IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v29y2018i4p588-611.html
   My bibliography  Save this article

Optimal Distinctiveness in the Console Video Game Industry: An Exemplar-Based Model of Proto-Category Evolution

Author

Listed:
  • Eric Yanfei Zhao

    (Kelley School of Business, Indiana University, Bloomington, Indiana 47405)

  • P. Devereaux Jennings

    (Alberta School of Business, University of Alberta, Edmonton, AB, Canada T6G 2R6)

  • Masakazu Ishihara

    (Stern School of Business, New York University, New York, New York 10012)

  • Michael Lounsbury

    (Alberta School of Business, University of Alberta, Edmonton, AB, Canada T6G 2R6)

Abstract

In this paper, we develop an exemplar-based model of the emergence and evolution of proto-categories—new groupings of products that are only weakly entrenched but have the potential to become widely institutionalized—and examine how different positioning strategies of new entrants vis-à-vis the exemplar of a proto-category affect entrant performance. Empirically, we study the U.S. console video game industry where proto-categories frequently emerge and evolve around exemplary hit games. Analyzing a proprietary database of 6,544 games comprising 78 such proto-categories, we find that, in the early stages of proto-category emergence, conformity with the exemplar’s features is positively associated with new entrants’ sales. As a proto-category evolves, a moderate level of differentiation becomes important for enhancing sales. We also find that this temporal dynamic is driven by the changing competitive intensity in the proto-category and strongly mediated by critics’ reviews. Moreover, the mediating effect of critics’ reviews on entrant sales becomes increasingly salient with the evolution of a proto-category. Finally, we show that accounting for the influence of emerging prototypes does not diminish the explanatory power of the exemplar model we propose. We conclude the paper by discussing the implications of our findings for research on categorization and optimal distinctiveness.

Suggested Citation

  • Eric Yanfei Zhao & P. Devereaux Jennings & Masakazu Ishihara & Michael Lounsbury, 2018. "Optimal Distinctiveness in the Console Video Game Industry: An Exemplar-Based Model of Proto-Category Evolution," Organization Science, INFORMS, vol. 29(4), pages 588-611, August.
    • Handle: RePEc:inm:ororsc:v:29:y:2018:i:4:p:588-611
    DOI: 10.1287/orsc.2017.1194
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/orsc.2017.1194
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.2017.1194?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Eric Yanfei Zhao & Greg Fisher & Michael Lounsbury & Danny Miller, 2017. "Optimal distinctiveness: Broadening the interface between institutional theory and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 93-113, January.
    2. Sendil K. Ethiraj & David H. Zhu, 2008. "Performance effects of imitative entry," Strategic Management Journal, Wiley Blackwell, vol. 29(8), pages 797-817, August.
    3. Raghu Garud & Michael A. Rappa, 1994. "A Socio-Cognitive Model of Technology Evolution: The Case of Cochlear Implants," Organization Science, INFORMS, vol. 5(3), pages 344-362, August.
    4. Mary J. Benner & Mary Tripsas, 2012. "The influence of prior industry affiliation on framing in nascent industries: the evolution of digital cameras," Strategic Management Journal, Wiley Blackwell, vol. 33(3), pages 277-302, March.
    5. Fernando F. Suarez & Stine Grodal & Aleksios Gotsopoulos, 2015. "Perfect timing? Dominant category, dominant design, and the window of opportunity for firm entry," Strategic Management Journal, Wiley Blackwell, vol. 36(3), pages 437-448, March.
    6. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Gino Cattani & Joseph F. Porac & Howard Thomas, 2017. "Categories and competition," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 64-92, January.
    7. F. Ted Tschang, 2007. "Balancing the Tensions Between Rationalization and Creativity in the Video Games Industry," Organization Science, INFORMS, vol. 18(6), pages 989-1005, December.
    8. Sujan, Mita, 1985. "Consumer Knowledge: Effects on Evaluation Strategies Mediating Consumer Judgments," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 12(1), pages 31-46, June.
    9. Philippe Monin & Hayagreeva Rao & Rodolphe Durand, 2005. "Border crossing : Bricolage and the Erosion of Categorical Boundaries in French Gastronomy," Post-Print hal-02311675, HAL.
    10. Rodolphe Durand & Hayagreeva Rao & Philippe Monin, 2007. "Code and conduct in French cuisine: Impact of code changes on external evaluations," Post-Print hal-00459450, HAL.
    11. Rodolphe Durand & Lionel Paolella, 2013. "Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory," Journal of Management Studies, Wiley Blackwell, vol. 50(6), pages 1100-1123, September.
    12. Nina Granqvist & Stine Grodal & Jennifer L. Woolley, 2013. "Hedging Your Bets: Explaining Executives' Market Labeling Strategies in Nanotechnology," Organization Science, INFORMS, vol. 24(2), pages 395-413, April.
    13. Cohen, Joel B & Basu, Kunal, 1987. "Alternative Models of Categorization: Toward a Contingent Processing Framework," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(4), pages 455-472, March.
    14. Wanda J. Orlikowski & Susan V. Scott, 2014. "What Happens When Evaluation Goes Online? Exploring Apparatuses of Valuation in the Travel Sector," Organization Science, INFORMS, vol. 25(3), pages 868-891, June.
    15. David L. Deephouse, 1999. "To be different, or to be the same? It’s a question (and theory) of strategic balance," Strategic Management Journal, Wiley Blackwell, vol. 20(2), pages 147-166, February.
    16. Orlikowski, Wanda J. & Scott, Susan V., 2014. "What happens when evaluation goes online? Exploring apparatuses of valuation in the travel sector," LSE Research Online Documents on Economics 57602, London School of Economics and Political Science, LSE Library.
    17. Christine Oliver, 1997. "Sustainable competitive advantage: combining institutional and resource‐based views," Strategic Management Journal, Wiley Blackwell, vol. 18(9), pages 697-713, October.
    18. Brandon H. Lee & Shon R. Hiatt & Michael Lounsbury, 2017. "Market Mediators and the Trade-offs of Legitimacy-Seeking Behaviors in a Nascent Category," Organization Science, INFORMS, vol. 28(3), pages 447-470, June.
    19. Michael Lounsbury & Mary Ann Glynn, 2001. "Cultural entrepreneurship: stories, legitimacy, and the acquisition of resources," Strategic Management Journal, Wiley Blackwell, vol. 22(6‐7), pages 545-564, June.
    20. Wei Zhao & Xueguang Zhou, 2011. "Status Inconsistency and Product Valuation in the California Wine Market," Organization Science, INFORMS, vol. 22(6), pages 1435-1448, December.
    21. Callen Anthony & Andrew J. Nelson & Mary Tripsas, 2016. "“Who Are You?…I Really Wanna Know”: Product Meaning and Competitive Positioning in the Nascent Synthesizer Industry," Strategy Science, INFORMS, vol. 1(3), pages 163-183, September.
    22. Durand , Rodolphe & Paolella , Lionel, 2013. "Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory," HEC Research Papers Series 996, HEC Paris.
    23. Mark Thomas Kennedy & Peer C. Fiss, 2013. "An Ontological Turn in Categories Research: From Standards of Legitimacy to Evidence of Actuality," Journal of Management Studies, Wiley Blackwell, vol. 50(6), pages 1138-1154, September.
    24. Joseph F. Porac & Howard Thomas & Charles Baden‐Fuller, 1989. "Competitive Groups As Cognitive Communities: The Case Of Scottish Knitwear Manufacturers," Journal of Management Studies, Wiley Blackwell, vol. 26(4), pages 397-416, July.
    25. Ethan Mollick, 2012. "People and process, suits and innovators: the role of individuals in firm performance," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1001-1015, September.
    26. Rodolphe Durand & Lionel Paolella, 2013. "Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory," Post-Print hal-01026129, HAL.
    27. David M. Waguespack & Olav Sorenson, 2011. "The Ratings Game: Asymmetry in Classification," Organization Science, INFORMS, vol. 22(3), pages 541-553, June.
    28. Jamal Shamsie & Corey Phelps & Jerome Kuperman, 2004. "Better late than never: a study of late entrants in household electrical equipment," Strategic Management Journal, Wiley Blackwell, vol. 25(1), pages 69-84, January.
    29. Hiro Izushi & Yuko Aoyama, 2006. "Industry Evolution and Cross-Sectoral Skill Transfers: A Comparative Analysis of the Video Game Industry in Japan, the United States, and the United Kingdom," Environment and Planning A, , vol. 38(10), pages 1843-1861, October.
    30. Greta Hsu & Peter W. Roberts & Anand Swaminathan, 2012. "Evaluative Schemas and the Mediating Role of Critics," Organization Science, INFORMS, vol. 23(1), pages 83-97, February.
    31. David Strang, 2010. "Learning by Example: Imitation and Innovation at a Global Bank," Economics Books, Princeton University Press, edition 1, number 9213.
    32. Meyers-Levy, Joan & Tybout, Alice M, 1989. "Schema Congruity as a Basis for Product Evaluation," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(1), pages 39-54, June.
    33. Michael T. Hannan & László Pólos & Glenn R. Carroll, 2007. "Language Matters, from Logics of Organization Theory: Audiences, Codes, and Ecologies," Introductory Chapters, in: Logics of Organization Theory: Audiences, Codes, and Ecologies, Princeton University Press.
    34. Jennings, Jennifer E. & Jennings, P. Devereaux & Greenwood, Royston, 2009. "Novelty and new firm performance: The case of employment systems in knowledge-intensive service organizations," Journal of Business Venturing, Elsevier, vol. 24(4), pages 338-359, July.
    35. Rodolphe Durand & Hayagreeva Rao & Philippe Monin, 2005. "Border Crossing: Bricolage and the Erosion of Categorical Boundaries in French Gastronomy," Post-Print hal-00457938, HAL.
    36. Corts, Kenneth S. & Lederman, Mara, 2009. "Software exclusivity and the scope of indirect network effects in the U.S. home video game market," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 121-136, March.
    37. Zuckerman, Ezra W. & Kim, Tai-Young & Ukanwa, Kalinda & James, von Rittmann, 2003. "Robust Identities or Non-Entities? Typecasting in the Feature Film Labor Market," Working papers 4291-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    38. Aoyama, Yuko & Izushi, Hiro, 2003. "Hardware gimmick or cultural innovation? Technological, cultural, and social foundations of the Japanese video game industry," Research Policy, Elsevier, vol. 32(3), pages 423-444, March.
    39. Rodolphe Durand & Hayagreeva Rao & Philippe Monin, 2007. "Code and conduct in French cuisine: Impact of code changes on external evaluations," Strategic Management Journal, Wiley Blackwell, vol. 28(5), pages 455-472, May.
    40. Aaron K. Chatterji & Rodolphe Durand & David I. Levine & Samuel Touboul, 2016. "Do ratings of firms converge? Implications for managers, investors and strategy researchers," Strategic Management Journal, Wiley Blackwell, vol. 37(8), pages 1597-1614, August.
    41. Tyler Wry & Michael Lounsbury & Mary Ann Glynn, 2011. "Legitimating Nascent Collective Identities: Coordinating Cultural Entrepreneurship," Organization Science, INFORMS, vol. 22(2), pages 449-463, April.
    42. Mary Ann Glynn & Chad Navis, 2013. "Categories, Identities, and Cultural Classification: Moving Beyond a Model of Categorical Constraint," Journal of Management Studies, Wiley Blackwell, vol. 50(6), pages 1124-1137, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Le Wang & Paul Benjamin Lowry & Xin (Robert) Luo & Han Li, 2023. "Moving Consumers from Free to Fee in Platform-Based Markets: An Empirical Study of Multiplayer Online Battle Arena Games," Information Systems Research, INFORMS, vol. 34(1), pages 275-296, March.
    2. Ricarda B. Bouncken & Sascha Kraus, 2022. "Entrepreneurial ecosystems in an interconnected world: emergence, governance and digitalization," Review of Managerial Science, Springer, vol. 16(1), pages 1-14, January.
    3. Younger, Shannon & Fisher, Greg, 2020. "The exemplar enigma: New venture image formation in an emergent organizational category," Journal of Business Venturing, Elsevier, vol. 35(1).
    4. Janisch, Jonas & Vossen, Alexander, 2022. "Categorically right? How firm-level distinctiveness affects performance across product categories," Journal of Business Venturing, Elsevier, vol. 37(4).
    5. Karl Taeuscher & Hannes Rothe, 2021. "Optimal distinctiveness in platform markets: Leveraging complementors as legitimacy buffers," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 435-461, February.
    6. Vossen, Alexander & Ihl, Christoph, 2020. "More than words! How narrative anchoring and enrichment help to balance differentiation and conformity of entrepreneurial products," Journal of Business Venturing, Elsevier, vol. 35(6).
    7. Williams, Trenton Alma & Zhao, Eric Yanfei & Sonenshein, Scott & Ucbasaran, Deniz & George, Gerard, 2021. "Breaking boundaries to creatively generate value: The role of resourcefulness in entrepreneurship," Journal of Business Venturing, Elsevier, vol. 36(5).
    8. Newaz, Md Tarique & Chandna, Vallari & Dass, Mayukh & Arnett, Dennis, 2023. "Using R-A theory and the optimal distinctiveness perspective to understand the strategic marketing approaches used by platform-based organizations: The cases of Facebook and Twitter in digital ecosyst," Journal of Business Research, Elsevier, vol. 167(C).
    9. Joey van Angeren & Govert Vroom & Brian T. McCann & Ksenia Podoynitsyna & Fred Langerak, 2022. "Optimal distinctiveness across revenue models: Performance effects of differentiation of paid and free products in a mobile app market," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2066-2100, October.
    10. Clarissa E. Weber & Norbert Steigenberger & Hendrik Wilhelm, 2023. "After successful fundraising: how overfunding and category spanning affect the release and audience-perceived quality of crowdfunded products," Small Business Economics, Springer, vol. 61(3), pages 1009-1026, October.
    11. Majid Majzoubi & Eric Yanfei Zhao, 2023. "Going beyond optimal distinctiveness: Strategic positioning for gaining an audience composition premium," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 737-777, March.
    12. Jean‐François Soublière & Christi Lockwood, 2022. "Achieving cultural resonance: Four strategies toward rallying support for entrepreneurial endeavors," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1499-1527, August.
    13. Juan Bu & Eric Yanfei Zhao & Krista J. Li & Joanna Mingxuan Li, 2022. "Multilevel optimal distinctiveness: Examining the impact of within‐ and between‐organization distinctiveness of product design on market performance," Strategic Management Journal, Wiley Blackwell, vol. 43(9), pages 1793-1822, September.
    14. Krzeminska, Anna & Lundmark, Erik & Härtel, Charmine E.J., 2021. "Legitimation of a heterogeneous market category through covert prototype differentiation," Journal of Business Venturing, Elsevier, vol. 36(2).
    15. Karl Taeuscher & Eric Yanfei Zhao & Michael Lounsbury, 2022. "Categories and narratives as sources of distinctiveness: Cultural entrepreneurship within and across categories," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2101-2134, October.
    16. Zhao, Eric Yanfei & Ishihara, Masakazu & Jennings, P. Devereaux, 2020. "Strategic entrepreneurship's dynamic tensions: Converging (diverging) effects of experience and networks on market entry timing and entrant performance," Journal of Business Venturing, Elsevier, vol. 35(2).
    17. Shon R. Hiatt & W. Chad Carlos, 2019. "From farms to fuel tanks: Stakeholder framing contests and entrepreneurship in the emergent U.S. biodiesel market," Strategic Management Journal, Wiley Blackwell, vol. 40(6), pages 865-893, June.
    18. Jeongsik “Jay” Lee & Hyun Ju Jung & Hyunwoo Park, 2023. "Rare is beautiful? Rareness, technology value, and the moderating role of search domain and knowledge maturity," Production and Operations Management, Production and Operations Management Society, vol. 32(4), pages 1019-1040, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Eric Yanfei Zhao & Greg Fisher & Michael Lounsbury & Danny Miller, 2017. "Optimal distinctiveness: Broadening the interface between institutional theory and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 93-113, January.
    2. J.-P. Vergne & Tyler Wry, 2014. "Categorizing Categorization Research: Review, Integration, and Future Directions," Journal of Management Studies, Wiley Blackwell, vol. 51(1), pages 56-94, January.
    3. Elizabeth George Pontikes, 2022. "Category innovation in the software industry: 1990–2002," Strategic Management Journal, Wiley Blackwell, vol. 43(9), pages 1697-1727, September.
    4. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Gino Cattani & Joseph F. Porac & Howard Thomas, 2017. "Categories and competition," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 64-92, January.
    5. Paolo Aversa & Annelore Huyghe & Giulia Bonadio, 2021. "First Impressions Stick: Market Entry Strategies and Category Priming in the Digital Domain," Journal of Management Studies, Wiley Blackwell, vol. 58(7), pages 1721-1760, November.
    6. Elizabeth G. Pontikes, 2018. "Category Strategy for Firm Advantage," Strategy Science, INFORMS, vol. 3(4), pages 620-631, December.
    7. Rory McDonald & Cheng Gao, 2019. "Pivoting Isn’t Enough? Managing Strategic Reorientation in New Ventures," Organization Science, INFORMS, vol. 30(6), pages 1289-1318, November.
    8. Vossen, Alexander & Ihl, Christoph, 2020. "More than words! How narrative anchoring and enrichment help to balance differentiation and conformity of entrepreneurial products," Journal of Business Venturing, Elsevier, vol. 35(6).
    9. Heewon Chae, 2022. "Income or education? Community‐level antecedents of firms' category‐spanning activities," Strategic Management Journal, Wiley Blackwell, vol. 43(1), pages 93-129, January.
    10. Jean‐François Soublière & Christi Lockwood, 2022. "Achieving cultural resonance: Four strategies toward rallying support for entrepreneurial endeavors," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1499-1527, August.
    11. Karl Taeuscher & Eric Yanfei Zhao & Michael Lounsbury, 2022. "Categories and narratives as sources of distinctiveness: Cultural entrepreneurship within and across categories," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2101-2134, October.
    12. Diego Zunino & Fernando F. Suarez & Stine Grodal, 2019. "Familiarity, Creativity, and the Adoption of Category Labels in Technology Industries," Organization Science, INFORMS, vol. 30(1), pages 169-190, February.
    13. Goldenstein, Jan & Hunoldt, Michael & Oertel, Simon, 2019. "How optimal distinctiveness affects new ventures' failure risk: A contingency perspective," Journal of Business Venturing, Elsevier, vol. 34(3), pages 477-495.
    14. Michael Lounsbury & Christine M. Beckman, 2015. "Celebrating Organization Theory," Journal of Management Studies, Wiley Blackwell, vol. 52(2), pages 288-308, March.
    15. Durand, Rodolphe & Hadida, Allègre L., 2016. "Logic combination and performance across occupational communities: The case of French film directors," Journal of Business Research, Elsevier, vol. 69(7), pages 2371-2379.
    16. Nina Granqvist & Tiina Ritvala, 2016. "Beyond Prototypes: Drivers of Market Categorization in Functional Foods and Nanotechnology," Journal of Management Studies, Wiley Blackwell, vol. 53(2), pages 210-237, March.
    17. Aaron K. Chatterji & Jiao Luo & Robert C. Seamans, 2021. "Categorical Competition in the Wake of Crisis: Banks vs. Credit Unions," Organization Science, INFORMS, vol. 32(3), pages 568-586, May.
    18. Juan Bu & Eric Yanfei Zhao & Krista J. Li & Joanna Mingxuan Li, 2022. "Multilevel optimal distinctiveness: Examining the impact of within‐ and between‐organization distinctiveness of product design on market performance," Strategic Management Journal, Wiley Blackwell, vol. 43(9), pages 1793-1822, September.
    19. Dror Etzion, 2014. "Diffusion as Classification," Organization Science, INFORMS, vol. 25(2), pages 420-437, April.
    20. Majid Majzoubi & Eric Yanfei Zhao, 2023. "Going beyond optimal distinctiveness: Strategic positioning for gaining an audience composition premium," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 737-777, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:29:y:2018:i:4:p:588-611. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.