Say what? D&D was on the brink of bankruptcy when Wizards picked it up. Part of the reason 4E made such radical changes was that Hasbro was threatening to mothball the D&D brand. Now they're going all-out to woo back the players who left over 4E, because they really need that player base back; when they left, new players didn't come to replace them in sufficient numbers. MMOs have been eating D&D's lunch for the last decade. And that's for the 800-pound gorilla (before Pathfinder, at least) of the tabletop world.
Meanwhile, Magic has been a cash cow for Wizards for the last 20 years. Magic revenues were what enabled Wizards to rescue D&D when TSR collapsed. It's had ups and downs, but at no point did it flirt with the kind of disasters that have threatened D&D. It's got no problem pulling in new players and keeping old ones engaged.
Um...TSR was on the brink of bankruptcy, D&D wasn't having any problems selling, TSR was selling products at a loss. Being horrible at managing a business doesn't mean the product wasn't selling well.
MMO's aren't eating anyone's lunch. That's one of the biggest problems with the RPG Industry, they created their own mythical beast they attribute all of their problems to. If you count World of Warcraft as the generational fad it is, you'll find the rest of the MMO genre just pretty much shuffles around the same playerbase for the last decade. World of Warcraft was the 2000's Call of Duty, it was the game "Everyone played", and it'll never be reproduced, because it was that generation's fad. Once you count out WoW, everyone else is obtaining pretty much the same sized player base with each release. Star Wars Galaxies in the early 00's pulled 1 million players, The Old Republic pulled 1.6 million. People in the gaming field routinely report that when a new MMO launches the others all dip. MMO's aren't pulling in new blood, they're shifting the same people.
There's a reason for that, an MMO is designed around forcing you to repeat actions endlessly in order to keep you paying for as long as possible. Players must have large amounts of free time and an extremely high tolerance for repetitive actions. There's no real story, you can't change the world or complete a grand quest because the world state can't be changed, it's just an endless grind. That limits its impact to a fairly small segment of players as its requirements precludes anyone with an active lifestyle.
It's also worth pointing out, judging from Ryan D's 1999 survey, pretty much every MMO has had only a fraction of the players that D&D had in 1999. It's also worth pointing out, the Asian MMO's are irrelevant, the Asian territories were never big D&D participants.
If D&D's popularity is dropping, then the problem lies somewhere other than MMO's. I'd suggest that it's because WOTC's policy has been minimal adventure support, eliminating all players with time or imagination limitations who previously participated due to the ability to buy adventures to play.
No, they're not. The number of variables may be technically finite, but practically it's unlimited. Chess has nowhere near as many variables as Magic does, and we aren't running out of chess games. The design team is always experimenting with new mechanics, because sometimes they hit on an idea that really improves the game, but the vast bulk of the cards printed in Magic are using the same design space* they've had from the start: Instants, sorceries, creatures, enchantments, artifacts, and lands. I came back to the game after a 10-year hiatus and had no trouble with the new cards.
Coming back to the topic at hand, though... I think there is potential for awesome movies to be made out of D&D properties, as long as they focus on the specific property instead of trying to make it "generic D&D." Epic fantasy demands a fleshed-out world. With a hugely popular novel series, a well-defined world-spanning conflict, and some really vivid characters, Dragonlance is the obvious choice. (Yes, they already made some animated films which were by all accounts awful, but that wasn't the fault of the source material. The animated "Lord of the Rings" was atrocious; didn't stop Peter Jackson from turning it into a blockbuster live-action hit.)
[SIZE=-2]*In fact, the original design space had a number of elements that have since been removed. It used to be that artifacts came in "poly," "mono," and "continuous" varieties. That's not a thing any more. There used to be a seventh card type called "interrupt," and at one point they added an eighth for "mana source." Both of those were later folded into instants. Ante was removed from the rules once they realized nobody wanted to play for ante, which meant they could no longer print cards that messed with the ante. Et cetera, et cetera.[/SIZE]
Practically unlimited and viable are two different things. You could have a creature with a p/t of 0/0, but it isn't viable. Any combination of X/0 isn't viable. You could have an instant that states "Tap an already tapped land", but it wouldn't be viable. At this stage, a substantial portion of Mtg cards are reprints/recolors/renames of existing cards. In fact, if you do a google search for M10 you'll find a massive firestorm over the fact that the better part of the "New cards" were existing cards with a different name.
Chess games aren't comparable, Chess strategies are. Which at this point are so well exhausted that you can buy books outlining them and their commonly used names.
Rejoining you on the topic at hand. I agree there is potential for awesome movies to be made. They can either tap into existing strong novel series like Dragonlance Chronicles or they can create new ones, but the key is to do a Resident Evil if they create new ones. Take the theme and some high level elements from D&D and focus on the story, not trying to tie it into D&D's mechanics like the jarring "You're just a low level mage..." from the first movie.