Jon Peterson's Game Wizards - The Epic Battle for D&D

[T. Foster]

An interesting point that Peterson does cover in detail in the book is that because ideas aren't copyrightable, only the expression of those ideas, if Gary hadn't credited Dave as co-author on D&D and had instead published it under his sole byline, he would have been totally in the clear legally (if not ethically). While many of the core ideas incorporated into D&D originated with Dave, Gary wrote the actual text of the published books and in doing so transformed Dave's initial work (as evidenced by Dave's numerous documented complaints about how Gary screwed up his ideas, that he wasn't consulted on the final text, that all of his suggested revisions were rejected or re-written, that the Twin Cities group barely recognized their game in the published rules, etc). Arneson's line of argument (at least in the court of public opinion) was that the ideas are what matter and the expression of them doesn't - that he was effectively 100% responsible for D&D and Gygax was a glorified typist who stole credit - but actual copyright law says exactly the opposite.

The courts found that Arneson was entiteld to a royalty share of AD&D because it was derivative of D&D, for which he was credited and registered as 50% author, but if he hadn't been, if Gygax had done in 1974 what he tried to do in 1978, he would have been in the clear legally. As it was, even before the settlement gave him a share of AD&D, royalties from D&D alone (the original and Basic sets) had already made Dave the second-highest-paid person in the adventure gaming industry, all for the sake of ideas that, legally, if TSR hadn't given him a 50% credit, wouldn't have entitled him to any credit or royalty at all. Arneson characterized himself as a martyr who was exploited and ripped off by unscrupulous businessmen, but he was able to take that position while also cashing large quarterly royalty checks ($35K for 1979, equivalent to $132K in 2021 dollars) even before his lawsuits and settlements.

 

[Endless Flight]

Happened in the comics business a lot. Stan Lee was guilty of it. So was Bob Kane.

 

[TristramEvans]

As a huge fan of comics, the history of the industry is actually pretty heartbreaking - wayway worse than RPGs

 

[Endless Flight]

I mean, some of it has been rectified to a certain extent. Now when a Batman movie comes out, it says “Batman created by Bob Kane with Bill Finger”. Before everybody just thought Bob did it. Bob himself actually did say Bill had a great contribution to the character but still took the sole credit.

 

[TristramEvans]

I mean, some of it has been rectified to a certain extent. Now when a Batman movie comes out, it says “Batman created by Bob Kane with Bill Finger”. Before everybody just thought Bob did it. Bob himself actually did say Bill had a great contribution to the character but still took the sole credit.

Yeah, due to the valiant efforts of Finger's granddaughter and Marc Tyler Nobleman, but that doesn't retroactively make up for Finger dying in poverty and obscurity

 

[Endless Flight]

Yeah, due to the valiant efforts of Finger's granddaughter and Marc Tyler Nobleman, but that doesn't retroactively make up for Finger dying in poverty and obscurity

Nope, and that’s the true crime.

 

[robertsconley]

This is what Peterson had to say about the topic of co-authors and Arneson and Gygax being co-Authors. So while it was Gygax who wrote D&D. The situation isn't clear cut due to the standards used by the courts.

The section explaining Nimmer and why it was important. For those of you with the books the discussion starts around page 193.


The following section walks through how Arneson's legal team went about proving each of elements of the claim that D&D was a joint work.

 

[Endless Flight]

I think Dave absolutely deserves credit.

I think Stan Lee was talking about creating a character, maybe it was Spider-Man, and the artist said they created the costume and deserved credit and Stan was irritated by that and said he did the hard work, coming up with initial character idea. I mean, he did do that, but in Spider-Man’s case, the costume is iconic and Ditko does deserve credit for him. Is it 50/50? Probably not, but that’s not the point. If Spider-Man had a paper bag over his head, he would have went nowhere.

In Dave’s case, even if he did 10% of the work, he still deserves the credit.

 

[T. Foster]

Yeah, there's a tendency among fans to equate Arneson with Bill Finger, but the situation really isn't the same at all. In correspondence from 1972 quoted in Peterson's book Gygax's initial proposal to Arneson was that Dave send him his Blackmoor material for incorporation into a 3rd edition of Chainmail, in exchange for which Gary offered to send him a free copy of the book. Now if that's the deal that Gary had stuck with for D&D, then the Bill Finger comparison would be a lot closer.

 

[TristramEvans]

I think Dave absolutely deserves credit.

I think Stan Lee was talking about creating a character, maybe it was Spider-Man, and the artist said they created the costume and deserved credit and Stan was irritated by that and said he did the hard work, coming up with initial character idea. I mean, he did do that, but in Spider-Man’s case, the costume is iconic and Ditko does deserve credit for him. Is it 50/50? Probably not, but that’s not the point. If Spider-Man had a paper bag over his head, he would have went nowhere.

In Dave’s case, even if he did 10% of the work, he still deserves the credit.

Just to be pedantic, it was actually Kirby that designed Spidey's costume

though I'm glad that Lee rejected his original idea

 

[Endless Flight]

Just to be pedantic, it was actually Kirby that designed Spidey's costume

Then he should probably get a credit too.

In the music business, people have sued for credit for writing literally one or two lines in a song and won their cases. Creating a costume would be similar to that.

 

[JRT]

I think the Kirby Spider-Man was a different concept. Mark Evanier, who was Kirby's assistant for a long time, sort of goes into this in the beginning of this article.

Jack Kirby and Spider-Man – News From ME

www.newsfromme.com

 

[xanther]

This is what Peterson had to say about the topic of co-authors and Arneson and Gygax being co-Authors. So while it was Gygax who wrote D&D. The situation isn't clear cut due to the standards used by the courts.

The section explaining Nimmer and why it was important. For those of you with the books the discussion starts around page 193.

....
The following section walks through how Arneson's legal team went about proving each of elements of the claim that D&D was a joint work.

Ahhhh is Peterson practicing law without a license? especially the conclusion about intent. How wholly inadequate Nimmer is to so opine, assuming he even got the right edition of Nimmer with the operative law of the relevant time is, is had to succinctly convey.

I think need to get this just to read Arneson's lawyers arguments.

 

[finarvyn]

I don't believe the writers of any edition of D&D had sinister agendas besides Gygax when he did AD&D to cut Arneson off from any profits

Honestly, almost every new edition seems to have been done (1) to reorganize, and (2) to cut out someone from the credits. AD&D cut Arneson out. 2E cut Gygax out. 3E cut TSR out. Dunno is that is "sinister" or not, but the current folks try really hard not to recognize either Gygax or Arneson. They don't like to print Greyhawk or Blackmoor stuff, seem to dislike supporting older editions, never seem to give credit to the guys in the early years -- including Ward, Kuntz, and others -- and generally try to make it sound like they created the thing rather than taking over decades after D&D's genesis.

 

[Bunch]

Honestly, almost every new edition seems to have been done (1) to reorganize, and (2) to cut out someone from the credits. AD&D cut Arneson out. 2E cut Gygax out. 3E cut TSR out. Dunno is that is "sinister" or not, but the current folks try really hard not to recognize either Gygax or Arneson. They don't like to print Greyhawk or Blackmoor stuff, seem to dislike supporting older editions, never seem to give credit to the guys in the early years -- including Ward, Kuntz, and others -- and generally try to make it sound like they created the thing rather than taking over decades after D&D's genesis.

I think thats an inaccurate statement. In the same location as all the other writing and production credits is a specific blurb in the same lettering font and size as everything else stating this is based on the game by Gygax, ,Arneson, Blume, Kuntz, Ward and Kaye.
At least my copy has all that.
below that is another blurb giving credit to basically every writer who was a primary on every other version of D&D, Basic, AD&D etc.

 

[Endless Flight]

Does Wizards have a responsibility to Gary Gygax and Dave Arneson other than printing their name in every book?

 

[JRT]

Does Wizards have a responsibility to Gary Gygax and Dave Arneson other than printing their name in every book?

If you mean financially or legally. No. I think all residual rights were turned over to WoTC back with the 2000 deal they did when they turned it over. I suspect one of the deals was for both men to agree to turn over all remaining rights, which means Gary and Dave couldn't and their heirs can't invoke Copyright Termination clauses against the D&D game or all the other works around it.

 

[T. Foster]

Do you recall where Breault tells that story about the all-hands meeting?

I found the source of the Blume "I'm in charge here" quote: Gary tells it himself in the famous The Kyngdoms interview, which I know Peterson wholly disregards and views as completely non-credible, so it's not surprising he wouldn't have mentioned that incident. I feel like some other ex-TSR person separately confirmed that story but I may well be misremembering that.

Re-reading that interview in light of Peterson's book is very interesting because it's really like they're telling two parallel stories - there are a bunch of facts that line up squarely between them there are also tons of differences. Many of them are about dates and numbers and such (e.g. Gygax talks about the reorganization into the "three presidents" triumvirate happening in 1981 that Peterson says was in 1982, he also seems hazy on stuff like when some of the mass-firings took place, or indeed when the first draft of D&D was written (1972 vs 1973)*) where we can safely assume Peterson's research trumps Gary's memory, but the whole narrative angle about how dysfunctional the management of the company was and how Gary was constantly overruled by the other board members doesn't contradict "known" facts but is nonetheless totally missing from Peterson's book, and I really feel like the book could have used it to paint a fuller picture and fill in some gaps (and tell a more compelling story - as-is the last few chapters of the book come off as very dry except in the sense of watching a train wreck occur in slow motion). Gary goes on at length about the frustration he felt with the rules applied by the outside directors and bankers in 1984-85 and how they didn't understand how a game company should be managed, which is largely missing from Peterson's account. It very well may be that had Gary gotten his way things would have gone even worse than they did and TSR would have folded (or, more likely, been sold to someone other than Williams on less favorable terms) but we'll never know.

*Another interesting thing is how in the interview Gygax elides over and doesn't mention the "Ambush" board meeting of October 22, 1985 that Peterson makes the dramatic center of his book. The way Gygax describes it, he learned about Williams' attempt to purchase the Blumes' stock, made a counter-offer that was rebuffed, learned about some irregularities involving the conduct of the board, and took the whole thing to court. All of that stuff is mentioned in Peterson's book, but it all happened AFTER the fateful board meeting, after there stock sale from the Blumes to Williams had been made official and Gygax had been removed from his position (and was therefore pretty much moot and doomed to fail). I guess Gary didn't feel that way - that from his perspective what happened at (and immediately prior to) that board meeting was illegal and therefore didn't deserve to be dignified by talking about it, and what mattered more was the subsequent court challenge

 

[Acmegamer]

Honestly, almost every new edition seems to have been done (1) to reorganize, and (2) to cut out someone from the credits. AD&D cut Arneson out. 2E cut Gygax out. 3E cut TSR out. Dunno is that is "sinister" or not, but the current folks try really hard not to recognize either Gygax or Arneson. They don't like to print Greyhawk or Blackmoor stuff, seem to dislike supporting older editions, never seem to give credit to the guys in the early years -- including Ward, Kuntz, and others -- and generally try to make it sound like they created the thing rather than taking over decades after D&D's genesis.

Considering that WotC bought TSR lock, stock and barrel, your points have no real merit.

 

[T. Foster]

AD&D wasn’t written to cut Arneson out of royalties. It was written because the OD&D rules were a confusing mess which was becoming increasingly obvious and problematic as the audience was expanding (and competitors were starting to step up to take advantage of by releasing more accessible games). However, that it also allowed them to cut Arneson out of royalties was presumably seen at the time as a fortunate side effect ;)

 

[Endless Flight]

3E was done because Wizards had done a lot of research into what gamers were doing with 2E and what they wanted to see fixed or changed. It was eleven years old. It was time.

 

[TristramEvans]

As I understand it, Gary was working on a second edition before he left. I wonder how much the 2n edition we got lines up with the changes he would have made himself?

 

[TristramEvans]

AD&D wasn’t written to cut Arneson out of royalties. It was written because the OD&D rules were a confusing mess which was becoming increasingly obvious and problematic as the audience was expanding (and competitors were starting to step up to take advantage of by releasing more accessible games). However, that it also allowed them to cut Arneson out of royalties was presumably seen at the time as a fortunate side effect ;)

The D&D basic rules presentation at that time were way clearer than AD&D. OD&D had been superseded by two editions by that point.

 

[David Johansen]

I recall Chrine Bal Ca talking about how Dave Arneson ran his Adventures In Fantasy company at a loss using money from his TSR royalties.

 

[Bunch]

My feeling was AD&D was written to give us more. OD&D was bare bones and the supplements filled the demand for more rules,monster,etc. Holmes was written to clarify. Basic was written to get the kids on board. AD&D was the big game. Tournament rules, less ambiguity more rules not rulings.

The problem was Gygax wrote it and he had a ton of good, cool ideas but he desperately needed the editors that Basic and Holmes had.

 

[Voros]

For me part of the dislike for 2e back in the day was the realization it was a corporate product made by a corporation with corporate goals. Devil's and demons and half orcs out because lowers mom sales. Higher quality art but less personal prose.

And it changed D&D from a cheap product with few things to buy to something more expensive. Rebuy the core books, endless splats, endless settings. It just looked like a cash grab which to a poor high school/college kid was not a winning sell.

If 2nd edition had come out after college and while I had a post college job I think I would have a totally different perspective.

Even though I had played a lot of B/X, BECMI and 1e by the time 2e came along I either didn't notice most of those changes or thought they were actually improvements.

Plus half-orcs were back in the same years as the PHB in the Monstrous Compendium (89') and were in the 93' Book of Humanoids (a fun book!), assasins were back in the same year as the PHB in the Complete Thief Handbook (another good book!) and Devils and Demons were back by 91' in a big, big way with the Outer Planes Appendix (love the art in this one) and Planescape ('nuff said).

Personally I never cared for half-orcs, seemed to make more sense to just play an orc. Ditto half-elves or half-anything really. The name change for Devils and Demons also worked for me because the new names were more flavourful than Type IV Demon and it figured that they would have their own names for themselves.

But yes, eventually the endless splats weighed the game down, that why I found the 91' Rules Cyclopedia so attractive back then, comparatively it felt light, concise and complete. But I couldn't find anyone who wanted to play 'basic' D&D back then, ironic considering how B/X is now the darling of the OSR.

She may not have been the best person for the job, but there were many more worse options.

From all reports she was responsible for the idea for Birthright, the Black Box and as already mentioned whatever the motivations, the Buck Rogers game was actually really good.

 

[T. Foster]

The Holmes-edit Basic Set was part of the same D&D revision project as AD&D - it was an introductory set that covered levels 1-3 and directed readers to AD&D for the rest of the game.

Why TSR continued to credit Arneson as co-author on it and not on AD&D is a mystery, especially since Peterson notes that doing so undermined their legal case that no credit was warranted for AD&D (since the Holmes set, like AD&D, is a revision of D&D and helps establish continuity between D&D and AD&D). Just like TSR would likely have been legally in the clear not to credit Arneson as co-author on D&D, they would more likely have been in the clear not to credit him on AD&D if they had also not credited him on the Basic Set.

 

[Voros]

I don't know if this is in Peterson or if any of the old guard have knowledge first hand, but does anyone know why the merger talks between TSR and Games Workshop broke down?

(Gygax claimed it was the Blumes' fault but I'm dubious on that without more verification).

Good question, I hadn't heard about that failed merger. I share your skepticism about any claim that it was the Blumes fault. If you listen to the many excellent interviews with the Games Workshop folks on the Grognard podcast, particularly those involved in Imagine magazine during the reign of Gygax, doesn't sound like there was a lot of love lost between him and most of the UK designers.

Livingstone and Jackson seem to have had friendly relations with him early on though and I haven't heard them mention any kind of falling out. Maybe it will be covered in the forthcoming history they're working on.

 

[Voros]

The Holmes-edit Basic Set was part of the same D&D revision project as AD&D - it was an introductory set that covered levels 1-3 and directed readers to AD&D for the rest of the game.

Why TSR continued to credit Arneson as co-author on it and not on AD&D is a mystery, especially since Peterson notes that doing so undermined their legal case that no credit was warranted for AD&D (since the Holmes set, like AD&D, is a revision of D&D and helps establish continuity between D&D and AD&D). Just like TSR would likely have been legally in the clear not to credit Arneson as co-author on D&D, they would more likely have been in the clear not to credit him on AD&D if they had also not credited him on the Basic Set.

Kinda suprised no one has dug up the legal documents around the Arneson settlement, I would guess there had to be some strong evidence of Arneson's contrbutions for that to be settled. Are they sealed?

 

[Voros]

I wonder if Gary was twirling his mustache and cackling while he was writing it.

More likely he looked like this.

 

[Bunch]

The Holmes-edit Basic Set was part of the same D&D revision project as AD&D - it was an introductory set that covered levels 1-3 and directed readers to AD&D for the rest of the game.

Why TSR continued to credit Arneson as co-author on it and not on AD&D is a mystery, especially since Peterson notes that doing so undermined their legal case that no credit was warranted for AD&D (since the Holmes set, like AD&D, is a revision of D&D and helps establish continuity between D&D and AD&D). Just like TSR would likely have been legally in the clear not to credit Arneson as co-author on D&D, they would more likely have been in the clear not to credit him on AD&D if they had also not credited him on the Basic Set.

Because Holmes started as just a clean up of OD&D and was last minute edited to direct to AD&D.

 

[Bunch]

Even though I had played a lot of B/X, BECMI and 1e by the time 2e came along I either didn't notice most of those changes or thought they were actually improvements.

Plus half-orcs were back in the same years as the PHB in the Monstrous Compendium (89') and were in the 93' Book of Humanoids (a fun book!), assasins were back in the same year as the PHB in the Complete Thief Handbook (another good book!) and Devils and Demons were back by 91' in a big, big way with the Outer Planes Appendix (love the art in this one) and Planescape ('nuff said).

Personally I never cared for half-orcs, seemed to make more sense to just play an orc. Ditto half-elves or half-anything really. The name change for Devils and Demons also worked for me because the new names were more flavourful than Type IV Demon and it figured that they would have their own names for themselves.

But yes, eventually the endless splats weighed the game down, that why I found the 91' Rules Cyclopedia so attractive back then, comparatively it felt light, concise and complete. But I couldn't find anyone who wanted to play 'basic' D&D back then, ironic considering how B/X is now the darling of the OSR.



From all reports she was responsible for the idea for Birthright, the Black Box and as already mentioned whatever the motivations, the Buck Rogers game was actually really good.

I didn't stick around long. 2e got rid of edgy things and sterilized what remained in the initial PHB. Looking at it now it was fine but in the late 80s I'd seen two borderline useless books (dungeneer survival and wilderness survival guides), one left field book (oriental adventures) and one poorly edited/play tested release (Unearthed Arcana). There was suddenly a lot of books being produced of dubious quality with written to make mom feel safe just as I was heading off to college. It just didn't feel like what I'd played up until then. I mean Monster Manual/Deities and Demigods were a books my parents bought with boobs all over in it. Now I can't see the word devil?!?! It seemed like it was heading in a different direction than I wanted to go in. It's childish now but if someone shows you the unedited intended for adults book in middle school and says here's a kiddiefied one as you head off to college it's not going to make a good impression.

 

[Séadna]

As I understand it, Gary was working on a second edition before he left. I wonder how much the 2n edition we got lines up with the changes he would have made himself?

There's a retroclone "Adventures Dark and Deep" that tries to reconstruct Gygax's 2E:

DriveThruRPG

www.drivethrurpg.com

 

[StonesThree]

3E was done because Wizards had done a lot of research into what gamers were doing with 2E and what they wanted to see fixed or changed. It was eleven years old. It was time.

Agreed. Gary's 2nd ed would still have hit that same brick wall that Zebs did. Which is that the game just went out of fashion. My own recollections of the mid to late 90's is that most gamers just looked down on things like THAC0, xp for gold, levels, cast-and-forget spellcasters, etc. All of the things that are considered the sacred cows of DnD were things to be mocked back then. 3E was seen as the edition that saved the brand.

Would a Gary 2nd ed have been able to fight off the changing times any better?

My own utterly baseless speculation is... Gary somehow gets the Blumes out of TSR. Somehow manages to get Lorraine out. Then discovers that TSR needs money fast. So he rushes his "second edition" for christmas release without enough playtesting and without listening to the other designers in the company. He is, afterall, the Great Game Designer and Father of DnD. The game releases to a mixed reception. Some say its basically 1st edition with some extra bits. Others say its even more broken then before. The game limps on into the early 90s before another financial crunch forces them to need another big release or go bankrupt. This new fangled card game (MtG) has just been released and stolen all their customers...

 

[A Fiery Flying Roll]

Good question, I hadn't heard about that failed merger. I share your skepticism about any claim that it was the Blumes fault. If you listen to the many excellent interviews with the Games Workshop folks on the Grognard podcast, particularly those involved in Imagine magazine during the reign of Gygax, doesn't sound like there was a lot of love lost between him and most of the UK designers.

Livingstone and Jackson seem to have had friendly relations with him early on though and I haven't heard them mention any kind of falling out. Maybe it will be covered in the forthcoming history they're working on.

I don't think there was a falling out. (The UK scene at the time was bitchy and incestous enough the fanzines would have covered it).

Games Workshop remained the sole licensed UK distributor for TSR products.

I suspect more practical issues were at play.

I don't see what GW was gaining from this proposed merger and I suspect Jackson/Livingstone didn't want to get involved with TSR internal politics.

Also, from what I can tell of Gygax's personality I think he may have mistaken the fact that J/L were friendly and even respectful of him for his vital role in the hobby as meaning they were less hard nosed when it comes to business.

 

[A Fiery Flying Roll]

Ah, just tracked down a Livingstone interview that puts a very different spin on it:

“We secured a three-year exclusive European distribution agreement for D&D in 1975,” Livingstone says.

“When that agreement came to an end in 1978, we tried to negotiate a renewal of the licence. We’d done a good job and were printing copies of D&D under licence for European distribution. However, we couldn’t agree terms with [Dungeons & Dragons publisher] TSR.”

Dungeons & Dragons co-creator Gary Gygax even hopped on a plane to London to propose a merger between Games Workshop and D&D publisher TSR in order to keep the fruitful partnership going.

“But being young, independent- minded entrepreneurs, Steve and I were not keen on the merger idea and declined his offer,” Livingstone says. “This meant, of course, that we lost the exclusive distributorship of D&D and urgently needed a replacement product, one which was owned by Workshop."

That seems very plausible to me. It wasn't about L/J being scared off or them disliking Gygax or the Blumes on a personal level. They simply weren't willing to become a subsidiary of another company (and Gygax has said they'd have only had 25% of the shares).

It's also notable that Livingstone describes it as Gygax's offer, which doesn't fit the narrative.

“It was the beginning of a gaming revolution”: Games Workshop co-founder Ian Livingstone talks fantasy, bringing D&D to the UK and the birth of Warhammer

Games Workshop co-founder and Fighting Fantasy co-creator Ian Livingstone discusses bring D&D to the UK in the 70s and …

www.dicebreaker.com

(In general, I consider L/J a much more reliable source than either Gygax or Arneson).

 

[StonesThree]

Was it a serious proposal do we know or Gary just being all spontaneous? Because he liked them so much? Was TSR UK started before or after that time?

It kind of echos the Apple & Microsoft relationship doesn't it? Where the big company kicks the smaller one out of the playground. Just arrogantly tosses them aside. And then that smaller one does a Rocky style montage where they get all jacked up and chisled and shit then comes back and batters their former mentor at the end of the movie.

 

[TristramEvans]

I think the Kirby Spider-Man was a different concept. Mark Evanier, who was Kirby's assistant for a long time, sort of goes into this in the beginning of this article.

Jack Kirby and Spider-Man – News From ME

www.newsfromme.com

It's an interesting story, and really no way to know now who is right, and who came up with the concept of Spider-man first, though it's very cler that whatever Kirby intended with his version is very different from what we ended up with.

What's strikingly odd about that article though is that it ignores Kirby's most famous picture of Spider-man, the one that established the character's look before Ditko even took on the character:

 

[JRT]

Actually, the article does mention the cover.

Jack was drafted into drawing the first two Spider-Man covers and some "guest star" stories because Stan (and the readers) liked the idea of every Marvel character meeting every other Marvel character.

I don't think the cover came before Ditko's redesigns. Cover's usually happen after the interior artwork is done.

 

[A Fiery Flying Roll]

Was it a serious proposal do we know or Gary just being all spontaneous? Because he liked them so much? Was TSR UK started before or after that time?

It kind of echos the Apple & Microsoft relationship doesn't it? Where the big company kicks the smaller one out of the playground. Just arrogantly tosses them aside. And then that smaller one does a Rocky style montage where they get all jacked up and chisled and shit then comes back and batters their former mentor at the end of the movie.

A serious proposal I think, especially from TSR's side. Games Workshop were had exclusive European distribution (and printing) rights for D&D until 1979, so there was already a strong working relationship in place.

TSR UK was founded in 1980 so I think it was probably in direct response to the merger falling through.

Practically, I don't think anyone was to blame for this merger not happening. I simply can't see any situation where Games Workshop would have been willing to be subordinate to the parent company. (The partnership with Citadel Miniatures was very different, being equal on both sides). I think L/J wanted to keep independence and were mostly being polite hearing TSR out.

It partially interests me as an alt history on how different British roleplaying would have developed if this merger had happened.

Almost certainly no Fighting Fantasy. If Warhammer had happened it's possible it would have been a D&D setting rather than its own RPG. White Dwarf even more focused on D&D. Games heavily pushed (and licensed) by Games Workshop like Runequest and Paranoia probably wouldn't have taken off over here in the same way. I always find it interesting talking to American gamers about quite how much more niche Runequest was over there. Here it was seen as a serious contender for D&D's crown and Games Workshop were a major reason for that.