Yet matters are never so black and white. Control of TSR was something that Gygax possessed but fleetingly in the decade-long history of the company. In fact, Gygax had only decisively acquired controlling interest as of March 1985, at a time of great upheaval in TSR’s business. Previously, TSR followed a consensual governance model, one that the industry celebrated during TSR’s ascent but disparaged after the company’s fortunes faltered. As Dungeons & Dragons took the world by storm, Gygax led by virtue of his design talent and his extraordinary community presence, rather than his financial stake in the company.

Control of Dungeons & Dragons depended on many contingencies of TSR’s founding. TSR Hobbies formally incorporated as a Wisconsin entity in July 1975—but that was eighteen months after the publication of Dungeons & Dragons. Previously, there existed the partnership of Tactical Studies Rules, which formed in October 1973 with two principals: Gygax and his childhood friend Donald Kaye. They lived blocks apart in Lake Geneva, and both were members of a local wargaming group called the Lake Geneva Tactical Studies Association, from which Tactical Studies Rules took its name.

At the time the partnership was formed, Gygax had not held a steady job in nearly three years. He repaired shoes in his basement for subsistence income, but dedicated his creative energies to game rules, for which he received little by way of royalties but widespread acclaim in the hobby games community. Thus Gygax was unable to make a capital investment in the Tactical Studies Rules partnership; it was Kaye who provided the initial $1,000. This was sufficient to publish a single slim wargaming title, but not to cover their planned flagship product: the three-volume boxed set of Dungeons & Dragons, authored by Gygax in conjunction with Twin Cities gamer David Arneson. That required a more substantial investment.

Gygax and Kaye therefore admitted to the partnership another member of the Lake Geneva Tactical Studies Association, Brian Blume, who contributed a further $2,000. The partnership lacked the means to employ any of its principals, however, so they worked on its administration after hours on a best-effort basis. Blume would later remark that he applied to join the partnership because “it seemed like a fun way to spend weekends and afternoons.” Kaye served as President of the partnership, Blume as Vice President, while Gygax held the title of Editor.

When Dungeons & Dragons first came to market in January 1974, no one yet thought to call it a role-playing game. TSR marketed it as a wargame, a game of conflict simulation: the legend on the box read “Rules for Fantastic Medieval Wargames Campaigns,” a construction that situated the game in a niche hobby market for such wargames that had existed since the 1950s. It was largely through his leadership in the wargaming community that Gygax initially popularized the game, which sold around one thousand copies its first year on the market. While this may sound like a paltry figure by mainstream standards, it was promising enough for a wargaming title to warrant a second printing early in 1975.

Tragedy intervened when Kaye died suddenly of a heart attack on January 31, 1975. As a result, Blume and Gygax entered into a new partnership agreement which named Kaye’s widow, Donna, as an equal partner. While the official TSR offices stayed at the Kaye residence on Sage Street in Lake Geneva, and Donna Kaye remained in charge of accounting and shipping through the spring, she had no interest in gaming and, especially as the business grew, little time for an enterprise that could not afford to employ her.

Gygax recognized that in the absence of salaries, only love of games could fuel the partnership. As a result, he committed TSR to a stark governing principle. He promised in a letter to David Megarry, designer of the Dungeon! board game, dated March 6, 1975: “We will never allow TSR to become a company which is run by any outside group. That is, we may take others in as partners eventually, but we will never seek any non-wargamer capitalization.”

Protecting control required a new corporate structure. Gygax and Blume had planned the creation of a separate “TSR Hobbies” company to handle mail order sales and possibly a retail store in Lake Geneva. When they incorporated TSR Hobbies, they decided to repurpose it to purchase the assets of the partnership and thereby relieve Donna Kaye of her ties to gaming. In crafting the governance structure of TSR Hobbies, they were understandably preoccupied with the possibility that a major shareholder would die suddenly, and thus they borrowed much language accounting for this eventuality from the stock agreement of a company run by Blume’s father Melvin, President of Wisconsin Tool and Stamping. The gist of this language was to guarantee that, should any shareholder die or seek to divest themselves from the firm, TSR Hobbies would reserve a right of first refusal to buy back their stock.

The original TSR Hobbies stock agreement, executed by Gygax and Blume on August 1, 1975, awarded Gygax 150 shares of stock and Blume 100. Thus, as the company was initially structured, Gygax held controlling interest. But Gygax could not have intended for this situation to last long. TSR Hobbies required capital to purchase the assets of the partnership. For that, it would need investment. The first two stock certificates, issued to Gygax and Blume as stipulated in the August 1 agreement, were given “in consideration of our being a part of that corporation,” as Gygax would later put it—not in exchange for money from either party.

The next two stock certificates issued reflect a substantial investment in the company’s future by the Blume family. Certificate #3, issued to Melvin Blume on September 1, 1975, was for 200 shares of stock, which he purchased at a price of $100 each. Certificate #4 designated that Brian Blume had simultaneously bought 140 shares at the same price. In total, then, the Blume family invested $34,000 into TSR Hobbies within the first month of its operation. These funds were crucial for the acquisition of the game products of the dissolving partnership, which TSR Hobbies formally purchased on September 26, and furthermore for the development and publication of new titles. But the sum probably looks larger than it actual was: due to Blume’s one-third stake in the partnership, some of this money must have effectively gone back into his family’s pocket.

The Blume capital infusion immediately rendered Gygax a minority shareholder, with his 150 shares now well below the total Blume family holdings of 440 shares—and he would remain a minority shareholder for the next decade. Thus, although Gygax enjoyed fleeting control over TSR Hobbies in 1975, it was only at a time that the company did not even own Dungeons & Dragons. But ownership did not translate into executive titles: Gygax retained the office of President of TSR Hobbies despite the reversal of control.

The steadily mounting popularity of Dungeons & Dragons enabled TSR Hobbies to bring Gygax and Blume on board as salaried staff. Further new hires drawn from the gaming community, including the immediate family of both Blume and Gygax, assisted with advertising, creative design, artwork, shipping, and manufacturing. Employees were given the opportunity to purchase small amounts of equity, though most shareholders possessed less than 20 shares at the end of 1975. Even Dungeons & Dragons co-creator Dave Arneson, who joined TSR around this time, only held about 30 shares; he was sidelined late in 1976, and although his famous resulting lawsuits against TSR ensured his presence at board meetings, he had little practical influence over company direction.

Gygax and Blume bolstered their own positions in the company as profits and investment increased, mostly thanks to a preemptive right to purchase new shares pro rata but also through various grants. Fatefully, in July 1976, TSR Hobbies issued both Gygax and Blume options to purchase up to 700 additional shares at a price of $100. Through gradual accumulation, Gygax’s stake rose to around a third of the company by the late 1970s; while Brian Blume always owned roughly 100 shares more than Gygax, his own holdings slid a few percentage points down from its peak over 40%. As Melvin acquired no further shares, his position declined precipitously, from around a third to just under a tenth of TSR. But, again, irrespective of ownership, it was clearly Gygax who ran the business; a 1976 issue of the Strategic Review shows pictures of both Gygax and Blume, the former identified as “TSR’s founder” and the latter as “TSR’s second banana.” Three years later in an interview, Gygax cast the situation more formally: “I am the President of TSR, and Brian Blume is V.P. and Secretary.”

By the end of 1977, there were 1,933 shares of common stock outstanding from an authorized 5,000, and the governance of the company was effectively stable: only 105 more shares would be issued in 1978, and after that, the number of shares outstanding would increase by just 23 over the next seven years. Sometime in 1978, the Blume family position in TSR Hobbies diluted below a 50% stake—no single party would own controlling interest in TSR again until 1985. As the 1970s wound to a close, TSR Hobbies still valued its shares near $100: when William Niebling joined the company as a Vice President in May 1979, he was offered an option to purchase 500 shares of TSR Hobbies stock at $125 each. But shortly thereafter, a turn of events would send TSR’s sales and valuation into the stratosphere, putting enormous pressure on the company’s management.