You have nicely laid out my case for me there. GenCon rolls around and WotC has practically nothing ready to sell and makes no announcements. And this is the 5E launch GenCon. Pretty much reflects that D&D is an afterthought as far as WotC is concerned.
People have looked at the Mearl's statement saying they have financial data saying lots of product was bad for 3E and 4E, and come to the conclusion that "bloat" leads to diminishing returns in terms of sales and that the "wall of books" phenomenon scares away potential new players.
Personally I agree with those people, but let's look at it from the other angle - let's assume for the moment that 75+ books on a shelf isn't off-putting to a portion of the fan base or intimidating to new players.
How many books should they put out?
The most direct answer to that question is "as many as is profitable". Only a portion of the fanbase will buy a Forgotten Realms Campaign Setting book, and while they can put out the Eberron and Dark Sun and Greyhawk and Planescape books as well to try and cover their bases, there's still a large chunk of fans who will never buy a setting book at all. And as others in this thread have pointed out, it's better to sell a thousand copies of one book than five hundred copies of two different books.
The same applies to player's option books. The population that buys every product Wizards comes out with is a tiny slice of the pie. Most groups with casual players make do sharing the core books. Let's say half of all customers buy supplements (that number could be higher or lower, but I think half is in the right ballpark). A quarter of that half of the customer base will buy the arcane casters sourcebook, another quarter the martial classes sourcebook, a third quarter the divine casters sourcebook, and another quarter is only interested in adventures and monster books. Not to mention that since groups share books with one another, not everyone who's interested in a given book will even have to buy it.
That's simplifying things obviously but the point to drive home is that for every product type you put out you're only catering to a fraction of your player base. Books are expensive to make and even assuming an edition's widespread popularity amongst fans, no hardcover after the core three will ever sell as well as those again. So even with a "healthy" release schedule of a single book a month, that's twelve books they have to pay to produce - all those writers, editors and artists have to eat, not to mention they have to pay to have those books printed, stored and distributed to retailers. They say a book's successful first printing basically makes its money back and profit is earned from second and third printings, etc.... how many printings do you think the 5E "Complete Book of Elves / Fighters" will get? Not enough to make it worth doing.
The classical solution to this dilemma is to reboot the edition, but that means spending money on R&D's salaries for two years while you're not making any money off of their work. Assuming the new edition is well received they'll make that money back, but that's not a guarantee.
This time they've decided it's
way easier to make money off of D&D by just leveraging a popular IP in more profitable areas. Why spend a lot of money putting out expensive hardcover books that'll be moderate sellers at best, when you can just sit back and have people throw money at you for video games and movies? Right now they've settled on the amount of money they're willing to spend on the tabletop game - 2-4 books a year, max - and only because they're reasoning it might help the brand. If a year or two from now they determine those 2-4 books aren't cutting it,
they'll stop putting out books and focus entirely on the other aspects of the brand, not put out more RPG books!
"D&D" isn't an afterthought as it looks like it could be quite successful financially, but that money isn't going to be coming from splatbook sales. Folks need to wrap their heads around the idea that the tabletop game is secondary to the brand's success.
