Business model innovation in video-game consoles to face the threats of mobile gaming: Evidence from the case of Sony PlayStation

Abstract

This paper investigates how videogame consoles have innovated their business model (BM) in response to the entrance of mobile gaming. Business Model Innovation (BMI) is widely recognized in management literature as a strategic tool that incumbent firms can leverage to face the competitive threat of new entrants. However, none of the previous work has addressed this topic for the context of videogame industry. With the aim of filling this gap, we explored the case of Sony PlayStation by adopting a qualitative approach. All the innovations that were identified were coded in terms of value creation and value capture mechanisms. We detected that the evolution of the Sony PlayStation's BM can be articulated in four phases where mechanisms typical of mobile games have been detected and incrementally integrated. Our findings were finally discussed to highlight novel insights about the innovations implemented by Sony, that can be beneficial for both scholars and practitioners. Indeed, this paper contributes to the academic debate in the field of BMI research as well as offers practical indications for managers and executives of incumbent firms that face the competition of new entrants in their industry.