How it started
1975–1980
Greg Stafford founded "The Chaosium" in 1975, deriving the name partly from his apartment (which he described as a house of chaos), which was near the Oakland Coliseum, combining "coliseum" with "chaos". His purpose was to publish his first fantasy war game White Bear and Red Moon (later renamed Dragon Pass), a board game set in his fantasy world of Glorantha.
In 1978, Chaosium published Steve Perrin's roleplaying game RuneQuest, also set in Glorantha, following up with a second edition in 1980 and various supplements over the next six years.
In 1979, Chaosium entered the board wargame market with Reich, Raiders and Traders, and (in 1980) Panzer Pranks. Although all received positive reviews, none of the games found an audience.
1980s: Growth and licensing with Avalon Hill
In 1980, the company officially incorporated as Chaosium Inc. That year, Stafford and Lynn Willis simplified the RuneQuest rules into the 16-page Basic Role-Playing (BRP). These simulationist, skill-based generic rules formed the basis of many of Chaosium's later "d100" RPGs, most notably Call of Cthulhu, first published in 1981.
From Wikipedia’s article on Chaosium, shared under CC BY-SA 4.0.2