So what's up? Why are they doing this? It's hard to say, but looking at this press release from WotC, I'd guess (and yeah, it's a pretty wild guess) that they're trying to shore up business in the brick-and-mortar stores. The sale of cheaper pdfs is the easy answer for why the FLGS is a vanishing breed.
But if that's the case, why cut off sales of out-of-print stuff that's never going to be in a FLGS? I'd believe WotC was going to sell D&D to Necromancer Games before I'd believe that they were actually going to start printing dead-tree versions of the little brown books again.
In any event, the winners here are clearly Swords & Wizardry, OSRIC, Labyrinth Lord, and the rest of the old school simulacra. With the originals now beyond (legal) reach, folks wanting a taste of that grognardy goodness will have to turn hunting through used book stores or the simulacra. As far as the old school renaissance is concerned, I think this will result both in a lot of teeth-gnashing and lamentation, and a greater sense of freedom and experimentation.
UPDATE: Paizo just published this:
Wizards of the Coast has notified us that we may no longer sell or distribute their PDF products. Accordingly, after April 6 at 11:59 PM Pacific time, Wizards of the Coast PDFs will no longer be available for purchase on paizo.com; after noon on April 7, you will no longer be able to download Wizards of the Coast PDFs that you have already purchased, so please make sure you have downloaded all purchased PDFs by that time.
We thank you for your patronage of paizo.com. Please check out our other downloads at paizo.com/store/downloads.
So if there was something you wanted, best hop over there quick!
UPDATE 2: And there are losers, too:
According to my data on RPGNow and DriveThru, a large chunk of my orders come from multi-product orders which include WOTC products. Now, with WOTC making this decision, those orders won't be there, because those customers won't be there.
UPDATE 3: Is piracy the reason?
April 6, 2009 ‹ Wizards of the Coast LLC today filed three lawsuits in US
District Court for the Western District of Washington against eight
individuals, including named defendants located in the United States, Poland
and the Philippines, for copyright infringement of its recently-released
Dungeons & Dragons® Player¹s Handbook® 2. The lawsuits allege that the
defendants illegally distributed the Player¹s Handbook 2 via free
file-sharing websites and that these illicit uploads resulted in a
substantial number of lost sales and lost revenue to Wizards of the Coast.
If that's the reason, then this is a prime example of using a sledgehammer to swat a fly. Why shut down all PDF sales? I doubt piracy of their out-of-print catalog was a serious threat to their business. It's also not likely to be terribly effective in a world of flatbed scanners. The scanner I use at Kinko's has no trouble picking up the blue grid on my maps, or my many stray pencil marks. The days of fuzzy scans and missing text or pictures are long gone. But then, one should never underestimate the power of wishful thinking.
ADDENDUM to UPDATE 3: The official word is, it's piracy:
Unfortunately, due to recent findings of illegal copying and online distribution (piracy) of our products, Wizards of the Coast has decided to cease the sales of online PDFs. We are exploring other options for digitial distribution of our content and as soon as we have any more information I'll get it to you.
This is a very, very bad sign. Seriously, the original three 4e core books were out on torrent downloads before the dead-tree versions had even been printed. So why the sudden interest in piracy? I have no secret bugs hidden in WotC headquarters, but I can guess what happened here. A recently released book, or spate of books, did not achieve projected or desired sales. Piracy is an easy scapegoat; nobody in the company gets fired because of something those naughty Polish pirates did. Shutting down all PDF sales is obvious, bold action meant to reassure someone that steps are being taken and the trend will be reversed.
But this obviously only delays taking useful action. This sort of activity confuses thieves with customers. Those who stole were not likely to buy in the first place. Which means when their is no significant improvement in sales for the next few books, some other, more drastic action will need to be taken. And that's where this story could get unpleasant.
Again, this is all supposition on my part, and I may be way off base here. Still, we've seen this pattern before, and it rarely leads anywhere good.
UPDATE 4: And, of course, we can always rely on RPG.net to bring sober, level-headed commentary steeped in the history of the industry:
This is the stupidest goddamn bullshit I've ever seen a gaming company pull, bar none. I apologize to Kevin Siembieda for making fun of his donations pitch, and I heartily congratulate the makers of FATAL on their relative professionalism, maturity, and common sense.
I don't know about you, but I needed that laugh. ;D
UPDATE, uh, er, 1, 2, 3... 5!: Or maybe there actually is a clever plan:
Most likely, according to a variety of sources I'm spoken to over the last few hours, WotC is developing an improved online store in order to sell these items themselves. The PDFs will likely have a special password protection or similar encryption making it difficult to copy the initial download. This way, WotC doesn't lose money and prevents piracy of its product (to some extent at least).
Piracy might be a nice excuse for cutting out the middleman. Or maybe it drove them to it.
In any case, here are the important things to take from this: first, I have no idea what's really going on. Really, I'm just guessing here, and as Oddysey pointed out, PHB2 made the Wall Street Journal's best seller list. That doesn't mean it did as well as everyone hoped it would; just like with stocks, making mad phat profits will still tank your stock price if you didn't make as much profit as the experts predicted. But it does make it less likely that this is a desperation ploy to excuse poor sales.
Second, no matter how you slice it, this is a win for the publishing arm of the old-school renaissance. Resources like Swords & Wizardry and Labyrinth Lord are now a lot more valuable with the originals no longer readily available as downloads. There's a chance we might see some retrenchment, with publishers feeling they need to more closely preserve the original games more faithfully rather than just embracing the essence of those games. I don't think that's where we're going, however. Especially with guys like Umlaut, Rients, and Raggi leading the charge.
ANOTHER FIRKING UPDATE?!?: Yep, one last time, because Ryan Dancey has spoken:
Wizards is about to be forced into the D&D end-game which is something that many publishers have gone through but none ever with a game the scale and impact of D&D (TSR walked right up to this cliff but WotC saved them from going over the edge). There are 3 outcomes:
1: A total collapse, and the game ceases meaningful publication and distribution at least for one gamer generation and maybe forever.
2: Downsizing until overhead matches income; could involve some kind of out-license or spin off of the business - think BattleTech in its current incarnation.
3: Traumatic rebirth, meaning that someone, somewhere finds some way to cut out the cancers that are eating the tabletop game and restarts the mass market business for D&D.
Note that 2 and 3 can be mileposts on the road to 1.
I don't think this is too far from the truth. DDI was the big gamble to save D&D. As of now, it's still more promise than reality. I once predicted that the core books for version 5 would either be given away free as loss-leaders for DDI2 or published by Necromancer Games.