Abstract
While innovation disruption has been extensively studied in extant literature, little is known about the performance outcomes of generational innovation so far. Building upon the demand-side perspective, we argue that generational innovations may elicit resistance from users, therefore exerting a disruptive effect on its demand dynamics. Further, the disruptive effect of GPI is conditioned by the relative benefits of adoption vis-a-vis behavioral readjustment. We suggest that the disruptive effect diminishes if the product has achieved top performance, and it amplifies as the product undergoes more generational changes. We examine our hypotheses in the context of the mobile game industry. In order to capture the short-term causal effect of GPI, our utilizes a unique matched difference-in-differences design, which takes advantage of asynchronous major updates of the multihoming apps on two dominant mobile platforms. The findings from 1610 mobile game GPI events in worldwide markets confirm our hypotheses.
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