Paizo is having its best year ever.
I think part of the problem is that folks who view, say, D&D or Pathfinder or a licensed game as "too derivative" are looking for a kind of tabletop gaming industry playing field in which oddball ideas without much commercial interest in the first place perform as well as brands that have multiple decades of fan interest, or that are based on genres that are very popular.
I contend that that sort of atmosphere has _never_ existed in the marketplace. It's not that the sort of market folks like Malcolm and Gareth hope for has disappeared, it's that it never really existed the way they envision it in the first place.
--Erik
PS: That's not to say that there aren't some real threats to the industry, but there is still a ton of money to be made my people at all levels of the game industry.
You just have to make something that people actually want.
Yeah, the stuff that many folks don't want to hear.
The fact is, if you're a foodie, you may get this awesome idea for "Escar-to-go!", the World's Finest Fast Food Snail Joint. That ain't gonna fly in Texas! You could put one up next to McDonald's, which sells some of the world's most unpalatable commercial beef products (Texans eat beef like it's going out of style... we know about this stuff!)... and you'll still watch people lining up to eat McDogpoop and few ever come to the Snail Joint drive-thru (and even the few that do ask for a burger half the time). And Heaven help you if you set up next to Whataburger. You'll be done for in no time.
Sure, after you go belly up you could stand around and complain about how the restaurant industry is dying because nobody wants to buy the Goose Liver Pate Kid's Meal with Belgian Endive and a toy surprise inside. Or how every time you ask your customers whether they want to add a side of Raw Antelope Nuggets they always blanch and decline. But the fact is that you were hoping to have a mass market approach to a niche market, and that is why it turned out to be disappointing.
I'm not sure if that's what Gareth is on about; I can only speculate as to what eyebeams wants as well. But I do think that product in the role playing game industry is selling... but it's probably not mostly niche product. Niche product is niche. Sure, I think niche can get a "bump" and get big for a while... but I think it will usually tend back down to niche status. As to the stuff that is selling... you can call it "McGaming" if you want, but if it sells, it sells. People must obviously be having some fun with it or I suspect that they'd just stop buying it.
I think it's cool that you could write a game called Mandelbrot where people play sentient fractals fighting it out in Plato's Realm of Forms, and using cut-ups of proofs from Symbolic Logic as a resolution system. I think it's cool that you could publish it online or as print-on-demand. I think it's cool that there is probably at least one group on Planet Earth that would actually play it, and maybe even write up an After Action Report or two. But I'm not especially bummed that you cannot make a career out of writing games like that, because I try not to get bummed about things that are so completely obvious.