I dont think 3.5 is a genuine new edition though. It was an excuse to sell new books, and 4e did kind of the same thing with essentials. But 4e also had a different release model, so it is hard to compare.
I do thnk it is obvious that 3e did well and either retained or grew the player base while 4e split and ended being seriously challenegd by a competitor.
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Bedrockgames I typed up this long reply in the "All editions are a failure thread", but it closed before I could submit it. Anyways, I would hate to see my thoughts go to waste, and besides, I would love to see any feedback, positive or negative, that you could give me on it. I'm genuinely interested in learning and understanding different perspectives, as I really want to help contribute to a less divisive community.
Does anyone really believe 4e is the most succesful edition at this point? I can't prove it isn't because i dont have any of the sales figures, but everything we have seen really puts the weight on it being a flop that lost half the D&D customers.
People have been saying that while 4e may not have been a failure sales-wise (and it is quite likely that even people who hate or ended up hating 4e bought at least the core), that 4e is a failure perception wise.
However, my perspective on the perception of 4e is that the nature of forums and websites dedicated specifically to RPGs/D&D, and the people that are invested enough in the hobby to participate on them, contribute to the appearance of a divisive community. This divisiveness is something that people like you and me are exposed to on a daily/weekly/monthly (depending how invested you are) basis, but which the average RPG gamer is rarely exposed to. The perception is further muddled by anecdotal evidence on both sides that try to convey the general perception, whether it is that "my shop never sells 4e products; everyone hates it, and I don't know a single person outside of an internet forum that admits to playing it" to "there was a lot of dissatisfaction with 3.X across all the stores in my tri-county area and we all moved universally to 4e, loved it, and never looked back."
However, in my experience, even the internet can cast a positive perspective on 4e, especially for someone that has never heard of the "edition wars". The Penny Arcade exposure and enthusiasm for 4e alone gives the edition
a lot of positive weight in nerd culture on the whole. Fourthcore, Sly Flourish, Critical Hits, EnWorld itself, and hundreds of other 4e and D&D websites spread plenty of positive and enthusiastic light on 4th edition, at least as positive and enthusiastic as any prior edition. Also, when 4e is (rarely) covered by the mainstream media (I remember several articles, but my favorite is the one about the guy DMing 4th for a group of pornstars), 4th edition *is* D&D, and there is no mention of any potential divide (and certainly, currently, Pathfinder isn't even a
thing to your average person who has passing familiarity with D&D).
I'll admit that there is a split (perhaps, hopefully, unwanted?) between the overall D&D playerbase right now; what is not clear to me is that is a result of the system and its mechanics itself (on the whole). WotC policies and actions, the OGL, and the awesomeness of Paizo are all as likely contributors to the market split. Hell, maybe instead of hating 4e, these other players just really, really like 3rd edition.
Here's another one of those anecdotes: I know a person at the local shop whose reason for avoiding 4e was because he'd already had a painful experience switching to 3.5 from 3.0 after investing a lot of money, and he felt 4e was another betrayal and was adamant he was not going through an expensive switch again. (He didn't even want borrow my 4e books, because his 3.5 book investment was still losing value if he played a different system with us; however, he didn't feel bad about eventually switching to Pathfinder, because Paizo hadn't betrayed him).
Finally, whether or not 3.5 is a separate "edition release" is irrelevant to the fact that they still decided to do it after 3 years. I'm almost positive that they hoped that everyone that bought 3rd edition books also bought 3.5 books, whether or not they continued to use their old books, and that the hope it would be an even bigger sales success than initial release. Incidentally, the same is also true of 4e and Essentials. The bottom line is, core books sell better than splat books, and if they can get away with it, they will release new (but improved!) core books as often as possible. History has shown us that right now 4 years is their timeline, and whether or not it is technically a new edition is not relevant. If 5th edition sells as well or better than previous editions, they will have continued to be correct. The same is also true of 5th Edition (Revised!) to be released in 4 years, or D&D 6th 4 years after that.
If 4e truly was a failure, I'd expect them to shelve the brand altogether for awhile, not do it again.