I've often been heard to make a sharp distinction between "the hobby" and "the industry" of roleplaying games and I think I do this with good reason. In the early days (1974-1977 or thereabouts), there really wasn't much of a RPG industry. Sure, there was TSR and there were a handful of other companies selling RPGs, but those companies were (mostly) just extensions of fandom. You have to remember that this was all before the advent of personal computers, easy to use desktop publishing programs, and print on demand services. This was also before the rise of the Internet and PDFs. Back then, if you wanted to get your RPG out into your fellow gamers' hands, you either had to create a fanzine or found your own company to do so.
I think it's fair to say, though, that the appearance of AD&D over the period between 1977 to 1979 changed the face of the hobby forever. Not only were its books the first hard cover RPG volumes -- a fact Mike Carr boasts of in his foreword to the Monster Manual -- but they were also the beginning of a shift in the way companies and, eventually, fans approached RPGs. To begin with, AD&D had its genesis in a number of non-hobby factors. By "non-hobby," I mean factors other than ones related strictly to gameplay.
OD&D was, by all accounts, still going strong in 1977. Indeed, its popularity was very much on the upswing, as more and more copies of the game and its supplement were being sold than ever. Likewise, attendance at gaming conventions were growing as well, as was interest in RPG tournaments. The tournament scene is an example of a "non-hobby" consideration that led to AD&D's creation. Gygax, in his June 1979 Dragon editorial leading up to the release of the AD&D Dungeon Masters Guide, explained that the demands of tournament play created a need for standardized rules of the sort that AD&D would provide. Likewise, he noted that OD&D was too "vague and often ambiguous" to bring in new players, many of whom were not "familiar with medieval and ancient history, wargaming, military miniatures, etc." that OD&D assumed. Finally -- though I hesitate to say so -- there was almost certainly a calculation on the part of TSR to cut Dave Arneson out of the D&D equation entirely by creation a "new" game with a "different" name that was wholly the creation of Gygax.
All of the factors I cite above are non-hobby ones. They all pertain to TSR's desire to maximize the popularity -- and sales -- of Dungeons & Dragons. Obviously, this isn't a bad thing in itself, but AD&D marks the real beginning of the "the industry" with interests and agendas that didn't always match up with those of "the hobby." At the time, AD&D was in fact quite controversial among OD&D players and many vowed, as D&D players have with every edition change, not to buy or play it. The saw it as a money grab and an unneeded revision, as well as a "betrayal" of the open-ended and do it yourself ethos of the original game.
Gygax acknowledged this himself when said that "there is no similarity (perhaps even less) between D&D and AD&D than there is between D&D and its various imitators produced by competing publishers." Obviously, I think he overstates his case a great deal, because, mechanically at least, AD&D is clearly derivative of OD&D. On the other hand, the spirit of AD&D is indeed dissimilar to that of OD&D. Again, Gygax acknowledged this by saying, "AD&D rectifies the shortcomings of D&D. There are few grey areas in AD&D, and there will be no question in the mind of participants as to what the game is and is all about. There is form and structure to AD&D, and any variation of these integral portions of the game will obviously make it something else."
That right there is when "the industry" began, maybe not literally but spiritually. It's an interesting counterpart to the lengthy Gygax quote I posted yesterday, because it's also clear that Gary never intended what he saw as the immediate needs of TSR to set any kind of precedent that would deform the way RPGs would be made for the next 25 years. And yet it did. Since that time, the demands of the business side of gaming have been in the driver's seat. This was probably inevitable and it hasn't always resulted in either bad games or in the destruction of "the hobby" side of things. Still, I can't shake the feeling that we're still coasting on the momentum of the crazy, gung-ho, rough around the edges, and not entirely consistent early days of gaming. We're living off the dwindling interest of the imaginative capital from the Do It Yourself days.
What thrills me so much about gaming lately is that technology is allowing a return of the Do It Yourself days. Not only are clone games ever more prevalent, but gamers with great ideas can now disseminate them without having to form their own companies if they don't want to do so. While I fear that "the industry" itself is about to be lost, I am far more sanguine about the prospects of "the hobby" side of things, which is probably as vibrant and creative as it's ever been. It's a great time to be a gamer and I expect we'll see some really remarkable things over the next few years.