Wizards of the Coast Inc.

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Wizards of the Coast Inc.

1801 Lind Avenue SW
Renton, Washington 98055
U.S.A.
(425) 226-6500
Fax: (425) 271 5215
Web sites: http://www.wizards.com
http://www.tsr.com

Private Company
Incorporated: 1990
Employees: 500
Sales: $150 million (1997 est.)
SICs: 3944 Games, Toys, & Children’s Vehicles

Wizards of the Coast Inc. is an international leader in the adventure game industry and is perhaps best known as the publisher of the world’s best-selling trading card game, Magic: The Gathering.

Wizards of the What?: Starting, 1991

Wizards of the Coast was founded in 1990 by Peter Adkison, a systems analyst at Boeing. With a dream of establishing a career in the adventure gaming business, Adkison and six other young visionaries began creating and developing role-playing games in their spare time.

Adkison asked game aficionado Richard Garfield—who, with a B.S. in Computer Mathematics and a Ph.D. in Combinational Mathematics, was teaching at Whitman College in Walla Walla, Washington, at the time—to design a card game that was fun, portable, and could be played in under an hour. Garfield, who had been designing his own games since age 15, and George Skaff Elias, another graduate student in mathematics, went away and worked on it.

Gathering the Magic, 1993

Two years later, in August 1993, WotC (rhymes with Yahtzee), with a staff of eight, operating out of the basement of Adkison’s home, released that trading card game created by Garfield and Skaff, called Magic: The Gathering.

The game, set in the imaginary realm of Domini a, featured wizards challenging one another for control of the land. Players used cards representing fantastic creatures and spells to reduce their opponents ’score from 20 to 0 and win the game.

Magic: The Gathering —both a game and a collectible item—was the first product of its kind to be released and it surprised the gaming industry, becoming one of the most popular games in history, outselling Monopoly and Trivial Pursuit, and spawning an entire new sub-industry within the gaming industry, based on trading cards. Each deck of 40 or so cards is different from every other deck, giving players/collectors no lack of items to buy. The Black Lotus card, which is extremely rare, has sold for over $1,000 in a flourishing “black market” for cards. Over 10 million cards were sold in six weeks in more than 10,000 book, music, and comic book stores, including Barnes & Noble, Tower Records, Babbages/Software Etc., and Borders Books. More than five million players throughout the world would go on to play it, and it would be published in nine languages and in over 65 countries. A bimonthly magazine called the Duelist, which offers rules, strategy tips, and tournament news, was also created.

Due to the success of Magic, Garfield, whose influences included Lewis Carroll and J. R. R. Tolkien, was able to quit teaching and pursue his true passion of game design, coming on board with WotC full-time in June 1994. Several months later, in October, WotC released Garfield’s RoboRally, the company’s first major board game, designed by Garfield while he was still a graduate student at the University of Pennsylvania. In the fast-paced, futuristic game, players attempt to be the first to maneuver their robots across a wild and treacherous factory floor.

The company’s skyrocket to the top allowed it that year to relocate to an office in Renton, Washington, and open international offices in Milan, Paris, and Antwerp. Trading card collecting in general surged in popularity from 1992 to 1995, losing a bit of momentum in the wake of 1994’s Major League Baseball strike.

In 1995, Garfield created a card game called The Great Dalmuti, which was WotC’s first game to be distributed through retail channels. The game is based on a medieval theme, and players are either kings, peons, or merchants.

That year the company also purchased Ohio-based Andon Unlimited, a company which ran trade shows. But, suffering from growing pains, WotC eliminated its Everway, Ars Magica, and Slay Industries games.

In 1996, telecommunications giant MCI entered into a partnership with WotC, with an estimated $750,000 three-year sponsorship of the latter’s Magic: The Gathering U.S. Tournament, and releasing prepaid phone cards featuring Magic artwork—a perfect premium for a collectible-friendly market and a hotline number for fans wanting up-to-the-minute tournament information, including tour dates, individual player rankings, and game strategy.

In November of that year, WotC released a BattleTech trading card game, based on FAS A Corporation’s popular board game of the same name. The WotC strategic card game transports players into the 31st century, where they assume the role of commanders and control armies of 30-foot-tall walking tanks known as “BattleMechs.” The game would go on to become the second best-selling trading card game in the United States, behind Magic: The Gathering.

David Buys Goliath: Wizards of the Coast Buys Struggling TSR, 1997

By February 1997, in order to not dilute Magic’s pure gamer image, WotC had only teamed with eight licensees, including software developers Acclaim Entertainment Inc. and Microprose Inc. (who released two CD-ROMs: Magic: The Gathering, a PC version of the game, and Magic: The Gathering Desktop Themes, images from the game), book publishers Workman and Carlton Books Limited, and apparel manufacturer Nice Man, to generate approximately $1 million in licensed Magic business. The company had also already received movie and television offers, but was holding off for the time being. Acclaim’s comics division began publishing a Magic comic book series and publisher HarperCollins released 12 paperback science fiction and fantasy novels based on the game under the HarperPrism imprint, featuring such authors as William R. Forstchen.

In April, in a move that stunned the gaming world, WotC, still considered an upstart by many analysts despite the staggering success of its Magic: The Gathering card game, announced its intent to acquire struggling veteran gaming company TSR Inc. for an undisclosed amount.

TSR, founded in 1973, in its 25 years in business, had created hundreds of games, including children’s board games, adult strategy games, dice games, card games, war games, and, of course, numerous role-playing games, translated into more than a dozen languages and sold in over 50 countries.

TSR was best known for its publication of former insurance underwriter E. Gary Gygax’s highly successful fantasy/adventure role-playing games Dungeons & Dragons (debuting in 1974), followed by Advanced Dungeons & Dragons, which went on to be played by millions of gamers throughout the world, singlehandedly creating the billion-dollar role-playing game industry. The D&D concept went on to expand into supporting settings such as Greyhawk Adventures, the Forgotten Realms classic sword-and-sorcery campaign set in a medieval world, the Planescape campaign in alternate realities and different planes of existence, and the Ravenloft classic gothic horror campaign in the haunted lands of the vampire Strahd and the archlich Azalin.

A second gaming system, called Saga, concentrates more on roles than rules, in an easy-to-use role-playing system that revolves around drama and storytelling, featuring the wildly successful DragonLance saga, set on the world of Krynn and brought to life in novels by authors Margaret Weis and Tracy Hickman, and the Marvel Super Heroes Adventure Game, which lets players role-play in one of the most popular universes in the world, featuring Spider-Man, The X-Men, The Avengers, and The Fantastic Four.

TSR also ranked as one of the world’s top fantasy and science fiction book publishers. Since first publishing in the early 1980s, the company had sold millions of copies of its novels, most derived from its gaming series, some of which would reach New York Times best-selling status, and featuring authors such as Simon Hawke, Rose Estes, Christie Golden, James Lowder, and Gygax himself, as well as launching the careers of R. A. Salvatore, Troy Denning, and Douglas Niles, among others.

In addition to book publishing, TSR also published two successful gaming periodicals, Dragon Magazine and Dungeon Adventures Magazine, both of which focused on the role-playing game industry, specifically TSR’s games. TSR also licensed its properties to other media, including television (Total Entertainment Network) and electronic games (Interplay Inc. and Sierra On-Line). Former TSR president Lorraine Williams assumed majority control of the firm from Gygax in the mid-1980s after a hotly contested stock sale to Williams by two other shareholders.

Speculation ran rampant as to what would happen to the gaming giant under its new ownership by WotC. TSR headquarters and most of the staff (including Amazing Stories editor Kim Mohan, but notably excluding TSR book editor Brian Thomsen) were moved from their longtime home of Lake Geneva, Wisconsin, to WotC’s facility in Washington state. WotC announced its intention to continue running the world’s largest gaming convention, with attendance at over 25,000 annually, GenCon in Lake Geneva.

Company Perspectives

Wizards of the Coast Inc. has gone from seven employees to over five hundred. We have moved from a basement to offices located throughout the world. We have reached into cyberspace and we have reached for the stars. It is our goal to make games as big as the movies, and we can’t get there if we don’t have the right people.

One of the major issues to be resolved in the purchase was the payment of royalties owed to a number of TSR authors. TSR was publishing nearly 60 books per year at the time of its purchase, all of which were distributed by Random House Inc. The Science Fiction and Fantasy Writers of America Inc. (SFWA) led a vocal group of writers into negotiations, which finally resulted in WotC agreeing to cover TSR’s debts.

Not content with just one acquisition, WotC also purchased Five Rings Publishing Group Inc. in 1997, best known for its Legends of the Five Rings trading card game, the Star Trek: The Next Generation collectible dice game, and the Dune: Eye of the Storm trading card game.

WotC also released two new games designed by WotC wizard Richard Garfield. Corporate Shuffle, a card game based on the United Features Syndicate Dilbert comic strip by Scott Adams, was released in May 1997. The game, featuring full-color cartoons of Dilbert, his ignorant superiors, his clueless coworkers (including the delightful Ratbert and evil Human Resources Director Catbert), and his cynical dog, Dogbert, appealed to gamers of all ages, satirizing the chaos and quirks of 1990s corporate life as players compete in a mad dash to climb the corporate ladder and assume the title of “Big Boss,” with all its perks.

By then the fervor for Magic cards had sparked criminal acts, with dealers reporting theft of the cards from their stores. A BRANDWEEK article entitled “The Gathering Storm” highlighted a report that“four street toughs mugged a trio of gamers at knifepoint for their collection of Magic cards valued at nearly $2,400.” Other stories surfaced about riots in Japan, precipitated by dwindling supply. WotC insisted such stories were exaggerated, but the company took tighter rein of its image in June 1997, launching its first national ad campaign via Moffatt Rosen thai, San Francisco.

Hoping to extend the popularity of its highly successful Magic: The Gathering game beyond a young, male demographic, WotC released an introductory version of the game called Portal, which introduced new players to the same sophisticated game mechanics, portability, and professional artwork that made Magic: The Gathering an international success. The national cable-television ad campaign, which accounted for 62 percent of WotC’s entire advertising budget was supplemented by ads appearing in Rolling Stone, Spin, and Swing, among others, and demos appearing at state fairs, the H.O.R.D.E. music tour, in-line skating and mountain biking events, military bases, and Miller Lite’s Dog Days of Summer Concert Series featuring acts like Patty Loveless and Ted Nugent. Portal Second Age would quickly follow, as well as the advanced-level Fifth Edition game of Magic, and expert-level products like the Tempest and Stronghold expansion decks.

Also in 1997, WotC opened The Wizards of the Coast Game Center in Seattle, the first gaming environment and entertainment center for adventure gaming enthusiasts in the world. The facility featured more than 250 games, including the BattleTech virtual reality center, with a dozen interactive simulator pods; 3,800 square feet of state-of-the-art video game and pinball machines; 1,800 square feet of retail store; a selection of computer network games; a 5,000-square-foot tournament center for organized game playing; and multiple players’ lounges. The center became a testing site for other top gaming manufacturers such as Atari and Williams/Bally, and also the headquarters for the official Magic: The Gathering World Tournament, featuring more than $1 million in prize money. WotC also received a patent on The Trading Card Game Method of Play by the U.S. Patent Office.

WotC started 1998 with a bang, releasing four games (Twitch, Pivot, AlphaBlitz, and Go Wild!) in February. The Twitch card game is all about quick reflexes, speed, and accuracy. Three-to-six players quickly flip colored cards into a bowl. If players are slow or make mistakes, others may challenge and penalize them. Like Go Fish or Uno, the first one to run out of cards wins.

In the Pivot card game, a dynamic game of ups and downs, two to eight players must turn on a dime. Rules change, directions switch, and play shifts, adding to the excitement of the game. Again, the first player to run out of cards wins.

The AlphaBlitz game introduced an innovative approach to word games. Created by one of the world’s leading word-puzzle designers, the card game pits two to six players against each other in a race to unscramble words and stump their opponents. AlphaBlitz can be played either for speed or strategy, making it two word-making games in one product.

In the Go Wild! game of wild cards, two to six players play sets of matching colored cards to win tricks and points. The first player to win the first of three tricks becomes “The Wild One”—the only player who can use wild cards—until another player seizes the title. The balance of power shifts quickly in the strategic card game, making it uncertain who will score 20 points first and win.

Several months later, in April, WotC teamed with WildStorm Productions to release C-23. The science fiction trading card game, part of WotC’s new ARC System of games (which eventually would feature games based on Xena: Warrior Princess and Hercules: The Legendary Journeys), featured story and art by famed comic artist Jim Lee (best known as co-creator of Image Comics and WildStorm Productions) and writer Brandon Choi (the team responsible for creating such major comic properties as Genl3 and WildC.A.T.S.: Covert Action Teams), blending the fundamentals of a traditional trading card game with comic-style art.

The post-apocalyptic Earth setting featured cybernetically enhanced humans and genetically altered humans battling for control of the planet’s surface. Players compete by using resource, character, action, and combat cards to discard cards from their opponents’decks. The first player to empty his or her opponent’s deck of cards wins. The release was accompanied by a C-23 comic book series, the first issue of which was written by Jeff Mariotte (also writer for Desperadoes, Hazard, and DefCon 4, among others), and featured painted covers by Travis Charest, and was drawn by Alexander Lozano.

In May, WotC announced an agreement with Viacom Consumer Products, the licensing division of Paramount Pictures, for the premiere issue of the relaunch of Amazing Stories, the world’s oldest science fiction magazine (founded in 1926 by Hugo Gernsback, the father of modern science fiction), to feature cover art and original short stories from the legendary Star Trek: The Next Generation television show.

Also in 1998, TSR released Alternity, a science fiction role-playing game which furnishes rules for all science fiction, from contemporary Earth settings to far-future space epics. The Star*Drive Campaign features a universe of star-spanning adventures set in the distant future in The Verge, a region of space on the frontier of human exploration. So the upstarts on the West Coast continued into the end of the 20th century with nothing but growth in sight.