pawsplay said:
There would be a few splinterings, and you'd end up with several D&D alternatives. Then eventually someone, probably one of those companies, would acquire the D&D license again and with it, market share.
Realistically, that'd be what would happen. No one in RPG publishing is just going to sit around and let the RPG market wither. Assuming the D&D license itself simply wasn't available anymore, you'd see a few things happen.
Companies would look to pick up ex-WotC designers and developers.
Several companies would come out with their own "core books" and settings, and pimp their lines as dependable, reliable, and high quality. Everyone would tweak the system a little. You might see a glut of cute alliterative names. Customers would gradually migrate to one or several of those companies - you might end up with the WotC pie split several ways; no more 800-lb gorilla in the corner. It'd come down to business acumen and financing. The early bird will have a clear advantage, but it might take a little while to turn a profit.
Paizo, Green Ronin, Mongoose, and White Wolf are in the best positions right now, followed by Fantasy Flight Games and possibly Goodman Games.
Paizo has the closest link with WotC and some potentially deep pockets to call upon for financing. Green Ronin has Mutants & Masterminds and True20; they'd probably add a third "D&D"-ish system. Mongoose has the publishing volume and manpower already in play, plus Pocket PH and that stuff; they're probably the least likely to tweak the system and most likely to blast out a PH, DMG, and MM ASAP. White Wolf has the Sword & Sorcery line and tons of experience.
FFG might be able to build on Midnight and develop a system. Goodman Games...just seems like it'd have the speed and flexibility to move quickly and take advantage, though perhaps not the financing.
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And as far as Eberron...3 settings were selected to create 100-page "bibles". Eberron was one. You've never heard of the other two because, at that point, WotC bought them lock, stock, and barrel. Why pay someone X dollars ($5,000?) to develop a setting, and then let it go?