Strategic Timing of Entry: Evidence from Video Games

41 Pages Posted: 16 Jan 2014

See all articles by Benjamin Engelstätter

Benjamin Engelstätter

University of Applied Sciences Darmstadt; ZEW – Leibniz Centre for European Economic Research - Information and Communication Technologies Research Group

Michael R. Ward

University of Texas at Arlington - College of Business Administration - Department of Economics; ZEW, Mannheim

Date Written: December 15, 2013

Abstract

This paper investigates how video game publishers’ choice of game release date is affected by the expected level of competition within the game’s product niche. We identify game niches by genre, age-appropriateness, a four week window cohort, publisher and console system. Our analysis is based on two different video game data sets, one based on industry sales data and the other featuring extensive consumer usage information. We show that consumer substitution across games is stronger within most of the dimensions describing product niches. Sales volumes decay quickly after the opening weekend, so at any point in time, a niche will typically be served by few current titles. Thus, publishers have incentives to avoid releasing during periods of fierce intra-niche competition. We show that games are more likely to be released so as to avoid weeks when their niche is relatively well served.

Keywords: Product Entry, Non-Price Competition, Niche, Strategy, Submarkets, Entertainment Goods, Video Games

JEL Classification: D43, L13, L96

Suggested Citation

Engelstätter, Benjamin and Ward, Michael Robert, Strategic Timing of Entry: Evidence from Video Games (December 15, 2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-117. Available at SSRN: https://ssrn.com/abstract=2379471 or http://dx.doi.org/10.2139/ssrn.2379471

Benjamin Engelstätter (Contact Author)

University of Applied Sciences Darmstadt ( email )

Max-Planc-Str.
Dieburg, 64807
Germany

ZEW – Leibniz Centre for European Economic Research - Information and Communication Technologies Research Group ( email )

L7, 1
D-68034 Mannheim
Germany
+496211235134 (Phone)

HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=ben

Michael Robert Ward

University of Texas at Arlington - College of Business Administration - Department of Economics ( email )

330 Business Building
Box 19479
Arlington, TX 76019
United States
817-272-3090 (Phone)
817-272-3145 (Fax)

ZEW, Mannheim ( email )

D-68034 Mannheim
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
70
rank
317,848
Abstract Views
570
PlumX Metrics