Competing Imitation Strategies In The U.S. Video Game Market

Abstract

Successful imitation relies on speed and quality in copying. Recent economic strategy maintains that improving quality for market entrants can greatly increase their chance of becoming a market leader. For socio-cultural reasons, we argue that once the standard setting and market leadership processes are complete, speed with close copying (‘fast following’) is more likely to be successful. Furthermore, in order to follow fast, firms need to rely on specific rather than general knowledge, but complement this knowledge with diverse first- and second-order co-production networks, making it difficult to switch production strategies. We support these claims using over time analyses of 143 imitative video game launches of the 10 hit game standards that were created between 1985 and 2003 in the U.S. video game market.