Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry
AbstractThis paper empirically investigates the relation between vertical integration and video game performance in the U.S. video game industry. For this purpose, we use a widely used data set from NPD on video game montly sales from October 2000 to October 2007. We complement these data with handly collected information on video game developers for all games in the sample and the timing of all mergers and acquisitions during that period. By doing this, we are able to separate vertically integrated games from those that are just exclusive to a platform First, we show that vertically integrated games produce higher revenues, sell more units and sell at higher prices than independent games. Second, we explore the causal effect of vertical integration and find that, for the average integrated game, most of the difference in performance comes from better release period and marketing strategies that soften competition. By default, vertical integration does not seem to have an effect on the quality of video game production. We also find that exclusivity is associated with lower demand.
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Bibliographic InfoPaper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 09-19.
Length: 47 pages
Date of creation: 10 Jan 2009
Date of revision:
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Other versions of this item:
- Ricard Gil & Frédèric Warzynski, 2010. "Vertical Integration, Exclusivity and Game Sales Performance in the US Video Game Industry," Working Papers 10-06, NET Institute, revised Sep 2010.
- Gil, Ricard & Warzynski, Frédéric, 2009. "Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry," MPRA Paper 21049, University Library of Munich, Germany, revised Dec 2009.
- A10 - General Economics and Teaching - - General Economics - - - General
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