Some time ago Erik Mona insinuated over here that the strong and healthy presence of the D&D brand in the market was fundamental for the well-being of the tabletop rpg industry.
I am curious if Paizo retains the same opinion as of today.
Yeah, pretty much. To the great unwashed, D&D and tabletop RPG is synonymous. I suspect more people come into the hobby because they want to play D&D (or have simply heard of D&D) than come into it because they like the idea of pretending to be a hero, or to play any other game.
It's the acquisition arm of the RPG industry, essentially. It's also a major anchor of the RPG business in hobby shops. It's kind of amazing, but if you go to any of the distributor open houses you'll run into tons of stores that _only_ carry D&D (usually in addition to cards or comics). So if D&D were to dry up, I suspect stores like that would just use that shelf space for something else. Which would mean RPGs are available to fewer people in fewer markets, which means fewer players across the board.
Take a look at the RPG section in Barnes & Noble. Over the holidays, D&D books filled more than a single shelf in that "section" at several stores I visited. If that goes away, leaving only the more marginal brands, you're in trouble. I think B&N does a generally pretty good job of stocking Pathfinder, for example, but more often than not a given B&N has one copy of the Bestiary, two random AP volumes, and nothing else. It's not that they never stocked the other stuff, but they probably ordered one or two copies per store, and it's a crapshoot whether those items will ever be restocked. D&D, on the other hand, has multiple copies of numerous books, including one or two different ways to get into the hobby (say, an unsold 4e PHB, all of the Essentials books, and maybe Red Box or earlier "starter" set). If one of those sells, there are still some ways to get into the game. Plus they seem to be restocked with greater frequency than similar books by smaller publishers. Not a lot of Pathfinder fans start with the Bestiary and two random AP volumes.
So take away the D&D "shelf" in the RPG section at B&N and you're left with a random smattering of core rulebooks and assorted supplements, usually stocked about 1 deep if you're lucky, and that's it.
I doubt that's enough to keep B&N investing an entire section to a given subject matter in almost all of their stores. Either some other folks "step up" and fill that D&D space (very, very difficult, as almost no RPG publishers are as well capitalized as WotC and few have long-standing relationships with buyers and distributors like they do), or the space probably goes away.
Which is bad. Essentially, that leaves the wide-stocking FLGS retailers and the internet. Decent for getting books into the hands of the die-hards, but not so great at exposing the hobby to new customers.
I am also curious what would they think for that matter if D&D's rpg business shifted to a mostly digital affair.
See above. I suspect that would be very challenging for the hobby retailer business and very challenging for the hobby. But it might be necessary to meet the kind of profit goals Hasbro likely has for WotC, so I wouldn't find it a terribly surprising development.
--Erik