Abstract
The mobile games business is an ever-increasing sub-sector of the entertainment industry. Due to its high profitability but also high risk and competitive atmosphere, game publishers need to develop strategies that allow them to release new products at a high rate, but without compromising the already short lifespan of the firms' existing games. Successful game publishers must enlarge their user base by continually releasing new and entertaining games, while simultaneously motivating the current user base of existing games to remain active for more extended periods. Since the core-component reuse strategy has proven successful in other software products, this study investigates the advantages and drawbacks of this strategy in mobile games. Drawing on the widely accepted Product Life Cycle concept, the study investigates whether the introduction of a new mobile game built with core-components of an existing mobile game curtails the incumbent's product life cycle. Based on real and granular data on the gaming activity of a popular mobile game, the authors find that by promoting multi-homing (i.e., by smartly interlinking the incumbent and new product with each other so that users start consuming both games in parallel), the core-component reuse strategy can prolong the lifespan of the incumbent game.
Highlights
The prevalence of smartphones and the mobile Internet changed the entertainment industry fundamentally by contributing to some of its sub-sectors’ unexpected rise or fall
Drawing on the widely accepted Product Life Cycle concept, the study investigates whether the introduction of a new mobile game built with core-components of an existing mobile game curtails the incumbent’s product life cycle
Based on real and granular data on the gaming activity of a popular mobile game, the authors find that by promoting multi-homing, the core-component reuse strategy can prolong the lifespan of the incumbent game
Summary
The prevalence of smartphones and the mobile Internet changed the entertainment industry fundamentally by contributing to some of its sub-sectors’ unexpected rise or fall. C. Mihale-Wilson et al.: The Impact of Strategic Core-Component Reuse..., Bus Inf Syst Eng. Traditionally, companies that operate in markets with a fast innovation pace but a simultaneous risk of failure routinely use their existing successful products (Faircloth and Richard 1995; Mihale-Wilson et al 2021) to develop new ones. Companies incorporate the functionalities and core-components of successful existing products into new products, reducing their time to market, and their risk of failure substantially. This strategy is commonly successful in developing software applications, mobile game publishers can have reservations about it due to technical and economic considerations (Folmer 2007). After introducing the data and the methodological approach, we present the estimation results, their implications for practice, and conclude with potential avenues for future research
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