The market is limited. There are only so many nerds.The recruiting of new players is the biggest issue of course, and not one that really seems to be going all that well for the industry as a whole.

Is there value in looking at what worked previously? Should we have (A)D&D which is all in books, and various starter sets to get new players in? Once the new players have enjoyed their red box, they may buy the full sized books.
In a lot of ways I think all WotC needs to do is slow down. Create an edition, get the core stuff out. Sit on it for a while. Produce new books at a more relaxed pace. I'm not aware of a rule that says they have to make all the profit from an edition within the first year.