That would seem to indicate that 5e launched far too early; in 2014 Pathfinder will still be in its prime. It was also too early for 4e fans to get tired of 4e.
That would be my read on it. (Although it seems fairly evident at this point that the market collapse of 4E was turning catastrophic, so they had little choice.)
By my reading of the situation, the clear goal of 5E is to recover at least
some of the market share that 4E has lost. To do that, it seems like it needs to accomplish three things:
(1) Attract new customers. Part of this is simply out-reach and marketing, but it can certainly be assisted with a new edition that's easier for new consumers to identify, pick up, and play. I know
how I would do it, but it's not clear to me that 5E is actually going to eschew the "buy multiple 300 pages books and read 'em before you can start playing" model that's been D&D's
modus operandi for the past 20 years. We'll see.
(2) Pull back some of the gamers lost to PF/3.5. The problem here is that these players have have a tremendous amount of time, energy, and money invested in the 3E ruleset. In order to overcome that inertia of investment, 5E would need to radically improve on 3E. But these gamers have already indicated that they're very satisfied with the 3E ruleset (that's why they're still playing it). So WotC would need to build a game substantially similar to 3E, but somehow also make enough improvements -- improvements that the vast majority of 3E players would agree were improvements and also consider significant enough to upgrade -- to win back customers who, AFAICT, are already very skeptical of WotC.
That's a tough nut to crack. And even if you crack it, it probably cripples you for achieving point #3...
(3) Retaining the vast majority of existing 4E gamers.
This basically boils down to an aphorism I've used a few times before: No reboot edition of an RPG has ever succeeded unless there is clear, deep, and widespread dissatisfaction in the existing customer base.
And there is no clear, deep, or widespread dissatisfaction in the 4E fanbase.
So while I know
the 5E that I'd like WotC to produce (revert to 3E, overhaul the foundation to fix fundamental problems particularly in high-level play, keep the core gameplay of D&D that was present from 1974-2008) I don't actually think that game will be a success in 2015. (It would have been in 2008, but not in 2015.)
Worse yet, as you suggest: Paizo can simply sit back, watch WotC flounder with 5E, and then be perfectly positioned to release a conservative fix-up edition (as opposed to a reboot edition) of Pathfinder in, say, 2016 with absolutely no risk of WotC being able to take advantage of it.