One silver lining of the sclerotic distribution system is that more and more fans are apparently coming out to shows to buy products; likewise, the community-building powers of the Internet help drive convention attendance as friends who know each other only from forums or LiveJournal plan meetups at shows. I'm not sure what kind of hobby we'll have in another ten years -- hundreds of boutique "indie" games and a strong network of local conventions anchored by regular D&D tournaments? That sounds oddly familiar -- maybe we're heading back to the 1970s. But hopefully, with better hair.
I begin with the following, hopefully uncontroversial, premises:
* The hobby game distribution system, through nobody's fault, is now very poorly equipped to support RPG publishing. Margins for other products with a much faster turn rate are higher; any incremental effort in sales or support should go to those products rather than RPGs. An RPG cannot financially (or creatively) sustain the "periodical model" needed to compete in the modern hobby game distribution system.
* This, among other (possibly even more significant) factors, is crippling the RPG sector as it struggles to recover from the "d20 glut." Hence, year-on-year core market sales of RPGs have dropped steadily.
* This cannot last. However, the tabletop roleplaying hobby will not die. It's too ideally suited for the socialization of shy geeks in high school, of which there will be an endless supply.
* However, shy geeks use the Internet. A lot. This further drives RPGs out of a "brick and mortar" sales model, as shy geeks are no less price-sensitive than anyone else. In 2005, PDF sales were between 5 and 10% of all core market RPG sales -- at a minimum. Add in Amazon, publishers' websites, wholesalers and discounters, and so forth. Game stores? That's where your sales went. If it's any consolation, it's probably not your fault.
So what does this mean for the future? Note: This is blue-sky extrapolation, not a hard and fast bet.
* Barring a Vampire-like explosion of the hobby into another untapped vein of geek subculture, the RPG hobby will become (even more starkly) Dungeons & Dragons and Everything Else.
* Aside from a very few amazingly well run stores in rich college markets (or high-legacy gaming markets like the suburban Midwest and South), most games will be bought and discussed over the Internet. (And likely played there, as Neverwinter Nights-style engines become cheap, transparent, and common. But that's a different hobby, and although RPG publishers could also reinvent themselves as "hint book publishers," I'm not considering that right now.)
* Those two developments will drive "second-tier" game companies and "indie" companies closer together, especially in the mind of the consumer. If he doesn't have a game store handy, and only sees D&D in his Borders, all other games will look the same to him -- he will judge based on how enthused his friends are, whether he thinks the game sounds cool, and by Actual Play reports on the Net. (This last gives "indie" companies, which have a culture of encouraging "tell me about your character," a boost at the expense of old-school companies, which have a culture of avoiding that stuff.)
* This, by the way, doesn't negate the Revealed Dancey Wisdom about network externalities, but I think it mitigates it somewhat. A network is only good if there's a transmission medium for it; if the whole marketplace reduces back to the RPGA and individual game groups, a Dogs In The Vineyard can potentially be as successful as a GURPS. That said, I think it's probably in the best interests of other "second-tier" publishers to open their system up and work with the grass-roots tendencies I see predominating in the Future. If they do, then network externalities and the monkey-trooping tendencies of Open Source models will keep them (relatively) strong. It may even keep their core books in Borders, on the very high end.
* I still believe, somewhat contra the above, that a "second-tier" RPG publisher can make the switch to the "small press" business model -- targeted marketing, hand-selling, high price points for real quality, available in a few good book stores. As an example, I habitually point to Ash-Tree Press, which had it not been for the Austerity, would have me in a vise-like grip reminiscent of the one Chaosium had me in in the 1980s. There are others, even more successful, such as Greenhill-Stackpole, or Osprey, that fit about where I imagine White Wolf will end up.
* Parenthetically, if RPG publishers have to adopt to book-trade terms (full returnability, hard sell sheets and ship dates six months ahead, etc.) or die, that could be the "high barrier to entry" that established RPG publishers claim to want. Be careful what you wish for, etc.
* The Internet's community-building effect will continue to increase the number of good regional gaming conventions. Right now, the ConQuest shows seem to be building on the back of the "German game" micro-boom; a convention, unlike a store, can switch from boomlet to boomlet fairly transparently. Also, a convention, unlike a store, actually gains by continuing to support legacy hobbies -- wargames now, RPGs soon. A game con that stays on the good side of the RPGA can also still ride RPGs very profitably -- that sub-hobby seems very solid, from the outside at least.
* Such game conventions are also excellent marketing, demo, and retailing opportunities for RPG companies that aren't Dungeons & Dragons. Much as I pick up a lot of small-press SF and so forth at SF cons, game cons will become everyone's local retailer. (Good local retailers will also sell at these cons, in the areas that are so fortunate as to have them, or possibly all across the region, much as Dreamhaven Books in Minneapolis sells at Chicago SF cons.)
I'm not sure what the holistic view of the RPG world circa 2016 looks like, but I think it's not unjustifiable to say that it will draw very heavily on the above projected trends.
The "better hair" thing is just the triumph of hope over experience.