Well, *I* feel a lot of love in the room right now.
Yeah, but I like the love. Don’t you like the love? I like the love…
It's easier to destroy something than fix it, I admit. But claiming that GDW went under because the ground shifted under their feet, and PnP was fading, is a bit much: Vampire and D&D (under TSR's worst ever boss) made it, while GDW - with some of the biggest IP rights in the industry, managed to (probably permanently) cripple the lot and alienate a generation of players.
Oh goodie, the famous,
Q: “Which one of you nincompoops ran GDW into the ground?” question. Yikes.
A: I figured this one would come up sooner or later, and here it is already! Fortunately I have prepared some thoughts on this, and discussed them with Loren as well. Before I launch into this one, I will stipulate what I think are the reasonable points on which to doubt my account:
1. Dave wasn’t there the whole time; he only arrived in October 1991.
2. Dave wasn’t on the board of directors of GDW, so he did not have the same direct visibility on finances as others did.
3. Dave may have been told inaccurate information, he may have misunderstood it, or may be remembering it incorrectly. (He may also be a NINCOMPOOP! Oops, sorry, strike that.)
4. Some of the evidence, especially for the CCG period, is anecdotal and not truly statistical.
The above points are valid points, I do not debate them. Nonetheless, I have an understanding of the situation which makes a great deal of sense to me, and it makes a great deal of sense to Loren, as it parallels his to a great extent and adds some issues that he agrees are also true. This understanding that I have is also an opinion. It is not empirically testable by any evidence that I have at my disposal. (Although I will say that while I was at GDW every week I would get a computer print-out of EVERY item we sold and their dollar value. These I of course saved, like the packrat/historian that I am, until some ridiculous impulse in me gave into that “streamline your lifestyle, let go of physical objects” nonsense and I threw out the whole box of them and our weekly production schedules as well—I may have been a packrat, but I was an organized packrat—when we made the big move out of 203 ½ North Street to Empire Street. This is another iteration of my life-principle: “I always live to regret everything I throw out.”) This understanding/opinion is economically based (except for the part about the Brontosaurus…ahem).
And it goes a little something like this.
(Ahem. Ehhh-hem.)
In 1990, GDW was in some serious financial straits, the source of which I do not know. However, it was bad enough that there was a suggestion before the stockholders advocating closing the doors and calling a day. Frank, however, would hear none of this. I don’t know if he had a belief that he could make this happen or if it was sheer divine reward for his audacity, but the Desert Shield Fact Book became a long-term New York Times bestseller and saved GDW. GDW’s products were being distributed into bookstores in this period via an exclusive deal they had with a book distributor. (As an aside, you may recall that this was the period when you could find Team Yankee and Harpoon in Waldenbooks, which I recall as I was a WB manager. The problem was that bookstores were terrible places to sell wargames. The staff had no idea what to do with them, and most bookstore patrons were not prepared for the complexity of board wargames. Of 10 titles, perhaps one would sell, another would sell but be returned the next day because the customer couldn’t understand it, six would be broken open and have the dice stolen out of them and have to be returned as incomplete, and the last two would have been opened by curious customers but not bought, but since the staff didn’t understand wargames, they couldn’t tell if the games were complete or not, so those got returned as damaged/shopworn to the warehouse, along with the one that got returned by the customer. So about 9 out of every 10 games probably got returned to GDW for a full refund. Anyway, back to the story.) This book distributor talked GDW into to trying to capitalize on the Desert Shield Fact Book success by putting out a sequel, the Gulf War Fact Book. This GDW did.
Around this time, GDW was awash in the large earnings from the DSFB and the payments for the large shipments of the follow-up GWFB. My understanding was that the amount made was large enough that GDW was going to have to pay out some significant tax payments on the earnings, unless they hurried up and reinvested that money into the company, which they did. They hired a lot of new staff, and bought new Macs for everybody. This was the period when I arrived, in 1991. GDW had 26 employees at the time, as I recall. About 5 office staff, 3 warehouse, 3 sales and marketing, 5 design staff, 3 text department, and 5 in the art department. (Okay, that’s only 24, but I’m pretty sure the total was 26.) There was serious talk about building a new GDW building with combined spaces for offices and warehouse, we were spending money on promotional videos for Dark Conspiracy, and we were also very seriously looking at putting out series of games in the Axis & Allies vein with lots of expensive injection-molded plastic pieces. (One of these was going to be “Star Vikings.” In the event, the closest we got was Minion Hunter.)
Somewhere after this, the downside of the book industry kicked in. Unlike the comic distribution industry which GDW was used to, where no returns are allowed--once a distributor buys it it’s his forever--in the book industry booksellers get 100% return rights. Any book that does not sell at a bookstore is returned to the publisher for a 100% refund, at which point the publishers can remainder them and ship them back out for a much lower price. That’s why at a Waldenbooks you won’t get 10% off for a shopworn or damaged book, because they can ship it back and get a new copy for free.
So, one terrible day the tractor trailer trucks backed up to the GDW warehouses with almost all of the GWFBs shipped, and the distributor demanded the money back. GDW didn’t have the money, having had to spend it to avoid the tax bite. The distributor was willing to accept product to pay for the debt, but GDW could not afford to print up huge quantities of product to give to the distributor for free to make up the debt. So we owed them all this money that we could not pay back, we could not afford to give them huge chunks of our production run for which we would not see a penny, and we had an exclusive arrangement with them, so we could not get back into the book business with another distributor. So for the remainder of its life, GDW was completely locked out of the retail bookstore business.
The other big thing going on at this time was “The Carpenter Project,” which was code for the Gary Gygax Dangerous Dimensions/Dangerous Journeys line. I don’t know what it cost us in terms of making the deal with Gary’s company (he was making direct deals for various markets, and GDW’s was for the mainstream game market. GDW would not have owned the game), but large portions of our staff did spend large portions of time of the DD/DJ line, preparing marketing materials and brochures, pushing the line at lots of trade shows, launching a magazine, etc. The DD line was going to be huge. Licensing was already lined up for novels, Nintendo games with JVC, miniatures with Ral Partha, etc.
Then, as most of you know, the other shoes started to drop. First TSR hit us with a protest that the “interlocking DD device in the Dangerous Dimensions title” was an unfair attempt to copy the titling of Dungeons and Dragons, which was odd, as D&D had never had an interlocking DD device. But we thought, fine, let’s not get tripped up over this, and changed the name to Dangerous Journeys. (There’s a cool story in here about how we handled tracking the playtest manuscripts to see who was actually feeding them to TSR, by the way.)
Then we got hit with the real lawsuit. As everyone has heard, it was frivolous, wicked, wrong-headed, mean-spirited, ridiculous, etc., and was entirely based on the grudge between Lorraine Williams and Gary Gygax, however the heck that started. And so huge gobs of time began being spent writing depositions and appearing in court by Frank and Lester Smith and various other GDW parties. The lawsuit included such complaints of copyright infringement as, “in Dungeons & Dragons a character can use a Cure Light Wounds spell to heal wounds, and in Dangerous Journeys a character can use his medical skill rating to heal wounds,” and spent pages and pages on how D&D used dice to generate random numbers to resolve events in the game, and so did DJ, thereby infringing the D&D copyright. As one principal on the right side of the lawsuit observed, “If TSR wins this lawsuit, they will have proved that all games are infringements on the D&D copyright, and no one will be safe.”
TSR failed to be able to win its points, but as the months went by, they had deeper pockets and more lawyers, and they spent us into the ground, and we eventually were obliged to settle out of court. One interesting observation is that TSR’s timing on hitting us with the suit was just before the JVC deal was signed, which would have put deeper pockets and more lawyers on Gary’s side. Plan, or coincidence? Loren has pointed out that the lawsuit didn’t cost us any money out of pocket, and he would know, being a member of the board, but the point is that for over a year about half of the GDW design staff was embroiled in the lawsuit and unable to produce games, never mind all of the time and expense that had gone into launching the line that was now completely wasted, and could not be recovered.
After these two blows, the final one came in, which was Magic the Gathering and the Collectible Card craze. This was no cosmetic change, this was a sea change, a revolution in the gaming industry. Up until then the game industry was a little dicey. There was a belief in the late 80s and early 90s that the gaming industry was booming, but this was actually a bubble. What was happening was that the same gamers that had been the audience in the 70s and 80s were now growing older and more affluent, and had more disposable income. The numbers of gamers were not actually increasing, as entry-gamers were getting captured by the computer game industry. The computer game industry was not eating the boardgame and P&P industry per se, but the traditional boardgame industry was a fixed size and aging.
The CCG games combined the addictive elements of gamers with the addictive elements of card collectors, and for about a year or so there if you weren’t one of the top CCGs, the distributors didn’t want to hear about you anymore. Frank Chadwick was the president of GAMA (Game Manufacturer’s Association) during this period, so he had access to a lot of information on how the distribution and retail system was changing in response to the CCG craze. First was the tremendous drop off in orders for games, both new titles and backlist. Distributors found that just by passing through the latest shipment of MTG cards they could make more money and with far less effort than by selling all of the 6 each and 12 each backlist restocks. They didn’t even have to bring the MTG shipments into their warehouses, they just transferred shrink-wrapped pallets from one truck to another on the loading docks. Retailers found that they could make more money in two hours than they used to in a month, just by selling MTG cards by the case from the back of the delivery truck. They could sell places in line to people waiting to buy MTG cards. We were told that some retail stores radically reduced their hours, because why work more hours when the MTG truck made your monthly numbers in a couple hours? Why go through all the detailed pain of keeping all the backlist in stock? Now certainly this information is anecdotal in nature, and certainly we all know that a great many game shops were committed to gaming, and kept selling the mainline games on principle. But then we began learning that distributors were not selling our new items, and that game stores who tried to order them were told that the titles were not available. It just wasn’t worth the distributors’ time to deal in chump change like 48 Regency Sourcebooks when there were a couple dozen pallets of MTG cards to move. What was really scary was after we saw the numbers dropping and we started getting phone calls from customers asking, “how come you never put out the Regency Sourcebook?” and we found that our product was just not getting into the stores anymore. Some fans reported to us that the retailers or distributors (as some of the retailers were our fans, and passed this on) would report, in response to attempt to order new items, like the RSB, that “that’s out of print,” or “that company is no longer in business.” Kind of tough to stay in business when some folks already have you buried.
I obviously don’t remember all the numbers, but we went through at least three printings of the TNE rulebook, and three of FF&S as well. The game was selling well until the CCG thing hit, and then it eventually got eclipsed. One piece of interesting trivia is that I was nominated for an Origins Award for best Science Fiction boardgame for Brilliant Lances in 1994. I lost to a new game called Magic the Gathering, which wasn’t a boardgame. The following year there was a new category for collectible card games. We learned that members of the Staff of WOTC were making lists or involved in a pool on the number of wargame companies they could drive out of business in the next year. We were on the list, as well as a couple others they also got. They eventually even got TSR, the 800-pound gorilla of the gaming world, with that big castle.
One question you might reasonably ask is why didn’t we try to fight fire with fire and do a CCG of our own? The reason was “me too” games never do as well as the first couple on the bandwagon. We were not in a position to get in on the leading edge of the wave, and had we tried we would have probably gotten the game out in just enough time to be one of the 200 games lost in the dust. Additionally, the production values for CCGs, the printing, slick paper, die-cutting, and foil packaging was very expensive. It would have been very hard for us to compete on that level of quality at that time.
By the summer of 1995 we were down to a skeleton staff. Only a part-time art director, contracted text processors, and we had to work in the warehouse boxing shipments a couple times a week. By the fall we had already missed payroll a couple months in a row and I couldn’t pay my rent until a few weeks late, and my landlord was not interested in hearing why. I could tell from helping box the shipments that they were getting smaller, and the checks would only get later and later. I was by then involved in a lot of advanced concepts work at Fort Knox with General Maggart, and I was offered a job putting Armor Center doctrine on-line. The last thing I wanted to do was leave GDW. I had this fear that if I left they might close down, and I didn’t want to feel responsible for that, but there was really no alternative. I also didn’t want to miss the chance to be able to work first hand at the Armor Center, and the AWWG/Maggart golden age still had a couple years yet to run. I was at my house packing for the move when Frank knocked on my front door to tell me that they had decided to close down GDW. We sat on my porch swing on that chilly morning and talked for a little while. It reminded me of a talk we’d had a couple years previously about how it was too bad GDW didn’t have a retirement plan. He said, “well, I guess we could just sell off the company and split the money when the time comes.” I told him I didn’t like that idea. I didn’t want to have to kill GDW to take care of myself. I told Frank about a year or so ago that I sometimes still feel guilty that I got out of GDW when I did, that I wish that I had ridden the company down to the final splat. Frank said, “Don’t be a fool.”
Frank always was pretty practical.
So, that’s my account of why GDW went out of business: Gulf War Fact Book, being locked out of the book trade, Dangerous Journeys Lawsuit, and the MTG/CCG card craze sucking the life out of the traditional game industry all in succession. As I said, that’s my impression/opinion.
The opposing premise I think is fairly accurately phrased as follows:
“Given that:
1. GDW put out Traveller products that irritated their customers on some level so that they stopped buying Traveller products, and
2. Traveller is the most significant GDW product, and as goes Traveller, so goes GDW,
Therefore:
3. GDW went down because they alienated their Traveller base.”
This opinion is also not empirically testable by any evidence available to me, nor I suspect, by any information available to anyone. This premise is not economically based, but is rather more emotion-based, and strikes me as inherently more subjective. It is also based, I think, on a few of untested premises:
1. The non-testable premise that GDW alienated their Traveller customers to that extent.
2. That existing Traveller customers (i.e., capable of being alienated—you can’t be alienated without a prior allegiance) were the only important market constituency for Traveller, i.e., new players didn’t matter
3. That Traveller was the only financially significant thing GDW was doing.
I’m not saying that I can prove any of those wrong, I’m just saying that it would take some work to demonstrate that those premises are correct.
So what it seems to come down to is a pair of unprovable opinions. The former seems kind of whiny and earnestly detailed, and the latter has the attraction of a big Sturm und Drang emotional stroke because it is probably advanced by some folks who did feel themselves alienated on some level, for whatever reason, and so probably has some genuine emotional gravitas to it. Emotions are powerful things. But they are both opinions, and I don’t believe that they can be adequately tested, and I damn sure promise that I am not interested in plowing that ground again. I have posted my account to the best of my recollection and understanding, and I see nothing to be gained in agonizing over it again and again and again. It happened, and we all have to go on living.
The idea that writing sourcebooks developing each of the nine "safe" areas DN mentions was a drain on the business is kinda surprising. White Wolf made money at that time because they would cookie-cut their systems just like that. Release core rules. Take your nine (or thereabouts, in later systems) clans, tribes, traditions etc. and release sourcebooks for each. Adventures, toy-books and regional descriptions, rinse and repeat.
Is this advocating a cookie-cutter approach to spewing out product as an alternative to whatever transgressions supposedly would “cripple the lot and alienate a generation of players”? Is that really a better answer? We certainly did not agree with that at GDW, for at least three reasons.
1. We wanted to tell a story. Releasing nine cookie-cutter sourcebooks that describe a static group or organization doesn’t do that very quickly. That’s more like punctuated equilibrium than a story arc.
2. And the main reason for 1 is that producing nine sourcebooks could not have been done simultaneously. They would have had to have been done serially. If one takes the RSB as indicative of what such a factional sourcebook would have looked like in order to be of a high quality worthy of the background, one can see that each of them would have been pretty time-consuming. And while that time was being consumed, the fans of the eight other factions would be waiting impatiently, and it would not have been fair to do that to them. Given how long it took us to get from the RC to the Regency, doing seven more backgrounds could not have gone quicker. Finally, that entire time that we were grinding out the nine sourcebooks would have been time when the story line would have been advanced not at all. And that would have been bad.
3. Finally, Traveller was not then, and never was a cookie-cutter game. To have treated it like a cookie-cutter game would have been to truly treat the Traveller players with the absolute utmost contempt, and we would not do that.
My thought, Endie, is that you feel like you were one of the ones alienated by some part of the MT-TNE process, and I am genuinely sorry about that. That was not my intent, nor the intent of anyone at GDW. I wish that things had worked out differently. My account of my recollection is not an attempt to discount your feelings, but simply to provide my best understanding of the story.
Best wishes,
Dave
