I don't believe this is the case, because the market will close the door on the edition for them.
The RPG market is
small. It very quickly saturates with a given product - after everyone who is going to play
4e right now has a PHB, the sales drop to a comparative trickle of replacements and a few books for the occasional new gamer.
When the market is saturated with a product, the profit margin on each book drops. So, to keep a decent revenue stream, they have to keep printing new products. That's okay, so long as they have new rules-territory and cool settings to cover. But eventually, when they've covered all the different options folks want out of D&D, the whole edition has saturated.
Then will be the time for a new edition. They don't have to plan it into the release strategy - it will happen eventually no matter what they do. Eventually, the edition willnot be economically viable to keep in print.
Oh, and by the way, I think it is safe to say that
WotC has no effective competition in tabletop RPGs at this time.
WotC far outsells all other RPG companies, and by economy of scale thereby also probably makes more money per book than any other RPG publisher. There's nobody out there who can make their materials obsolete for them.
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