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 Library of Munich, Germany in its series MPRA Paper with number 21049.
Date of creation: Dec 2009
Date of revision: Dec 2009
vertical integration; exclusivity; performance; video games;
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, Frederic, 2009. "Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry," Working Papers 09-19, University of Aarhus, Aarhus School of Business, Department of Economics.
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-13 (All new papers)
- NEP-COM-2010-03-13 (Industrial Competition)
- NEP-MIC-2010-03-13 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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