There are some great comments to James' latest post at Lamentations of the Flame Princess. You probably should read it. I'll wait...
Alright then. Anyhow, just how big is this "niche of a niche" we call the OSR? Even better question might be "does size even matter"?
I would guess that 4e, 3.5e/Pathfinder and WoD are the big three in terms of this hobby of ours. Barnes and Noble, B. Daltons, Borders... hit the major book stores and its probably 60% 4e, 20% WoD, 10% Pathfinder (give or take) and the rest a remainders from lord knows when.
I haven't seen a single OSR product in the retail bookstore chains. Which is a shame, as probably the easiest way to grow our corner of this hobby is to bring back those that left gaming around the time of the TSR implosion. Work, family, school, careers, responsibilities cause many folks to leave behind this hobby. They are also (i'm willing to guess) easier to bring back with an Old School Game that they can browse then a a New School Game that resembles little of their nostalgic memories. Besides, these people already know how to game.
What about those of us already enjoying the OSR? Are publishers at risk by offering too many choices? Can we be oversold? I don't think so. I would guess (its an assumption... right or wrong) that those gamers that enjoy the OSR are older than the average 4e player... most of us started in the 70s or 80s or early 90s... we have our families, our careers, and most importantly disposable income. We fall for the nostalgia of our youth, and there is nothing wrong in that. We will buy quality products that will succeed or fail by word of mouth.
I do find at this point in my life that finding time for a weekly game is much more difficult then when I was younger. Playing 4 or 5 times a week wasn't all that unusual during summers in college. Playing twice a month can get hairy to schedule these days, and that's with the convenience factor of using a Virtual Table Top. (as an aside, Old School publishers would be well advised to get their rulesets converted for use with Fantasy Grounds 2 - only Labyrinth Lord and Castles & Crusades have such at the moment). Still, I find time to purchase and read OSR products that are well done.
The OSR is a "healthy niche within a niche". There is nothing wrong with that. Its something to be proud of.
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