1. The RPG market is just too small to support two versions of D&D. One version struggles enough as it is. D&D has had a rocky marketing history. DO you really think you can split it in two and get two viable markets? Be realistic and look at marketing history!
Firstly you have to define what 'viable' is. Pathfinder selling 5k or even 3k of every supplement, every month is very viable in the rpg industry. It might be a fraction of D&D's sales but it would still make it a very healthy company for the industry. If they should get anywhere close to 10k of every supplement then it would be a more than profitable company able to support a number of staff without a problem.
(e.g. 5k copies of a 19.99 supplement, selling solely through the retail channel would generate half a million in sales each year).
2. History also shows that two RPG versions of the same genre eventually succumb to one or the other (sure some may linger, but are they really viable?). Pathfinder already has a large fanbase that grows daily, and it comes from the CORE of an established system. D&D 4e is edging themselves to the fringe, and out of existence.
Call of Cthulhu continues to sell. The company's financial problems are unrelated to the core game and down to a number of other factors. It's a horror game, same genre as White Wolf. For that matter White Wolf supports three core lines and (so far) three limited lines all in the horror genre.
Earthdawn sold very well at the same time as D&D, Earthdawn sales weren't the reason for FASA getting out of the rpg industry. M&M and Champions both enjoy healthy sales, both companies employing several staff and continuing to put out exciting and well designed new products. Both are in the superhero genre.
Could you please quantify how one of, if not the, fastest selling RPG books of all time is edging itself <snip> out of existence?
3. HASBRO wants D&D to make money. If a goodly percentage of previous gamers do NOT go with the new product, don’t you think the axe is in its future? Again, be realistic, HASBRO views D&D as a minor product to begin with (take a look at there board meeting transcripts and you can see whats important to them). DO you HONESTLY think if Pathfinder does well that D&D won’t be axed? It might be axed regardless, but Pathfinder sure is not helping.
Hasbro wants WotC to make money, given how many people have refuted the 'they didn't mention D&D' comment with regard to the board meeting then I'd really expect someone to not be trotting out the same tired old argument.
Pathfinder can do well, Pathfinder can do incredibly well. For your argument to have any logical validity or business sense you would also have to prove that Pathfinder doing well automatically means that D&D will tank.
Given both Pathfinder and D&D seem to be selling very well (albeit with the latter being at a much higher scale), I simply find yout points to be lacking in any merit. WotC is actually increasing their release schedule and adding more products to their lineup. That's a sign of healthy growth.
