So Paizo's taken a chunk out of WotC off-the-shelf market share. Well, so what?
Isn't the fact that WotC's focusing on DDI and the subscription format make this a fait accompli? It just makes logical sense. They're voluntarily giving up publishing market share, because they make more money via DDI subscriptions than they do for hardcover book sales.
This doesn't mean WotC's in trouble... it doesn't mean they need to find ways to "win back" the disenfranchised... it just means they are changing their means of distribution (much to the chagrin of the game sellers, whom I'm sure would rather keep the sales of WotC products as they probably made the sellers a good chunk of change.)
Assuming this post wasn't meant as sarcasm...
This is like global warming "science": If it's hot, it's global warming. If it's cold, it's global warming. If it's dry... If it's wet... (And, no, I'm not saying global warming isn't happening, I'm saying the "science" being used to prove it beyond a reasonable doubt doesn't meet the scientific method criteria of most 9th grade science classes. To avoid violating the politics rule, I'll leave the analogy there.)
4e is #1 on Amazon. See?
Of course, 4e is outselling Pathfinder.
Pathfinder is taking book sales away from 4e? Of course they are, but only because WotC ceded that ground in favor of the more lucrative online subscription model.
C'mon, get real. Companies like to
add revenue streams. They don't replace them, especially if they are their traditional bread-n-butter, unless they have to. Electronic vs. print, for a property like D&D, should largely be a matter of format -- the content should be consistent. So WotC's electronic endeavors shouldn't impact the quality or success of their print products.
Now if WotC comes out and says "we're abandoning print b/c our electronic revenues are 2x, 3x, or some other multiplier greater than their book sales then it's a rational business transformation. What evidence (slight & often anecdotal, I'll admit) exists today, however, paints a far less rosy picture.