But it's also not being allowed to go up a level.
The new licensing agreement that goes with D&D 4.0 is now the Game System License, or GSL. What does this mean? Well, first, everyone who was confused into thinking that the 3.0 OGL applied to anything in 4th edition will finally be shut down. I hope.
Yeah, I know, people will still be confuzzled. Oh well...
Second, well, we don't know exactly what else this might mean, because everyone who's seen the GSL is still under NDA. But from what WotC has let out, the GSL will only allow you to reference the core rulebooks, but not reprint any material in them. What does that mean? That means, the GSL will allow you to make supplementary material for D&D 4.0. You can make splatbooks and adventures. However, you cannot make a brand new, stand-alone game. No Conan, True20, Mutants & Masterminds, or Traveller d20 based on the D&D 4.0 engine.
Does that mean those games go away? No. As each currently exists, they are based on D&D 3.x's OGL, which is still in force. It means the games cannot be rewritten with direct reference to bits in the 4.0 books, however. So now the world of d20 gaming bifurcates. On one path, we have D&D 4.0. On the other, we have products descended from D&D 3.x's OGL.
This poses all sorts of interesting questions. Can games like Conan, True20, M&M, and others survive without riding on D&D's coattails? That depends on the game. Honestly, I think all three of those can do just fine without D&D. They've got a good fanbase now, and all three can be grown with or without support from the companies that created them. After all, Star Frontiers seems to still have a strong and loyal fanbase even though the rulebooks have been out of print for twenty years or so now. There's no reason to think these other games couldn't fare just as well, if not better.
And D&D 4.0? Well, I dunno, honestly. It really depends on how much synergy was created between the various games. I think this isn't as big a fumble as limiting who can publish new material for 4.0 when it's first released. But I think that fumble will come back to bite them. How hard? I can't say. But right now, I'm expecting a very strong 3.x community to exist well into 2009.