I wrote this in my blog back in January. You may find it of interest.
"Roleplaying in 2007 is a category of extremes. On the one hand, it’s possible to see the current RPG market as a golden age for the fans. There new games coming out all the time and it’s never been easier to find even the most obscure titles with the advent of PDF sales and POD technology. You can order one of the fifty printed copies of a game that uses the torture of field mice as its resolution mechanic and central metaphor and you can do it in your underwear at 3 am. By anyone’s estimation, there are far more RPG games and support products coming out than one group could ever use. RPG fans are spoiled for choice as never before.
On the other hand, RPG publishing as a business is in a perilous state. The gap between the big publishers and the small publishers is widening, just as the gap between the rich and the poor is widening in America. There used to be a middle ground for successful RPG companies, a place between the one man shop and TSR where a company could have full time staffers, put out regular releases in print, and make a decent wage. That space is becoming more and more difficult to occupy. The reasons for this are legion, from failing hobby stores to just-in-time ordering to the shrinking number of roleplayers to the heated competition for every entertainment dollar. So you have a small number of larger companies like WotC, GW, and White Wolf and an ever-expanding roster of PDF/POD companies, with the shrinking middle ground occupied by the likes of Green Ronin, SJG, Goodman, Atlas, and MWP. With the market for third party d20 material continuing its death spiral, there is no longer a quick and easy way for new companies to establish themselves. With RPGs making up the smallest percentage of retailers’ sales, making the jump from part time hobby to full time business is getting harder and harder.
Historically speaking, roleplaying has never strayed too far from its roots. The origin of tabletop gaming is hobbyist and everyone who works in the industry started out as just another gamer. It is a nerdy version of the American Dream, where anyone with the gumption can pull themselves up by their own bootstraps and get into the RPG industry. The danger of current trends is that the RPG industry could complete its polarization into two camps: small hobbyist companies that sell PDFs and POD books largely direct and big professional companies that do traditional game publishing through the three-tier system and the book trade. This would not be a welcome development, as the RPG industry needs a "middle class".
Mid-level RPG companies have performed some important functions in the game industry. First, they have provided readily available games for players to graduate to after D&D or the WoD games. While there are certainly many fans who find those games and never leave them, there have always been those who become dissatisfied and look for something else. It has been the mid-tier companies that catch those gamers and ensure they don't just leave roleplaying altogether. Second, they provide a training ground for designers, editors, illustrators, and entrepreneurs. You can learn a lot working for such a company and parley that into a job in a bigger company, the computer game industry, comics, etc. Third, they are the place most likely to bring about the "next big thing" in roleplaying. The large companies are too risk averse to take big chances and the small companies lack the means and often the expertise to pull it off. The mid-level companies are hungry, but they do have resources and know-how that can turn an idea into a real success.
I know there are people who are very excited about the growth of the small press thanks to advances to technology that allow games to be delivered directly to the consumer in ways that just didn't exist 20 years ago. Certainly new ideas and implementations are always welcome, but we shouldn't fool ourselves. While it is true that a game that sold 100 copies last year and 200 copies this year has doubled its sales, in my mind this is not a cause for celebration for the RPG industry at large. Nor is the continued stagnation of D&D and WotC's failure to bring in the stream of new players that RPGs need if they are to ever again become a category that shows real growth."
