From Benjamin E. Sones' interview of Dave, "Dungeon Crawl" Dungeons & Dragons co-creator Dave Arneson takes role-playing off the table 5/8/2001
Around that time you were running a "dungeon crawl" war-game using a variation of the Chainmail rules—how did that turn into Dungeons & Dragons?
I used Chainmail for about a month before switching its Matrix based combat system of 'winner take all' to the AC, Hit Points, and Hit Dice system that is still used today. After the first game it was obvious that none of the players liked the sudden death of the matrix. The reason was simple—it existed, and I had no idea that this might catch on. And I had the only three sets of d20 known to exist, at that time, in the USA. With the rapid addition of my favorite monsters from fiction, and the vivid imagination of the players, a matrix could not maintain the variety. All this stuff went into my big notebook [and was later published as the First Fantasy Campaign by the Judges Guild].
Chainmail had a 'fantasy section;' otherwise it was strictly a set of miniatures wargame rules with no role-playing. Certainly the Spell section proved to be inadequate even by the end of the first dungeon crawl. Being an avid fantasy and science fiction reader, the addition of role-playing was natural. My club had been dabbling in role-playing for miniatures games for several years. We had done games ranging from South American Revolutions to modern day cloak and dagger. That was all pretty much non-formalized and just an extension of our tabletop wargames.
Blackmoor quickly took the game off the table and onto graph paper. This all began in about 1971. The next step was going into the great outdoors, beyond the tabletop. As a point of interest, the original group still gets together once a year to play the 'old' campaign that started in 1971—usually around Christmas. This year we will be doing it in May, when I am doing a local convention called MarsCon. And I got to use those d20 for something!