on to become one of the most popular settings for ''D&D''. TSR's settings would generally include a [[boxed set]] with multiple paperbacks and a map as their core product, and would produce tie-in supplements such as pre-made adventures (usually called "modules"), guides to regions within the world, and novels. Also in 1987, a small design team began working to develop a second edition of the ''AD&D'' game. In 1988, TSR released the ''[[Bullwinkle and Rocky Role-Playing Party Game]]'', complete with a spinner and hand puppets. That same year, TSR released the wargame ''[[The Hunt for Red October (board game)|The Hunt for Red October]]'' based on Tom Clancy's novel ''[[The Hunt for Red October]]'', which became one of the all-time biggest selling wargames. In 1989, [[Advanced Dungeons & Dragons 2nd edition|''AD&D'' 2nd edition]] was released, which saw a new ''Dungeon Master's Guide'', ''Player's Handbook'', and the first three volumes of the new ''[[Monstrous Compendium]]''. A new campaign setting, ''[[Spelljammer]]'', was also released in 1989, which allowed characters from one ''D&D'' world to travel to other worlds via space galleons in an [[Age of Sail]] themed setting. TSR would go on to produce many expansions for 2nd edition, such as a series of class handbooks that began with ''[[The Complete Fighter's Handbook]]''.<ref name="history"/>

In 1990, the ''[[Ravenloft]]'' setting was released, a horror-themed setting for ''AD&D''. ''Ravenloft'' had been introduced in an acclaimed [[Ravenloft (module)|1983 adventure module]], and was now expanded into an entire setting. In 1991, TSR released the ''[[Dark Sun]]'' campaign setting, which was more [[dark fantasy]] in genre, and set on a [[post-apocalyptic]] desert world threatened by evil life-draining wizards and psionicists. In 1992, TSR released the ''[[Al-Qadim]]'' setting with a Middle Eastern flavor similar to a fantasy version of the ''[[Arabian Nights]]'', although its world was also connected to the Forgotten Realms. In 1993, a revised version of the ''[[Forgotten Realms Campaign Setting]]'' for 2nd edition was released; TSR had published a sourcebook on upgrading the 1st edition material to 2nd edition in 1990 earlier. In 1993, ''[[DragonStrike (board game)|DragonStrike]]'' was released as an introductory product aimed to recruit new role-players, including a half-hour video which explained role-playing concepts; a similar introductory product, ''[[First Quest]]'', was released in 1994. Also in 1994, the ''[[Planescape]]'' campaign setting was released, featuring the city of [[Sigil]] as the "City of Doors" that connected to the various planes of existence in ''AD&D''.<ref name="history"/> ''Spelljammer'' had not been considered a success by TSR as players perceived it as mainly a way to move characters from one world to another rather than its own setting; ''Planescape'' attempted to remedy this by focusing on Sigil as a place to set an entire campaign, rather than a place to pass through.<ref>{{harvnb|Riggs|2022|pp=185–191}}</ref> TSR also released ''[[Karameikos: Kingdom of Adventure]]'' in 1994, which detailed one of the kingdoms in the setting of [[Mystara]].<ref>{{harvnb|Riggs|2022|pp=208–209}}</ref> As an innovation, it included an audio CD with tracks of dialogue and sound effects. In 1995, TSR released ''[[Birthright (campaign setting)|Birthright]]'', a campaign setting that mixed ''D&D'' with strategy games. The intent was for players to play noble characters empowered by divine blood which gave them the power to rule domains; players could expand their domains and divine powers with a mixture of war and diplomacy.<ref name="history"/> In 1996, ''[[Dragonlance: Fifth Age]]'' was released, a "diceless" role-playing game that departed from the roots of ''Dragonlance'' in ''AD&D''.<ref name="history"/>

====Expansion into other products====
Under Williams' direction, TSR solidified its expansion into other fields, such as magazines, paperback fiction, comic books, and collectible games. TSR's book division was a traditional powerhouse for the company, especially due to the comparatively low costs in producing novels compared to role-playing supplements which required commissioning art and play-testing. The most notably successful novel series of the era was [[R. A. Salvatore]]'s [[The Legend of Drizzt|Drizzt series]], set in the Forgotten Realms. Starting with ''[[The Crystal Shard]]'' in 1988, many of Salvatore's books would go on to reach the paperback bestseller lists.<ref>{{harvnb|Riggs|2022|pp=83–90}}</ref> TSR eventually moved into publishing hardcover novels as well with Salvatore's ''[[The Legacy (Forgotten Realms novel)|The Legacy]]'', published in 1992. It made the top of [[The New York Times Best Seller list|''The New York Times'' Best Seller list]] weeks after its release.<ref name="history" />

The Dille Family Trust, of which Lorraine Williams was a part, held the rights to the [[Buck Rogers]] license. Williams personally encouraged TSR to produce Buck Rogers tie-in material. TSR would end up publishing Buck Rogers board games, novels, a comic book, and a role-playing game based on the ''AD&D'' 2nd Edition rules.<ref name="magicnmemories2"/> TSR's Buck Rogers projects were commercial failures.<ref>{{harvnb|Riggs|2022|pp=69–70; 108}}</ref>

In the late 1980s, TSR opened a new West Coast division in Southern California to develop various projects in the entertainment industry, similar to how Gygax had sought deals in Hollywood in the early 1980s. However, the efforts of the division would come to "less than nothing" according to TSR historian Ben Riggs, despite initial promise.<ref name="riggs103">{{harvnb|Riggs|2022|pp=103–123}}</ref> TSR had an arrangement with [[DC Comics]] to produce the comics ''[[Advanced Dungeons & Dragons (comic)|Advanced Dungeons & Dragons]]'' and ''[[Forgotten Realms (comics)|Forgotten Realms]]'', which sold well and were profitable for both DC and TSR. Sensing an opportunity, TSR decided to produce comics themselves as a stepping stool to television and film, as comics were cheaper to produce and start with. However, they had already sold the rights to their own A-list product in ''AD&D''. TSR attempted to not enrage DC Comics by calling their new product "comics modules" and including game-related material at the end of each issue; additionally, TSR largely sold the comics modules through bookshops rather than comic shops. The compromise failed in both directions: DC, feeling betrayed that their partner was moving to become a competitor, immediately stopped production of both the ''AD&D'' and ''Forgotten Realms'' comics, and canceled an in-production ''Ravenloft'' work. However, the changes to present the product as not a comic book caused the potential audience to either not know of its existence at all, or to be confused as to its nature. TSR West eventually published four comics modules: a Buck Rogers comic, a sci-fi comic ''Intruder'', a time travel comic ''Warhawks'', and a horror comic called ''R.I.P.'' They were not commercially successful.<ref name="riggs103"/> TSR West closed around 1991, although TSR would continue to work with Flint Dille on film-adjacent products made in California such as the introductory video for ''Dragonstrike''<ref name="riggs164"/> and a 1995 interactive video game series called ''Terror T.R.A.X.'' In 1994, TSR signed an agreement with Sweetpea Entertainment for rights to make a ''D&D'' movie. This would eventually result in the 2000 [[Dungeons & Dragons (2000 film)|''Dungeons & Dragons'' movie]].<ref>{{cite news|last=Gardner|first=Eriq|title=Hasbro Sues to Stop Warner Bros. 'Dungeons and Dragons' Film|url=http://www.hollywoodreporter.com/thr-esq/hasbro-sues-stop-warner-bros-522262|access-date=August 8, 2015|work=The Hollywood Reporter|date=May 14, 2013}}</ref>

TSR continued to own and operate the [[Gen Con]] role-playing game convention. Gen Con grew beyond its initial focus on ''D&D'' and wargames to role-playing fans in general. Gen Con was a growing and successful convention; in 1992, it broke every previous record for attendance to game conventions in the United States, with over 18,000 attendees.<ref name="history"/>{{better source needed|date=September 2022}}   

In 1993, [[Wizards of the Coast]] released the game ''[[Magic: The Gathering]]'' at Gen Con, which was an immediate smash hit that established the [[collectible card game]] (CCG) genre. TSR's Jim Ward led a development effort to create a ''Dungeons & Dragons''-themed CCG competitor that would be a response to ''Magic''. The result would be ''[[Spellfire]]'', released in April 1994. ''Spellfire'' was produced on a shoestring budget, and re-used art that TSR had already commissioned for other projects; Lorraine Williams was not a fan of the project. Its financial results are contested; some TSR insiders say that ''Spellfire'' sold well considering the constraints on it, while others indicate it sold poorly.<ref name="riggs211">{{harvnb|Riggs|2022|pp=211–214}}</ref><ref name=ODaM/> ''Spellfire'' was discontinued in 1996, although one final release occurred in late 1997.<ref>{{Cite web |last=Braid |first=Davi Nonato |date=April 4, 2021 |title=10 Card Games No One Remembers |url=https://www.thegamer.com/forgotten-card-games/ |access-date=June 4, 2024 |website=The Gamer |language=en}}</ref><ref name="Duelist-16">{{cite magazine |date=April 1997 |title=Game news & updates |magazine=[[The Duelist (magazine)|The Duelist]] |publisher=[[Wizards of the Coast]] |page=76 |issue=16}}</ref> Another collectible competitor to Wizards of the Coast that TSR produced was ''[[Dragon Dice]]'', which was released in 1995.<ref name="history" /><ref name=":2">{{harvnb|Appelcline|2011|p=29}}</ref> ''Dragon Dice'' was a collectible dice game where each player started with a random assortment of basic dice, and could improve their assortment by purchasing booster packs of more powerful dice. The first sets of ''Dragon Dice'' sold well at games stores, and TSR produced several expansion sets. However, interest in ''Dragon Dice'' was waning.<ref name="30years" />{{rp|216}} In addition, TSR tried to aggressively market ''Dragon Dice'' in mass-market book stores through [[Random House]]. However, the game did not catch on through the book trade.<ref name=":2" />

TSR's book division ran into troubles in the mid-1990s. TSR engaged in disputes with some of its most successful authors over terms and remuneration. Weis & Hickman had been driven off in the mid-1980s; a new dispute with [[R. A. Salvatore]] happened in 1994–1995.<ref>{{harvnb|Riggs|2022|pp=71–76; 177–184}}</ref> TSR suffered "the effects of overexpansion" in 1996 with an "expanded number of hardcover novels and a wide array of gaming accessories such as its ''Dragon Dice''".<ref name="arts-arcana" />{{rp|277}} Part of this overexpansion included publishing twelve hardcover novels up from the usual two novels per year.<ref>"TSR: 1973–1997" {{harvnb|Appelcline|2011|p=30}}</ref><ref>{{Cite web |last=Meadows |first=Chris |date=August 8, 2014 |title=Review: Designers & Dragons Vol. 1: The ‘70s |url=http://teleread.com/review-designers-dragons-vol-1-the-70s/ |access-date=June 4, 2024 |website=TeleRead News |language=en}}</ref> Shannon Appelcline, in ''Designers & Dragons: The 90s'', commented that the books were sold at a loss and the "TSR warehouse" was "truckloads" full of ''Dragon Dice''.<ref>"The TSR Purchase: 1997", {{harvnb|Appelcline|2011|p=281}}</ref>

====Final years: Financial trouble and sale (1995–1997) ====
By 1996, TSR was experiencing numerous problems, as outlined by various historians of the company. Shannon Appelcline wrote: "Distributors were going out of business. TSR had unbalanced their ''AD&D'' game through a series of lucrative supplements that ultimately hurt the long-time viability of the game. Meanwhile, they had developed so many settings&mdash;many of them popular and well received&mdash;that they were both cannibalizing their only sales and discouraging players from picking up settings that might be gone in a few years. They may have been cannibalizing their own sales through excessive production of books or supplements too."<ref name="appelcline30">{{harvnb|Appelcline|2011|p=30}}</ref> Ben Riggs agreed that TSR was factionalizing the AD&D audience by continually releasing competing new settings (Forgotten Realms, Al-Qadim, Dragonlance, Planescape, Dark Sun, Birthright, Karameikos, etc.), a strategy intended to lure in new customers, but that actually divided its own core customers.<ref name="riggs272">{{harvnb|Riggs|2022|pp=272–275}}</ref> TSR's products essentially competed with themselves, requiring more development effort to reach the same number of total customers. [[Ryan Dancey]] and [[Lisa Stevens]], who examined TSR's finances for Wizards of the Coast, found that many of the AD&D settings products were never profitable, and more worryingly never ''could'' have been profitable&mdash;the cost of production was simply too high compared to the price they sold for.<ref name="riggs272"/> [[David M. Ewalt]] writes that ''Spellfire'' and ''Dragon Dice'' "were both expensive to produce, and neither sold very well".<ref name=ODaM>{{cite book | first=David M. | last=Ewalt | author-link= David M. Ewalt | year=2013 | title= Of Dice and Men: The Story of Dungeons & Dragons and the People Who Play It | publisher=Scribner | isbn=978-1-4516-4052-6 |page=174 }}</ref>

Another factor that hobbled TSR in the long-term was a financial arrangement known as "factoring." Factoring worked like this: TSR first arranged contracts with retailers in the [[Hobby shop|hobby trade]] (gaming stores, comics stores, and so on) to preorder their products and offered a discounted rate for contracts signed in January. TSR then took these contracts to investment banks, and was advanced money immediately by the banks, with the banks to be paid off from the eventual sales of the product. This financial innovation allowed TSR to be essentially "paid in advance", less fees from the banks and from discounts given to suppliers, which worked out to keeping about 82% of the revenue. Getting all of the money in January allowed TSR to budget with more certainty and potentially fund projects with a long lead time immediately, rather than waiting on sales. Other than the direct cost of losing 18 pennies on every dollar of revenue, factoring had the other downside of not being flexible to changing market conditions, as TSR was essentially locked into its budgeting from January. It was partially why ''Spellfire'' was made on a tiny budget, as TSR was attempting to take on a new initiative in the middle of the year, and led to a fiasco with its ''[[Advanced Dungeons & Dragons CD-ROM Core Rules]]'' product where a preorder arrangement with [[GameStop#NeoStar_Retail_Group_(1994–1996)|Babbage's]] was continued despite Babbage's becoming financially insolvent.<ref name="riggs204">{{harvnb|Riggs|2022|pp=204–209; 212}}</ref>

TSR's old deal with Random House, which had been mutually beneficial in the 1980s, began to be used by TSR in ways that would paper over short-term financial problems. Since TSR was paid up front on the assumption that shipped goods would ultimately sell, TSR began shipping overstock to Random House to generate loans on demand. This caused people in the know at TSR to call it the "Banco de Random House".<ref name="riggs164"/> It also dulled TSR's internal sense of which products were selling, leading to overprinting of niche products. Ben Riggs cites the introductory product ''[[DragonStrike (board game)|DragonStrike]]'' as an example, which sold well but was vastly overprinted.<ref name="riggs164"/> The extra copies were still sent to Random House to generate loans, however. The result was a steadily expanding "debt bubble" with Random House as returns of product soared. Random House eventually noticed something was amiss, and began demanding TSR shrink its debt load with them&mdash;around $11.8 million in June 1995. Random House sued TSR in April 1996 for repayment.<ref name="riggs196">{{harvnb|Riggs|2022|pp=196–202}}</ref>

Despite total sales of around $40&nbsp;million in 1995,<ref name="riggs196"/> TSR ended 1996 with little in cash reserves, and the company was deep in debt.<ref name="appelcline30"/> Random House returned an unexpectedly high percentage of unsold stock, including the year's inventory of unsold novels and sets of ''Dragon Dice'', and charged a fee of several million dollars. Random House returned around $14 million of product between 1995 and 1997.<ref name="riggs215"/> TSR found itself in a cash crunch. With no cash, TSR was unable to pay their printing and shipping bills. J. B. Kenehan, the logistics company that handled TSR's pre-press, printing, warehousing, and shipping, refused to do any more work.<ref name="riggs215">{{harvnb|Riggs|2022|pp=215; 220–223; 231}}</ref> Since the logistics company had the production plates for key products such as core ''D&D'' books, there was no means of printing or shipping core products to generate income or secure short-term financing.<ref name="30years">{{cite book |last=Stark |first=Ed |author-link=Ed Stark |title=30 Years of Adventure: A Celebration of Dungeons & Dragons |publisher=Wizards of the Coast |year=2004 |isbn=0-7869-3498-0 |location=Renton WA |page= |pages=55, 216}}</ref> The company laid off thirty staff members in December 1996, and other employees including [[Jim Ward (game designer)|James M. Ward]] quit over disagreements about how the company managed the crisis.<ref name="appelcline30"/><ref name="riggs215"/> In large part due to the need to refund Random House, TSR began 1997 more than $30&nbsp;million in debt.<ref name=ODaM/> TSR was threatened by lawsuits due to unpaid freelancers as well as missing royalties, but TSR made sufficient earnings from products already shipped to stores to keep their remaining staff paid through the first half of 1997.<ref name="appelcline30"/> With no viable financial plan for TSR's survival, Lorraine Williams sold the company to Wizards of the Coast in 1997 in a deal brokered by Five Rings Publishing Group (FRPG).<ref name="Gygax-GygaxFAQ"/><ref name="believer"/>

===After acquisition (1997–2000)===
Wizards of the Coast settled TSR's debts as part of the acquisition. This included unwinding TSR's deal with its printer, enabling the products TSR had worked on in the first half of 1997 to be printed and distributed, such as the space opera game ''[[Alternity]]''. More generally, Wizards was cash-rich, which solved some of the problems TSR had faced that had caused it to resort to the rolling loans and financial trickery that had cut into TSR's profits, such as factoring.  Wizards of the Coast also moved to mend relations with some of TSR's former employees and contractors who had been alienated. This included allowing artists to take back personal ownership of the original versions of art they had made for TSR.<ref name="riggs263">{{harvnb|Riggs|2022|pp=263–278}}</ref>

Wizards eventually closed the TSR corporate offices in Lake Geneva. Some TSR employees accepted the offer of transferring to Wizards of the Coast's offices in Washington, and a few others continued to work remotely from Wisconsin. Wizards of the Coast continued to use the TSR name for ''D&D'' products for three years. Wizards also set about the creation of the [[Dungeons & Dragons 3rd edition|third edition of ''Dungeons & Dragons'']]. It was released in 2000 under the Wizards of the Coast brand only. In 1999, Wizards of the Coast was itself purchased by [[Hasbro|Hasbro, Inc]].<ref>{{Cite web |url=https://www.rpg.net/columns/briefhistory/briefhistory1.phtml |title=A Brief History of Game #1: Wizards of the Coast: 1990-Present |website=RPGnet|access-date=2018-01-22}}</ref> In 2002, the Gen Con convention was sold to [[Peter Adkison]], the founder and CEO of Wizards of the Coast.<ref>{{harvnb|Appelcline|2011|p=291}}</ref>