The current player base is an order of magnitude or two larger than it has ever been. WotC could safely produce a lot more than they are currently.
Is the player base 10 to a 100 times larger then during the 2e era?
Gary Gygax in Roleplaying Mastery (1987) pegged the number of (A)D&D players as approx. 5 million in the USA, 8 million worldwide.
So... Today there would be 80-800 million active D&D players world wide?
If those numbers were accurate... I think last time I checked there have been 85 million players
over the entire 50 year lifespan of D&D, maybe during the height of the pandemic there were tens of millions of D&D players, but after those numbers will most certainly have dwindled significantly.
Even so, back in the 2e days, there was very little third party product for D&D, even other RPGs were relatively limited. That meant very little competition. These days with digital publication, the barrier to entry is extremely low. Crowdfunding made for another relatively low barrier for physical production. And with a 288 page book costing $75, even when correcting for inflation, D&D hardcover books have become about 20% more expensive in the US. I suspect that there's not as much room for additional physical products as you think, there is for purely digital products and WotC has been experimenting more and more with that.
The issue is the average D&D consumer. This is not the consumer that buys everything D&D, they buy selectively. Generally something they'll use or think they'll use. Only DMs buy adventures, and the average DM can only DM so much, so for period X they buy one adventure book, the one they like (or think their group will like most). If for period X there's now two books available, the average DM won't buy both, they will still buy one. Even if they now buy the other option, there is less sales for the first option. Sure, you'll sell more product overall to collectors and the extreme DMs that DM way, way more then average. But that's only a tiny spike in sales, I suspect that it's probably not worth the upfront cost of the adventures writing and development. So overall, the revenue might be slightly higher, but the profit would be down, which is bad. There was a reason why WotC outsourced their adventures to third parties, now they could take the risk. And it's no longer as extreme, that is still part of the tactics and probably the reason why we had those license shenanigans a while back. WotC/Hasbro didn't want the risk, but they did want the benefits (aka. money)...
