I think the thing that bothers me the most is I can't quite undersatnd why WotC would bother to "unlicense" Dragon and Dungeon from Paizo *unless* Dragon and Dungeon were to be in direct competition with what WotC was planning to do. Now, for that to be the case, a couple things would seem to have to be true.
A) The same people that read Dragon and Dungeon would have to be the people WotC was trying to court.
B) The value of Dragon and/or Dungeon would have to be better than or equivalent to the value of whatever it is WotC has planned.
A seems to fly in the face of the common notion, that the people who subscribe to and read Drangon and Dungeon are the same people that would subscribe to an electronic magazine. B suggests that whatever the cost WotC plans to ask, it is going to be more -- at least from a value perspective -- than what Paizo asks.
So, I am going to hazard a guess and suggest that the "online content" thing is only half the story -- largely due to "A". I think, in reality, Dragon and Dungeon probably get sold or licensed as a package deal, and the real issue is that Dunegon outperforms WotC's own adventures for much less. But in order to clear Dungeon from competing with WotC's new adventure push -- and I'll get to the reasons in a second -- they also had to get rid of Dragon. The "online content" isn't, I don't think, the reason Dragon got axed -- it is the damage control. that is, the electronic initiative is going to be more along the lines of databases and record keeping and virtual tabletop. But WotC can't leave people in the lurch, so they are, temporarily at least, going to step up the value and quality of the content already provided on the WotC site as a salve to help lessen the sting of the Dragon loss.
Now, as to the issue with Dungeon and WotC's adventures: the only thing that makes any real sense, to my mind, is that 4E is actually a good ways away -- probably in order to test out the use of the digital initiative and determine exactly how "digital" 4E needs to be to compete. I was talking to the owner of my FLGS today and he said that gaming, even D&D was down by lots, but Dragon and Dungeon were still selling well. We got to talking, and even the D&D minis aren't selling well. Of course, this is anecdotal to one store, but assuming the store isn't unique and the trend, if not the exact numbers, is common in the industry, then it is obvious that WotC would be looking at ways to improve their sales. I think they know that they won't catch lightning in a bottle a second time -- 4E will not reinvigorate the game the way 3E did. therefore, they need to find new ways to market the game, and new people to market it to. To do that, they need to look at technology.
How's all this relate to Dungeon magazine? Well, one thing that "old" D&D had was the shared experience of classic and iconic modules. but it isn't just D&D that has this. it is also MMORPGs, especially WoW. I am not a WoW fan myself, and only played casually for a year or so, but I can tell you that when you hear WoW folks start talking about the raids they've done, you might as well be listening to grognards talking about going into the Keep on the Borderlands. it is amazing, even enlightening, and lamost makes you want to subscribe to WoW just to get a small piece of the same bliss that those pasty guys are geekgasming over. Same with D&D. but with D&D, the experience is much more protracted, and it is a hell of a lot more work. Especially when it comes to adventures, given the complexities and weight of the 3rd edition rules (the same complexity and weight that is a draw for the player base).
Now, bear with me, I think i am finally coming to my point.
If on the one hand you have a solid library of iconic modules -- including encounter designs and stat blocks built specifically for taking the labor out of DMing said adventures -- and on the other hand you have a level of electronic support and immediacy on par with an MMO, or at least a CCG, where those things meet is where D&D successfully traverses into the 21st century.
Imagine, if you will, a group of gamers sitting down at the FLGS in 2009 or 2010 to play Return of the Red Hand of Doom or some such. Now, there's four of them, and they've all played through portions -- i.e. levels -- of the adventure, but never together and never at this FLGS. But that's okay. they hit the WotC website, load up their current PCs and start playing, on a virtual tabletop with a "paid" DM -- whether it is a guy who volunteers for free swag/subscriptions, or an actual employee whose job it is to click the right mouse buttons to "run" the adventure -- getting the best of both -- traditional and electronic -- RPG worlds.
It's a longshot, I know, and there are entirely too many details for me to be "right" about this, but I think something like this, along these lines, might be where WotC's head is at: they need to incorporate technology into the D&D experience in order to compete against MMOs and the like, and unless they do it soon, the industry (not necessarily the hobby, though) is as good as dead.
