The Impending Doom of Paizo

Two years ago, I made some predictions about Paizo's ability to survive 5e. I said they had 3 bad options:

1. Keep running with the 3E model forever.
2. Update to the 5e SRD.
3. Do something new. 

They are going with the option I expected they would, the third. The Pathfinder 2 RPG is obviously going to be a failure, and let's get into why (it actually has little to do with the revealed mechanics, which admittedly look pretty bad). The key is to understand what the Pathfinder brand's identity. Pathfinder is embraced by the market as a well-supported, generic knock-off of D&D 3.5. The fundamental problem is that it's a backward-facing brand. The way brands work, the heir to a beloved brand can never come from another company. Pathfinder isn't the successor to 3.5; it's just a repristination. The successor to D&D 3.5 is D&D 5e.

Furthermore, 5e has changed what makes Pathfinder unique. While 4e was WotC's flagship product, Pathfinder's identity was "pretty much everything you liked about 3.5 that 4e dumped." Since 4e dumped nearly every classic D&D-ism that didn't work with 3.5's feat-bloat, that meant a Pathfinder game felt more like "real" D&D than 4e. But the 5e design team not only kept what worked about 3.5,  but went back to the sources (a kind of "Protestant Reformation" of D&D, if you will) and restored a number of AD&D-isms and even OD&D-isms that had been discarded over the years. This means that what makes Pathfinder unique in 2018 is "mostly failed design ideas from 3.5."


Because Pathfinder's brand identity is defined entirely in terms of somebody else's product, Paizo has nowhere to go with Pathfinder 2. The revealed design of PF2 has so far been pretty incoherent. Paizo's doubling down on bloated feats, large numbers, fiddly modifiers, and mechanical complexity for its own sake. But that isn't fundamentally why Pathfinder  2 is going to fail. Even if PF2 is a great RPG, it's going to fail because the D&D brand is owned by Wizards of the Coast, and 5e has been a smash success. There is little to no market demand for a game that is "like D&D, but different." Pathfinder only succeeded because it was perceived by the market as being more true to D&D than the official version.

Pathfinder 2 will initially sell seemingly well, but its peak will almost certainly be below PF1's. There will be significant attrition of existing Pathfinder players, as it is so different as to be incompatible with old material, it will lure almost nobody over from other games, and it will not grow the RPG market at all. Within 18 months, even if initial sales numbers seem impressive, there will be significantly fewer people playing PF2 than PF1, and growth will be practically nonexistent.

It's much harder to shrink a company than to grow it, so it's anyone's guess as to whether Paizo will stay solvent.