Innovativeness in the Video Games Industry
Innovation is crucial for every business, and the video game industry is no exception. But what exactly is innovation in video games, and which aspect of it actually drives the success of the game and the publisher? Here's a study that looked at that. Enjoy!
• Innovation drives a company's success (profit, market share, productivity, and more).
• "Especially the video game market, as a cyclical platform market, is characterized by dynamic and volatile technical developments leading to disruptive innovations every several years." [1]
• The results of the study indicate that the presentation was important for short-term success in general.
• "Second, our results demonstrate that the degree of innovativeness in the game principle is relevant for the short-term game success." [1] However, not for the long-term success.
• The third most important result was that the degree of innovativeness within the storyline negatively impacted short-term game success and was not important for long-term success.
Where would humanity be without innovation? No innovation, no progress. The same is true for virtually every industry that exists. Innovative companies typically have a higher performance (total employment, employer attractiveness, market share, productivity, and profitability). By having an innovative edge against the competition, more customers buy their product or service, leading to more revenue, market position, etc. The video game industry is no exception.
"Especially the video game market as a cyclical platform market, is characterized by dynamic and volatile technical developments leading to disruptive innovations every several years." [1]
However, are all these innovations worth it? Do the costs of R&D always pay off? In other words, does innovativeness affect video game success? But what is innovativeness regarding video games? The researchers propose it's 1) game principle innovativeness (in the interaction between player and game), 2) storyline innovativeness (the game's story, challenges, or campaigns), and 3) presentational innovativeness (visual and auditory features of the game).
The researchers took sales data of 351 computer games published between 2012 and 2015 to measure their success. In addition, they collected evaluation data from expert judges on each game and specifically each of the three innovativeness measures.
📈 Innovate and Thrive?
The results of the study indicate that the presentation was important for short-term success in general. No surprise, I guess. If a game has new and advanced graphics and sounds, customers are probably going to like it. However, in the long term, it didn't matter. I'd assume that great graphics today are outdated in two years or so, not impacting the game's success on the long run.
"Second, our results demonstrate that the degree of innovativeness in game principle is relevant for the short-term game success." [1]
Overall, good game principles are rated by players as a popular characteristic of video games. For instance, if a game is very well balanced (just think about LoL, Dota, CS...) between challenge and achievements, players will enjoy it more. Therefore, it makes sense that such a game will have a success, at least short-term. However, in the long term, the effect wasn't significant.
"In our opinion, this might be a result of the fact that after a certain time on the market the game principle of the once innovative game has been copied or adapted by other competitors, thus decreasing the competitive advantage of the game principle." [1]
The third most important result was that the degree of innovativeness within the storyline negatively impacted short-term game success. This may not make sense at first, as one would expect new stories and background settings, which are what players would like to see. In my opinion, the key word here is "nostalgia." People don't necessarily want a new setting or crazy new stories within a specific universe. Think about World of WarCraft, especially with their latest World of WarCraft Forever. Yes, new elements are great, but within the old setting—the familiar.
The researchers argue that the consumer "expect settings similar to those they are used to." [1] They don't want too much change and stick with a portfolio of games, settings, etc., they know. This is why many successful video games are part of an established game series or franchise or universe (again, World of WarCraft or GTA), based on the same storyline.
With that in mind, it makes sense that storyline innovativeness was also not important for long-term video game success.
Last but not least, sorry for not posting last week. I was super busy. To make up for it, you're getting one episode today, and one tomorrow. Cheers,
Christian 🙂
