If this is true, then it seems to me that the OGL didn't work out so well for WOTC. I doubt they envisioned that they would be competing against what is essentially their own IP in the future.
Pathfinder is still the relatively new kid on the block, you've got high sales as everyone checks out the game they've heard so much about, which after a few years will drop to a lower level. Further I would assume for both markets there is a point where they reach supplement saturation - where most players will have more material than they will ever use and will stop buying new content. I reached this point for 4e in 2009 - haven't bought a thing since Ebberon was released (Wouldn't have purchased if I had the 3e version). If I was playing pathfinder I would have bought little beyond core as the whole point of pathfinder (IMO) is still using my 3.5 books.
Of course if we're talking market share we could also consider other publishers and other games as well as previous editions - from what I read on this and other forums there are an increasing number of people checking out the older editions.
To put some perspective on the numbers.
To have team of 10 programmers working for me, I have to pay about 3000 to 5000 dollars a day (if the programmers were okay working for low wages).
To have a team of 10 writers working for me, writing game material, I would get away with maybe 1500 dollars a day, IF they cranked out top notch 100% usable right now material, otherwise I could drop their pay since they get paid per word written.
So coding is at least two to three times as expensive, just off the top of my head. Really, that seems to little, so I would guess that coding is about 10 times as expensive to buy than game design writing.
/M
As someone who both writes code and fiction, I'd say that if I could make half the money with fiction (heck, 25%) as with coding, I'd be writing full time. Code monkeys actually expect to get paid, and can get paid in many companies so there are market forces at work.
Nor did I say they did. It is only in my opinion and from my stand point, there seems to be a larger or more vocal group of them. This could be because I haven't personally met 4E fans who were huge proponents or fanboys of the system. I'm sure there are those 4E crusaders out there, I just have been lucky enough to avoid them thus far.I've seen the same sort of behavior from 4e fanatics (or fanatics of other systems). I don't think PF has any sort of lock on this.
The costs don't end once the app is written. Someone needs to maintain the code as the platforms they run on receive updates. Someone needs to make sure the app still works and if not, someone needs to update the DDI code to make sure it does. This is nearly a monthly need as security patches are rolled out.
Beyond just the continual maintenance of code there is the maintenance of the infrastructure it runs on - server hardware, operating systems, network, bandwidth, backups, the media to do those backups and the talent to manage all of that layer. Now that could be outsourced to a major data center, but it is still a monthly expense that adds up as the services scale up.
DDI is not a "program it once and forget about it" application.
Plus, the cost of those coders is on top of the money you're already paying for your writers. And they're probably more expensive than any of the people they may have replaced within the organization as you've shifted away from printed books.
I think there are some giant leaps of logic being made here. The vast number of posts and talk I see is of people pointing future Pathfinder players to the Paizo SRD or d20pfsrd to get their feet wet. An excellent way to see the rules without spending anything. Or I also see the $10 PDF recommended frequently before the full rule book. There a numerous low cost ways to intro one to Pathfinder without pushing them straight to the hardcover core rulebook.
I know in our group we switched to Pathfinder about 9 months ago. As GM I didn't push anyone to any of the hardcover books. I pointed them to the d20pfsrd, the $10 PDF. Now I think all of them have gone and bought the core rulebook and several have purchased the APG and Ultimate Magic and the Inner Sea Campaign guide - but not due to any pushing from me as GM.
While there may be some people out there doing that I think it is a leap to say this accounts for the majority of sales. Paizo puts out a quality product and people are willing to pay for and are attracted to quality product.
Quest for Fun!: RPG Sales YTD
Black Diamond Games has a interesting post along these lines. Only one store, sure, but they've been reporting the trend for a while now. Pathfinder up 300% seems like a huge turnaround while the D&D drop off doesn't seem very drastic.
They will claim that 4th Edition abused their mother, killed their father and touched them in all the wrong places. The claim is usually that 4th Edition ruined D&D for them (a discussion for a different thread).
To be fair, I did buy the 4e DMG, PH, and MM, when they were first released. Since I could not convert my 3.5e game and I had no intention of ending the campaign, coupled with the number of sacred cows that 4e sent to the slaughterhouse, I stayed with 3.5e.

(Dungeons & Dragons)
Rulebook featuring "high magic" options, including a host of new spells.