Game Firms Research Articles

Hybridization of human resource management practices at South Korean online game firms: the effects of inter-organizational networks

ABSTRACT This article examines inter-organizational relationships as a vital context in the hybridization of human resource practices for adopting best practices. Employing an actor-centred institutional approach, it analyzes actor interactions in order to comprehend how institutionalized actors influence the hybridization process in South Korean online game firms. Drawing from interviews and secondary data, the findings highlight the significant impact of evolving actor relationships on situational contexts. Hierarchical relationships between game publishers and developers, coupled with unionization and state involvement, shape the distinct characteristics of hybrid HR practices. This study emphasizes the intricate interplay between national, industry and firm-level contexts in the hybridization process.

Entrepreneurial Decision-Making of Born-Digital Companies Using An Effectuation Lens

In order to examine how born globals in developing economies create global possibilities in a digital global business environment, this paper will reply to requests for papers in the field of international entrepreneurship. This study's goal is to use effectuation theory to analyze how digital businesses develop prospects in international marketplaces. This study is based on numerous case studies from two Indonesian game firms and qualitative data. By offering insights into the decision-making logic utilized by international entrepreneurs in born-digital enterprises, this study contributes theoretically to the literature on IE. The results also support further study in this field and improve our understanding of born globals.

IP box effects in the gaming industry

PurposeThis paper aims to verify how the intellectual property (IP) box affects firms’ effective tax rate, growth and innovation activity outcomes related to intellectual property rights.Design/methodology/approachImplementing the innovation box regimes into the tax system intends to encourage firms to engage in more innovative activities. In UK, Italy and Poland, the IP box tax relief was introduced in 2013, 2015 and 2019, respectively. In return, companies may reduce their tax rate to increase their investment and innovativeness. With a panel model approach – system GMM and DiD with multiple time periods – it analyses data from the Orbis database for 2011–2019 of 673 firms from the gaming industry in 11 countries and hand-collected data on intellectual property rights protection. The authors study public and private companies from the gaming sector in leading European markets and all three countries that protect intellectual property rights of software (Japan, South Korea, the USA).FindingsRecent reforms enable gaming companies to use preferential tax treatment for IP-related income and significantly impact a firm’s revenue growth.Practical implicationsNevertheless, European gaming firms require time to leap the gap to the growth and innovativeness of countries that protect software.Originality/valueThe authors show that the IP box stimulates gaming firms to protect IP via wordmarks, figurative marks, trademarks and software patents that bring effects in five years. Despite the critics against IP box, the authors prove its lagged efficiency, especially in profitable and larger firms.

Do gaming companies benefit from the IP Box tax rate? Multinational, Polish and Wielkopolskie voivodeship perspective

This article aims to verify the impact of the reduced IP Box tax rate on the revenues of gaming companies and Gibrat’s Law stating that firm growth is independent of a company’s size. The dynamic panel-data models estimated in this article using GMM, FE panel data and OLS methods were created based on data of 673 companies from 11 countries. We show that small gaming firms are growing faster than their larger rivals. Thus, we reject Gibrat’s Law. We did not find evidence that IP Box supports the firm’s growth except for the Wielkopolskie Voivodeship. More chances for IP Box’s (reduced to 5% income tax rate being in force in Poland since 2019) effects are given to firms with more remarkable and dynamic changes in capital intensity, intangibility and inventory. The gaming industry in Wielkopolska benefits more from IP Box than the rest of Poland.

Hitting reset: Industry evolution, generational technology cycles, and the dynamic value of firm experience

AbstractResearch SummaryWe study how the value of depth and breadth of experience shifts across generational technology cycles and industry evolution. Experience breadth builds organizational flexibility that is valuable during technology transitions and when the industry is younger, while experience depth builds domain‐specific resources that are important during periods of technology stability and later periods of industry evolution. We test our theory in the console game industry, where publishers face repeated periods of transition and stability across multiple console generations. We find support for most hypotheses, except that the value of breadth correlates with the magnitude of any transition instead of decreasing linearly over time. We contribute to research on the changing value of firm experience and to the understanding of generational technological change during industry evolution.Managerial AbstractMany industries face generational changes. How incumbent firms handle those transitions is important to firm survival and success. We study how the prior experience of video game publishers helps them navigate transitions. First, we find that firms with deep experience in a genre produce more successful games in that genre only during stable periods in the industry. Second, the benefits of deep experience increase over time as some of the experience‐built capabilities of the firm survive technological transitions. Third, broad and diversified firms perform best during generational transitions as they successfully enter new domains made popular by the generational shift. We suggest that the product strategies of video game firms should depend on the relevant experience they possess and the degree of environmental change.

Kernel naïve Bayes classifier-based cyber-risk assessment and mitigation framework for online gaming platforms

ABSTRACT Recently, the number and intensity of cyberattacks against massively multiplayer online (MMO) gaming platforms have increased; up to 74% of distributed denial-of-service (DDoS) attacks on MMO gaming (MMOG) firms have been launched by hackers. These malicious attacks affect gamers’ experience and MMOG firms’ revenue model. Along with financial losses, MMOG firms’ reputation also suffers from these attacks. Therefore, in this study, we devised a framework to quantify and mitigate cyber-risk for MMOG firms using a hybrid learning method, namely, a kernel naïve Bayes classifier. Our kernel naïve Bayes classifier-based cyber-risk assessment and mitigation (KB-CRAM) framework included the DDoS attack traits. Subsequently, it outputs (i) the probability of DDoS attacks; (ii) the expected financial losses; and (iii) cyber-risk mitigation strategies, such as self-protection (technology, compliance, and legal deterrence), self-insurance, or cyber-insurance. Our study contributes to field-relevant literature by providing managers with a tool to improve game performance. This framework also suggests ways in which MMOG firms can hedge losses against repeated attacks from unethical hackers.

Editorial: Creative industries at the intersection between local agglomeration, national regulation, and global networks

Editorial: Creative industries at the intersection between local agglomeration, national regulation, and global networks

Market Expansion of Domestic Gaming Firms in Shenzhen, China: Dilemma of Globalisation and Regionalisation

AbstractChina's domestic mobile gaming firms, such as Tencent, which has developed into the world's biggest gaming firm by revenues in a short span, have outweighed the leading counterparts in the Western advanced economies. Despite an increasing attention has been paid to the global investment of Chinese gaming firms, this paper argues that their market expansion has focused on the selected Southeast Asian countries. This arguement is developed through the aurthors' extensive field investigation and personal interviews with games developers and publishers in Shenzhen, where Tencent is located, during the early 2017 and late 2019. We showcase that the protective multi‐scalar institutions in which the Chinese gaming firms have dominated in the domestic market, have prevented the overseas market expansion of these firms. Although the government‐designated extra‐local inter‐firm collaboration has helped narrow the technological gaps and articulate China’s firms into the global production networks, the market gaps between the domestic and western economies have not been overcome in the expansion to overseas markets. This study sheds light on that the market expansion of Chinese gaming firms has stucked in a dilemma between globalization and regionalization. While China’s domestic gaming firms, particularly Tencent, have been evolving into lead firms in the global games production networks, their market power has been confined at domestic and regional levels.

Cognitive and Structural Antecedents of Innovation: A Large-Sample Study

This paper studies how cognitive and structural antecedents affect adaptation to disruptive innovations. We do so by analyzing how video game firms adapted to the free-to-play business model around the period of disruption (2012–2015). Our data set (which contains 461 firms, collectively employing 83,157 individuals) allows us to characterize each firm’s organizational structure and each employee’s experience profile; it also captures the performance of firms under the existing and new technological regimes (that is, firms that do and do not adopt the disruptive innovation). We show that adoption, implementation under the existing regime, and implementation under the new regime are affected by cognitive and structural antecedents in different and often opposite ways. We also point out conditions under which cognitive and structural antecedents can compensate for each other. Overall, our study contributes to a better understanding of how firms should organize to face disruptive innovations.

Organizing for Disruptive Innovation: Untangling the Cognitive and Structural Antecedents of Adoption and Implementation

This paper studies how cognitive and structural antecedents affect adaptation to disruptive innovations. We do so by analyzing how video game firms adapted to the free-to-play business model around the period of disruption (2012-2015). Our dataset (which contains 461 firms, collectively employing 83,157 individuals) allows us to characterize each firm's organizational structure and each employee's experience profile; it also captures the performance of firms under the existing and new technological regimes (that is, firms that do and do not adopt the disruptive innovation). We show that adoption, implementation under the existing regime, and implementation under the new regime are affected by cognitive and structural antecedents in different and often opposite ways. We also point out conditions under which cognitive and structural antecedents can compensate for each other. Overall, our study contributes to a better understanding of how firms should organize to face disruptive innovations.

Windows of Opportunity, Capability and Catch-Up: The Chinese Game Industry

ABSTRACT This study examines the catch-up experiences of the Chinese game industry from a neo-Schumpeterian perspective. It determines that Chinese indigenous firms succeeded in catch-up by strategically responding to favourable policy changes, such as a quota system that limited the import of overseas games and content inspection by the government. It is found that China has established its capabilities in a quite different manner than the experience of advanced countries during the dynamic catch-up process. This verdict shows that the order of capability development of late-comer countries can be different from that of advanced countries. Despite numerous studies that emphasise the role of government, we argue that, even when the market is unsegmented, if foreign knowledge is accessible, then the necessary intervention can involve little more than the protection of the initial market in the form of exclusive licensing, import restriction, not sharing R&D costs or promoting marketing activity. Despite exclusive licensing, import restriction and piracy, overseas game firms continued co-operating with China in the form of a publishing contract and IP sales due to massive market opportunities in China. This indicates that a large country with an immense domestic market can differentiate its catch-up strategies from those of small-market countries.

Business model innovation in cultural and creative industries: Insights from three leading mobile gaming firms

This paper contains an exploratory analysis of the business model innovations (BMIs) that firms in cultural and creative industries (CCIs) undertake along their life-cycle. Despite the role that creative and cultural and creative firms (CCFs) have in the economic development of industrialised countries, they tend to remain small and often fail due to industry-specific constraints and tensions, such as the lack of managerial capabilities and complexity in nurturing value chain relationships. However, there has been relatively limited scholarly interest into the specific conditions and processes that enabled CCFs to overcome these liabilities, and in particular into the identification of the business models they have adopted along their life-cycle. In this paper, this issue is analysed by using the concept of BMI, which sheds light on how the reconfiguration of the activity system through which a CCF creates, delivers and captures value enables the exploitation of entrepreneurial opportunities over time. This paper builds on an in-depth historical study of three leading firms operating in the mobile gaming industry, namely Rovio, Zynga and King Digital Entertainment. Three main results emerge from this study. First, in the ramp-up phase of their life-cycle, CCFs organize their resource architecture to build a strong and recognized reputation. Second, in the development phase, BMI is used to leverage new distribution paradigms. Finally, in the maturity phase, firms dedicate resources to innovate their product portfolios by providing platforms that support the development and testing of new creative ideas and solutions. Findings and implications are then discussed.

Organizing for Disruptive Innovation: Untangling Cognitive and Structural Antecedents

This paper studies how cognitive and structural antecedents affect adaptation to disruptive innovations. We do so by analyzing how video game firms adapted to the introduction of the ``free-to-play'' business model around the period of disruption (2012--2015). Our dataset (which contains 461 firms, collectively employing 83,157 individuals) allows us to characterize each firm's organizational structure and each employee's experience profile; it also captures the performance of firms along both S-curves (that is, firms that do and do not adopt the innovation). We show that cognitive and structural antecedents affect adoption, implementation under the existing S-curve, and implementation under the new S-curve in different and often opposite ways. We also point out conditions under which cognitive and structural antecedents can compensate for each other. Overall, our study contributes to a better understanding of how firms should organize to face disruptive innovations.

The role of consumption emotions in users’ mobile gaming application continuance intention

Purpose The long-term development of a mobile gaming application (app) depends on its continued use by its users. The expectation–confirmation model of IS continuance was used as the basic framework, to which bi-dimensional consumption emotions were added to help better explain satisfaction judgment and continuance intention in the context of mobile gaming app use. The paper aims to discuss this issue. Design/methodology/approach The data were analyzed using structural equation models. The effects of positive consumption emotions and negative consumption emotions were examined, respectively, in Models 1 and 2. Competing models (Models 3 and 4) were also examined in order to compare the proposed model. Findings Both PE and NE have an effect on the satisfaction of mobile gaming app users and their continued usage intention, a finding that represents an important contribution to the extension of technology continuance theory. Comparison with the IS continuance model shows that the new model can explain significantly more variance in continuance intention. Practical implications Mobile gaming firms should pay attention to users’ consumption emotions, especially negative emotions. Some specific emotions involved in mobile gaming app use were identified, which could guide firms’ understanding of users’ emotions. Originality/value This study offers insight into the role of consumption emotions in forming continuance intentions toward mobile gaming app use in China, a topic that has not previously been investigated.

Do software and video game firms share location patterns across cities? Evidence from Barcelona, Lyon and Hamburg

The aim of this paper is to analyse common location patterns of software and video game (SVE) industry and the related agglomeration processes with other creative industries in Barcelona, Lyon and Hamburg. SVE is a key industry in developed countries and one which, due to a search for agglomeration economies, skilled labour and a range of spillover effects, is mainly located at the core of larger metropolitan areas. The cities used in our empirical application share some common features in terms of size, manufacturing tradition and, especially, economic strategies, as they have managed to promote high-tech neighbourhoods through ambitious urban renewal policies aimed at attracting the SVE industry. When analysing location patterns of firms in the industry, although our results highlight the predominant role of the urban cores of these three cities, they also indicate important specificities in terms of core–periphery distribution of SVE firms and the already mentioned urban renewal projects.

Aspects of Independent Game Production

Recent years have witnessed independent game production rise to a prominent position in the digital game industry. Be it by the fresh, innovative take it brought to the scene or by its rebellious attitude towards what is perceived as mainstream, the term “indie game” has become somewhat of a buzzword. The following study displays a series of findings of research fieldwork aiming to advance the study of indie game development by investigating organizational and managerial practices commonly adopted by these developers. Relying on semi-structured interviews conducted with lead developers of seven Brazilian indie game firms, the connections, similarities, and differences among these developers’ firm structure and project management practices and those of the larger game industry is explored, utilizing the lenses of scope, organization, time, cost, and quality management as a starting point. Given the growing and significant relevance of the game industry as a whole, this empirical study offers pragmatic data on the still-niche research topic of indie games.

The importance of spatial agglomeration in product innovation: A microgeography perspective

This study focuses on how innovation in general and product innovation in particular are influenced by firms' agglomeration in smaller local districts, the so-called microgeography of product innovation. Using spatial analytic methods on the mobile gaming industry in the Seoul Metropolitan Area, this study finds that mobile gaming firms co-locate to form sub-clusters for specializing in specific product innovation activities such as visual complexity, product price, and product upgrade. Furthermore, results show that the relationships between product innovation and sales performance differ across individual firms and sub-clusters. The findings confirm that microgeographic location plays a key role in promoting different product innovation activities within a city-level cluster. One key implication is that regional and district policy makers should consider product innovation policies based on each sub-cluster's specific product innovation potential, due to the heterogeneous agglomeration effects in product innovation activities.

Federal Tax Law Trumps Indian Canon

On November 27, 2001, the Supreme Court ruled in Chickasaw v. United States that Native American gaming (NAG) firms are subject to federal excise and occupational taxes. Prior to the decision, these firms had been exempt from all federal taxation. We hypothesize that Chickasaw improves the competitive position of publicly traded gaming firms and their suppliers by leveling the playing field for publicly traded firms. Consistent with this argument, we find that the stock prices of publicly traded gaming firms and their suppliers reacted positively to the announcement of the Chickasaw Supreme Court and Tenth Circuit decisions. We also hypothesize that Nevada casinos are relatively insulated from competition because they offer a unique experience that is not easily replicated by NAG firms. Consistent with this argument, we find smaller stock price reactions for firms with Nevada operations.

Trial or No Trial: Supplying Costly Signals to Improve Profits*

ABSTRACTMany software and video game firms offer free trials with limited content to help buyers assess the likely value of the goods that they may purchase. This article examines fundamental issues related to the incentives and risks for a monopoly by providing a trial. Assuming that a seller can control the mix of components in a trial, we introduce a new mechanism for buyers’ inference of using a trial. We find that a trial may enable the seller to segment the market and charge a higher price to high‐valuation buyers, but can also cause a decline in demand. Moreover, the seller forfeits partial value of a full product through providing a free trial, so the benefit is offset by this cannibalization loss. In addition to the size and content of a trial, the distribution of buyers’ prior belief also affects a trial's ability to convey information. We show that a trial can provide more information if the prior belief is more concentrated in the tails of the distribution.

“Clusters” or “communities”? Analysing the spatial agglomeration of video game companies in Australia

In this paper, I question whether agglomerations of video game companies in Australia function as clusters (spatially bound) or rather as communities (not spatially bound). The two case studies included in the analysis are the main agglomerations of video companies in Australia—Brisbane and Melbourne. The data have been collected through 21 semi-structured interviews performed between 2012 and 2014. The main findings are as follows: (1) the primary reason that video game companies come together is to share tacit knowledge and skilled labour; (2) these agglomerations do not have the attributes of “creative clusters”; and (3) new technologies enable experienced game developers to operate at the geographic periphery of the main agglomeration of developers. Therefore, to paint a more accurate picture of why some video game companies are successful—beyond simply positive externalities associated with co-localization—I propose the term “networked communities.” This recognizes that social networks at varying scales (local, national, international) are being developed by video game firms in order to thrive and reach a global audience.