Hi all,
First off, thanks for making this a truly constructive forum. I haven't seen any major trolling or flaming here, so I'm happy to participate, and sincerely thank everyone for their input!
Now on to some specific issues.
Let me start by reminding everyone that in my State of the Industry message (which was originally delivered only to Pinnacle's fans on our listservs), I did not bash D20 nor D20 publishers (and remember, I am one and happy for it!)
Second, I also said that those companies who do great books, such as Green Ronin, Fantasy Flight, Atlas, and many, many others are A) doing well with D20 and B) will continue to do well with D20. I agree with Ryan Dancey 100% that those books that are full of good crunchy bits will continue to do spectacularly. Non D20 books written in the same vein will not do as well--with a few rare exceptions--but (of course) also benefit greatly from ensuring their content is good and crunchy.
Steve Long and Hero games are a perfect example of the latter. The Hero system is nothing but crunchy, and has sold *incredibly* well. So hats off to Steve!
Now let me address a few of the comments directed at me by Mike Mearls:
>>For the past 2 years, we've been hearing about the d20 glut and how any day now there's going to be a massive culling of the companies that produce d20 material.
I said there was a glut (I didn't say there would be a massive culling of companies abandoning D20--though I think many will switch to OGL instead of D20 specifically so that they can better tailor the system to their lines and include rules for character creation.) A subtle but important difference.
As to the glut, it's simple math. *Publisher X's* game will sell better if it is one of 10 products on a shelf than if it is one of 100.
>>Over that time, we have seen *one* major company get out of d20: PEG. And even that decisions seems more driven by unhappiness with working with d20 than sales issues. (It's also worth noting that, IN MY OPINION, Deadlands is at the end of its product lifecycle. I wouldn't be surprised if after the splat books for DL d20 were released PEG stopped producing major supplements for it.)
My own experience with both Weird Wars and Deadlands D20 has been that we got a lot of new people to look at our lines because we did D20 (Weird Wars) or D20 versions (Deadlands/Hell on Earth/Lost Colony). We angered a *huge* portion of our core Deadlands audience because I personally did a very poor job of communicating that we weren't switching our system, we were just offering a D20 version, and all sourcebooks after that would be dual-statted. This occurred for many reasons, mostly because of our notorious split with our former buyer. 'Nuff said on that--I'll take full responsibility for not getting the word out very well.
Both DL D20 and Weird Wars did quite well, selling what *most* D20 publishers sold of their stuff, which is right in line with what we sold of our standard DL classic, Hell on Earth, and Brave New World lines before. While that sounds fine, I had hoped that D20 versions of our games would sell closer to the numbers done by a few breakout products, like Atlas' Penumbra series or Green Ronin's Freeport books. Perhaps an unrealistic expectation given hindsight, but considering that Deadlands often ranked in the top 10 best-selling games (Comis Retailer Magazine), it seemed that a cool campaign book *should* sell as much as an adventure (which traditionally sell much less than a sourcebook). That didn't happen. Again, and I don't want to be misquoted here as I was on another board a year ago, but those products *did* sell well--but only as well as any standard sourcebook we release these days.
Is it D20's "fault" that we didn't sell above our standard levels? Let me answer with some observations I've made from thousands of emails and discussions on our boards over the last two years (not from any real marketing surveys which I have no means to complete).
First, Deadlands' appeal is about half how much our fans like the setting, and about half how much they like the system. *Our* fans love the poker chips and cards aspect, the openness of character creation, and all the other bells and whistles preferred by those who don't generally like classes, levels, and hit points.
Second, Weird Wars gamers are generally older men who have a couple of 20th century military history books on their shelves. They "graduated" from classes, levels, and hit points years ago and don't care for D20. Many of them were *very* disappointed (and said so quite vocally!) that we had decided to use D20 for WW. They find the idea of hit points appalling because they think you can get hit with a tank round and survive, and they find the prep work needed to run D20 daunting because they have 60 hour a week jobs, kids, etc.
So *my* personal opinion is that Pinnacle's fans *are* mostly those who would prefer to play something besides D20, and that fan base is more than enough to sustain my company and do quite well. I'll continue to dual-stat Deadlands for those who prefer D20 (or more often, can only get their group to play if it's D20), and will do so happily and with the absolute best effort I and my freelancers can put forth.
Mike also said that we'll quit publishing DL D20 books after the last splat book, Way of the Righteous. That was always the plan. We did the core rulebook, the monster book, and each class book. What else is there? Everything else is dual-statted along with the classic material in books like Lone Stars, Great Weird North, and even the newest "world" expansion, Lost Colony.
From all this, my *personal* conclusion is that:
1) If you got into D20 early, did fantasy to attract the D&D folks looking for more material in that crucial first year, your book didn't completely stink, and you've graduated into more crunchy material, you'll continue do just fine with D20. Atlas and Green Ronin are perfect examples here.
2) If you got into D20 later but did a truly outstanding (and most likely hardback) book *filled* with crunchy bits, you'll continue to do just fine. FFG fills this slot in my mind.
WOTC, of course, will also continue to do just fine.
More interesting to me personally is the recent trend by Green Ronin and White Wolf with Everquest, in using the OGL but not D20, to make their games. This allows the publisher to keep the same core rules so that everyone knows how to play, but tinker with the system enough to better reflect their game world. One can certainly argue on either side--that this reflects the success of D20 or its failure. I'll leave you to your own decision there. My opinion is that it's a sign of its success for now, but may indicate you no longer need a PHB down the line (you don't need any WOTC book to play White Wolf's Everquest, for example).
>>don't trust any comment that's made about how distributors and retailers are angry about lame d20 products. As far as I can see, those same enraged retailers who are desperate for anything non-d20 are still ordered d20 materials en masse and selling them at a steady rate, a much better rate than RPG material for anything short of White Wolf's World of Darkness lines.
They do continue to sell at a steady rate--at least for those top tier publishers. Never said they didn't. But as you know Mike, a mutual friend of ours welll known to this list, and owner of one of the companies I've mentioned above, lamented on the private Delphi forums how preorders for his last book (a beautiful, D20 hardback) were far below what he'd expected. Every retailer he talked to had told him they wanted something new, and he gave it to them. But they still sold far more books on elves and dwarves than they did his.
As recently as Friday, the owner of Gameboard told me how much all of his retailers complained about new D20 products. But again, that's all that's selling right now.
Let's examine that a bit. If retailers are sick of D20, but that's all that's selling, there could be several things going on:
A) Retailers are (mostly) gamers like the rest of us, and have their opinions which they voice incessantly.

But D20 sells, so that's what they buy. End of story.
B) D20 is about all there is right now besides GURPs and Hero. But GURPs and Hero are experiencing great sales spikes right now.
Again, draw your own conclusions. I don't have the answer, but if you doubt the truth of my comments, ask around.
>>This goes double for all the alleged designers who don't like d20. There might be some out there, but there are plenty of us who enjoy tinkering with, reading, and *gasp* playing the game. The comment strikes me as sour grapes more than anything else. I can't relate, since D&D has always been my favorite RPG, but I can see how it would be frustrating if I, for example, had to do all my design work in Rolemaster, GURPS, or some other system that I don't prefer.
No offense Mike, but I know lots of folks and talk to them often, and this *is* the general opinion. Someone said that perhaps I simply have friends who are all anti-D20. My personal gaming group is much that way and I'll freely admit it, but I'm not talking about them. I'm talking about the heads of major companies. Again, I won't name anyone because it may hurt their business, and it's really not important anyway. Most of them aren't involved in the actual creation of material anyway--they dictate it to talented freelancers like you who *do* enjoy the material, and put their absolute best efforts forward to make a beautiful, professional product.
And someone on RPG.NET said it best. If Game Designer X has been pimping his system for years, it's probably because he believes it's a better system. Let's face it--how many game companies got started as "here's a better D&D." *Of course* he isn't going to prefer D20 over his house system.
I *didn't* start PEG for that reason, btw. I started it because a Brom painting wouldn't get out of my head.

And I don't believe the DL system is perfect or even necessarily better than D20. I do think it's better for *our* game.
>>d20 is here to stay. It's fate is chained to the fate of D&D. If d20 dries up, that means the entire RPG hobby is heading down the tubes. From what I've seen, sales are doing fine. I don't think RPGs will ever again reach the fad level of sales they hit in early 80s, but the industry is far, far healthier now than it was in the period from 1993 - 1999.
Of course it's here to stay and I never said otherwise. I think there will also be a fairly significant non-D20 market as well, such as GURPs, Hero, and perhaps my own upcoming Savage Worlds.
Again, this is a good discussion, and much appreciated ! The one thing I would hope we can all avoid is to *not* turn this into a D20 versus anti-D20 discussion--that is best left to another thread. This is simply a discussion about D20 and its impact on game publishers.
Let me sum up *my opinions* so that I'm not misunderstood, then I'll shut up and save the bandwidth.
A) There is a D20 "glut," by simple virtue of so many products competing for shelf space. It's simple math.
B) D20 isn't a big draw for Pinnacle's fans, and I haven't proactively attempted to change that, nor will I.
C) I haven't bashed D20, WOTC, the OGL, or Ryan Dancey (who is a personal friend and I think an absolute genius). I think that it absolutely did what it set out to do, and did it well.
D) I believe that Point C had an adverse effect on the middle tier of game companies that didn't immediately jump in with D20 fantasy products. Now that the first wave has really settled, there are opportunities to do other things. GURPs and Hero will continue to thrive, and maybe my own Savage Worlds will do just as well as Deadlands, Deadlands D20, and Weird Wars, which is just fine by me!
Whew. That's all.

Sorry for the long post, gang!
Sincerely,
Shane Hensley
Pinnacle Entertainment Group