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Miniatures representing Gary Gygax and Dave Arneson. Between them a solid white d20. Image: MIT Press

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How a pending lawsuit changed the original Dungeons & Dragons Basic Set

Jon Peterson uncovers the hidden history of the Holmes Basic Set

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Game Wizards: The Epic Battle for Dungeons & Dragons, the new book from The MIT Press, arrives in stores on Tuesday. In it, New York Times best-selling author Jon Peterson chronicles the early history of Dungeons & Dragons, charting its growth from a tiny niche experience to a pop culture phenomenon in the mid 1980s.

This month Polygon sat down with the author to discuss his project. and to contemplate what D&D might look like today if Gary Gygax had retained control of TSR. But much of the book details the years-long feud between Gygax and collaborator Dave Arneson, including the legal maneuverings that impacted one of the game’s most popular boxed sets. Today Polygon is pleased to reveal this never-before-seen piece that was cut from the final book.

The original Module B1, the Holmes Basic Set, and The Keep on the Borderlands. From Jon Peterson’s personal collection. Photo: Jon Peterson

From the Unknown to the Borderlands

Adventure “modules” have long been an important way for new players to learn games like Dungeons & Dragons. Dungeon Masters can use these pre-designed adventures to run sessions without a lot of experience or preparation, and also learn from them how to design their own adventures. Modules only started to become a business for TSR in the summer of 1978, and it would be just months later that the first copies of a Holmes D&D Basic Set would ship with a special introductory module: In Search of the Unknown (B1) by Mike Carr. It contained a lot of useful starting guidance on running an adventure that you wouldn’t find in the D&D books available at the time. How that module came to be included in the Basic Set, and why would only stay there for a year, is an interesting story.

The thing is, at the end of 1978, Dave Arneson was about to sue TSR, and TSR knew it. Ever since Arneson left the company late in 1976, he had repeatedly questioned whether he was being paid his fair share of the royalties for D&D, which he had co-authored back in 1974. The situation came to a head with the initial publication of the Basic Set in the summer of 1977: soon thereafter, Arneson learned that he was not being paid his expected 5% royalty on the $10 cover price of the whole Basic Set, but instead only on the copy of the Basic D&D rulebook that shipped in the box, which then sold separately for $5.

At the time, the other items shipping in the Basic Set were a set of polyhedral dice, a few pages of dungeon “geomorph” tiles that could be quickly arranged into a suitable underground, and a slender booklet of pre-generated monster encounters for beginner dungeon levels. As TSR would argue, Arneson had never previously received royalties for dice sales, accessories, or supplements created by other people, and it was unclear what about packaging those things in a set with the D&D rules in a box suddenly entitled Arneson to a cut. TSR felt that the contract Arneson had signed for the “game or game rules called Dungeons & Dragons” applied only to the rules themselves.

There was one wrinkle, though, which is that the Dungeon Geomorphs and Monster & Treasure Assortment then shipping in the Basic Set were credited to Arneson’s D&D co-author, Gary Gygax, who was President of TSR. And with that credit would come royalties. So effectively, Gygax was being paid something much closer to a 5% royalty on the $10 cover price of the Basic Set than Arneson was. TSR was still a small business back in 1977, and the Basic Set was only selling one or two thousand copies a month—the amount of money at stake wasn’t all that much. But it was enough for Arneson to seek legal recourse. His subsequent dispute over whether the Advanced D&D game was the same game as original D&D is more famous, but it was really just tacked on to his original complaints about the Basic Set.

Wood block prints of Gary Gygax and Dave Arneson. Image: Andrew Meger/MIT Press

As Arneson’s lawsuit loomed, TSR made a very pointed substitution to the contents of the Basic Set: they rotated out the Dungeon Geomorphs and Monster & Treasure Assortment booklets, replacing them with Mike Carr’s In Search of the Unknown module. Carr, an old friend of Arneson’s (and a player in his original Blackmoor campaign), had remained on staff after Arneson’s 1976 departure, and was now TSR’s general manager. Carr volunteered to write In Search of the Unknown to help beginning players learn the ropes of D&D. In it, adventurers would seek to learn the fate of Rogahn and Zelligar, powerful heroes of years past, and the vast treasure they supposedly squirreled away in the Caverns of Quasqueton.

It was a good idea to target a module at beginning dungeon masters — but it also had clear implications for the legal situation. Previously, when Arneson sought a 5% royalty on the whole contents of the Basic Set, he was effectively asking for money that was going into Gygax’s pocket. Now, he would instead be asking for money earmarked for his friend Mike Carr. Carr had negotiated a 2% royalty on the $5.50 cover price of all copies of In Search of the Unknown sold, either in the Basic Set or sold separately.

If anyone hoped this would alter Arneson’s calculus, it came too late: Arneson’s lawsuit would drop in February 1979. But surprisingly, that legal case would not be the biggest D&D news of 1979. In September, the disappearance of James Dallas Egbert III, who famously was believed to have become lost in the steam tunnels beneath a Michigan university, would suddenly catapult D&D to mainstream notoriety. And with that, sales of the Basic Set rose dramatically. Right before the steam tunnel incident, the Basic Set might have sold 5,000 copies a month. By the end of 1979, it was trading over 30,000 copies per month, and only going up from there.

With the Basic Set carrying In Search of the Unknown now bringing in nearly 100,000 sales per quarter and rising, the 11 cents per copy due to Mike Carr started to amount to real money, especially in pre-1980 dollars. Those quarterly royalties would likely exceed the annual salary of a starting TSR employee, and if Basic Set sales kept growing, it could easily overtake Carr’s own salary. Carr had some difficulty getting the Blume brothers, Gygax’s business partners, to honor the agreement — though eventually, they did. It turned out a module like this would could bring significant income to its author.

It was then that Gygax apparently grasped that, in light of such dramatic sales volumes, maybe he shouldn’t be so concerned about how attractive the Basic Set might look as a legal target to Arneson. In fact, perhaps TSR could try substituting in a different module to the Basic Set — one of Gygax’s own creation, Keep on the Borderlands (B2), which began to ship early in 1980. It’s a classic, beloved module, whose Caves of Chaos owe no particular debt to Carr’s Caverns of Quasqueton, though much of Carr’s enlightening text about the art of dungeon mastering was effectively paraphrased in Gygax’s version.

The history of D&D is full of contingencies like this, influenced as much by business and legal circumstances as by game design and innovation. Because Keep on the Borderlands would ship with the Moldvay Basic Set, at the height of the D&D boom in 1981, it became one of the most widely known modules in D&D history, selling 750,000 copies a year. It might never have served as the gateway to adventure for so many players if it hadn’t been for a certain legal dispute and its consequences.